BusinessDay 29 May 2019

To grow Nigeria’s economy at 7-8% a year does not need a miracle

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t his inauguration four years ago at the Eagle Square in Abuja, President Muhammadu Buhari said, “I belong to everybody and I belong to nobody.” Insecurity, unemployment and a weak

economy are three intertwined problems facing every Nigerian he will swear again to serve today.

The President is unconvinced that the solution lies with private sector investments

FRONT PAGE COMMENT in farms, rails, roads and power.

He doesn’t hide his distaste for private businesses. But the government cannot borrow its

way out of these grave problems, even with a debt profile that has ballooned to N24 trillion.

Some of his aides are quick to say the problems were caused by a profligate predecessor. Of late, the stumbling block has been

the past Senate President. We think the root of the problem lies closer: President Buhari prefers to abdicate responsibility to a few trusted advisers who have masterfully kept him in Potemkin village. Insular and aloof from the public, the President Continues on page 39

Buhari’s reforms and transformations, 4 years after ...See pages B1-B20 businessday market monitor

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news you can trust I **wednesDAY 29 may 2019 I vol. 15, no 320 I N300

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FG may raise $34bn from reducing JV oil assets stake to 40% Equivalent to 401,250 bpd from the six oil majors

DIPO OLADEHINDE & OLUWASEGUN OLAKOYENIKAN

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ess than two weeks after Africa’s largest mobile operator, MTN, listed its Nigerian unit on the Nigerian Stock Exchange (NSE), Airtel Africa, the continent’s second-largest mobile operator, is planning an initial public offering (IPO) on the London Stock Exchange (LSE), a move expected to open

DIPO OLADEHINDE & OLUFIKAYO OWOEYE

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resident Muhammadu Buhari’s decision to reduce government stake in Joint Venture (JV) assets to 40 percent in 2019 may help the treasury rake in as much as $34 billion in revenue in 2019, according to BusinessDay estimates.

President Buhari ordered the government to reduce all shares in the country’s JV assets with International Oil Companies (IOC) to 40 percent this year, a restructuring plan that will earn the Nigerian government additional revenue, according to budget documents released on

Continues on page 39

Inside Sanwo-Olu, Ihedioha, Babagana, 26 others take office as governors today FIXING NIGERIA: Sectoral challenges, what government needs to do

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L-R: Pat Utomi; Temi Otedola, who received the Zik Prize for Business Leadership 2018 on behalf of her father, Femi Otedola, and Niyi Adebayo, former governor of Ekiti State, in Lagos.

Continues on page 39

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news Senate approves N69bn subsidy payment to 20 oil marketers OWEDE AGBAJILEKE, Abuja

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he Senate on Tuesday approved the payment of N68.9 billion as outstandingsubsidyclaims to 20 petroleum marketers.

A breakdown of the amount shows that while the Senate approved the payment of N10.8 billion as subsidy claim to Tanzila Petroleum Company, it okayed another N58.1 billion for 19 oil marketing companies.

Someoftheoilmarketersare Conoil,Oando,A&EPetroleum, MatrixEnergy,OntarioOil&Gas Limited, Swift Oil Limited and Honeywell (HOGL).

Others are Blacklight, Fatgbems Petroleum, Forte Oil, Frado International, Tempogate Oil, Linc Nigeria Limited, IPMAN Investment, Hudson Petroleum, among others.

The approval followed the adoption of the report of its Committee on Petroleum Downstream on the Promissory Note Programme and a Bond Issuance to Settle Inherited Local Debts and Contractual Obligations to Petroleum Marketers.

Presenting the report, Chairman of the Senate Committee Petroleum Down-

stream, Kabiru Marafa, observed that there were differences in submissions made by the Federal Ministry of Finance, Petroleum Products Pricing Regulatory Agency (PPPRA) and oil marketers.

He attributed the discrepancies to the use of different input parametersforthecalculationof the subsidy payable value.

“The differing calculation processeswhichcouldn’tdefine thestepusedtoarriveatthetotal subsidy due value (e.g. it could not be determined if simple or compoundinterestmethodwas adopted in the computation or the interest was computed on the forex differential element amongst others).The internal inconsistencies which do not followthesetprocessingparameters by the government agencies,”thereportofthepanelread.

Some of the oil marketers and the amount approved for them include: Ontario Oil & Gas Limited N9.8 billion, Conoil N8.3billion,OandoN4.9billion, Matrix N4.6 billion, Honeywell (HOGL) N4.3 billion and Swift Oil Limited N4 billion.

OthersareForteOilPLCN3.8 billion, Blacklight N3.7 billion, Stallionaire N3 billion, Tempogate Oil N2.3 billion, among others.

L-R: Jacob Olufemi Williams, managing director, Willao Nigeria Limited; Abiodun Amokomowo, managing director, Ibile Holdings Limited, and Olayinka Oladunjoye; commissioner for commerce, industry and cooperatives (representative of Lagos State governor), at the commissioning of The Campbell Centre in Lagos, recently.

Sanwo-Olu, Ihedioha, Babagana, 26 others take office as governors today …amid high expectations, slowing economy MICHAEL ANI

F 233 companies scramble for slots as NNPC starts natural gas liquid bids HARRISON EDEH, Abuja

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he Nigerian National Petroleum Corporation (NNPC) has started natural gas liquids bid pre-qualification exercise for 2019-2021 and the corporation is prioritising companies with proven investments in gas utilisation, storage, distribution and marketing infrastructure.

Two hundred and thirty-three (233) companies have joined in the bidding process.

Maikanti Baru, NNPC group managing director, said at the bid opening on Tuesday in Abuja that the bid is to maximise the value of the natural gas liquid resources for the benefits of Nigerians and other stakeholders.

“As a corporation, our current pursuit is to continuously grow our domestic gas supply and utilisation while also maximising value from our utilised knock-off condensates and natural gas liquid resources,” Baru said.

“The strategic focus in the coming months is to expand domestic liquefied petroleum gas (LPG) supply from our established local sources while also encouraging investments in storage, marketing and distribution infrastructure,” he said.

Represented at the bid opening by Saidu Mohammed, GMD, Gas and Powers, the NNPC boss said the corporation is focused on

engaging qualified companies to off-take natural gas liquids for the domestic and international markets.

“The objective is to further ensure the selection of offtakers is aligned with tested transparent and accountable procedures in compliance with the Public Procurement and Nigerian Content Acts,” he said.

He noted that selected companies would be encouraged to ensure maximisation of transportation, marketing, and distribution to widen LPG market.

The bidding process was conductedwiththefullobservation of Centre for Transparency watch, officials of the Bureau for Public Procurement (BPP) and the Nigerian Extractive Industry Transparency Initiative.

In the last three years, Nigeria has been putting in place mechanisms to help the country make the most of its abundant natural gas reserves. In 2016, relying on Nigeria’s petroleum law empowering the minister of petroleum resources to take flared gas and commercialise it, Ibe Kackikwu, minister of state, launched the National Gas Flare Commercialisation Programme to involve thirdparty investors or off-takers.

On April 11, Kachikwu said that 226 companies had submitted bids to participate in the commercialisationprogramme.

•Continues online at www.businessday.ng www.businessday.ng

ew hours from now, a total of 29 governors-elect will take the oath of office as governors for a fouryear term, having won the March 9, 2019 governorship election in their various states.

Those to be sworn in today include seven first-time governors and 22 incumbents who have won a second term.

In Lagos, Babajide SanwoOlu of the All Progressives Congress (APC) will succeed the outgoing Governor Akiwunmi Ambode of the same party, while in Imo State, Emeka Ihedioha of the People’s Democratic Party will take over from Rochas Okorocha of the APC. Also to be sworn in are Inuwa Yahaya (Gombe, APC), Darius Ishaku (Taraba, PDP), Abdullahi

Sule (Nasarawa, APC), MaiMala Buni (Yobe, APC), Seyi Makinde (Oyo,PDP),DapoAbiodun(Ogun, APC), Abdulrahman Abdulrazaq (Kwara, APC), Babagana Zulum (Borno,APC),AhmedUmarFintiri (Adamawa, PDP), and Mohammed Mattawale (Zamfara, PDP), whowasrecentlydeclaredwinner bytheSupremeCourt.

Others include Ifeanyi Ugwuanyi (Enugu, PDP), David Umahi(Ebonyi,PDP),Muhammad Badaru (Jigawa, APC), Okezie Ikpeazu (Abia, PDP), Abubakar Bello (Niger, APC), Emmanuel Udom (Akwa Ibom, PDP), Ben Ayade (Cross River, PDP), Ifeanyi Okowa (Delta, PDP), Nasir El-Rufai (Kaduna, APC), Mohammed Badaru (Jigawa, APC), Aminu Masari (Katsina, APC), Atiku Bagudu (Kebbi, APC), Simon Lalong (Plateau, APC), Nyesom Wike (Rivers, PDP), Samuel Ortom

(Benue, PDP), Aminu Tambuwal (Sokoto, PDP), and Abdullahi Ganduje (Kano, APC).

The governors will be ushered in with high expectations from the citizenry amid negative economic indices across the country. Many citizens, weighed down by worsening poverty, look up to the incoming governors for salvation.

For these governors, this might not be the time to promise so many and achieve so little, but analysts say they should focus on the core areas they can make impact on the common man.

Sanwo-Olu, incoming governor of Lagos State, would have to deploy an effective and efficient means that would ease flow on movement for the well over 20 million Nigerians living and doing business in the coastal

state that prides itself as the Centre of Excellence.

Incoming governors in the North of the country will be faced with the challenge of improving the safety and security of the populace whom they will pledge today to govern. Many parts of the North have for long been ravaged by the Boko Haram insurgency, while the herdsmen threat has spread far into the North-Central and many parts of the South.

Many of the states’ economies are also in a precarious condition. With allocations from the Federation Account ever dwindling,analystshaveemphasised the need for diversification of the economy away from the traditional reliance on monthly allocations from Abuja towards deploying far-reaching economic policies that would drive growth in their respective states.

Electricity regulator rises from slumber, sanctions erring operators ... Abuja pays N300m in fines, PPIP LVI and Cummins Power ordered to pay millions for infractions

ISAAC ANYAOGU

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ummins Power Generation Nigeria Limited (CPGNL) has become the third company ordered to pay millions of naira in fines for infractions against its licence in an indication that the electricity regulator is now awakening to its responsibility of regulating Nigeria’s floundering electricity sector.

In an order published May 28, the Nigerian Electricity Regulatory Commission (NERC) ordered Cummins Power Nigeria Ltd to pay as much as N3 million in fines for noncompliance with the Electric Power Sector Reform Act and terms of its off-grid generation licences, as well compensate

Ikeja Electric for lost revenue for encroaching on the DisCo’s distribution network.

This month alone, NERC has meted out sanctions on Abuja and PIPP LVI DisCos for different infractions. While Abuja DisCo has been ordered to pay N300 million in fines over cases of electrocution in its franchise areas and to conduct a detailed safety audit of its network to prevent further infractions, PIPP LVI, like Cummins, is on the hook for encroaching on Eko DisCo’s distribution network and tampering with its distribution infrastructure.

Cummins applied for an off-grid electricity generation licence in 2016 to supply power to the Nigerian Carton and Packaging Manufacturing

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Company Limited (NICAPACO), lIupeju, Lagos and was granted.

But Ikeja Electric filed a petition against the company on August 9, 2018 accusing it of encroaching on its network by supplying customers on Ikeja Electric’s priority feeders without the approval of the Commission. Ikeja Electric further objected Cummins’ application for an off-grid licence on grounds of encroachment into the DisCo’s distribution network and tampering with distribution infrastructure.

According to NERC, its investigation panel confirmed that Cummins had constructed distribution infrastructure without the Commission’s approval and ordered the @Businessdayng

company to defend its actions in January this year.

In its defence, Cummins said when it filed an application for a licence to supply power to NICAPACO, it did not receive an objection within the specified period and it did not receive any correspondence from NERC that any objections had been received. So it took NERC’s silence as acceptance, in line with the Executive Order 01 issued by the Vice President for the purpose of ease of doing business. Cummins thereafter entered into a supply arrangement with NICAPACO and commenced supply of offgrid electricity.

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Of mentors and professional advisers to entrepreneurs Small Business handbook

Emeka Osuji

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lthough mentoring has become a trending word, it still evokes little or no meaning to some people. To some people, seeking advice is either a sign of weakness or even something of which to be ashamed. While many parents are very excited at the idea of their kids and wards going to schools that run effective mentoring programmes for students, some of the kids do not see the value. It is actually a developmental opportunity for students to go to institutions that put premium on mentoring. Such institutions match students with staff members who guide them with their work and studies and often provide officially mandated internship programmes for most courses. Parents who send their children to such schools often get shocked to their marrows when they discover, mostly after the fact (when something has already gone amiss, e.g. the student’s Grade Point Average has tanked), that the children they very much want to be properly mentored, do not use the school’s mentoring services.

Some students actually make it a point of duty to avoid their mentors, either due to shyness or some other reasons.They end up not getting the

full benefit of the learning and experiences of their mentors.

The same situation prevails in business. Many budding entrepreneurs are either too shy or proud to seek knowledge and learn from their precursors - those who have done or are doing the business they plan to go into. Experience may be the best teacher and so one may prefer to learn by doing. However, we do not need to spend valuable time trying and probably failing to reinvent a wheel that is lying just beside us. The best thing is to first try the wheel on the ground and if it doesn’t roll properly we see if it could be repaired, reshaped, adapted or modified. That in itself is entrepreneurship. The wheel beside us is most likely to give us an idea or point the direction we should go in our new invention than anything else. Young entrepreneurs should seek and find mentors in their field of interest. Mentors are a special gift to us, no matter what the subject matter of our interest is – family, business and education inclusive. Some of those close to us have already achieved some level of success, experience and insight in the business we want to do. We should be humble enough to seek them out and learn from them. These people can share their insights almost always for free.

Some successful entrepreneurs, if not most of them, feel elated or even flattered when asked to speak to younger people or those coming after them. It gives them a sense of true success and fulfilment. We notice how excited the invited guest speakers to public for a usually are when they get a chance to speak on their experiences, especially in the

areas they claim or are seen to be successful. They like the glamour and the glitz that comes with the mention they get among the success stories of the time. I watch some people who have made names in one field or the other enthusiastically mount the rostrum to “prophesy” on the subject matter of interest and their speeches are usually high-pitched.

They are usually excited to be invited to share their story. Successful people often crave the chance to share their experiences, mostly as a service to humanity but sometimes to enjoy that feeling of arrival. Some not only like to share their experiences, they actively seek out opportunities to share it, especially in the limelight.

It makes no business sense therefore, for young entrepreneurs trying to discover something which somebody else has long found out and is willing to share his ideas with you.

There may be a caveat there and it is to the effect that one has to be careful whose mentee one becomes. In societies where political patronage is key to success, the risk of holding out mere beneficiaries of state favour and prebendalism as icons of enterprise and success is very high. This risk is even much higher where impunity and discretion have crowded out accountability and social justice. Most developing countries find themselves in this mould. Government remains the heaviest spender in such societies, and they have used this position to pick and choose where they direct both development and financial resources.The favoured individuals become icons but not real icons because they have only one story to tell – how they got connected to the powerful.

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In societies where political patronage is key to success, the risk of holding out mere beneficiaries of state favour and prebendalism as icons of enterprise and success is very high

This is not to say that the skills they deployed or applied to win the contest for favours from those in power are not important. However, we have to be careful what ethics we promote.

When people become wealthy by appropriating what belongs to the public, it may be necessary to exercise some care when using them as mentors and models. If I have an oil well allocated to me today, I become a Forbes Millionaire before long. Am I really a model of enterprise to the youth? These are some of the issues in mentorship that need to be understood and managed. The ethics of my success must inspire, just as my success does. In many countries today, those with access to the mostly opaque governments, especially in developing countries, have been assigned public assets such as mines and oil fields. They have become so rich and some are now itinerant preachers of the ethos of entrepreneurship, and are now mentoring the youth on how to succeed in business.

This, sometimes gives the impression that the end justifies the means or that it does not matter how you succeed but just succeed. There may be something wrong with that thesis in regard to the moral fabrics of society.

Young entrepreneurs should also not be afraid to consult professionals who have good understanding of the business. Consultants are available and they are not always as expensive as we think. You are not too young to seek professional advice whenever the fog thickens.

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

The present danger of illicit trade in tobacco products Nkemdili Nwadike

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istory has shown consistently that whenever there is substantial demand for a product, unscrupulous elements invariably spring up to exploit the market. They do this in many ways such as creating and smuggling counterfeit products into the market, circumventing laid down rules in terms of taxes, import and excise duties requirements, sale of banned products, among others. This illegal trade of the product undermines a country’s economy in many ways.

Cigarettes are the most illicitly traded products in the world. This is because the product is light, easy to conceal and easy to transport across vast distances and across international borders. Trade in illicit products also provides a good return to the actors.

Information on the website of the World Health Organisation, (WHO), reveal that governments collectively lose between $40.5 billion in revenue to illicit trade in tobacco and in some cases, illicit tobacco accounts for between 40% and 50% of the country’s tobacco market. Illicit tobacco trade is also more prevalent in low and middle-income countries than in high-income countries.

The Financial Action Task Force, (FATF), an independent inter-governmental body that develops and promotes policies to protect the global financial system against money laun-

dering, terrorist financing and the financing of proliferation of weapons of mass destruction reported in 2012 that illicit trade in tobacco was prone to money laundering and the illicitly generated proceeds were used to fund other crimes and terrorism.

There are several global programmes aimed at tackling the scourge of illicit trade in tobacco.

WHO, through the Framework Convention for Tobacco Control, (FCTC), which is a comprehensive treaty that provides an internationally coordinated response to tobacco regulation and control and sets out specific steps for governments in addressing tobacco use, has established the Protocol to Eliminate Illicit Trade in Tobacco Products. This protocol is an international treaty with the objective of eliminating all forms of illicit trade in tobacco products through a package of measures to be taken by countries acting in cooperation with each other.

Multinational tobacco companies such as British American Tobacco and Philip Morris have also partnered with the International Police, INTERPOL, to create an international framework to combat illicit trade in tobacco products. Nations also collaborate through frameworks of the United Nations such as the United Nations Convention against Transnational Organised Crime (UNTOC) and the United Nations Convention against Corruption (UNCAC).

Illicit trade in tobacco products remains prevalent in Nigeria. It may not be unconnected with the increased spate of terrorism, banditry and other forms of organised crime and calls for a more effective approach to curbing the

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threat in Nigeria as it is a major way by which perpetrators fund their operation and launder illegal funds. Of particular concern are parts of Northern Nigeria which have been devastated by terrorism and where widespread illicit tobacco trade can be readily exploited for terrorism financing.

Some factors fostering illicit trade in the country include Nigeria’s history of enforcement and control, which promotes the perception that the likelihood of getting caught and punished is very low, and therefore attracts illicit traders to our markets.

Nigeria’s land borders provide little resistance to smugglers and this combined with the numerous illegal entry points into the country signal to the illegal operators that they can operate within the country with relative ease. This continues to make Nigeria very attractive.

In 2015, Nigeria passed the National Tobacco Control Act NTCA, to accommodate the provisions of the FCTC. The NTCA is Nigeria’s comprehensive set of laws for the regulation of the tobacco industry and comprises elaborate clauses including: regulation of smoking; prohibition of tobacco advertising promotion and sponsorship; tobacco product sales; regulation of tobacco product content and emission disclosures; tobacco product packaging and labelling; licensing of tobacco dealer; enforcement; education, communication, training and public awareness.

While the full implementation of the NTCA is still being awaited, it is important to note that Nigeria, in a bid to strengthen the fight against illicit trade, also signed the protocol for the

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elimination of illicit trade in tobacco products on March 8, 2019. Nigeria thus became the 51st country to ratify the treaty.

With this development it is hoped that institutions will now be strengthened and relevant infrastructure made available to efficiently tackle this scourge.

Proper and effective policing of our borders is critical, if the fight must be won. The Nigeria Customs Service must step up their efforts in all our ports, increase the number of personnel so that all entry points are adequately manned and secure barricades provided at all illegal entry points. Arrangements must also be put in place for adequate training even on the provisions of the new protocol as well as other international best practices.

Commercially, it poses a danger to the investments of industry operators as bigger chunks of businesses are lost to illicit traders who are able to sell at far cheaper prices as they do not pay any taxes or duties on their illegal products. Also very importantly, the economy loses income from lost taxes and duties due to the falling incomes of the legal tobacco industry.

In 2018, tobacco products were among the top non-oil export products for Nigeria. A lot of products were exported to neighbouring West African countries. It is imperative that Nigeria takes the lead in the fight against illicit trade in tobacco products and drive the participation of other West African countries to secure our export market as well as the Nigerian market.

Nwadike sent this piece from Lagos.

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Excellence doesn’t come by chance - part 3

Character Matters with Daps

Dapo Akande

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Third World country which genuinely harbours any ambition of stepping up to First World wouldn’t be so nonchalant about holding the unenviable record of being the number two public defecating capital of the world. It would as a matter of urgency immediately set about making ample provision by providing good, well maintained public toilets, which members of the public wouldn’t hesitate to use. A country with such ambition would feel ashamed that it has one of the highest number of out of school, school age children in the world. In which direction can the country’s future possibly be heading when so many of it’s potential assets remain uneducated? Such country would not appear to watch helplessly as its unemployment rate jumps to an alarming 23.1% of the workforce

from 18.2% a year before. Certainly, the people of a country with such lofty ambition should reflect same ambition in their behaviour.

You definitely would not expect them to senselessly throw empty bottles out of moving vehicles because they would take greater pride in their environment, not to talk of consider the danger such thoughtless act would portend to the life of others. To encourage the habit of doing the right thing too, dustbins would be found dotted all over, starting from bus stops.

So, at least passengers on public buses will always know they can get rid of their bottles and other litter at the bus stop where they alight. An enabling environment must be created before you can realistically expect people to cultivate the habit of discipline and decent behaviour. In the absence of discipline, excellence for the most part, loses its meaning. And that’s where governments need to come in because to achieve this, it will on one hand require educating the people to understand why each person must play his part and why what’s good for all is also what’s best for each. And on the other hand, it must be backed up with diligent enforcement, dishing out unpleasant consequences for those who willfully decide to breach.

Governments with First World ambitions won’t publicly announce that in alignment with what obtains in developed nations, one can now renew or apply for a new driver’s licence online, only to then subject would-be applicants to untold frustrations when the portal refuses to work; compelling them to take the usual cumbersome manual route which ends up costing them about twice the official rate. Naija!! Worse still is trying to apply for a new international passport. What’s the big deal, right? Have you ever tried getting blood out of a stone? Then I suggest you do, as your chances of succeeding are far higher than trying to get your dear country’s passport. What’s the usual story?

“There are no booklets.” But booklets miraculously appear when you agree to pay double the official cost. Isn’t that amazing? And some people out there doubt if miracles still happen. They happen here every day. Live! There was a time when the fear of shame deterred Nigerians from less than noble acts but nowadays we’re told we should hide our faces only if or when we don’t have money. Hmmm...how can excellence be present where values are absent?

Excellence is an engulfing spirit which must transcend all aspects of life. In France, if the popular

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Excellence is an engulfing spirit which must transcend all aspects of life...A lackadaisical attitude like African timing can never produce excellence

state of the art TGV train is billed to leave at 10am, the doors will automatically shut at 10am on the dot.

Punctuality and precision are key.

A lackadaisical attitude like African timing can never produce excellence. Like just about everything worth having in this life, to get it, you must consciously pursue it.

Excellence and national transformation which it would ultimately culminate in, is not an exception to this rule. Don’t be deceived into believing it will fortuitously fall on your lap. Much like breakthroughs you have not prepared or worked for. It’s simply not Biblical. Neither is it logical. Rather than wait for a poor system to evolve into something better, it makes more sense to simply replace it with a better system. Like Lee Kuan Yew discovered, to transit from Third World to First one must intentionally forgo Third World habits to pick up First World ones. And that’s why a wise man once said, “nations develop or decay in response to the value system they operate by”. One would be hard pressed to find a country which affirms this assertion more than ours.

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

Development implication of a functional ministry of environment

Tosin Abdulsalam

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e as a people have looked at ministries of environments in a very myopic way. We tend to think it is just a ministry that ensures filths and garbage are managed; that our drainages are cleared and yards tidied. It is even more painful when you see actors in the environment industry, especially people whose job is to manage the environment ministry, have a version of the aforementioned ideas as the role of the ministry. When you truly comprehend what the environment represents and what it means to be the “Oga at the top” in a ministry of environment, then you would fathom out the level of influence these environmentalists have as growth agents and as champions of sustainable development in any society.

The Merriam-Webster dictionary defines environment as “the surroundings or conditions in which a person, animal, or plant lives or operates”. Therefore, as the chief manager of the environment in a given space, it is your duty to ensure that the surrounding and conditions of every living thing in that space is at the optimum. The development of a society on the other hand is measured using main development indicators which are broadly social, economic

and political, encompassing issues like employment, poverty, health, education, social cohesion, safety and security and good governance. A good environment is a direct catalyst for all of the indicators except education and good governance, in which case, good environment can still be argued as an indirect precursor for achieving them.

On employment, many ministries in Nigeria have used recruitment of personnel as a primal effort on what the ministers are supposed to do. They have employed thousands of redundant staff. We just employ and do not strategically create value around the people we employ. In fact, the extent of idle capacity could be seen by a simple visit to any local ministries; the lax attitude and the conversation these staff engage in lives a lasting impression. There is hardly anybody taking responsibilities. For example, who is the officer that supervises the street light on the expressway that passed through my hometown in Offa? If such office exists, can they present a report on the condition of the many streetlights along the expressway?

Should you think it is not within the purview of the ministry of environment, it would be because you do not properly grasp the breadth and depth of the concept environment. Also, when the ministries of environment decide to do their jobs, issues like bioremediation, waste disposal and treatment, industrial and home cleaning, degradation of harmful substances, maintenance of street lights, air sanitation, noise screening and all aspects of environmental aesthetics and balance will become part of our lives and inform our culture towards environmental consciousness and sanity while gearing up innovations and economic gains.

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Health is another measure of development in any society. Environmental health used to be a big thing in Nigeria. Growing up, I had a neighbour who was an environmental health officer at a time when the environmental health agency was proactive. When last did a “wole wole”, as we used to call environmental health officers then come to your homes to check the environmental nuances that occur therein? I am sure the environmental health officers are still on government payrolls. Why are they not ubiquitous as they used to be? What are the commissioners and ministers of environment in Nigeria doing about this? Who monitors the environmental health indices of public and popular institutions like abattoirs, hospitals, manufacturing and service industries? How well is the Lagos KAI (now LAGESC) doing in recent years? Why did we stop the LastSaturday-of-the-month’s environmental day and who still check if we observed it?

On safety and security, having talked about health, physical and emotional security is obviously a product of the environment. The environment either predispose or shield us of many of these hazards. The direct presence of hazards like the oil pollution in the Niger Delta or the ubiquitous presence of pure water sachets in Kano, in Lagos, and in our waterfronts, disturbs our security. It poisons the environment, thereby making the food cultivation difficult; disturbs the ecosystem and killing up the fauna and flora that makes up the productive machinery of our environment. These hazards also end up poisoning us by finding its way into our water, food and air.

All these inadvertently contributes to our nonperforming life expectancy and standard of living indices. On security in terms of injuries, pollutions like noise and dust are here with us.

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They cause injury that might not be instantaneous but unarguably build up and lead to many health conditions like deafening, cancer and many more of those conditions that has become common in our daily lingua. The last one is the physical assaults. An environment could be in such a way that it encourages crime and accidents. A poorly lit road and dark alleys are breeding grounds for criminals and steaming pot for accidents to happen. It is the job of the ministries of environment through its many organs to make sure we are safe of all these problems.

Social cohesion will always come when we have food in our stomachs and don’t have to think of the basal needs of life like fresh air and water. If you doubt me, look at how your fire-spitting senator from the core north just gave a warm hug to that senator from the South-South that you always talk poorly about in your local barber’s shop. It is simply because their immediate environment is conducive. The same goes with good governance and education, the environment contains all the basic things that we need to function as a society. When those basic needs have been put in place, then we have good governance and your kids would have a prepared mind to accept education.

In final notes, to the minister and commissioners of environment, the dusty roads on the way to different corners in your home states is an environmental problem and should be a big concern for your ministry as much as it is for the works ministry. If you want to wake up a slumbering society like Nigeria, please prod the minister of environment! O di gba!!

Abdulsalam is of the Friederich Schiller University in Jena Germany.

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Challenge and opportunity in Ramaphosa’s South Africa

H

umbled by the trust of the electorate and aware of the challenges, Cyril Ramaphosa took oath May 25 for his first full five-year-term as president of South Africa. He assumed office in 2018 following the forced exit of Jacob Zuma and won reelection in his own right in the May 8 election. Many challenges and opportunities confront Ramaphosa as he steers the country as the fourth person elected on the platform of the African National Congress since the end of apartheid.

Youth unemployment is a high 27 percent. Corruption casts a shadow and hangs over the country; it was the leading cause for the failure of former labour leader Jacob Zuma. Series of corruption scandals forced the people to ask Zuma out. There remains the challenge of closing the gap in the vast disparity and economic inequality between the races owing to its history.

The 58 percent of the votes is a good score, but down from the regular 80-90 percent the ANC fetched in the past. He needs to restore the confidence of the black

majority in an ANC-led government.

Economic growth at 1,2 per cent in 2019 and a projected 1.5 per cent in 2020 is insufficient. Consumer confidence is low, and the GDP per capita continues to decline. Ramaphosa has acted on corruption, but the country requires more holistic treatment of the menace. The wage bill of government-owned enterprises grew so much it became a scandal such as ESKOM, the electricity utility.

Ramaphosa declared, “The challenges that we face are real. But they are not insurmountable. They can be solved. And we are going to solve them.”

The fourth black president of South Africa enacted the traditional dance of his people as he rejoiced with citizens at the inauguration.

He dressed in a black suit, white shirt and red ties, custom attire of the business class. A former labour leader and a top official of the ANC, Ramaphosa succeeded much as an entrepreneur. He was a poster boy for the Black Empowerment postapartheid. Among his many positions, Ramaphosa was a director of MTN Communications, the South African firm that leads the telecommunications market across Africa.

South Africans and the world expect Ramaphosa to bring the drive

and discipline of business to the running of South Africa. His speech at the inauguration read like a SWOT analysis of the country he leads as it expects new dawn.

He stated, “Despite our most earnest efforts, many South Africans still go to bed hungry, many succumb to diseases that can be treated, many live lives of intolerable deprivation.

Too many of our people do not work especially the youth. In recent times, our people have watched as some of those in whom they had invested their trust have surrendered to the temptation of power and riches. They have seen some of the very institutions of our democracy eroded and resources squandered.

The challenges that we face are real. But they are not insurmountable.”

It was a nice coincidence that Ramaphosa’s inauguration was on Africa Day, a day celebrated across Africa. It offered the president of the Republic of South Africa an opportunity to speak to the rest of Africa even as the challenges and the picture he painted represented most of the continent.

“We gather here on the day that the people of our continent celebrate the unity of Africa. It is a day of friendship, solidarity and cooperation. It

is a day on which we reaffirm our common commitment to an Africa that is at peace, that is prosperous, and that promises a better existence for its people.

“As South Africa, we are honoured and deeply humbled by the presence here of leaders from across the African continent. We are profoundly grateful to you for choosing to celebrate Africa Day among us, giving further poignancy to South Africa’s transformation from a pariah state to a full and valued member of the family of African nations,” Ramaphosa stated.

Ramaphosa must build a fairer South Africa. He needs to prioritise the provision of world-class education for the majority black population and increased productivity in the economy. Improvements in urban housing are a priority to eliminate the ugly sights of the townships that remind of the evil of apartheid.

The president of South Africa must ensure that the narrative of South Africa is positive and that it does not fall below the standards during apartheid but instead increases in vital areas such as standard of living, healthcare, education and overall modernity. We wish Ramaphosa many successes in the next five years.

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Ganduje and Sanusi: The problem with Nigeria!

Franklin Ngwu

G

iven the eagerness with which Governor Ganduje is pursuing the creation of new emirates in Kano state, the question on many lips is why other development and governance issues are not pursued with the same speed and commitment. If they are, Kano will be a shining example and model of good governance in Nigeria. As I moved around Kano sometime in February, I prayed that God will grant the leaders the fortitude to truly appreciate and address the development crisis very evident in almost all parts of Kano and the North generally. With Ganduje’s swiftness, there is no doubt that while he might have jotted a few notes from his in-law, out-going governor Ajimobi of Oyo state, it is not clear if he exercised some patience to properly learn of the complexity and consequences of Ajimobi’s actions. Even though Ganduje’s group argues that the creation of the new emirates is on the need for further development of the emirates and rural areas, it is also widely perceived especially by Sanusi’s group as Ganduje’s retaliation strategy against Sanusi’s attacks on the government.

The interesting aspect of the ongoing Kano episode is that a deeper examination of the issues helps to better understand our development trajectories and crisis as a country. Just as Kano is presently caught

between formal and informal institutions, the key take- away is that it is also the fulcrum of our national development crisis.

We are basically suffering from a clash of two sets of norms and values or two sets of legal systems- the informal and formal legal systems. While Ganduje is operating within the realm of the formal legal system, Sanusi’s influence and authority is from our deep rooted and powerful informal legal system (norms and values).

Based on these two divides, the question is who will win. With insights from institutional economics and socio-cultural research particularly, Williamson’s (2000) four levels of social analysis, Ganduje will lose while Sanusi will win.

In the four levels of social analysis, the first level is our social embeddedness that is deep rooted and takes about 100-1000 years to develop. It is who we are as a people and relate to our norms and values, culture and informal legal systems that distinguish us broadly as Hausa/Fulani, Igbo, Yoruba, Ijaw, Efik, Kanuri etc. The second level is the institutional environment which represents our adopted formal legal system. It takes about 10-100 years to develop and it is where Ganduje derives his powers from. It is followed by the governance system which is the third level that runs from 1-10 years. This level is exemplified by our democratic governance term limits of four years. The fourth level is the resource allocation which is continuous and presently being exercised

by Ganduje who won an election using the formal laws of the institutional environment to govern Kano for 4- 8 years. In societies such as ours that context greatly matter and the very long years (100-1000) that it takes to develop as compared to the other levels, the lasting power and influence rests within the social embeddedness which Sanusi represents. As Ganduje is presently enjoying very short and tempo-

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As Governor Ajimobi might have learnt and Governor Ganduje will likely learn after four years, fighting our social embeddedness might be a shortlived and futile effort

ral power and authority that lacks deep institutional origin, his actions might succeed but will be short-lived.

The reason is that all the remaining three levels (institutional, governance and resource allocation) are significantly influenced by our social embeddedness (informal norms and values). While there is also a feedback or influence from the formal to the informal as Ganduje is presently doing, the formal has a lower connection and less intrinsic influence on the informal especially in our limitedly integrated country. It will be recalled that upon attaining political independence from Britain in 1960, the over 250 ethnic groups that make up Nigeria experienced very limited integration and as such, the real governance of the different groups (one which is accepted and internalized) is mainly through our social embeddedness which is the informal legal system (norms and values) of the respective tribal groups.

It is through this prism that we engage and participate in the national governance of the country. As the legal system used in the formal governance of the country is the formal legal system that is not properly understood, accepted, internalized and as such limitedly complied to, there is an inherent conflict of legal systems that results in crisis of governance and unending competition for power along ethnic lines.

To further clarify, when either PMB/ Yemi Osinbajo or Atiku Abubarkar/Peter Obi were selected as the presidential/ vice-presidential candidates of APC and PDP respectively, they were selected not based strictly on their unparalleled competences but mainly based on our social embeddedness. Even though that INEC conducted the election and announced the results using our adopted legal formal system, the strong influence of our social embeddedness was very pervasive in the whole process especially the voting pat-

Buharinomics 1: Uninstalling version 2.0 Bongonomics

Bongo Adi

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resident Muhammadu Buhari’s ride to office in 2015 was largely driven by his avowedly, stoic, anticorruption stance – a reputation he crafted in his first coming as a military commander in 1984. For some, his anticorruption persuasion was without blemish. For a country that had orbited out of rationality and flung deep into the abysmal quagmire of corruption in the preceding years to 2015, large sections of the electorate felt that a repeat of Buhari’s 1984 intolerance and stampede against the corruption malaise was the only route to sanity. Back in 1984, Buhari launched an unrelenting war against corruption and indiscipline, promoted austere living among citizens and took a lethal stance against narcotics trading by signing off death warrants on drug peddlers.

While his anticorruption war was notable and memorable, his economic management offered much that people who lived through the era would be very happy to delete from memory. His disdain for free market then as now, was cloaked under a spurious ideology of economic patriotism, by which he purported to wean the nation off

consumerism, profligacy, and redirect it along productivity and self-reliance.

He cut down expenditures and put a leash on the exchange rate in order to commandeer stability. In a strange move purported to arrest local currency hoarding, he changed the color of the naira in April 1984. This required holders of currency to file in long queues in the few bank branches available in those days to swap the old naira notes for the new ones. The exercise inflicted unimaginable pains on ordinary citizens. But his 1984 regime is most notorious for the painful price controls his administration instituted which punished merchants who sold above government-directed price ceilings. The move inevitably created all manner of distortions in the market in addition to scarcity, smuggling and black market racketeering. By the time his first coming ended in a 1985 coup d’etat orchestrated by his successor and another dictator, General Ibrahim Badamasi Babangida, most Nigerians were just relieved to see him exit the scene.

His second coming in 2015 as a “born-again democrat” was an excellent piece of media choreography. Preceding that election, those of us born in the post-civil war era never witnessed a more cantankerous, divisive and vitriolic diatribe than was fanned by the partisan media, in their resolve to sell him off as the ultimate messiah.

The ruse the media sold to the masses reinforced a popular imaginary of the slayer of the corruption dragon, which was again, packaged as the only ill of the Nigerian www.businessday.ng

state which once eliminated — by none other than Buhari — must invariably, herald the Eldorado. “Sai Baba” was the populist revolutionary mantra, employed as a metaphor for the populist comeuppance and invoked against perceived oppressive elite hegemony and curated by the partisan media which seized upon the naive gullibility and collective mental astigmatism of the masses in their readiness to be mobilized, that is, turned into an unthinking mob. As ordinary Nigerian folks were incensed by politicians and their collaborating journalists to lurk horns like rabid, irrational and uncalculating he-goats all over the place, the happy beneficiaries were none other than the opportunistic, selfserving political elite and their servant bureaucrats – both united in perfidy and callousness in their joint exploitation of a perverse system that rewards only the crafty, the dubious and the slothful.

Thus the popular consciousness was hijacked by the media imaginaries of the anti-corruption tzar. And so, many came to expect the system to automatically “fall in line” — borrowing from the phraseology of his first coming’s War Against Indiscipline and “one-by-one for line”. It was naively believed that Buhari would just wield the magic wand and corruption and its perpetrators would simply run away.

But the “body language” didn’t seem to work the magic. Disappointingly, fans came to discover like the fox, that the comb of the cock is not a burning flame and that the hero’s feet is just a pack of clay. It took 6 months into his

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‘

Disappointingly, fans came to discover like the fox, that the comb of the cock is not a burning flame and that the hero’s feet is just a pack of clay

terns which the results clearly exposed.

It is also the same reason why it is almost impossible to win elections in many states such as Osun, Oyo, Sokoto, Edo, Anambra and Kano if the governor is fighting with the foremost traditional ruler in the states such as Oni of Ife, Olubadan of Ibadan, Sultan of Sokoto, Oba of Benin, Obi of Onitsha and Emir of Kano.

As Governor Ajimobi might have learnt and Governor Ganduje will likely learn after four years, fighting our social embeddedness might be a short-lived and futile effort. The confusion and contradictions arising from the usage of two legal systems expectedly lead to higher transaction costs of doing business in Nigeria. Two further illustrations will be helpful. In buying a land in most parts of Nigeria, you have to first buy from the villagers and after complying with all the terms and conditions of the informal legal system, you then proceed to the formal government system to get the formal certificate of occupancy after complying also with the terms and conditions of the formal governance system. This is also the same with marriages where you are normally expected to comply with traditional, church/mosque and court requirements before the marriage is deemed as consummated. In the end, one marriage has about 3 or more sub- marriages. As it is land and marriages, so it is in other areas and as such very high cost of governance in all aspects of our human existence as a people and country.

Note: The rest of this article continues in the online edition of Business Day @https:// businessday.ng

Dr. Ngwu is a Senior Lecturer in Strategy, Finance and Risk Management, Lagos Business School and a Member, Expert Network, World Economic Forum. E-mail: fngwu@lbs.edu.ng

regime before constituting a cabinet, whose membership did not generally appease even his core fanatical support base. That was the first taste of what many have come to perceive as his management style — no heat, no action but mostly hypes. Lacking anticipation and imagination, his administration has been notorious for decision delays and reactionary syndrome. For a failing economy literally on life-support, such a reactionary, rather than proactive, mode of governance has not fared well for the system, it has further deepened the state of hopelessness and eroded whatever remnant of integrity he has.

Critics saw his administration as aloof and far removed from the people and the issues of the day. His health challenges did not help matters either, as he had to spend a total of 13 months abroad seeking treatment for undisclosed ailment between 2015 and 2019.

Some go as far as saying that the economy and indeed, the entire Nigerian system, have been under autopilot since he assumed office, with occasional dynamism felt each time he traveled and handed over power to his vice. Some also feel that he either underestimated the enormity of economic challenges it was up against or misread its demands because his policy drive belied the urgency of the moment.

• To be continued next week Dr Adi is a Senior Economics faculty at the Lagos Business School

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Consumers squeezed as tomato prices double Josephine Okojie

C

onsumers of fresh tomatoes are gradually switching to pastes on account of a 100 percent rise in the prices of the produce.

Constant rainfall has reduced the availability of local fresh tomato as the crop does not thrive during the wet season, forcing consumers to buy puree and pastes that are relatively cheaper.

“A basket of tomato I bought last month for N10,000 now goes for N20,000, Mojidat Abuldrasheed, a buyer in Ketu market said.

“I am now switching to tomato paste because I cannot afford spending N700 buying only tomatoes to make stew for my family,” Abuldrasheed said.

Tomato constitutes 18 percent of all vegetables consumed by the Nigerian populace, according to a research by the Agricultural Economics Department of the University of Ibadan.

BusinessDay survey at Mile 12 Market shows that a big basket of fresh tomatoes which went for N10, 000 last month now sells for N20, 000, while a medium-sized basket which went for N7,000 now sells

for N14,000.

A basket of fresh pepper has also risen by 100 percent to N12,000, from N6,000 it sold for a month ago.

A 50-kg Chilli pepper (sombo) costs N9,000 as against N5,000, while of a basket of scotch bonnet pepper

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he Federal Government has signed a Memorandum of Understanding (MoU) with Kiyasa Farm Limited to improve cattle breeding in the country.

Nigeria’s livestock sector is a key part of the country’s quest for food security and prioritising cattle improvement activity will help attain it.

Au d u O gb e h, Mi n i s t e r o f A g r i c u l t u re w h o s i g n e d t h e agreement on behalf of the Federal Government, said in a statement that for over 50 years, Nigeria has never paid enough attention to improve livestock production and this has resulted in farmers and herders clash.

Ogbeh stated that Kiyasa Farm has started planning ahead on the cattle improvement programme in Sokoto and Zamfara states to compliment the Buhari administration’s efforts in growing the Nigerian livestock industry.

He assured the farm that the ministry would provide them with bio-gas production machine and also provide support and assistance whenever the need arises.

Similarly, the government signed another MoU with Cikasoro Farm to improve beef production in the

country.

Ogbeh commended the vision and foresight of Cikasoro Farm Limited for the establishment of a livestock market at Tunga Maje in Abuja to supply wholesome meat to residents, adding that this would minimise the transportation of cattle in trucks from the northern region to the southern region of the country.

He stated that the government would provide the needed infrastructures to aid beef production in the country while providing technical support to the market to ensure it meets international standards.

Mohammed Sambo Bashar, managing director Kiyasa Farm Ltd, said that the farm was engaging on Cattle Breeding Improvement Programme in Sokoto and Zamfara states with the aim of promoting modern beef and dairy industry in both states.

Bashar said that the farm was creating necessary incentives for nomadic herders towards government efforts by providing modern facilities for training and production in new ranch initiative as transition to modern cattle farming.

Also, Abubakar Cika, chief executive officer, Cikasoro Farm disclosed that the objective of establishing the livestock market was to supply wholesome meat to people in Abuja and its environs. www.businessday.ng

during the raining season. The price always increases during rainy season as few farmers plant it during that time,” Mohammed said.

“It is a crop that requires less water despite the fact that it is a vegetable. The prices will further

Obasanjo identifies Nigeria’s agric sector problem

FG signs MoU with Kiyasa Farm to improve cattle breeding, beef production Josephine Okojie

(rodo) costs N13,500 as against N9,000.

Haruna Mohammed, chairmanperishable section, Mile 12 market attributed the sharp rise in prices to seasonality.

“Tomato crop do not do well

increase and would last for the next two months,” he explained.

Nigeria’s inflation rate climbed to 11.37 percent in April from 11.25 percent in March, as food inflation increases, according to the National Bureau of Statistics.

Nigeria is the 13th largest producer of tomato in the world and the second after Egypt in Africa, yet the country is still unable to meet local demand because about 50 percent of tomato produce is wasted due to lack storage facilities, poor handling practice, and poor transportation network across the country.

The situation has resulted in an estimated bill of N16 billion annually for the importation of tomato paste, which makes up for the shortfall in local production.

“Sellers bring in tomato from Ghana, Togo and Benin Republic to sell in Nigeria,” said Abindun Oyelekan, Lagos State president of FADAMA project, and chief executive officer of Farm Fresh Agric Ventures.

According to Oyelekan, countries in the West Africa coast usually complement themselves in the area of vegetables because when there is scarcity of tomato in one country, there is a surplus in others.

…as IITA names road after Ajimobi Remi Feyisipo, Ibadan

F

ormer President Olusegun Obasanjo has identified lack of political will t o i mp l e m e nt va r i ou s policies formulated by successive administrations in the agric sector as the bane of the growth and development of Nigeria’s agriculture.

The former President said that the country had enough policies on paper capable of transforming its agriculture sector to one of the most productive in the world, but for lack of proper implementation.

Obasanjo who spoke during the unveiling of a 10.5km ring road named after the Governor of Oyo State, Abiola Ajimobi, by the International Institute of Tropical Agriculture and the institute’s Agr icultural Transfor mation Building, in Ibadan de cr ie d the huge gap between research institutions and the smallholder farmers in the country.

This, he said, was the only way the existing gap could be closed in order to ensure total agricultural transformation.

While calling for the extension of the benefits of innovations and research breakthroughs to the ordinary farmers commended the efforts of the IITA in agricultural

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research development in Africa.

He however urged the institute not to rest on its laurels.

The former president eulogised the governor for suppor ting IITA through the construction of a per imeter fence w ithin the sprawling complex, which he said was a demonstration of his administration’s support for agricultural development.

In his remarks, Ajimobi said that his support for IITA was in furtherance of his administration’s transformation of the agric sector.

The governor also acknowledged the contributions of the institution t o t h e s t a t e ’s a g r i c u l t u r a l development and the successful implementation of its various policies formulated to enhance the

Olusegun Obasanjo @Businessdayng

growth of the sector.

Ajimobi disclosed that the state had comparative advantage on a w ide arable landmass, concentration of research institutes in Ibadan, clement weather, agriculture-friendly policies of the state and vast population.

In addition to these, he said that the pervading peace and security in the state made it the best place to invest and promote agriculture.

Earlier, Nteranya Sanginga, director-general of IITA, said that the rejuvenation of the institution’s facilities in the country was crucial to the institute’s sustained efforts to transform agriculture in the continent of Africa.

He said that the institute was excited with the exemplary gesture of the state government in supporting infrastructure in an international agricultural research centre.

Sanginga said that the naming of a road after Ajimobi was one of the ways to show the depth of the gratitude of the management of IITA to the governor for his uncommon assistance.

The director-general said that the newly constructed agricultural transformation building would accelerate the pace of research and accommodate the critical human and material resource needed to bring transformation to the agricultural sector.

Wednesday 29 May 2019

BUSINESS DAY

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Springboard trains cocoa farmers on GAP to boost productivity Josephine Okojie

S

pringboard Nigeria has trained over 400 farmers in key cocoa producing South-West states on good agricultural practices (GAP) and seed multiplication techniques to boost production of the commodity in the country.

The two-day training which was held at the Federal College of Agriculture, Akure, entailed series of practical sessions and had players across the cocoa value chain in the South-West region in attendance.

Framers were taught on how to prepare nursery for seedlings, good agricultural practices before and after harvest of cocoa pods and farm management to boost their productivity as well as improve their livelihood.

“Farmers were taught on how to adopt good farming practices to increase their yield per hectare and produce quality cocoa beans to guarantee better income for themselves,” Lawrence Afere, founder and CEO of Springboard Nigeria, said during the training.

“Practical sessions were carried out on our demonstration farms by CRIN,

A cross section of cocoa farmers and other stakeholders at the training workshop organised by Springboard Nigeria in Akure - Ondo State recently.

ADP and the Agricultural State Ministry for the farmers.

We believe with this, their livelihood will be positively impacted on and farmers will be able to cultivate the much- needed new cocoa plantations,” Afere said.

He stated that the cultivation of cocoa was no longer profitable to farmers owing to their inability to increase their yield per hectare which has resulted in the country’s quality and quantity declining.

He stated that on this note, Springboard was organising

the training workshop for cocoa farmers in the region to provide the needed support to help boost their productivity and quality of their cocoa beans as well as support them with finance and other inputs.

“We want to help cocoa farmers easily access finance, inputs and other training supports that will help to increase their production and yield per hectare. Cocoa production in Nigeria is declining and the quality is getting poor and that is why we are doing this workshop so that farmers will be trained,”

KWASU to partner Heart and Capital for cultivation of 500 hectares SIKIRAT SHEHU, Ilorin

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h e Kw a r a S t a t e University, (KWASU), Malete, has declared its readiness to partner with Heart and Capital Nigeria Limited, an indigenous agricultural revolutionary company, for the cultivation of about 500 hectares of land to drive entrepreneurship development in the state.

AbdulRasheed Na’Allah, a professor of Comparative Literature and Vice Chancellor of the institution, stated this after signing a Memorandum of Understanding (MoU), with the co-founders of Heart and Capital Limited, Umar Oba Adelodun and AbdulQauwiy Olododo.

Na’A l l a h n o t e d t h a t the event was historic and important because the founders of the company were alumni of the institution.

According to him, the idea of the founders of the company was to highlight the principle of entrepreneurship development in the school.

The vice-chancellor however urged the company to go beyond plantation and process the produce for

export.

“The problem we have in Nigeria is not about land, but lack of strategies to make our land useful. The act of smartness is to go beyond plantation and process for export to international market.

“It is therefore our goal to promote you to the world because there is no way parents will want their children to come down”, he said.

He, however, urged the company not to disappoint the confidence the university had in the company.

“O u r a i m s i n c e t h e inception is to produce graduates like them, who will not be roaming about the street searching for jobs.

“We have trained and empowered them, we have shown them the world in ways that they must create wealth and must not be servant to anybody and they must create employment.

“We are therefore proud of you because you are already role models on the campus.

Having come together, I want to charge you that idea are central to success, the sky is your limit,” he further said.

The KWASU boss expressed www.businessday.ng

willingness and readiness to encourage former students of the university to come up with genuine ideas that would benefit the country.

Earlier, Umar Adelodun, co-founder of the company, stated that the university would provide the land while the firm would do the cultivation.

According to him, the firm was to grow economic and complimentary tree crops such as cashew and others.

He commended the vicechancellor for his leadership role, adding that the firm would forever be grateful for trust and confidence that the university had in them.

In his submission, AbdulQauwiy Olododo, who disclosed that the project could provide over 200 direct jobs, stated that it would contribute immensely to the state economy.

While expressing the readiness of the firm to contribute immensely to the economic growth of the country, he pointed out that it would reduce the alarming rate of unemployment and youth restiveness in the society.

he said.

He added that cocoa farmers from over 20 communities from Ondo and Ekiti states were present at the training and that Springboard would not just stop at the training but would follow up on the farmers present as well as monitor their farming activities.

Speaking on the changing climate pattern, he called on farmers to adopt tree planting measures to mitigate the impact of climate change on their cocoa plantations.

Kayode Adejobi, from the

agronomy section, Cocoa Research Institute of Nigeria (CRIN), said that Nigeria would only increase its cocoa production also regain its status of number two in the global cocoa rakings when farmers start replacing old cocoa trees with improved hybrid varieties.

Adejobi stated that cocoa f a r m e r s w e re t h e m o s t important player in the value chain that must get things right to grow the Nigerian cocoa industry.

He added that it was the cocoa farmers that needed to get it right because they had the skills and the knowledge they gained from the training.

He stated that cocoa some farmers in the country do not currently have access to improved hybrid varieties such as CRIN Tc -1 to CRIN Tc-8 owing to inadequate information, and highlighted the importance of the training on nurs er y preparation techniques with the right hybrid varieties.

He called on farmers to buy cocoa pods from CRIN to use in raising their nurseries for seedlings, saying that the research institute had new hybrid varieties for them.

Speaking on what the Ondo state government was doing to support cocoa farmers in the

state, Omogunwa M.O, project manager – tree crops unit, representing Adegboyega Adefarati, Ondo State commissioner of Agriculture, said the state was ensuring that farmers had access to improved seed varieties through the department of tree crop at the ministry.

She stated that extension workers were also provided for cocoa farmers in the state to train them on new technologies that would boost their productivity.

S e g u n O j o, a c o c o a farmer from Ekiti who was a participant at the training, appreciated Springboard for the capacity building workshop for farmers.

Ojo said he would ensure he carried out all he had learnt from the organisers on his farm while calling on the government to support farmers with cheap finance and access to land to expand their production areas.

Springboard Nigeria is a network of cocoa, rice and plantain farmers in Nigeria with over 3000 members.

The goal of the organisation is to empower smallholder farmers in Nigeria to become prosperous and earn sustainable livelihoods and reach a target of 100,000 smallholder farmers in Nigeria.

FG donates 120 tilling machines to farmers in Akpabuyo, Bakassi MIKE ABANG, Calabar

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n line with the agricultural policy of the Federal Government, Usani Uguru Usani, minister of Niger Delta affairs, recently flagged of the commissioning and distribution of about 120 habitto tilling machines to farmers in Akpabuyo Local Government Area of Cross River State.

The minister, who also distributed 96 sewing machines, five laptops and 77 wrappers to women, said the gesture was in tune with the Social Investment programme of the Federal Government and advised the beneficiaries to make good use of the opportunity provided by the government. “ The mission of the

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Ministr y is to promote sustainable development, peace and economic prosperity in the Niger Delta region, which can only be achieved with promotion of an enabling environment for industrialization, by adding value to agricultural commodities, enhancing the capacities of farmers, generation of employment, increase farmers’ income and sustainable food security in the region,” Usanii said.

“Nigeria is currently the highest producer of cassava in the world and this huge production in the country may be wasted if not properly processed and utilised for economic prosperity,” he said.

Usani noted that the choice of Akpabuyo

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community in the distribution of tilling machines was in recognition of the people’s agrarian nature and the need to ensure that farming produce was hygienically processed for both local and export consumptions.

Usani also during the day commissioned 40 units of 2-room and 3-room bungalow housing estate at Bakassi Local Government develop by the ministry and initiated during the administration of former President Goodluck Jonathan that was laid siege on by Bakassi militants.

I n h i s re m a r k s, t h e paramount ruler of Bakassi, Etim Okon Edet, thanked the ministry of Niger Delta Affairs for commissioning and allocating the houses to the less-privileged ones, but noted that the gesture was a palliative measure and advised the Federal Government to do a proper resettlement programme for the people of Bakassi, who were ask to leave their ancestral homes.

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17

Nigerian Fintech app ‘Switch’ launches, to eliminate transaction fee on transfers

COMPANY NEWS ANALYSIS INSIGHT

Pg. 18

CONSUMER GOODS

Flour Mill hits a decade low at N13.75 as investors show apathy ISRAEL ODUBOLA

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ha re s o f Fl ou r Mill of Nigeria Plc (FMN) tumbled to its lowest level at N13.75 since July 2009 on Monday, buoyed by sell pressure as investors show disinterest in the stock.

FMN’s bearish streak began late-March this year, and shed 0.36 percent after Monday’s trading, down 68 percent since the yearto-date.

The miller underperforms the benchmark index and consumer goods index that have returned negative 3.9 percent and 16.2 percent respectively so far in the current year.

Investors’ apathy toward the stock is driven by weak market sentiments and unimpressive earnings scorecards of the firm.

General sentiment towards equity market is weak as investors are yet to see economic-stimulating poli-

cies that would resuscitate the bourse.

Analysts maintained that the slow growth of wider economy and absence of key reforms that centers on unifying the multiple exchange rate system, developing infrastructures, lowering cost of credit, wanes investors’ confidence towards the equity market.

Logistic turbulences posed by Apapa gridlock, decrepit infrastructure and harsh operating conditions continue to torture the miller reflective in its latest financial scorecards.

A snapshot of its earnings figure revealed that the food products maker’s top-line shed 6 percent to N400.6 billion in the first nine months of 2018, relative to N427.5 billion realized in the previous corresponding period.

This in addition with elevated operational expenses adversely affected bottom-line as net income

FMN hits 10-year low

dipped nearly by half to N7.9 billion.

Consequently, profit margin of the agro-allied player slowed to 1.97 percent in the review period, 1.12 percentage points lower than 3.08 percent a year before.

This implies that FMN retained N20 as profit from

every thousand naira generated as revenue, relative to N31 one year back.

However, given the presidency’s directive towards clearing the country’s premier port city, Apapa, the firm might possibly see improvement in top and bottom-line in 2019.

FMN announced plans

three months ago to transfer existing assets in Golden Penny Fertilizer to its sole agro-allied segment, Golden Fertilizer Company Limited to boost efficiency and market expansion.

The move was approved at a court-ordered dated February 20, 2019.

FMN trades at a price-

to-book ratio of 0.39x, compared with Dangote flour (2.6x) and Northern Nigerian Flour Mill (0.76x), implying that the stock is currently undervalued.

The company offers flour, noodles, pastas, oil & spreads, and sugar, as well as feeds, fertilizers, and logistics and support services.

Banking

Unity Bank gains most in 3 months after clarifying N7bn allegation DAVID IBIDAPO

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nvestors on the Nigerian stock exchange (NSE) market re sponded positively to Unity bank’s clarification on N7 billion allegations levy against it by the special presidential investigation panel (SPIPRPP).

According to a report released on the NSE, the bank stated it is false and unfounded.

The mid-tier bank on Monday recorded its biggest gain in the last 3 months after stock price rallied 9.23 percent to N0.71, increasing shareholders value by N70.14 million to N8.29 billion.

This was upon the bank’s statement released on the NSE refuting allegations by SPIPRPP which saw the price of stock pick up after an early trade selloff witnessed on the stock.

In September 2018, a team of the SPIPRPP visited the bank as part of its special investigation

into banking transactions of the government for the period 2009 to 2018.

As stated by Unity bank, the panel requested the bank to provide certain information and solely relied on the information provided for the “special” investigation.

“Throughout the review, the panel refused to invite the MDAs to any of the meetings to corroborate the bank’s records neither was any adhoc investigative process initiated to validate the SPIPRPP findings,” Unity bank explained.

According to SPRPRPP, the N7 billion represents the sum of $15,561,769.99 and N1,488,455,810.90, being excess and arbitrary charges on accounts of some agencies of government by the bank before the institution of Treasury Single Account (TSA).

The statement said the agencies from whose accounts the excess and arbitrary charges had been deducted by the

bank included the Nigerian Ports Authority, the Nigerian National Petroleum Corporation, the Nigeria Customs Service, the Kaduna Refinery and the Nigerian Maritime Administration and Safety Agency.

The panel in an ear-

lier letter requested the bank to accept culpability and pay off a certain sum deemed outstanding which the bank objected and insisted on completing the reconciliation exercise on the basis that the claims presented against the bank is un-

founded.

“It is therefore surprising for the SPIPRPP to do volt face and issue a statement alleging sabotage when it abandoned its sitting and investigation whilst reconciliation was still on-going with the bank,” Unity bank stated.

Analysis of the yearto-date performance of Unity bank, as shown that the value of shareholder’s investments had been eroded by 33.6 percent.

Shareholders have therefore lost a whooping sum of N4.2 billion in market value.

R-L: Tobechukwu Okigbo, Head of Corporate Relations, MTN Nigeria Communications Plc; Ferdi Moolman, CEO MTN Nigeria Communications Pl; Olabiyi Durojaiye, chairman governing board of the NCC, and a guest at the maiden Nigerian Telecom Leadership Summit in Lagos.

Editor: LOLADE AKINMURELE (lolade.akinmurele@businessdayonline.com) Graphics: David Ogar

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Business Event

TECHNOLOGY

Nigerian Fintech app ‘Switch’ launches, to eliminate transaction fee on transfers IFEOMA OKEKE

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witch, a revolutionary new app has launched to offer Nigerians at home, in the U.K and the U.S a single point of entry to the Nigerian financial market which currently doesn’t exist.

Designed to meet the unique financial needs of the Nigerian community, Switch is a Naira savings account (with 10percent interest on savings), providing access to a range of new lending, investment and insurance opportunities in Nigeria, with better rates.

The free and easy-to-use app is also the only facilitator of completely free money transfers between the UK and Nigeria.

According to The World Bank, globally, Nigerians living abroad sent a total of 22 billion dollars home in 2017, representing a 16.4percent increase from the amount repatriated in 2016.

With over 200,000 Nigerian-born UK residents, Switch is serving a clear need and is democratising the remit-

tance industry for them.

Switch is led by Seun Runsewe, a 28-year-old woman who is Africa’s youngest female banking CEO. Speaking on the inspiration behind Switch, Seun Runsewe, founder and CEO at Switch comments: “When I was looking for lending and investment options in Nigeria to provide for my son’s future education, I couldn’t see anything on the market that provided the level of service, flexibility and security I wanted for my family.

“I created Switch to fill this gap in Nigeria, and for the first time to give the diaspora community around the world access to the Nigerian market through one single entry point, so they can be financially connected with and invested in the motherland.”

The platform aggregates a variety of Nigerian financial products from reputable companies to provide unparalleled choice and better rates. The product range includes loans, health insurance, stocks, bonds, real

estate and agriculture investment opportunities in Nigeria with up to 35 percent interest.

Partners providing products to the Switch app are: Vetiva Capital, PiggyBank, Fint Technologies, Reliance HMO, i-Invest, Doubble and Pipit Global.

In addition, Switch gives its users control over their finances with budgeting and savings tools. Financial forecasting features and analytics on income, expenses and investments help Switch customers manage their financial lifestyles and build wealth over time.

As of today, Switch is available to customers in the UK, the US, as well as the local Nigerian market. Powered by NIBSS and Nigerian Online Payment Gateways, users can fund their Switch accounts from bank cards issued anywhere in the world (diaspora) or via international cash deposits, free for the first six months and three percent thereafter. Also, transfers can be made to Nigerian bank accounts for N25 (cheaper compared to N50 charge offered by other banks).

L-R: Omobolande Victor- Laniyan, head of sustainability, Access Bank Plc presenting 2019 Brandcom Young Advertising Agency of the Year awards to Esosa Osagiede, creative lead at Leo Burnett Lagos while Joshua Ajayi, publisher of Brand Communicator/Convener of Brandcomfest looks on at award dinner in Lagos.

MEDIA

Leo Burnett Lagos bags ‘Young Advertising Agency of the Year’ award DANIEL OBI

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eo Burnett Lagos, one of Nigeria’s fastest growing agencies based in Africa’s most vibrant city, Lagos has clinched a coveted the Young Advertising Agency of The Year 2019 award at the recent Brandcom festival in Lagos.

The creative agency, which is driven by the belief that creativity has the power to transform human behavior, overcame other young and vibrant advertising agencies to clinch the prestigious award.

Speaking after receiving the award, Esosa Osagiede, Creative Lead at Leo Burnett Lagos said the agency has gradually carved a niche for itself, by winning some of these competitive laurels even though it is still one of the youngest in the industry.

According to her, when Leo Burnett Lagos came on the

scene it came with new thinking; the HUMANKIND philosophy; “with this in our focus, we set out to not just create campaigns but transform human behavior.

Therefore we have worked on campaigns that have remained memorable with some of these campaigns still running. We might remember the KONGA Christmas campaign, Heritage Bank’s New Kings and Queens of Africa, Maggi Naija Pot campaign, Crusader Sterling Pension MVP and Santa’s Last Christmas, Custodian Insurance ‘TRUST’ campaign among others. These campaigns were conceived to add value to these lifestyle brands.

Asked about the KONGA campaign, she explained the thinking behind that campaign “At the time the Konga campaign was created, the online retail platforms were just growing and then we needed to do something

to make Konga become the most relevant and most trusted retail platform hence all the interesting ads campaign that followed.”

On the future of the agency, the Creative Lead believes that Leo Burnett Lagos future in Nigeria and sub-Saharan Africa is extremely bright. Osagiede said “Every client that comes on board is always eager to do things differently. Some recent clients are Amstel Malta with the recently launched Amstel Malt campaign “We’ve got balls”, Leadway Assurance with the “No more see finish” campaign that caused quite a stir, Page Financials, and a lot more others on the way,” borrowing from what the organizers have said, “real work should be rewarded and awards should not go to the highest bidder”. Leo Burnett Lagos believes strongly that campaigns should not just impact on businesses but also on the consumers.

L-R: Ken Zhao Wenjum, director partner, business development enterprise, business group Nigeria, Huawei; Aderemi Adejumo, chief technical officer, Commercio Cloud Computing Limited, and Cai Qong, IT solution director, Huawei, during a partnership between the two company’s on cloud computing in Lagos.

L-R: Kennedy Ighodaro, executive director, DLM Advisory Partners; Ademola Seriki, chairman, Primero Transport Services Limited, and Fola Tinubu, managing director, Primero Transport Services Limited, at the Signing Ceremony of the N16.50Billion Series 1 Medium Term Note transaction under theN100Biilion Securitisation Programme sponsored by the company, in Lagos.

OIL & GAS

Aiteo swells Bayelsa Education Development Fund with N500m SAMUEL ESE

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iteo Eastern Exploration and Production Company has pledged N0.5 billion to the Bayelsa Education Development Trust Fund (BEDTF) at the fund raising ceremony in Yenagoa at the weekend.

Managing Director, Victor Okoronkwo pledged the sum on behalf of the Founder of Aiteo Group, Benedict Peters while bemoaning frequent vandalisation of the Nembe Creek Trunkline (NCTL) linking its oilfields in Bayelsa to Bonny Export Terminal.

Speaking at the Chief DSP Alamieyeseigha Banquet Hall, venue of the fund raising, he stated that the donation was an indication that Aiteo shared the aspirations

of the state government in seeking to use education to fight youth restiveness.

Okoronkwo expressed optimism at the pledge of Governor Henry Seriake Dickson to provide an enabling environment for the operations of the indigenously oil firm in the state.

His words: “I wish to state here that our business as operators of the OML 29 has not been stable; it has been up and down and we are pleaser by the assurances given by the Bayelsa government.

“We are being hosted by Bayelsa and we see Bayelsa as home: we are here to stay and we want the people to understand that oil and gas investments are for the long term.”

Earlier, Bayelsa State Govwww.businessday.ng

ernor, Henry Seriake Dickson said that his administration had invested about N80 billion in the education sector from 2012 till date and initiated the fund in 2017 with a view to sustaining it beyond his tenure in 2020.

Dickson explained that the state government has dedicated 10 percent of its monthly internally generated revenue to the BEDTF in addition to monthly contributions by all public servants in the state.

BEDTF chairman, Turner Isoun, a former Minister of Science and Technology had disclosed that the fund had over N1.0 billion under its management and it is being run in a transparent manner with its books open to external auditing.

L-R: Juliana Owolabi, care, House of Mercy Children Home, Egbeda Lagos; Lawrence Okoye, business manager, Akowonjo Business Unit, Ikeja Electric; Mercy Ariyukwu, matron, House of Mercy Children Home Egbeda, and Titilayo Adekeye, brand and event manager, Ikeja Electric during presentation of gift to Orphanage Home Egbeda Lagos to mark the children’s day.

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MARITIMEBUSINESS Shipping

Logistics

Maritime e-Commerce

NPA and the move to rest Apapa problem for ease of cargo evacuation amaka Anagor-Ewuzie

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ecently, evacuation of cargo in and out of the nation’s major seaports in Lagos, Apapa and Tin-Can, became very tough for cargo owners due to issues with persistent traffic gridlock along the routes leading to the ports.

This was largely due to the bad state of roads to Apapa and uncontrollable parking of container carrying trucks and trailers, queuing on the roads and bridges to Apapa, just to have access to the ports and petroleum jetties to lift laden containers and petroleum products.

Consequently, the Office of the Vice President, issued a two-week ultimatum to truckers to vacate Apapa roads and bridges with the aim of restoring law and order in Apapa and its environs. The Nigerian Ports Authority (NPA), Nigerian Shippers Council (NSC) and other agencies of government in the port, were mandated to implement the order with the NPA being the lead agency.

The Presidential order, which was issued middle of last week, came three weeks after the NPA started implementing new measures aimed at resting the gridlock problem bedevilling movement of people and cargo in and out of Apapa.

First, the new measures started with the NPA converting and opening the Lilypond Container Terminal to Truck Transit Park, which is presently serving as temporary parking spaces for

Hadiza Bala Usman (r), managing director, Nigerian Ports Authority (NPA), and Boboye Oyeyemi, corps marshal, Federal Road Safety Corps (FRSC), who paid a courtesy visit to the MD at the NPA Corporate Headquarters in Lagos, recently.

trucks coming to both Apapa and Tin-Can Island Ports.

The Lilypond terminal, which was made available to service trucks carrying containers that have business to do in Apapa port, was opened for business on Friday May 3rd, 2019 while Tin-Can Second Gate Trailer Park, which was billed to be opened the same time to service trucks going to Tin-Can Island Port for business, was shifted to mid-June as the Federal Ministry of Works, Power and Housing, is yet to put finishing touches to the basic facilities needed for a transit park.

“We have setback regarding the Tin-Can Truck Park because the Federal Ministry of Works and Housing requested the NPA to give them till the first two weeks in June to put amenities like lightening, security facilities, and toilets in place.

However, we are using Lilypond to manage traffic into

Apapa and Tin-Can Island Port,” said Adams Jatto, general manager, Corporate and Strategic Communication of the NPA. Meanwhile, at the opening of these truck transit parks, the NPA promised to deploy its towing vans with the assistance of LASTMA officials, to towing any defaulting trucks found parking on the roads and bridges leading to the ports in Lagos.

In view of this, the NPA, which promised truckers that the parks would be used free without charges particularly at the interim, said that a fine of N20,000 surcharge would be imposed on any defaulting trucks.

At the opening of Lilypond Park, it was discovered that thousands of empty and export containers have so far transited to the port through the park since it was opened on Friday.

Also, the NPA sends trucks in batches to the road

from the terminal in line with what the terminal operators want while majority of the container carrying trucks parked along the Ijora Bridge were cleared off the highway, thus allowing some smooth ride into Apapa.

The opening of the truck parks will enable the NPA to implement an integrated call-up system to deal with the emergency traffic situation along Apapa corridor, said Sekonte Davis, executive director, Marine and Operations of the NPA, at a sensitisation workshop on traffic management/use of Lilypond and Tin-Can Island Truck Terminals held in Lagos recently.

According to him, the new measures would be implemented in collaboration with the shipping companies’ holding-bays, adding that the new call-up system would only be generated and managed by the NPA. “Trucks without empty

containers would not be allowed access into the ports areas. With the new measures, trucks that want to pick laden containers must first go to the shipping companies’ holding-bays to pick empty container meant for the terminal from where the truck is going to pick laden container,” he said.

Davis, who said that the NPA would prioritise exports and containers of perishable goods that have full documentation, pointed out that such containers would be allowed into the parks and would be given maximum staying period of 48hours.

He assured truckers that military and other uniformed personnel would soon be disbanded from mounting checkpoints on the roads while a new taskforce would be set up by the NPA to enforce the new measures.

Ihenacho Ebubeogu, general manager security of the NPA, said the traffic in and out of Apapa would be managed by the LASTMA, police, FRSC and the NPA security officials.

“Henceforth, the NPA forbids trucks and trailers to park on the bridges to Apapa. And the new trailer parks will not be opened to trucks that are not in the callup system because the parks will serve as transit parks and not permanent parking spaces,” he said.

Bu s i n e s s Day u n d e rstands that the new presidential order issued to consolidate the NPA’s effort in managing the Apapa problem, no doubt, contributed to the low volume and low cargo throughput being recorded at the ports.

Reacting, Remi Ogung-

bemi, chairman, Association of Maritime Truck Owners (AMATO), who commended the NPA for the new measures, described them as workable solutions to Apapa gridlock.

He assured the NPA of the commitment and compliance of members of his association towards the workability of the new measures.

“It is even an aberration for the government to use military personnel to be controlling traffic. Military personnel cannot be the solution to solving Apapa gridlock. One of the solutions was converting Lilypond into transit part, which the NPA has done and it can accommodate about 1,000 trucks,” he said.

In addition, the management of the NPA recently signed a Memorandum of Understanding (MOU) with APM Capital to begin the use of barges for evacuation of containers from the ports in Apapa to Epe. Speaking when she hosted a team from AP Moller Capital in her office in Lagos on, Hadiza Bala Usman, managing director of the NPA, said the problem of Apapa access road seemed intractable because of decade-long decadence in infrastructure, which was caused by multiplicity of problems.

She said the NPA would continue to consult with stakeholders across all levels in area of providing the needed infrastructure, since this was crucial for sustainable ports operations.

She however assured that NPA would build on the synergies that exist with stakeholders to ensure the ease of doing business at ports.

all of us to think about safety and to actively discuss these issues in order to reach the next level,” Mac-Arthur said.

The event, which highlighted the company’s safety practices, shared learning with stakeholders and new safety targets in the coming year, also featured safety quiz, safety puzzle, safety games all emphasising teamwork and safe system of work, drama, team dances, fitness and health checks, and occupational H&S speech on “Making Safe Choices by and OH&S professional, as well as short

occupational talk.

LADOL is building the world’s first Sustainable Industrial Special Economic Zone (SSEZ), using the UN’s Sustainable Development Goals (SDGs). In 2017, LADOL disrupted the local oil and gas market, halving the costs of local support, and creating thousands of local jobs.

Today, the company is focused on attracting and servicing a range of non-oil and gas companies, in sectors ranging from technology to agriculture to create a circular economy within the Zone.

LADOL puts policies in place to ensure quality, safety of staff - Jadesimi amaka Anagor-Ewuzie

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etermined to ensure quality and safety of staff and clients, the Lagos Deep Offshore Logistics Base (LADOL), Nigeria’s first 100 percent private and indigenous industrial Free Zone, said it had put policies, procedures and work instructions in place to promote safety at work place.

“Safety and quality is at the heart of best business practices. This week is a celebration of our many

achievements, including becoming the first company in West and North Africa to be ISO 45001-certified,” Amy Jadesimi, managing director of LADOL, said at the company’s event to mark this year’s safety week.

She described the week as a call to action as LADOL continuously improves to reach greater heights each year.

Jide Jadesimi, LADOL’s executive director, Business Development, who signed the safety commitment banner, said at the opening day of the event that safety remained at the core of the www.businessday.ng

company’s operations.

“Because of the importance of safe practice in the company, other personal engagements have to be put on hold. I want everyone to see themselves as safety champions. LADOL has reached a stage where it has to meet and exceed international standards, due to the hard work and talent of LADOL’s staff and the support of our stakeholders,” he said.

Obi Mac-Arthur, LADOL’s SHEQ manager, said high safety culture is the cheapest and most effective insurance policy, stressing that safety is

not a hobby but a living.

According to him, the choice of the theme for this year’s safety week “Making Safe Choices,” was born out of the need to continuously inculcate positive safety culture and to ensure zero risk tolerance in all operations. “ This year ’s event is unique as it coincides with the launch of “LADOL’s Employee Continuous learning Centre. One of the core truths about safety is that it is a job not just for people who have “safety” in their title, but for everyone, everywhere, every day. It takes

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TRANSPORTATION Motoring

RailBusiness

ModernTravel

Roads

Motoring

Stallion’s new KYC SPV boosts commerce start-ups MIKE OCHONMA Transport Editor

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oad users in Lagos are in high expectations of improved traffic control and reduced journey time as Babajide Sanwo-Olu takes over as the new executive governor of the state today.

A cross section of private car owners and commercial vehicle operators who spoke to BusinessDay on Monday said they are optimistic that, there will be a change in the area of the state’s traffic management structure within the state which they lamented has gone from bad to worst in the last four years.

Among other demands, the motorists are hopeful that, there will be a complete re-orientation in the conduct and attitude of officials of the Lagos State Traffic Management Authority (LASTMA), whom

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tart-up s in Nigeria’s commercial activities are in for good returns on their investment following the introduction of a range of affordably priced KY5 Mini and KY10 Light Commercial Vehicles (LCVs) to cater to the growing demand for functional one-ton and two-ton payload vehicles by the commercial vehicle division of Stallion Motors These categories of vehicles, especially the renowned brands are currently priced beyond the limits of start-ups and emerging commerce in the small and medium enterprises’ sector.

Anjan Aditya, head of sales and marketing of Stallion Motors Commercial Vehicle division, said that, the introduction of the low-priced KY5 Mini and KY10 branded cargo trucks is expected to stem the tide of incessant downtime, profit losses and accidents, resulting from the application of decrepit and unserviceable vehicles by emerging commercial ventures in the country, said.

Aditya explained that the company had in the wake of numerous challenges experienced by emerging enterprises conducted independent survey of businesses in Nigeria with recourse to their most dreaded encounters.

“We discovered forthwith that majority of emerging businesses including some renowned enterprises are either besieged by wanton inability to source affordably priced functional light commercial vehicles or are constrained to buying unserviceable decrepit vehicles that are prone to accidents, incessant downtime and consequential loss of profits,” Aditya added.

Designed and manufactured in China by Chongqing Changan Kuayue Automobile Co. Limited popularly known as KYC, Stallion says, the payload commercial vehicles are being assembled locally by Nigerians at the franchisee facility in Lagos. Both the KY5 and KY10 are functional and resilient for start-ups,

Lagosians expect improved traffic as Sanwo-Olu takes over today as governor

especially small and medium scale enterprises.

Also adding that these specialpurpose light commercial vehicles are here to stay, Aditya assured the utility vehicles will help businesses recoup their losses and reposition for a better and profitable future.

Powered by 1.5 liter /47kw AFII – 05(Euro V) petrol engine, the single cabin KY5 Mini is capable of producing 64bhp of power and maximum torque of 91Nm/rpm. It is also mated with a six-speed manual transmission gear system delivering maximum efficiency and optimum performance.

KY5 is designed tough and robust to transcend difficult terrains with specially mounted independent front MacPherson suspension and rear Leaf Spring suspensions.

This is in addition to the pinion and rack electric power steering, which makes turning and parking in extremely constricted traffic and street corners an easy task.

The 2600mm length, 1450mm width and 360mm height cargo di-

mension is designed to allow seamless loading from either sides of the vehicle with a palpable wheel base of 2700mm.

Safety is also not compromised as every freight is guaranteed by a needful 165/70R14 single rear tyre structure, efficient front disc brakes and rear drum brakes that respond practically to any road condition.

The clutch engages the Diaphragm Spring type described as one of the best in the light commercial vehicle segment, and its minimum ground clearance of 150mm is unprecedented just as its quintessential average fuel consumption efficiency of ≤ 7.6 liters/ 100km (@ speed 50km/h).

Designed bigger and sturdier, the single cabin KY10 on the other hand is a superior version of the MINI series but fitted with larger internal cargo dimension 3400mm length, 1680mm width and 380mm in height.

Its wheel base of 3400mm and gross weight of 3510 is comparable to some renowned brands of 2.7L

freighters, which explains why both the front and rear suspensions are fortified with Leaf Springs alignment.

The KY10 is powered by a tougher 1.5liter/82kw DK15–10 (Euro V) engine, capable of churning out 112bhp and maximum torque of 143Nm/rpm. These powerful engines are supported by a six-speed manual transmission gear system and have a differential gear ratio of 5.375.

Unlike the KY5, the KY10 is fitted with 185R14LT double rear tyres, with 175mm minimum ground clearance; robust front disk and rear drum brake outline and fuel consumption efficiency of ≤ 8.9 liters/ 100km (@ speed 50km/h).

Currently exported in 50 countries and regions in South America, Europe, Southeast Asia and Africa, KYC is a joint venture enterprise of Kuayue Group and district government of China as well as a subsidiary of Changan Automobile Group thatspecializes in building commercial vehicles.

they say have fallen below expectations in their quality of service delivery and productivity.

Some of misconducts of the traffic officials ranges from incessant and selective harassment of private car owners while ignoring the menace of driving against the traffic by the commercial bus drivers and in many instances without valid vehicle particulars and drivers license to jumping into the vehicles of contravened vehicles.

Investigations also reveal that, some of the LASTMA zones and unit commands carry out their day to day traffic control without the necessary equipments such as towing vehicles, communication equipment and qualified personnel.

Jaguar Land Rover posts heavy annual losses

J

aguar Land Rover (JLR) has recorded an annual loss of £3.6 billion. The pre-tax loss for the financial year that ended in March did not only reflect a £3.1 billion writedown of the value of the business in the final quarter of last year, but also showed the ongoing impact of falling sales in China and continued uncertainty over Brexit. The firm’s annual revenue of £24.2 billion was down £1.2 billion year on year.

Without the one-off write-down, Jaguar Land Rover’s annual pre-tax loss was £358 million. While annnual sales increased by 8.4 percent in the United Kingdom and 8.1 percent in North America, the sharp decline in China meant that its overall sales of 578,915 vehicles was a year-onyear decline of 5.8%.

JLR posted a £269 million pretax profit in the final quarter of the financial year covering JanuaryMarch 2019, although this was www.businessday.ng

reduced to £120 million after redundancy costs, part of its ongoing transformation programme, were taken into account. The firm noted

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that, it retained £3.8 billion of cash.

Reacting on the development, Ralf Speth, CEO of JLR says an ongoing cost-saving programme will transform it into a “leaner and fitter” company for the future.

He said that, a restructuring programme has already resulted in £1.25 billion of efficiencies, and made the firm “one of the first companies in its sector to address the multiple headwinds simultaneously sweeping the automotive industry”.

He added: “We are taking concerted action to reduce complexity and to transform our business through cost and cash flow improvements.

“Jaguar Land Rover is focused on the future as we overcome the structural and cyclical issues that @Businessdayng

impacted our results in the past financial year. We will go forward as a transformed company that is leaner and fitter, building on the sustained investment of recent years in new products and the autonomous, connected, electric and shared technologies that will drive future demand.”

The financial results come amid ongoing speculation that Jaguar Land Rover’s owners, Tata Motors, are considering selling the firm to the PSA Group.

In a conference call, Tata’s financial chief, PB Balaji, again denied it was considering selling Jaguar Land Rover, telling reporters “there is no truth to these rumours. We do not comment on speculation.”

Wednesday 29 May 2019

BUSINESS DAY

23

TRANSPORTATION Motoring

RailBusiness

ModernTravel

Roads

ModernTravel

Rail

Nigeria dithers as Nairobi airport-rail link opens 2021

W Bombardier Aerospace sees significant potential in Africa MIKE OCHONMA Transport Editor

C

anadian aircraft manufacturer Bombardier Aerospace, part of the Bombardier group, sees a lot of promise in the African market. Bombardier’s commercial aircraft range comprises the twin-turboprop Q400 – which can carry 90 passengers, with a range of 1 100 nautical miles (nm) – equivalent to 2 037 km – at a maximum cruising speed of 360 knots (almost 667 km/h) and has a maximum takeoff weight of 30 481 kg – and the CRJ twin-engined regional jet family. (Bombardier invented the regional jet concept.)

The members of the CRJ family, which are currently available as new aircraft, are the 50-passenger CRJ550, the 78-passenger CRJ700, the 90-passenger CRJ900 and the 104-passenger CRJ1000. All these aircraft have a maximum cruise speed of Mach 0.825 (Mach being the speed of sound, which varies with altitude.)

Their maximum takeoff weight varies from 34 019 kg (the CRJ550

and CRJ700) to 41 640 kg (CRJ1000), while their ranges vary from the 1 400 nm (2 593 km) for the CRJ700 to the 2 200 nm (4 075 km) for the CRJ550.

Earlier versions of the family, the CRJ100 and CRJ200, are available on the second-hand market.

Arnaud Brun-Khoobeelass, the company’s airline marketing manager Middle East and Africa, said that Africa is a very dynamic market, for sure. It is a market that offers lots of potential for growth, especially for regional aircraft adding that, he continent has lots of connectivity issues, particularly regional connectivity.

According to the airline official, “Some African operators are obtaining second-hand CRJs and Q400s.

Both aircraft are very popular on the second-hand market, so few are readily available. But demand in Africa for new CRJs and Q400s is very promising’’.

He declared that, the era of African operators acquiring old, secondhand aircraft is clearly ending. The market is much more competitive and African travellers are demanding an increased quality of service

across the continent, and this is best provided by new aircraft.”

This applies to regional aircraft, both jet and turboprop, as well.

The market dynamics are driving a renewed interest in regional aircraft.

Regional jets can provide high-quality and fast services, with ranges great enough to allow international flights within regions, at significantly lower costs to the operator than is possible with larger single-aisle airliners. And, because of their smaller size, regional jets enjoy higher load factors, which is a key factor in airline profitability.

“We are currently busy with a number of serious negotiations with African operators about selling them CRJs,” reports Brun-Khoobeelass.

“The interest is from all over Africa – it is not concentrated in any one region.

South African State-owned operator SA Express currently operates an all-Bombardier fleet, comprised of both Q400s and CRJs. In all, some 60 African operators fly more than 230 Bombardier aircraft. The company is currently fulfilling an order from Uganda Airlines for four CRJ900s, two of which have been delivered so far.

hile Nigeria foot-drags on l inking its airports with railway systems and the issue that is of very strategic importance for economic being either grossly undermined, over politicised and downplayed by the authorities , the government ok Kenya is walking the talk with the proposed linkage of the rail tracks between central Nairobi and Jomo Kenyatta International Airport.

President Uhuru Kenyatta made the commitment to completing a commuter rail connection to east Africa’s largest airport after touring Nairobi Central station with French president Emanuel Marcon, who was Kenya for a state visit two months ago.

Uhuru Kenyatta had announced on March 13 that a rail link between central Nairobi and Jomo Kenyatta International Airport (JKIA) will be completed in 2021.

Kenyatta Macron says France and Kenya have signed deals worth €3bn during his visit and Kenyatta says the airport rail link will be completed in partnership with a French consortium.

“A properly functioning urban commuter rail system and Bus Rapid Transit system in our cities, particularly here in Nairobi, will

completely transform the lives of millions of urban dwellers as well as make Nairobi a wonderful experience for tourists and visitors,” Kenyatta says. “Our target is to have 500,000 urban commuters moving freely daily within the next 12 months. This number will grow to over a million commuters daily within the next five years.”

Kenya’s Ministry of Transport recently concluded an agreement to acquire 11 metre-gauge DMUs from Mallorca to increase capacity on the Nairobi commuter rail network.

Last year September, the Abuja Rail Mass Transit commenced commercial train services on the Airport-Idu-Central Area metro line, two months after the Federal Capital Territory Administration (FCTA) offered free services to passengers travelling from the Idu airport station take-off point to the city centre following the inauguration of the metro line by President Muhammadu Buhari in July.

Roads

Data is crucial to traffic management - FRSC C ollection and analysis of reliable data is very important in traffic management. This assertion was made by the Zonal Commanding Officer (ZCO), FRSC Zone RS10, comprising Sokoto, Kebbi and Zamfara States, Kayode Olagunju’ an assistant corps marshal (ACM), FRSC. He stated this while addressing key stakeholders that form the multiple data sources on Road Traffic Crashes (RTC) in the zone. He called on the agencies involved in RTC management comprising the FRSC, the Police, hospital management, vehicle inspection officers, state agencies on traffic and the National Bureau of Statistics (NBS) to ensure proper documentation of every road crash detailing vehicles and persons involved as well as casualty statuses.

According to Aliyu Ma’aji, the Public Education Officer, assistant corps commande, Olagunju enjoined all the participants at the technical workshop for the planning research and statistics officers of the key agencies involved in data

collection in the Zone to effectively collaborate in creating credible RTC database in the zone.

He drew the attention of the participants to the National Road Traffic Crash Management System (NRTCMS) aimed at harmonizing www.businessday.ng

data from different sources for the country to have single credible RTC data.

The ZCO also emphasized hospital follow-up to have update on road traffic crash victims brought to the hospitals as some of the injured

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could have died or discharged.

He reminded that in line with the global best practices, the country operates a 30-day rule which means a RTC victims should be monitored for at least 30 days and whoever dies within 30 days after @Businessdayng

the crash, is recorded to have died through RTC involved in.

Assistant corps marshal Olagunju also advised hospitals against rejection of victims of accidents. He informed that it is illegal for any hospital to reject accident victims and that the fines for this is N50,000 only and or six months imprisonment.

He reiterated the importance of the RTC victims getting prompt rescue and care as the bulk of the victims die within one hour of the crashes, known as the golden hour. All hands must be on deck to ensure that the victims are well managed within the golden hour.

Olagunju further called for continues collaboration of all agencies in traffic management in the zone, even as he believed that the umbrella body on RTC data management, the National Crash Report Information system (NCRIS) comprising all the key stakeholders on data will enhance the credibility of the data in Nigeria and also better traffic management and planning.

24

Wednesday 29 May 2019

BUSINESS DAY

Harvard Business Review

MANAGEMENTDIGEST

The Big Idea: The real story of the fake story of one of Europe’s most charismatic CEOs dals — they also referenced and built on the previous fabrications, creating a mesh of reports that contributed to a long narrative that was picked up and reposted by casual web users, journalists, activists and bloggers.

LUDOVIC FRANÇOI AND DOMINIQUE ROUZIÈS

L

aboratoires Berden had quite a run.

Founded in 1996 by Eric Dumonpierre, who also served as CEO, Berden successfully commercialized Mutorex, a drug to treat obesity. Dumonpierre quickly became a star chief executive, winning several awards for corporate social responsibility. He invested in an all-hybrid vehicle fleet well before it was fashionable. He planted trees in and around Paris to stop deforestation. His employees loved him; they were given “solidarity leave” — full pay while on humanitarian missions, and he instituted a 32-hour workweek.

Dumonpierre was celebrated at industry conferences and political forums, and was cited in the media.

But in the mid-2000s his impeccable reputation took some hits. There was disquiet over Berden’s intent to offshore some operations, potentially leading to layoffs in France. Then a philanthropic venture of Dumonpierre’s was exposed as a front for an organization that employed child labor in Asian factories. Rumors of serious side effects to Mutorex surfaced, and an executive died by suicide under circumstances that are still mysterious.

Still, by 2009 Berden and Dumonpierre had weathered the storms — and profits skyrocketed.

What’s most incredible about Berden and Dumonpierre is not their success or how their reputations recovered from scandal.

It’s that neither the company nor its CEO exists. Every iota of information was fabricated — by college students — starting in 2005 and kept alive for a decade. This is the story of how, in our classroom, we at HEC Paris created false news before anyone understood the phenomenon — and what we’ve learned about the techniques that make false news spread and stick.

YE

AR

THE REPUTATION GAME The Laboratoires Berden story came out of the course we teach, at HEC Paris, about corporate reputation and crisis management in the age of the internet.

The assignment was simple: Create a company and a CEO, and raise their profiles online so that they rise to the top of search engine rankings for general terms related to the firm. In the first year, the students created Berden, Dumonpierre and peripheral players — including an investment partner called John Fund Equity and its CEO Elvis Brownie, and nonprofits that championed Berden’s operations in developing countries. Students were not allowed to communicate directly in any way with legitimate media outlets. They had to grow the reputations organically by building out an internet ecosystem of websites and social media accounts that distributed news releases and spread other information about the company.

The devious twist: While one group of students was building up the company and its CEO with false stories, another set was assigned to tear them down with reports of scandal and misdeeds, using the same tools and the same rules.

Then, every year, a fresh crop of students would carry on the fight. Each class would create

new highs (Dumonpierre won France’s CEO of the Year) and new lows (a polluted river tarnished Berden’s reputation).

We constructed a false-news tug of war to learn which tactics would find their way to the top of search rankings and move reputations one way or the other. The two teams of students competed for visibility on the internet because, in the corporate world, visibility is what sustains sales momentum. The information we find factors into decisions we make. A person’s or a firm’s reputation may be only as good as what someone sees listed on the first search-results page. If false news sticks, it carries real consequences for businesses.

IT WORKED Recent research indicates that false news is easier to spread than real news, and our 10year experience of managing the reputations of Laboratoires Berden and Eric Dumonpierre bears this out. With limited resources, even in the first year, and although the accounts and websites that students created were quite rudimentary, the false news proliferated rapidly. Developments about Berden and Dumonpierre also spread on social media threads and on discussion boards. Job candidates sent their curricula vitae to Labora-

toires Berden, and the firm even received a complaint from a real pharmaceutical company about the unauthorized commercialization of Mutorex.

Even now, a few years after the university seminar ended in 2014, web search still turns up more than 20,000 references to Berden, Dumonpierre and the other fictitious organizations.

WHY DID IT WORK? Research on the spread of false news shows that the students were using communication techniques that, decades earlier, academics had discovered as drivers of this phenomenon. Readers are more likely to distribute vivid stories that inspire emotion than stories that are flatly recounted. The students used this understanding to encourage the spread of their news.

The students also boosted believability through repetition, reposting and relinking stories across the ecosystem of sites and accounts they had created, until eventually the algorithms lifted those stories to the top of search results.

Finally, the students enhanced the stickiness of the false news by recycling old stories when they generated new ones.

Students in each seminar didn’t just develop new wins and scan-

S

Expertise It’s in our DNA

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You can be confident that we will continue to deliver innovative banking products and services which seamlessly and conveniently suit your lifestyle needs.

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WHAT NOW? False news is in the spotlight because of its role in today’s politics, but perhaps more insidious is its use in business and economics. Fact-checking sites like Snopes and Emergent document a steady stream of false news that hurts corporate reputations.

Investors and traders are contending with false news from sites that fabricate information about firms to goose stock prices for quick sell-offs, a modern twist on the classic “pump and dump” scheme that relies on the sharply rising use of algorithms to make trades.

Our success in saturating a web ecosystem with convergent false news, comments and analyses suggests the dangerous potential of this type of long-term influence strategy.

It takes very little imagination to envision that well-funded, professional “fake journalists” would be able to weave a false news narrative much bigger and more sophisticated than our reputation game. The scale of deception, amplified by the search algorithms of legitimate actors, means that corporate reputations are more vulnerable than ever.

Adopting the technical and social skills and the heightened focus needed to manage this phenomenon should be a top priority for any company, lest it permit the false news to go viral, stick and begin to erode the bottom line. Our personal and corporate reputations are so strongly linked to value creation that this may become one of the most important jobs of any firm.

Ludovic François is an affiliate professor at HEC Paris and the CEO of Stratinfo. Dominique Rouziès is a professor at HEC Paris.

Wednesday 29 May 2019

Harvard Business Review

BUSINESS DAY

25

MANAGEMENTDIGEST

Business in the age of mass extinction ANDREW WINSTON

N

WORK VS. LIFE ature and its vital contributions to people … are deteriorating worldwide” says a new, critical report from the United Nations. The New York Times puts it another way: “Humans Are Speeding Extinction and Altering the Natural World at an ‘Unprecedented’ Pace.”

What can, or should, business do? It’s time for radical changes in how we live our lives and run our businesses.

Here are a few pathways to consider.

— UNDERSTAND YOUR BIODIVERSITY FOOTPRINT: The gold standard on this topic is the Global Footprint Network, and it’s a good place to start (along with Project Drawdown). I suggest mapping out your business and its supply chain to understand your major land and sea impacts, including

“

mining and metals, oil and gas exploration, coal production, fisheries, cattle grazing and agricultural products like soy and palm oil that drive destruction of virgin forests.

— EXPLORE RADICAL NEW BUSINESS MODELS: I see three key elements of what I call “the big pivot” mindset: decoupling, circularity and regenerative models. The first means continuing to provide for more and more people, but decoupling the growth of production from material needs (energy, water, stuff ). Businesses need to move much

faster to embrace circularity (closing the loops on all materials to find reuses and dramatically reduce virgin-material use) and regeneration.

The prime examples of the latter are “regenerative agriculture ” and “holistic grazing,” which use farming and cattle to improve soil quality and sequester carbon from the atmosphere.

— SUPPORT AGGRESSIVE POLICIES AND INITIATIVES TO PROTECT HABITATS: The science on biodiversity “hot spots” is strong — we know where we get the biggest spe-

cies bang for our buck. Leaders should lobby for protections around the world; support policies that put a price on natural resources and eliminate subsidies for fossil fuels and industrial nonsustainable agriculture; endorse international aid to help compensate developing countries with less financial resources but abundant natural resources; and publicly and financially support initiatives like National Geographic’s Last Wild Places and E.O. Wilson’s Half-Earth Project.

— SUPPORT LEADERS WHO GET IT: With countries as diverse as the U.S., Brazil, Hungary and Poland embracing nationalist leaders, we’re moving away from global action. Short-term tax cuts are poor reasons to support leaders who do not recognize this global emergency.

— TALK TO CONSUMERS AND OTHER STAKEHOLDERS: Companies can help consumers understand the choices they make and offer better alternatives. Few com-

panies discuss biodiversity issues on packaging or marketing, so it’s a real opportunity for new leadership.

— CHALLENGE THE GROW-AT-ALL-COSTS ECONOMIC MODEL: We have to face harsh reality that our current model of measuring “success” in our economy and companies is coming at the expense of our ability to thrive.

The news on the state of the planet is relentlessly bad.

We’re really out of time for pretending business as usual will continue to work. We need bravery to challenge the status quo now. What an amazing opportunity for real leaders to step up.

employees, customers or management, will be affected. If a vendor or internal team can’t explain how an AI project works, it may not be the right fit for your company.

— YOU DON’T HAVE TO GET CREEPY TO GET VALUE OUT OF DATA: Too often, companies assume that in order to make the most out of AI, they need to be like Facebook or Google and pull in every last bit of data they can find. But that can get creepy fast and, usually, there’s no need for that level of data. Our work developing machine-learning-based credit-underwriting models with banks and lenders has shown that social media data doesn’t provide particularly strong signals, anyway. Most companies are already sitting on a ton of banal data full of insights that can be unlocked using machine learning.

— AI IS AN OPERATING EXPENSE, NOT A CAPITAL INVESTMENT: If manage-

ment’s plan for getting on the AI bandwagon revolves around a big one-time investment, chances are the team is going about it all wrong. AI has the potential to enhance the bottom line by boosting revenue and cutting costs, but budget concerns need to be put aside to ensure that the algorithms and models are functioning properly and are being rebuilt as new sources of data emerge.

Andrew Winston is the author of “The Big Pivot” and “Green Recovery.”

What boards need to know about AI DOUGLAS MERRILL

MONEY

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ost boards have few members who are comfortable with advanced technology, and this generally has little impact on the company.

This is about to change, thanks to machine learning and artificial intelligence.

More than half of technology executives in the 2019 Gartner CIO Survey say they intend to employ AI before the end of 2020, up from 14% today. If you’re moving too slowly, a competitor could use AI to put you out of business. But if you move too quickly, you risk taking an approach the company doesn’t know how to manage. In a recent report, 75% of companies cited fear of disruption from data-driven digital competitors as the top reason they’re investing.

Boards will have to ask themselves: Why are we

spending all this money?

What’s the economic benefit? How does it affect our people and our long-term competitiveness?

Here are four guideposts that board members in any industry can use to orient themselves: — IT’S MATH, NOT MAGIC: Boards shouldn’t be intimidated by AI. Members don’t need degrees in computer engineering to understand the technology behind AI, just as they don’t need to be certified public accountants to understand the comwww.businessday.ng

pany’s balance sheet. Any good use of machine learning or AI is going to be an outgrowth of what the company is already doing. A basic understanding of AI will help boards better decide how to direct its use.

— WELL-RUN AI PROJECTS SHOULD BE EASILY UNDERSTOOD: When evaluating if a project is right for their company, boards should feel confident enough to say when something doesn’t make sense.

It should be clear how real groups of people, whether

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@Businessdayng

Douglas Merrill is the CEO and founder of ZestFinance.

26

FIXING NIGERIA

BUSINESS DAY

Wednesday 29 May 2019 www.businessday.ng

Sectoral challenges

What government needs to do

Oil and gas

Major hurdles as Buhari is sworn in for second term ...PIB, oil licensing rounds, fuel subsidy removal top expectations ISAAC ANYAOGU & DIPO OLADEHINDE

K

ey agendas ranging from drawing up competitive fiscal and regulatory terms for the oil and gas sector, to organizing transparent oil licensing bid rounds, removing fuel subsidy, deregulating the downstream sector and liberalizing gas prices are some of the most urgent tasks awaiting President Muhammadu Buhari’s second term, after a dreary performance in the last four years.

Buhari’s second term will have big implications for Nigeria’s oil and gas sector, which accounts for 90 percent of Nigeria’s foreign exchange earnings, however still contributes little to the GDP. The sector’s contribution to GDP has remained in the one-digit margin, with an all-time high of 9.84 percent in Q3 2017.

Experts in the oil and gas sector have ranked reforming fiscal and regulatory terms, by passing into law, a competitive petroleum industry bill as the most urgent task the administration should prioritise as a new term beings. Next is leveraging the oil and gas sector to provide linkages across the economy and creating efficiency in the oil and gas sector.

For Adeola Adenikinju, director, Centre for Petroleum and Energy Economics and Law, and a member of the Central Bank of Nigeria Monetary Policy Committee, the most important agenda for government is ensuring passage of the Petroleum Industry Bill (PIB) to provide transparency in the sector. Also, to reform the NNPC and provide clarity for fiscal and regulatory terms so the oil sector can confirm to international standards.

“We have an upstream that is not operating optimally, Midstream that is not functioning and a downstream that is dying so we have to think of a way to ensure private sector can make investments in the sector,” Ademola Henry, team leader at Facility for Oil Sector Transformation (FOSTER II) said.

Henry further explained that the major task before the new administration is to reform the sector for more efficiency, more effectiveness, find a way of reducing leakages in the sector, and maximizing opportunities.

Buhari had historically opposed market liberalization in the Oil and Gas sector, publicly citing corruption risks as the rationale for his position.

He also argues that through state control, oil profits can be more easily distributed to nascent sectors of the economy and help the masses.

But with Nigeria’s economy at a breaking point, Buhari may be forced to adopt unprecedented liberal reforms to solve old perennial problems with Africa’s most populous nation boasting of the greatest number of people in what World Bank calls ‘extreme poverty:’ 87 million Nigerians living on less than $1.90 per day.

Henry Biose, a petroleum economist based in Port Harcourt believes a petroleum industry law is a critical framework that will drive investments followed by actions to liberalize the gas sector. “Our current laws are out-dated and if the PIB is not passed, uncertainty in the sector will increases and investors will stay away due to absence of law to protect their investments.”

As it has been for more than a decade, the PIB remains the biggest regulatory issue in Nigeria’s petroleum sector although there was a significant progress in the bill in the last three years, which was championed

by Bukola Saraki-led Eight National Assembly (2015-2019).

The president withheld his assent on certain grounds, chief among was the proposal in the bill to have the

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Petroleum Regulatory Commission (PRC), retain 10 per cent of the revenue generated by the commission for its own operations.

However, the Nigerian Extractive Industries Transparency Initiative (NEITI) says the absence of the PIB costs Nigeria $15 billion yearly in investments.

NEITI, in a joint study with Open Oil, a Berlin-based extractive sector transparency group, also found that Nigeria lost at least $16b from 2008 – 2017 due to non-review of the 1993 Production Sharing Contracts (PSCs) with oil companies. Nigeria’s Deep Offshore and Inland Basin Production Sharing Contracts Acts stated that terms should be reviewed if oil prices exceeded $20 per barrel and 15 years from the commencement of the PSC Act.

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Another major dilemma for the present government is issues concerning oil bid round, which last took place in 2011.

Last year, Madagascar, Algeria, Ghana were some African countries that started oil licensing rounds to boost their reserves, increase revenue as well as their capacity to take advantage of soaring oil prices but Nigeria, Africa’s biggest producer, has been unable to finalise bid round plans started since 2016. Over 186 marginal fields lie fallow because bid rounds have not been conducted leading to loss of billions of naira in revenue.

According to a BusinessDay February 12 report, the Department of Petroleum Resources, the oil sector regulator, charged with the responsibility of conducting the bid rounds was not ready to conduct the bid

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rounds slated for the first quarter of 2019.

“The DPR is not anywhere close to concluding preparations for the next bid rounds, in fact from all indications, it does not seem it will happen any time soon, because the guidance notes for the bid rounds are not even prepared yet. It does not even look like it could happen this year,” said a source that preferred anonymity.

Luqman Agboola, head of energy infrastructure at Sofidam Capital expects a president who will not only ensure transparent bid rounds, but also be more capitalist oriented which would help Nigeria domesticate the value chain in the oil sector and also increase oil revenue.

“Oil bid rounds should be more competitive and transparent, let Nigerians know who is bidding for each field,” Agboola told BusinessDay. Deregulation of the downstream petroleum sector is another key issue that will be facing President Buhari.

Before the 2015 elections, Buhari strongly questioned the fuel subsidy arrangement, which was one of the issues that irredeemably dented the image of his predecessor, Goodluck Jonathan.

Despite attempting to coat it as “under recovery”, the current administration has not moved away from subsidy payment. In fact, it budgeted over N300 billion to fund subsidy in 2019.

“It is a big shame that we are one of the world’s biggest producers of crude oil and still the world’s biggest importer of petrol, the new minister must change this,” Adenikinju said.

Experts also expect Nigeria’s next petroleum minister to boldly reform the downstream sector and abolish wasteful fuel subsidies. The Federal Government spent N7.9 trillion importing petrol to augment supply from the country’s rickety refineries, according to data from the National Bureau of Statistics (NBS).

Austin Avuru, CEO of Seplat has often advocated that oil should play the role of an enabler to other sectors of the economy, providing linkages with other sectors that will grow jobs.

He identified gas as the next goldmine if reforms are enacted.

Today, Nigeria is only capable of pumping some 2.5 million barrels of crude oil per day despite sitting on more than 40 billion barrels of proven reserves. The country’s mid-stream and downstream infrastructures are arguably in worse shape than upstream production.

The country’s refineries – mostly concentrated in the oil-rich Niger Delta region – currently operate at under half of their intended 500,000 barrel per day consolidated capacity which billionaire Aliko Dangote sees as a business opportunity leading to a $15 billion refinery.

Stakeholders in the sector are of the opinion that processing 650,000 barrels of crude oil daily would give the billionaire a near monopoly on Nigeria’s refining sector although not necessarily a step in the right direction for market liberalization.

FIXING NIGERIA Sectoral challenges

BUSINESS DAY

Wednesday 29 May 2019 www.businessday.ng

27

What government needs to do

Housing

Infrastructure, land reform, mortgage top stakeholders’ agenda for Buhari CHUKA UROKO

A

s Muhammadu Buhari settles in for another four-year term as president of Africa’s most populous nation and the largest economy on the continent, Nigerians are welcoming him with great expectations and hope of a better outing this time than his last tenure.

Buhari spent the last four years adjusting in so many areas top of which was removing his military toga and realigning his mentality to the reality of democratic governance. The president also spent time trying to come to terms with the enormity of the work at hand, hence some critical areas that needed attention suffered. Housing was one of such areas.

As important as housing is, especially in the hierarchy of man’s needs where it ranks second, it remains a weeping child in Nigeria.

Buhari, during his campaign, which was couched on a change mantra, promised to deliver one million houses annually to Nigerians. On assumption of office, his government came up with a housing roadmap that targeted “the majority and the vulnerable,” but till date no tangible results to show for it.

However, Buhari is not the first suspect in Nigeria’s housing problem. Since the days of Shehu Shagari as Second Republic president when ill-advised, politically guided and poorly executed low-cost housing programme was carried out, housing story has been the same which is why the deficit in housing stock in the country is today in excess of 20 million units and counting.

Economic analysts are of the view that government has no business in direct delivery of housing to the people. Its business, instead, is in creating the environment that will enable private sector operators deliver same to the people in a more efficient and profitable manner.

Of all that are needed to make this happen, housing sector stakeholders have listed only three areas; infrastructure, land reform and mortgage, which they believe are critical to delivering housing not only efficiently and massively, but also profitably and cheaply in the long run.

Nigeria has a high infrastructure deficit estimated at $1 trillion, and this has significant impact on house prices in the country. Chii Akporji, former executive director at the Nigerian Mortgage Refinance Company (NMRC) disclosed at a real estate forum in Lagos, that infrastructure alone constitutes about 30 percent of the cost of construction in Nigeria.

Femi Akintunde, CEO, Alpha Mead Group, agrees, adding that of all the various aspects of infra-

structure, roads, rail system and power are of great importance in addressing the housing problem.

Government needs to provide these facilities. Good road network and efficient rail system, for instance, will not only open up communities and connect cities, they will also engender mass transportation that will move people and goods around and encourage them to leave the hinterland,” he noted.

Power, he explained, is very important for housing because it lowers energy cost, improves quality of life, supports enterprise and productivity and also encourages people to live anywhere outside the city centre and even set up businesses that thrive well only in the city at the moment.

To do well in housing , the stakeholders also want Buhari to embark on a comprehensive land reform process to free same for housing development at both individual and corporate level.

Nigeria has a rigid traditional land tenure system coupled with land titling system which is onerous and excludes many people from formal land ownership, hampering full scale economic activities, especially housing development which happens on land.

Today in Nigeria, only five percent of the country’s housing stock, which is less than 20 million units, is in formal mortgage. This means that 95 percent of the houses are considered ‘dead assets’ because they are neither tradable nor bankable. It is believed that only land reform can unlock this huge stock of dead assets with a value estimated at $307 billion or 81 percent of Nigeria’s GDP. www.businessday.ng

Andrew Nevin, partner and chief economist at PwC, sees land reform as the next best thing to happen in Nigeria for its housing delivery purposes. He agrees with Alfred Marshall’s Principles of Economics written in 1890 which notes that land, labour, capital and organisation are the four factors of production, but land is so important that the other factors would be redundant without it.

“Land is the bedrock upon which the satisfaction of all human needs is built. Food, clothing and shelter are all human needs met from resources derived from land. It accounts for 20 percent of the earth’s surface, and consequently, every economy requires comprehensive land regulations and policies to guarantee the effective usage of its land and the maximisation of resources attached to it,” Nevin said.

From traditional, economic and industrial perspectives, experts see land as very unique and strategic and its availability plays a pivotal role in the development of any economy as it increases investment inflow. Industrialisation, housing development, agriculture, mining, oil exploration and other economic and productive activities that lead to improved standard of living, job creation, economic growth, among others, are possible only when land is available and harnessed for such purposes.

Akintunde added that land reform is also needed for purposes of ease of doing business, especially property registration which, he said, was not only costly, but also laborious and time-consuming. It is expected that land reform would also lead to amending or reviewing the obsolete Land Use Act.

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In most advanced economies, homeownership is easily attainable because people do not have to work for donkey years in order to save to buy or build their own homes. This is because they can easily get mortgage, which for them is the only means of owning homes especially for first time homebuyers.

“In Nigeria, mortgage is luxury.

Indeed, for a large number of Nigerians, there is no mortgage system in the country. Mortgage exists where housing loans are given at low single digit interest rate and long repayment period. All that are non-existent in Nigeria. Mortgage lenders charge commercial interest rates and that is no mortgage,” Gbenga Olaniyan, CEO, Estate Links, told BusinessDay in an interview.

The Buhari administration needs to address this very critical aspect of housing and homeownership either through intervention as done in the manufacturing and agric sectors, or by creating a special funding arrangement for both suppliers of housing products and the buyers.

Paul Onwuanibe, CEO, Landmark Group, recommends a legislation on mortgage, noting that, in some countries, a body is set up that manages mortgage subsidies.

That body delivers the subsidies either through banks or by itself. So, “the legislation around mortgage has to be fine-tuned, implemented and advertised so that people can access it.

According to him, the mortgage industry has to improve, and developers have to be encouraged to build mortgage-viable and ready properties; mortgage interest rates @Businessdayng

have to be reduced to single digit and made available; the whole process of securing mortgage has to be made clearer and more transparent. “Mortgage has to be available on retail high street such that every time you go out looking for it, you see it”, he advised.

Expectation is that when Buhari addresses these critical areas, housing delivery will be a lot easier and cheaper while access will increase and affordability will improve. These ultimately will lead to increased number of homeowners and a reduction in housing demand-supply gap.

The official figure for Nigeria’s housing deficit is put at 17 million units, which contrasts sharply with South Africa’s 3 million units. The Federal Mortgage Bank of Nigeria (FMBN), the country’s apex mortgage provider, recently estimated the deficit at 17-20 million units with a potential value of N6 trillion (about $16 billion) and 900,000 annual unit deficit increase.

Even at that, analysts argue that whether it is 17 million or 20 million or whatever figure, the deficit is no longer tenable, citing population growth and lack of data that captures annual housing deliveries and demolition/ destruction.

“The housing deficiency has, therefore, climbed and is likely to worsen in the nearest future if urgent steps are not taken by the government in conjunction with all stakeholders to address the problem,” said Danladi Matawal, DG/CEO of the Nigerian building and Roads Research Institute (NBRRI), at a real estate forum in Abuja.

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Wednesday 29 May 2019

BUSINESS DAY

PENSION today

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In Association with

Galvanising the informal sector for micro pension scheme

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n 28 March, the much talked about micro pension plan (MPP) eventually commenced operations following the formal launch of the product by President Muhammadu Buhari in Abuja. The launch of the contributory pension scheme (CPS) some 16 years ago was a turning point in the administration and management of pensions in the country. Before CPS, pension administration was cumbersome and riddled with irregularities and fraud, with thousands of pensioners denied their entitlements.

To correct the inherent lapses witnessed in the old pension management theCPS was birthed with the following objectives: establish a uniform set of rules, regulations and standards for the administration and payments of retirement benefits for the Public Service of the Federation, the Public Service of the Federal Capital Territory, the Public Service of the State Governments, the Public Service of the Local Government Councils and the Private Sector;make provision for the smooth operations of the Contributory Pension Scheme;ensure that every person who worked in either the Public Service of the Federation, Federal Capital Territory, States and Local Governments or the Private Sector receives his retirement benefits as and when due; andassist improvident individuals by ensuring that they save in order to cater for their livelihood during old age.

The contributory scheme has largely been successful. Unfortunately, the informal sector, which is the larger part of thesociety was not covered under the scheme.

Thus, the federal government introduced the MPP initiative as part of its financial inclusion drive, which is envisaged to build a diversified and inclusive economy. The MPP, promoted by the National Pension Commission (PenCom), is expected to significantly expand pension coverage to the informal sector, to cover self-employed persons, artisans, transporters, farmers, their employees, and other category of people not covered by the CPS. At the launch, president Buhari said: “Today, millions of traders, farmers and other entrepreneurs in various industries are completely excluded from the different pension programmes in existence…The Micro Pension Plan guarantees that when these hardworking citizens retire, they can do it in dignity and comfort.”

Aisha Dahir-Umar, the acting directorgeneral of PenCom said the micro pension plan targets the significant majority of Nigeria’s working population who operate in the informal sector. According to Dahir-Umar, “Participants are expected from various informal sector workers, including market women, members of the National Union of Road Transport Workers (NURTW), members of Textile, Garment and Tailoring Associations, KekeNapep and Okada Riders Associations, Butchers Associations, workers in the Movie and Performing Art industry, mechanics and other workers in the automotive industry and single professionals like lawyers, accountants and many others. Micro Pension Plan is designed to fit the peculiarities of these informal sector groups.

Pension Fund Administrators (PFAs), under whom the CPS has thrived and even surpassed expectations, are equally tasked with managing the MPP. Long before the formal launch, many PFAs were expected to have calibrated their internal processes and operations to accommodate the new group of retirement savings account holders.

For instance, Stanbic IBTC Pension Managers Limited,Nigeria’s biggest pension fund administrator, has continued to show leadership. According to the PFA, it considered the pension reforms necessary to maintain the strength and depth of the country’s Contributory Pension Scheme. Part of its engagement with the media was not only to intimate and educate them on the MPP but to also demonstrate its readiness for the micro pension plan.

Some of the engagement platforms Stanbic IBTC Pension Managers had instituted to continue to engage stakeholders include Town hall meetings and public awareness programs.

It has a dedicated 24/7 customer care line that can engage its clients in English and the four major Nigerian languages – Pidgin, Hausa, Igbo and Yoruba. And with offices in over 200 locations across the country and its electronic platform to engage the technology minded clients via internet or the Stanbic IBTC mobile app, it is clear Stanbic IBTC Pension Managers is truly ready to onboard the MPP customers.

Following the launch of the micro pension plan, Stanbic IBTC again pledged its readiness and commitment to contributing its quota when it launched a game-changing nationwide micro pension campaign tagged ‘Game Plan Retire Well’, which is part education and part assurance that it has the necessary experience, expertise and platform to successfully manage the new scheme. According to the PFA, the effort is aimed at sensitising and stimulating the informal sector not covered by the current CPS to secure their buy in into the pension scheme.

Eric Fajemisin,chief executive, Stanbic IBTC Pension Managers Limited said of the Retire Well campaign, “It is our callout to stakeholders to secure their future and reinforce the need to save and plan for retirement, irrespective of the nature of their jobs or the profession they may find themselves in. It is all about taking a decision today by signing up for a retirement plan, making the right move now towards a secure future or simply put, having a game plan.”

Fajemisin noted that while Retire Well is

targeted at the various tiers of the demography in both the formal and the informal sectors, it amply addresses the full spectrum of the upper class/skilled workers, the middle class/semiskilled, and the lower class/unskilled workers.

Speaking further on the scheme, Fajemisin said MPP is meant to insulate those not covered in the formal sector of the economy as well as low-income earners against old-age poverty.

The MPP will equally help in deepening asset accumulation in the country. According to him, the scheme will provide the crucial capital required for investment in critical sectors of the economy. As an initiative designed to cover an estimated 70 percent of Nigeria’s working population in the informal sector, the scheme offers enormous benefits to the society, regardless of challenges associated with its seamless implementation.

Among its benefits is improved standard of living for the elderly, safety of funds and access to other incentives, such as reduction in their dependency on the younger generation, flexible contribution remittances, the opportunity to make withdrawal prior to retirement and the enhancement of financial inclusion in the country.

Nike Bajomo, executive director, Business Development, Stanbic IBTC Pension Managers Limited said the company intends to create awareness across the country about Retire Well micro pension scheme to drive adoption even as the PFA continues to engage various stakeholders on developments in the industry to ensure that the provisions of the CPS are fully harnessed to the benefit of all. Such platforms as Town Hall meetings, Stakeholders fora, Associations’ meetings, Public Awareness programsand exhibitions on TV, Radio & Digital media, among other initiatives Stanbic IBTC Pension Managers will be organised yearly to ensure regular engagement and to drive awareness.

Bajomo assured that the PFA, backed by the experience and expertise of Stanbic IBTC Group, which recently marked its 30th anniversary, and as a member of the over 155-yearold Standard Bank Group, will not relent in providing excellent services to its RSA holders and Nigerians. Stanbic IBTC Pension Managers Limited, she said, has over 1.7 million RSA holders nationwide, with assets under management in excess of N2.8 trillion. It paid N3.26 billion over 55,809 retirees in March, 2019 and has paid out over N635 billion to retirees since the PFA commenced operations in 2006.

This section is created to increase awarness and deepen knowledge about the contributory pension scheme.

If you have enquiries or contributions, send to this e-mail:

RC634453

Diamond Pension Fund Custodian Limited 1A, Tiamiyu Savage Street, Victoria Island, Lagos State.

Tel: 01-4613753, 2713680, 2713954 Fax: 01-2713955 Email: info@diamondpfc.com Website: www.diamondpfc.com www.businessday.ng

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diamondpfcbusday@yahoo.com

@Businessdayng

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insurance today E-mail: insurancetoday@businessdayonline.com

Leadway Assurance pays N33.8b on claims in 2018 …grows total assets by 15% to N312.7bn

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L-R: Bola Onigbogi, deputy president, Nigerian Council of Registered Insurance Brokers (NCRIB); Steve White, chief executive, British Insurance Brokers Association (BIBA); and Shola Tinubu, president, NCRIB, at the 2019 BIBA’s Conference held in Manchester, United Kingdom

Swiss Re sees technology, climate change shaping risk space Stories by Modestus Anaesoronye

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he annual SONAR report from Swiss Re Institute highlights new technology, the spread of 5G, limits to central banking tinkering, the growth of genetic testing and the impacts of climate change on public health as emerging risks that insurers and reinsurers need to have on their radar.

The latest SONAR report from the global reinsurance firm looks at emerging risk themes and trends that the insurance and reinsurance

sector needs to be mindful of. The reinsurer notes that the risks identified in its report are relevant to both life and non-life markets, asset management and also operations and insurance market conditions.

The report explores a range of risks in detail, but highlights five risks that have high potential impact on the re/insurance industry.

This includes the rise of new technology and specifically the fact that much of the hardware in areas of critical infrastructure is often outdated, which, drives significant accumulation risk for insurers as well as the potential for unexpected

losses related to property damage, bodily injury, BI, and cyber threats.

Continued advancements in technology has also led to the impending spread of 5G tech, which will enable wireless connectivity in real time for any device of the Internet of Things (IoT), such as autonomous cars. For insurers, there are concerns are the impacts of potential negative health effects from electromagnetic fields, as well as the fact hackers can leverage 5G to essentially steel data much faster. “Major concerns are possible privacy and security breaches, as well as espionage,” says the report.

FBNInsurance pays N4.8b claims in 2018, declares dividend

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BNInsurance Limited, one of the leading life insurance companies in Nigeria, has presented its annual report to shareholders at the company’s Annual General Meeting (AGM) held in Lagos, declaring a profit before tax of N4.2 billion, a 44 percent increase from the previous year’s figure.

Val Ojumah, managing director/CEO, FBNInsurance Limited commenting on the result stated that the company closed the year with positive results and also made prompt claims payments to customers despite the unpredictable economic situation in the country occasioned by preparation for the just concluded general

election.

Reviewing the year, Val Ojumah stated “we grew Gross Premium Written (GPW) by 33 percent to N26.0 billion in 2018 from N19.6 billion in 2017; while Profit Before Tax (PBT) appreciated by 44 percent from N4.2 billion in 2017 to N6.13 billion in 2018. The performance, he said, was driven by the company’s sustained growth and penetration into the retail segment of the industry.

“Over the same period, as a responsive and responsible organisation, we promptly paid claims to our clients to the tune of N4.8 billion which is a 66 percent increase from N2.9 billion in 2017. Our strategy remains to provide financial secuwww.businessday.ng

rity to our customers. We are keen to attain uncontested leadership status in the life insurance sub-sector as well as aggressively exceed our customers and shareholders’ expectations,” he said. The company also announced a dividend of 65k per share, representing 81 percent increase from 36k that was declared for 2017.

Commenting on the company’s financial returns, Adenrele Kehinde, chairperson of the Board of Directors, FBNInsurance Limited attributed the growth and outstanding performance of the company in 2018 to its commitment in putting its clients first and resilience in achieving remarkable milestones.

igeria’s foremost insurer, Leadway Assurance Company Limited recently held its 47th Annual General Meeting (AGM) in Lagos, where the company presented its 2018 Financial Year results to its shareholders and stakeholders.

Among key announcements made at the Annual General Meeting was an increase in Claims paid from N27.4billion in 2017 to N33.8billion in 2018.

The company said it also recorded a 15 percent growth in its Assets Base withN312.7billion recorded in 2018 as againstN271.9billion in 2017 in addition to a 4 percent increase in Gross Written Premium (GWP) from N84.1billion in 2017 to N87.5billion in 2018.

Speaking during the company’s AGM, Hassan Odukale, managing director /CEO, who observed that Leadway has continued to lead other industry players in the area of claims payment, restated the company’s commitment to prompt claims payment as the cornerstone of its business principle, revealing that the company has paid claims in

excess of N110 billion over the last five years.

In his words, “The value we have created over the years is embedded in the loyalty and commitment of the greatest number to keep Leadway as a legacy for several generations.

We are sincerely grateful to our treasured customers, brokers, agents and other stakeholders who have objectively trusted in the liquidity advantage and unmatched conservative risk reserves we hold as a yardstick for placing certain risks with us. We are equally grateful to them for the testimonial campaign which attests to us as the insurer to beat in claims payment.”

On the future outlook of the company, Martin Luther Agwai, chairman, Board of Directors said Leadway’s operation in 2019 and beyond would be driven by the strategy of using digitization and creativity to harness unexploited and prompt means of selling insurance as a contingency benefit to its target market while also strategically deepening the penetration of insurance to smallholder farmers in every community through

the instrumentality of Area Yield Index Crop insurance and creating insurance awareness in the rural communities.

He noted further that with Leadway Vie (a Leadway subsidiary domiciled in Abidjan, Cote D’Ivoire), the company had settled its presence in West Africa, beyond Nigeria, and was moving up the ladder to joggle the market and inscribe Leadway Vie as an enviable company within Cote D’Ivoire.

“On our part, we will not rest on our oars and will intensify our corporate strategy to identify the needs, behavior and culture of our potential customers with an attentive ear to market-feedback and create products to address and protect the underlying risks the populace are susceptible to.

Leadway Assurance is one of Nigeria’s foremost insurance service companies with a reputation for service efficiency and customer reliability. The organization is committed to bridging the financial protection gap and increasing the rate of insurance penetration in Nigeria.

STACO partners Paystack to enhance consumer experience

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nderwriting firm, STACO Insurance Plc, a licensed general insurance special risks insurer in her quest to continuously delight her numerous customers and make payment for business transaction easier has embarked on a strategic partnership with Paystack, an online payment hightech company. Paystack is a technology outfit solving payment problem for ambitious business ventures with a mission to help business become more profitable while making it easy for business to accept secure payments from multiple online channels.

The strategic alliance with Paystack will enable STACO Insurance numerous customers to transact business and pay for insurance premium at the comfort of their homes and offices. This

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is a testament to STACO’s strategic objectives of adding real value to customers’ needs particularly in the area of payment and extending the penetration of insurance services so as to enhance the fulfilment of the of the company’s vision of providing a world class insurance.

Recall that STACO Insurance has already secured the approval of National Insurance Commission (NAICOM) to deploy e-platform portal for the purchase of third party Motor and Personal Protection Plan (PPP) Insurance policies. The new e-platform portal is a web based transactions solution; it operates twenty-four hours round the clock payment system and utilizing an automated insurance online real time service technology platform. The portal enables ease of business transaction, offers convenience, speed @Businessdayng

and seamless method of payment of premium by the company’s clients especially for third party motor insurance, personal protection plan and other Insurance products. The solution has the feature of issuing digitalized receipts for payments without exposing the customers to cyber risks.

The introduction of the transaction and e-payment platform into the Nigerian Insurance market is in line with the company’s commitment to boost exceptional customer experience and reduce turnaround time for customer service delivery, while responding to the technological needs of the sector. It is hoped that the system will create loyalty from existing customers, attracts additional clients to the company as purchase of insurance policies would become easier.

Wednesday 29 May 2019

BUSINESS DAY

31

FINANCIAL INCLUSION

& INNOVATION

New ways to assess credit worthiness of MSMEs Stories by Endurance Okafor

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icro, Small and Medium Enterprises (MSMEs) face several challenges when trying to expand, especially in accessing adequate funds to finance their operations and growth, but their credit worthiness can now be assessed by exploring alternative data, the World Bank has said.

Estimated at 37 million, Nigerian MSMEs are said to have a finance gap of $158.13 billion, data compiled from the 2017 MSMEs report by the World Bank and Finance Forum with the title: MSME FINANCE GAP- Assessment of the Shortfalls and Opportunities in Financing Micro, Small and Medium Enterprises in Emerging Markets, show.

The Washington-based financial institution says that MSMEs play a huge role in facilitating economic development due to their flexibility and affinity to innovation, “even more so in emerging economies with a high contribution from the informal sector.”

“Access to credit for MSMEs and individuals can be enhanced and expanded by promoting the use of alternative data in credit reporting,” World Bank said.

Out of the total 162 million formal micro, MSMEs in developing countries, of which 141 million are micro-enterprises, and 21 million are SMEs, Nigeria accounts for one of the countries with the highest number of MSMEs.

“Three countries - Brazil, China and Nigeria; contribute 67 percent to the total number of MSMEs, which is equivalent to 109 million enterprises. There are close to 12 million SMEs in China alone, which represents 56 percent of all SMEs in developing countries,” World Bank noted.

World Bank’s claim on the use of alternative data in assessing credit worthiness of MSMEs can be affirmed by the 2016 report by Global Partnership for Financial Inclusion (GPFI) as it said in its G20 publication that it encourages service providers to use multiple sources of digital data for evaluating consumer and small and medium enterprise (SME) creditworthiness.

“This approach should include appropriate safeguards while facilitating

development of such data and ensuring a fair, nondiscriminatory approach to its use. Examples of such alternative data sources include mobile phone use, utility payments, data enterprise registration information, and other information that can complement traditional loan repayment or insurance-related data,” G20 report explained.

Earlier this year, Renmoney, one of Nigeria’s leading Fintech companies, launched a new solution for self-employed individuals, business men and business women, the micro loans for MSMEs The new product allows the market segment to access credit of up to N4million either via Renmoney’s, contact centre, agent network or branches.

But for these businesses

to access credit from the Fintech Company they are expected to present financial record of at least six months.

“We’ve always been aware of the need to solve credit challenges for another equally important segment- the self-employed, the businessman, the business woman,” Oluwatobi Boshoro, Renmoney’s CEO, said.

This means that the businesses which are constrained by barriers to financial inclusion may not be able to have access such credit loans.

The Central Bank of Nigeria (CBN) has a set target to ensure it includes 80 percent of the country’s adult population into the financial cycle by the year 2020.

With less than two years

to the projected deadline, Africa’s most populous nation has about 36.6 million or 36.8 percent of its adult population excluded from the financial cycle.

According to the International Committee on Credit Reporting (ICCR), alternative data are ways to collect and analyse data on creditworthiness based on information readily available in digitised form but ‘alternative’ to conventional methods such as documented credit history.

It has been broadly categorised as structured data e.g. utilities, mobile phone, rental information and taxes and unstructured data e.g. social media and internet usage, emails, text and messaging files, audio files, digital pictures and images.

The World also cited

some of the key policy areas and issues to look at when promoting alternative data.

According to the lender, improving the availability and accuracy of the information being collected due to the lack of clarity on what constitutes alternative data and how it should be treated is one aspect that should be considered when using alternative data.

“There are many issues countries face while ensuring the availability and accuracy of information collected. This is further exacerbated by the absence of digitized public information and digital footprint of MSME transactions, unavailability of data, or poor data quality. Regulators and policy makers can address this by issuing guidance on how alternative data may be sourced and processed,” World Bank explained.

On how to go about this, the world financial service provider said it could include implementing the use of unique identifiers like passports, identification alternatives such as social security numbers, tax identification numbers etc.

“Government agencies can also work towards digitizing their records and promoting the development and provision of access to Open Data Systems and Standards for MSMEs.” Other policies as noted by the World Bank include: expanding credit information sharing, enabling cross-border data exchanges, balancing integrity, innovation and competition, and data Privacy, Consumer Protection and Cybersecurity

Union Bank, Mamamoni establish innovation hub for low-income women

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s part of its commitment to boost women empowerment, talent development, and financial inclusion, Union Bank Plc recently partnered with MamaMoni Empowerment Foundation to set up an innovation hub for lowincome women and girls from urban slum communities.

The hub, which is located in Amuwo-Odofin area of Lagos State, was

formally opened on the 21st of May, 2019.

The vocational training programme has been established to enable girls and women to build sustainable means of living.

It is expected that each year, over 400 underprivileged beneficiaries will receive training in vocational skills such as hairdressing, makeup, fashion designing, mobile farming and furniture making. Other courses to be offered at the

hub include financial literacy, coding and personal branding.

Speaking at the launch of the innovation centre, Ogochukwu Ekezie-Ekaidem, head of corporate communications and marketing at Union Bank, applauded the efforts of the MamaMoni team in improving the outcome of women in underserved communities through micro loans and empowerment schemes.

“Union Bank is proud

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to have been a principal partner of the MamaMoni foundation over the years.

We identified this initiative as one that will help amplify our efforts to support women and drive financial inclusion. It is our hope that this innovation centre will go a long way in improving the lives of women from low-income communities and their families as they strive for a better future,” Ekezie-Ekaidem said.

In 2016, Nkem Okocha,

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founder of the MamaMoni foundation emerged a winner in the leap Africa social innovators programme (sip) sponsored by Union Bank, receiving a grant of N1million to expand the MamaMoni operations.

Since then, the foundation has impacted over 6,000 women by providing them with micro loans and basic vocational and financial literacy skills.

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of the average Nigerian and continues to champion the cause for the women empowerment, the bank stated.

Earlier this year, the bank launched its women’s proposition, tagged Alpher, a platform to empower women across all segments of the Nigerian society through capacity building opportunities, networking platforms, scholarships and tailored financial services.

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Wednesday 29 May 2019

BUSINESS DAY

BANKING

33

In Association with

Need for self-regulation in microfinance banks HOPE MOSES-ASHIKE

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he need for self-regulation in Microfinance Banks (MFBs) cannot be overemphasised as it enhances performance and sustainability of the sub-sector.

The 2011 revised microfinance policy framework prescribes self-regulation by apex associations of Microfinance Banks and Institution.

In view of this, the Central Bank of Nigeria, (CBN), and the International Finance Corporation, IFC, have charged Microfinance Banks, (MFBs) to embrace self-regulation and consolidation in order to enhance transparency and good corporate governance practices among their members.

Meanwhile, the National Association of Microfinance Banks, NAMB, has called for standardized performance measures and requirements for operators in subsector.

These were highlights of the 5th annual symposium of the Nigeria Microfinance Platform held in Ibadan, Oyo State, with the theme, “SelfRegulation for Sustainability and Development of the Microfinance sector”.

In her Keynote address, deputy governor, Financial Sector Surveillance, Central Bank of Nigeria, CBN, Aisha Ahmad stressed the need for self-regulation in the MFB subsector, saying:

“A comprehensive oversight mechanism is required for effective supervision of microfinance activities of over 900 licensed MFBs; this is where the relevance of a self-regulatory organization comes into play.”

Stressing the expectation of the CBN from MfBs operators in terms of self-regulation, Ahmad, who was represented by Tokunbo Martins, director, Other Financial Institutions Supervision Department (OFISDs) said: “We believe that the effectiveness of self-regulation

Accion MfB leverages technology for growth in 2018 Hope Moses-Ashike & Gbemi Faminu

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ccion Microfinance Bank limited recorded increased Profit After Tax (PAT), which rose by 30 percent to N1.05 billion in the financial year ended December 2018 from N809.76 million in 2017.

The bank’s loan disbursements grew by 21.4 percent from N19.13 billion in 2017 to N23.33 billion in 2018. Its shareholders fund experienced an 18 percent growth from to N4.61 billion in 2018 as against the N3.91 billion realized in the previous year. The board and shareholders of the company at the meeting approved a dividend payment of 25k.

This was largely due to the resilience of the board, the people and on the strength of the bank’s diversified product offerings shaped by customer preferences.

Announcing the results at the 13th Annual General Meeting (AGM) on Thursday 23rd May 2019, Patrick Akinwuntan, chairman he stated that despite the challenging business environment, the bank was able achieve feats and record successes in course of the year incorporating technological and electronic models to improve

customer satisfaction.

He said, “2018 witnessed significant investments in our core banking system upgrade and in strengthening our capabilities to deepen financial inclusion leveraging on digital and communication technology”.

Furthermore the company was able to pass the CBN benchmark of 2 billion in 2018, according to the chairman of the bank.

Speaking on the company’s market success, he said “our total number of accounts also grew significantly from 282,057 to 406,807 representing a 44.2 percent increase, our borrowing clients grew marginally by 16 percent from 39,036 in 2017 to 45,151 in 2018 while our saving clients grew from 166,795 to 253,523 in 2018 representing a 52 percent growth” “We continue to actively manage our capital base to cover risk inherent in our business, closing at a strong capital adequacy ratio of 50 percent as at December 2018 as against the regulatory requirement of 10 percent” The chairman also stated that the bank was able to surpass the 2 billion capital requirements for national microfinance banks with over 40 percent, adding that the bank will have no problem meeting the N5 billion upgrade before the stipulated time.

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in driving performance of the microfinance sector depends on an effective and efficient mechanism for addressing non-compliance, standardized performance measures driven by the best performing operators in the microfinance sector. It is therefore important that the umbrella associations set the tone right from the onset and clearly communicate their expectations which should be congruent with the regulators’ expectations for the microfinance industry.”

Also speaking, Eme Essien, country director of IFC, noted while selfregulation is important it will not happen immediately but gradually as operators and regulators work together.

She however stressed that in addition to selfregulation, there is need for consolidation in the MfB sector, noting that most of the MFBs in the country are small and their viability is fragile.

She said: “There must be pursuit of consolidation in the sector. We hope that the smaller banks will look for partnership with other larger ones. You can join forces, you can grow your network in that way, you can expand your offerings in that way, you can grow the credibility of the sector in that way and you can build trust among customers. In fact, overtime we see a very significant benefit in combining businesses.

This will also reduce the pressure on the CBN, but broadly it will lead to a high level of sustainability in the sector so that the microfinance

sector really has its place in driving financial inclusion in Nigeria.”

NAMB President, Rogers Nwoke averred that self-regulation has been one of the cardinal objectives of the association since inception, adding that there is huge prospect for self-regulation in the sector.

He noted that self-regulation among other things will eliminate the regulator-anxiety of the operator and enhances compliance, adding that it will also streamline compliance indicators according to size, status and risk framework of the microfinance banks. He added that in addition to the above self-regulation will grossly reduce cost of statutory regulation and promote consumer protection.

He however averred that for these to happen there is need to develop effective mechanism for addressing noncompliance, standardized performance measures and requirements driven by best performing operators in sector. He said in addition to these, there must be focus on developing, disseminating and promoting best practice through developing guidelines, ratings and codes of conduct.

He said the CBN will also have to make MFB ratings a condition to receiving intervention funds and other incentives, and allow for peergroup differentiation, use of external validation, production of scores and penalties for noncompliance.”

EdFin Microfinance Bank commences operation with focus on education Hope Moses-Ashike

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dFin Microfinance Bank on Thursday officially kicked-off banking operations, focusing on providing savings, loans and value-added services to stakeholders in the education sector of the economy.

The lender, which is Nigeria’s number first specialised bank focused solely on education finance, is an initiative of Gray Matters Capital through their investment company Gray Matters Mauritius (GMM) together with Bunmi Lawson and Adetayo John–Fishers.

The bank is designed to improve learning outcomes by providing financial services to private schools, school contractors and other stakeholders in the sector. EdFin will enable schools become sustainable businesses, develop linkages to education solution providers for innovative apps and technologies to supplement school curriculum.

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Speaking at the launch of the bank, Oby Ezekwesili, former minister of education, advised the banks to direct their services to bridge the gap in skills and knowledge of schools, to enable the students transform the economy and compete with their counterparts across the world.

She said that if a country wants to improve the economic and social wellbeing of its citizens, it must be done through quality education.

“Those who have the capacity to pay should pay the right price for tertiary education and for those without the capacity to pay, edufinance and a subsidy from the federal government that is well designed will ensure that they are not left out of education,” Ezekwesili said.

It’s the bank’s vision to be the globally recognised bank of choice for education financial solutions in Africa and its mission is the provision of financial services to the education ecosystem for the realisation of human potential.

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Wednesday 29 May 2019

BUSINESS DAY

BANKING Keystone Bank trains entrepreneurs on digital banking Stories by HOPE MOSES-ASHIKE

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eystone Bank Limited has reaffirmed its c o m m i t m e nt to providing support for the real sector as it recently partnered Facebook via its partners, Rabbington Media, to organize a capacity building training on digital marketing for its Micro, Small and Medium Enterprises (MSME) customers in Lagos State.

According to the lender, the training on “Social Media Marketing” held two days, was part of the Bank’s Corporate Social Responsibility (CSR) initiatives under the scheme “BoostYour-Business”.

At the event, participants (comprising of both

existing and prospective customers of Keystone Bank) were trained on the advantages of inter-

net marketing through the social media to grow their businesses and achieve their dreams.

Abubakar Danlami Sule, acting managing director represented by the head, MSME/Value Chain man-

agement of Keystone Bank Limited, Helen Nwelle, said the bank is providing businesses and organizations the opportunity to expand their customer reach by projecting their message on global platforms like Facebook thereby promoting exposure.

“We are committed to ensuring that our self-employed customers thrive at their various businesses hence we constantly seek ways and means to connect them to the market and ensure they succeed in reaching their customers. Giving them a social media presence will aid their appeal to the emerging middleclass customers in Nigeria who will most likely form a larger percentage of their customer base in the near future and are majorly upwardly mobile youths who connect daily on these plat-

forms at a reassuring rate.

“The capacity building trainings are available to all Keystone Bank customers who seek a competitive edge to transform their businesses and will be coming to other parts of the country with trainings slated to take place in Edo, Port Harcourt and Enugu within this quarter and in the northern parts of the country from the third quarter,” Nwele explained.

She further stressed that the bank recently relaunched her MSME drive to ensure businesses are well equipped with required knowledge and skills for their growth and survival in the heavily underfunded sector.

Keystone Bank is a technology and service-driven commercial bank offering convenient and reliable solutions to its customers.

Stanbic IBTC reiterates commitment to children’s healthcare, education

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tanbic IBTC, a member of Standard Bank Group, has reiterated its commitment to the health and wellbeing of indigent children, even as it promised to continue to work to ensure their educational development.

The organisation made these pledges over the weekend at Tarkwa Bay, an island community in Lagos, and at Shaga, a riverine community in Epe, Lagos when it distributed treated mosquito nets to school children in those areas. The gesture aims at helping to stem the malaria scourge among school children.

The distributions were done in the communities at special events to mark the World Malaria Day organised in partnership with Slum2School, a non-government organization devoted to meeting the educational needs and aspirations of indigent children.

Oyefeso-Odusami, head, marketing and Communications, Stanbic IBTC, Bridget while speaking at Tarkwa Bay, said this year marked the fifth year the financial institution is partnering with Slum2School to

sensitize indigenes in areas such as Tarkwa Bay, Shaga in Epe, Makoko, and other disadvantaged areas on the malaria blight and ways to ensure a malaria-free environment. According to her, the distribution of the mosquito nets and similar interventions are important measures to help stem the scourge, in line with the 2019 theme for World Malaria Day, “End Malaria for Good.” She stated that the Stanbic IBTC Group’s corporate social investment philosophy is focused on

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three key pillars of education, health, and economic empowerment.

“We hope to help, through this health intervention, our children, particularly the disadvantaged ones, live a healthy, malaria-free life. We believe that healthy children are better able to concentrate on their education and hopefully live a higher quality of life,” said Oyefeso-Odusami.

She enjoined the pupils to ensure they imbibe cleanliness as a habit and to use their mosquito nets as a pre-

ventive measure against malaria, which remains prevalent in Nigeria. She assured that Stanbic IBTC will continue to support initiatives that will help to eradicate the scourge and other diseases.

The leaders of the two communities, while responding to the gesture, thanked Stanbic IBTC and Slum2School for their efforts. And they promised to continue to rally their people to ensure a clean and safe environment for their children to grow in.

According to Chief Sunday Emmanuel, Baale of Shaga, “We are grateful for the kindness shown by Stanbic IBTC and Slum2School.

Today is like a celebration day for us, as you can see how excited the children are to receive the mosquito nets, the refreshments and the tests and medicines given out.” Baale of Tarkwa Bay, said: “This is the second year that Stanbic IBTC and Slum2School will visit us and donate nets, medicines, and vaccines to ensure we are healthy, particularly the children and pregnant women.

We will continue to appreciate them and the gesture.”

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Ecobank Nigeria aligns strategy to reflect Africa

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cobank’s approach to doing business in Africa is to create a united and integrated brand and platform that reflects the values of Africa as a whole whilst leveraging its diverse talents and resources to tackle its common challenges and realize its immense opportunities as one market.

This was the submission of Patrick Akinwuntan, managing director, Ecobank Nigeria who spoke in commemoration of Africa Day 2019.

“With a larger African footprint than any other bank in the world operating in West, Central East and Southern Africa, we are the @Businessdayng

only bank that spans 36 African countries, but operates a truly integrated African network.

That is One unified integrated Ecobank Mobile Banking App, that works seamlessly across all 33 operating countries in Africa; One Ecobank Omni and Omnilite serving all Multinationals and SMEs in Africa; One Rapidtransfer app that breaks down country borders and allows the diaspora community send money directly to their loved ones, instantly and affordably across Africa; One Ecobank Online Banking platform that you can access easily whether you are in Abuja or Kinshasha”, he stated.

Wednesday 29 May 2019

BUSINESS DAY

35

tax issues CITN inducts 560 new members, emphasises on professional conduct Iheanyi Nwachukwu

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he Chartered Institute of Taxation of Nigeria (CITN) has inducted no fewer than 560 new members.

The new members of taxation profession were urged to eschew all forms of professional misconduct and uphold the integrity of the Institute in all their dealings.

Speaking at the 40th induction ceremony held in Lagos, Cyril Ikemefuna Ede, 13th president/ chairman of council, Chartered Institute of Taxation of Nigeria said the “institute’s council frowns at any conduct deemed to be at variance with the Code of ethics for members.”

The new tax professionals successfully navigated the process that led to the ceremony, which attests to the fact that they willingly made efforts to become members of the noble

L-R: Abbas Abdulkadir, head of department, Securities and Investments Services, Securities and Exchange Commission; Anastasia Braimoh, head of department, Legal Department SEC, Osaro Eghobamien, managing Partner, Perchstone and Graeys (SAN) and Graham Penn, Professor of International Finance Law, University College London during the Securitization Training in Abuja.

profession.

“I have no doubt that you would commit yourselves to the ideals of the Institute by being professionals in all your dealings. CITN recognises the

need to accord serious consideration to putting in place policies that would enhance investment in the economy and promote voluntary tax compliance,” Ede.

In its recommendations on issues of concern in the economy and the 2019 federal government budget, CITN noted that there is potential for government to increase productivity

by investing in education with emphasis on quality over quantity. “It is a bold thinking that should be driving the 2019 budget”.

CITN believes that the economy requires an average of 5 million new jobs, annually, to reverse the unemployment trajectory that has subsisted over the years.

“To achieve this, the economy needs to grow at an inclusive growth rate of between 5percent and 6 percent per annum. Deliberate policies should be activated to drive economic growth”, CITN president added.

Accordingly, CITN noted that the Federal Government budget should inspire hope, resting on a philosophy of progress and not only on the churn of figures.

“The budget can do better in assuring Nigerians of the reversal in the observed gale of unemployment etc.

More so, the budget ought to detail a plan of action beyond the statement of incomes and expenditure,” it stated.

The Nigerian Transfer Pricing Regulations: A tool for enhancing tax competitiveness Omojo Okwa and Gali Aka

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ccording to Adam Smith, a good tax system must possess the qualities of equity, certainty, economy and convenience. All tax laws and accompanying tax regulations must be written with the intention of balancing these qualities with meeting the core objective of taxation, which is to enable the collection of all monies due to government.

The Income Tax (Transfer Pricing) Regulations, 2018 (the TP Regulations) highlights the provision of certainty of transfer pricing treatment in Nigeria (certainty) and a level playing field for both multinational enterprises and independent enterprises carrying on business in Nigeria (equity) as some of its core objectives.

This article seeks to review the potential effectiveness of the current TP Regulations in enabling the accomplishment of the objectives stated above and suggests ways by which the Regulations can enable the realization of these objectives.

Certainty The TP Regulations as a whole is a step in the right direction towards providing corporate taxpayers with certainty of the transfer pricing treatment of transactions conducted with their associated counterparts .

Prior to the release of the TP Regulations, taxable persons lacked clarity on the approach to be adopted by

the tax authority in determining compliance with the arm’s length standard. For example, Section 22 of the Companies Income Tax Act empowers the Federal Inland Revenue Service (FIRS) to adjust the pricing of transactions between related entities where in its opinion those transactions have not been made on terms consistent with the arm’s length principle. This section of the principal act exposes taxpayers to the risk of assessments to additional tax liabilities on frivolous basis. The TP Regulations speak to the methods to be adopted by the tax authorities in making a determination of the arm’s length nature of related party transactions, and the documents/ information that taxable persons can show to demonstrate compliance.

Furthermore, the inclusion of safe harbor and advance pricing agreement (APA) provisions in the TP Regulations, have reinforced the

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intention of the FIRS to provide taxable persons with avenues through which they can obtain the advantage of a greater level of certainty in the area of Transfer Pricing. The demonstration of this intention is quite laudable. However, the TP Regulations still leaves a lot to be desired in this regard, especially because intentions alone are not enough and taking action is more important. The prompt publication of the promised guidelines, which provides greater clarity on how the FIRS intends to go about the application of both the safe harbor and the APA provisions and heralds the commencement of their practical application, is pertinent if this objective is to be achieved in the nearest future.

In addition, the APA provisions in the TP Regulations specify that agreements entered into shall apply to the controlled transactions for a period not exceeding three years.

Increasing the duration of time for

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which a pricing agreement between the tax authority and a taxable person remains valid will go a long way in enhancing certainty. For example, in India, APAs entered into between taxable persons and the Indian tax authority can remain in force for a period of five years. Similarly, in India, bilateral APAs (i.e. APAs entered into between taxable persons and tax authorities in India and other jurisdictions) have a “roll back” provision which allows such APA to be applied retrospectively for up to a maximum period of four years. This essentially means, bilateral APAs in India can effectively be in force for a period of up to nine years.

Also, in addition to enhancing certainty, increasing the validity period of APAs will help to justify the significant investments in time and money made by both the tax authority and the affected taxable persons towards reaching a consensus.

Equity Another laudable feature of the TP Regulations is the relaxation of the requirement to prepare contemporaneous documentation for companies with a total value of related party transactions that is less than NGN 300 million. This will significantly reduce the burden/ cost of compliance especially for smaller companies, and will most likely have a greater positive impact on domestic groups. The TP Regulations, however, still retain the right of the tax authority to request for contemporaneous documentation from such companies. Therefore, the @Businessdayng

burden is not completely lifted from such companies.

The introduction of a threshold that completely exempts smaller companies and pre-defined categories of domestic companies which fall within the class of low risk entities from complying with the TP Regulations will significantly enhance the accomplishment of the objective of equity.

Conclusion Businesses thrive on certainty.

Therefore, achieving greater levels of certainty in the area of transfer pricing can go a long way in increasing a country’s tax competitiveness and improving the attractiveness of a country as a destination for foreign direct investment.

Furthermore, in a country where, according to the World Bank’s ease of paying taxes rankings, taxpayers spend over 370 hours per year on tax compliance, increasing certainty and reducing the TP compliance burden on smaller businesses will go a long way towards improving the overall tax compliance experience and enabling companies channel their energy towards achieving their core objectives of profit generation.

The opinions expressed in this article are strictly those of the authors who are as follows: Omojo Okwa (Manager) and Gali Aka (Manager) of Global Transfer Pricing Services of KPMG in Nigeria.

They can be contacted at omojo. okwa@ng.kpmg.com and gali.aka @ng.kpmg.com respectively.

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Wednesay 29 May 2019

BUSINESS DAY

Live @ The Exchanges Market Statistics as at Tuesday 28 May 2019

Top Gainers/Losers as at Tuesday 28 May 2019 LOSERS

GAINERS Company

Opening

Closing

Change

NESTLE

N1400

N1450

50

SEPLAT

N520

N549.9

29.9

Company

Opening

Closing

Change

FLOURMILL

N13.75

N13.35

-0.4

PZ

DANGCEM

N192

N201.6

9.6

ETERNA

MTNN

N130

N132.55

2.55

NAHCO

N58

N60

2

NB

AFRIPRUD

ASI (Points) DEALS (Numbers)

N8.5

N8.1

-0.4

N4

N3.65

-0.35

VOLUME (Numbers)

N3.3

N3.18

-0.12

VALUE (N billion)

N3.6

N3.56

-0.04

MARKET CAP (N Trn)

31,307.00 4,456.00 344,308,714.00 7.270

Global market indicators FTSE 100 Index 7,268.95GBP -8.78-0.12%

Nikkei 225 21,260.14JPY +77.56+0.37%

S&P 500 Index 2,822.65USD -3.41-0.12%

Deutsche Boerse AG German Stock Index DAX 12,027.05EUR -44.13-0.37%

Generic 1st ‘DM’ Future 25,540.00USD -80.00-0.31%

Shanghai Stock Exchange Composite Index 2,909.91CNY +17.53+0.61%

13.789

Stock investors gain N490bn as sell pressure halts on NSE …as Nestle, Seplat, Dangote Cement, MTNN, Nigerian Breweries top gainers Stories by Iheanyi Nwachukwu

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nvestors at the Nigerian Stock Exchange (NSE) booked gains valued at about N490billion on Tuesday May 28, 2019 as more value stocks were on demand.

Topmost amongst them are Nestle Nigeria Plc, Seplat Petroleum Development Company Plc, Dangote Cement Plc, MTN Nigeria Communications Plc and that of Nigerian Breweries Plc. At the sound of closing gong 30 stocks gained against 6 losers.

Despite the hunt for bargains in Tuesday’s session, stock prices remain attrac-

tive across the board and as such investors are expected to take advantage of the good entry point during Wednesday’s trading session.

The direction of the two market heavyweights Dangote Cement Plc and that of MTNN could still dictate the performance of the bourse.

The Nigerian Stock Exchange (NSE) All Share Index (ASI) increased by 3.68percent, while the Yearto-Date (Ytd) return stood at -0.39percent.

The All Share Index closed at 31,307points against the preceding day close of 30,194.71points while Market Capitalisation closed at N13.789 trillion as against preceding day close of N13.299 trillion.

Nestle led the gainers af-

ter gaining N50 or 3.57percent, from N1400 to N1450.

Seplat followed after rising from N520 to N549.9, adding N29.9 or 5.75percent.

The share price of Dangote Cement Plc moved up from N192 to N201.6, adding N9.6 or 5percent. MTNN rallied from N130 to N132.55, up by N2.55 or 1.96percent, while Nigerian Breweries gained N2, from N58 to N60, up 3.45percent.

Flourmills Nigeria Plc recorded the biggest loss, after moving from a high of N13.75 to N13.35, down by 40kobo or 2.91percent.

Likewise, PZ Cussons Nigeria Plc made the top decliners list after dropping from N8.5 to N8.1, down by 40kobo or 4.71percent.

Eterna Plc dipped from N4

to N3.65, losing 35kobo or 8.75percent. NAHCO Plc was down from N3.3 to N3.18, after its share price lost 12kobo or 3.64percent; while that of Africa Prudential decreased from N3.6 to N3.56, losing 4kobo or 1.11percent.

The volume of stocks traded increased by 132.31percent, from 148.213 million to 344.309 million, while the total value of stocks traded increased by 227.87percent from N2.218 billion to N7.271 billion in 4,456 deals.

The Financial Services sector led the activity chart with 271.9million shares exchanged for N4.097 billion; while Services followed with 21.3 million shares traded for N67million.

Airtel Africa weighs London, Nigeria Stock Exchanges listings

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irtel Africa plc, second-largest mobile operator in the continent by subscriber base, is planning a premium listing of its shares on the Official List of the Financial Conduct Authority (FCA) and admission to trading on the Main Market of the London Stock Exchange (LSE).

Thereafter, the telecommunications company will do a potential secondary listing on the Nigeria Stock Exchange (NSE).

Airtel Africa plc’s expected IPO registration document seen by BusinessDay shows that if the company decides to proceed with a listing on the Nigerian Stock Exchange, the earliest that this could happen will be at the time of Admission.

The syndicate firms in the transaction are J.P. Morgan Cazenove, BAML, Citi JBRs, Standard Bank, ABSA, Barclays, BNPP, GS and HSBC. Announcement of the planned listing comes barely two weeks after MTNN

listed by introduction its 20.35billion units on the NSE at N90 per share.

In the initial public offering of the Ordinary Shares, Airtel Africa plc targets 100percent primary proceeds with expected free-float of 25percent minimum.

The move would see the continent’s secondbiggest mobile operator freely float at least a quarter of its shares and use the proceeds to reduce net debt, according to the Offer document.

“Airtel Africa is a leading telecom and payment service operator with leadership and scale across our footprint,” said Raghunath Mandava, the Group’s chief executive.

“The 14 countries where we operate offer strong GDP growth potential and have young and fast-growing populations, low customer and data penetration and inadequate banking infrastructure. These fast-growing markets provide us a great opportunity to grow both our telecom and payments businesses.

Standard Chartered provides insight into manufacturing sector funding

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tandard Chartered Bank Nigeria Limited recently hosted the first edition of its Business Banking industry event, The Confluence, as part of its efforts to deepen sustainability in the Nigerian manufacturing industry and promote business financing. The event which took place

on May 17, 2019 in Lagos brought into perspective the growing demands in the industry.

Themed “The Path to Sustainable Manufacturing”, the event provided a platform for stakeholders in the manufacturing industry as well as key regulatory organisations such as NAFDAC, Standard www.businessday.ng

Organisation of Nigeria (SON), Institute of Exports Operations Management, Nigerian Export Promotions Council and the Nigerian Customs to identify points of collaboration to grow the Manufacturing sector in Nigeria.

The panel of experts came up with critical insights to boost the sector

and the various supports and interventions available to the players, especially in these challenging times. The event created an avenue for these stakeholders to network and exchange invaluable industry intelligence.

Speaking at the event, Lamin Manjang, the Managing Director/CEO of

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Standard Chartered Bank Nigeria Limited highlighted the importance of the

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manufacturing sector in driving economic growth in Nigeria, noting that access to market and financing are crucial to business development. He added that within the bank there are available solutions for clients that are hinged on its global expertise, network, capabilities and financial strength.

Wednesday 29 May 2019

BUSINESS DAY

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Wednesday 29 May 2019

BUSINESS DAY

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Wednesday 29 May 2019

BUSINESS DAY

39

news FG may raise $34bn from reducing JV oil...

Continued from page 1

Tuesday.

Joint venture agreements in the oil sector occur where two or more parties combine to execute an oil and gas transaction and mitigate risk associated with the business.

Six major IOCs such as Shell, Chevron, Mobil, Agip, EIF, and Texaco, which account for a large chunk of Nigerian oil exploration and production, are in joint venture agreement with Nigeria through the Nigerian National Petroleum Corporation (NNPC) which owns 55 percent stake in its joint venture with Shell and 60 percent stakes with other joint venture companies.

BusinessDay calculations of the potential value the FG can get for selling down its stake compared the relative valuation of Saudi Arabia’s Aramco which boasts of an average oil production of 11.6 million and a $2 tril-

lion valuation envisaged by Crown Prince Mohammed bin Salman, though the market later valued it at $1 trillion.

The plan of reducing government shares to 40 percent is expected to generate additional revenue for the Federal Government which will be selling a total of 401,250 bpd from the six oil majors that will generate a total of $34 billion to the Nigerian treasury.

Forexample,ShellPetroleum DevelopmentCompanyofNigeria Limited’s new 15 percent gap in Joint Venture agreement with NNPC translates to 134,850bpd from its total oil production of 899,000 barrels per day (bpd).

Previous NNPC’s 55 percent translates to 494,450bpd, while the new 40 percent translates to 359,600bpd.

NNPC’s 20 percent gap translates to 80,000 bpd in a joint venture agreement with Chevron Nigeria Limited, the second-largest producer (approximately 400,000 bpd), compared to the previous 60

percent stakes of 240,000 bpd.

For Mobil Producing Nigeria Unlimited, NNPC’s 20 percent gap translates to 126,000bpd from its Joint venture agreement, which operates in shallow water off Akwa Ibom State in the south-eastern delta with an average production of 632,000 bpd. NNPC’s 60 percent translates to 379,200bpd while the new 40 percent translates to 252,800bpd.

Also, NNPC’s new 20 percent gap translates to 30,000bpd stake in Joint venture agreement with Nigeria Agip Oil Company Limited with a total production capacity of 150,000 bpd.

For Elf Petroleum Nigeria Limited, NNPC’s 20 percent gap translates to 18,000bpd which produced approximately 125,000 bpd from both onshore and offshore. Currently NNPC’s 60 percent translates to 54,000bpd, the new 40 percent translates to 36,000bpd.

Finally, Texaco Overseas Petroleum Company of Nigeria’s 20 percent gap translates

to 12,000bpd. It currently produces about 60,000 bpd from five offshore fields.

Energy and financial experts have described the decision by the government to sell some of its stakes in JV oil assets as a welcome development.

Abimbola Omotola, macro & fixed income analyst at Chapel Hill Denham, noted that the restructuring will help the government generate more revenue to finance some capital projects and liquidity to finance its budget deficit.

According to Omotola, the success story recorded in the NLNG could also be translated to other JVs in the country and also improve efficiency in IOCs. Ayodele Oni, partner, energy practice group, Bloomfield Law Practice, said the development will reduce revenue the government realises from the JVs but notedthatthecashrealisedfrom the sale could be channelled to fund capital projects.

Over the years NNPC, which functions as an operator in the upstream, midstream

and downstream sectors; a joint-venture partner to private sector exploration and production companies; and a regulator has failed to meet its share of cash call obligations for many years, resulting in significant debts owed to oil companies.

NNPC, in its latest monthly report, said total oil and gas export receipt of $381.70 million was recorded in January 2018 as against $345.68 million in December 2018.

It said, “Of the export receipts, $156.11 million was remitted to the Federation Account while $225.60million was remitted to fund the JV cost recovery for the month of December to guarantee current and future production.”

The debt office in 2017, had announced the government’s plan to raise N710 billion ($2.32 billion) through restructuring its equity in joint venture oil assets, which reflected in the 2018 budget.

The Group Managing Director, NNPC, Maikanti Baru, said in June last year that the corporation had settled all its

Airtel plans London IPO, Lagos listing...

Continued from page 1

more investment opportuni-

ties in Nigeria.

These opportunities include alistingofitsNigerianunitonthe domestic bourse and acquisition of a mobile banking licence which would help to further increase financial inclusion rate in Nigeriabyextendingfinancial services to the unbanked.

Airtel Africa on Tuesday announced plans to sell 25 percent of its shares through an IPO, while it looks forward to trading on the Main Market of the London Stock Exchange using its premium listing segment.

The success of these would lead to a listing on NSE, the company said in a document titled ‘Announcement of Intention to Publish a Registration Document and Potential Intention to Float on the London Stock Exchange’.

“The company is considering a listing of its shares on the Nigerian Stock Exchange. If the company decides to proceed with a listing on the Nigerian Stock Exchange the earliest that this will happen will be at the time of admission,” Airtel

Africa said in the document released on Tuesday.

Although Airtel’s planned listing may have come shortly after MTN Nigeria listed on the NSE by way of introduction, Airtel has since 2016 indicated interest to trade its shares on Nigeria’s stock market.

Similarly, the telecommunication company, which operates three main business lines such as mobile voice, mobile data and Airtel Money, said it’s in partnership with a local bank in Nigeria and has applied for a mobile banking licence.

Nigeria represents the Group’s largest single country subscriber base, comprising 37.6 percent of the Group’s total subscribers as at March 31, 2019, with 43.4 percent of subscribers in East Africa and the remaining 19.1 percent in the Group’s Rest of Africa segment.

Airtel Africa had group revenues of $3.08 billion in the year ended March 31, 2019, and Nigerian operations alone accounted for 35.9 percent or $1.106 billion (N400 billion) compared to East Africa operations at 35.8 percent or

To grow Nigeria’s economy at 7-8% a...

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belongs to a few Nigerians.

Voting for Buhari was a tough choice in 2015. Nigerians were caught between a hapless incumbent and a self-declared reformed democrat. Cast as a nononsense ex-general and corruption buster, the former general’s austere and disciplined lifestyle was sold as the solution to the insecurity and corruption that continually plague Nigeria. It convinced sceptical voters to take a chance on him after

three attempts at being democratically elected as president.

Four years ago, Nigerians took a chance for a change.

If it changed anything at all, it was the idea that a democratic transition, change at the top through the ballot box, was possible. Expectations were high. Sadly, other than the possibility of democratic alternation, that chance was squandered. In hindsight, the gain Nigerian stocks made, the most in the world on April 1, 2015, feels like an April Fools’ Day joke. The expectations that underpinned that bounce have waned. www.businessday.ng

outstanding cash call arrears amounting to $5 billion, and that it had restored confidence in the country’s oil and gas industry.

Recall last year, cash call payment for the development of joint venture oil and gas assets ate into the Federal Government’s revenue as a total of N1.829trillion was paid.

In December 2018, a total of 59.05 million barrels of crude oil & condensate was produced representing an average daily production of 1.90million barrels. This translates to an increase of 5.63percent in the average daily production compared to November 2018 average daily performance.

“Of the December 2018 Production, Joint Ventures (JVs) and Production Sharing Contracts (PSC) contributed about 32.77percent and 37.09percent respectively. While AF, NPDC and Independents accounted for 13.19percent, 7.99percent and 8.96percent respectively,” NNPC said in its latest financial record.

L-R: John Jemede, MSME & Value Chain Management, Keystone Bank Limited; Edache Obe, Facebook; Helen Nwelle, Head, MSME & Value Chain Management, Keystone Bank Limited and Okemini Otum, CEO, Rabbington Media at the capacity building training on Social Media Marketing organized

by Keystone Bank in collaboration with Facebook – Rabbington Media in Lagos.

$1.102 billion and rest of Africa’s revenue of $888 million representing 28.9 percent.

AirtelAfrica’searningsbefore interest, tax, depreciation and amortisation(EBITDA)whichis a measure of a company’s operating performance for Nigerian operations was $550 million for the period compared to East Africa’s $442 million and rest of

Africa at $339 million.

Should it proceed with its intention to do an IPO, Airtel Africa intends to distribute to its shareholders a minimum of 80 percent of consolidated free cash flow.

“At the individual operating country level, the company will recommend to the local boards a dividend

pay-out of a minimum of 80 percent of the free cash flow,” Airtel Africa said. This would be done “at the country level as long as a ratio of net debt to EBITDA between 2.5 to 3.5 times is maintained, subject to all regulatory, statutory and monetary restrictions”.

Immediately after the admission, Airtel Africa said it

intends to have a free float of at least 25 percent of the company’s issued share capital and expects that it would be eligible for inclusion in the FTSE UK indices.

“In addition, it is expected that up to a further 15 percent of the offer will be made available pursuant to the OverAllotment Option,” it said.

A growing economy that generated no jobs was one of several reasons former President Goodluck Jonathan lost the election in 2015. Under Buhari, the economy has slowed down, generated no jobs, made millions poorer and risks leaving an equal number without the capacity to read and write.

Mr President and his triumvirate will probably shrug and say his character and voters’ desire for continuity won him a second term. They possibly take comfort that few of the President’s staunchest supporters didn’t vote based on expectations of a better economy or help for the poor.

According to a poll con-

ducted before the elections

by NOI Poll on behalf of ANAP Foundation, continuity, integrity and security were the top three reasons given for supporting Buhari.

Expectations about the economy under President Buhari began to drop after it took him months to choose his ministers, and fell further due to his rigid stance on the foreign exchange. With 91 million people living in extreme poverty, the Nigerian economy was failing more citizens faster than India’s, a country with five times more people.

Four final more years and it’s hard to expect any major reforms from the President.

Still, we at BusinessDay will keep making the case for the potentials and benefits of a private sector-led economic recovery. For the next three days, beginning today, we will draw attention to sectors of the economy, their challenges and what it will take to fix them. All it will take are steps that build confidence, encourage new investments that will grow the economy and generate jobs.

The pace at which the economy is travelling suggests Nigeria will arrive late and unprepared to a future where a large and highly-skilled population is an advantage.

It would be big mistake if the President thinks only his will

and character can steer Nigeria back on track.

Some things have to stop.

Stop interfering excessively in the economy. Stop wayward regulators and ministers from acting like bouncers behaving badly, bullying party guests they are hired to protect. Stop thinking your advisers don’t have vested interests they will pursue at the risk of ruining the entire country.

It would be a disaster to be remembered as the leader who each time he ruled Nigeria left the country poorer, and given the millions of poor uneducated and unemployed youths, will probably leave it more insecure.

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@Businessdayng

40

Wednesday 29 May 2019

BUSINESS DAY

PRIVATEEQUITY &FUNDRAISING

How family businesses can reposition to attract PE investments - PWC survey MICHAEL ANI

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ver the last decade, there has been a shift in the way family-owned businesses are financed from traditional means to attracting Private Equity (PE) investments.

The relationship between familyowned businesses (FB) and attracting PE investments can be liken to a two-way chain. An FB can invite a PE as a partner, or a PE invites an FB as a partner.

A recent survey by global consulting and auditing firm, PriceWaterhousecoopers (PwC), on family businesses showed that FB is fast appreciating the benefit from PE firms’ expertise in the areas of governance, financial management, strategic planning, and shoring up companies for sustained success.

According to the survey, 39 percent of family businesses are considering PE investments within the next 1-2 years.

This change in ideology is due to an increased focus on long-term value generation, succession and professionalism at FB, as well as the positive brand perception that an announcement of a PE investment (and re-investment) gives a business.

According to the survey, the most important factors considered when PE’s are looking into family businesses include: • Identification of core capabilities, and developing them, to create a differentiated position in the market.

• Strong corporate governance that ensures absolute transparency in business operations and separates ownership from management of the business.

• Historical and current financial

records that conform to International Financial Reporting Standards (IFRS) • Compliance with all applicable local and national tax regulations PE firms appreciate the strategic value of good corporate governance and are well positioned to work with FB in strategy implementation such as independent review of existing strategies. This would ensure the FB is better equipped to identify risks and make smart, goal-oriented decisions within their marketplace.

In terms of short-term aspirations, profitability is crucial as 93 percent of the correspondents cited it as a top goal of Nigerian family businesses. This followed with the maintenance of best talent (via recruitment and retention) and contributing to the community.

Globally, family business leaders reported robust health, with levels of growth at their highest level since 2007. Revenues are expected to continue growing for the vast majority of businesses as 84 percent showed with 16 percent of them saying it will be “quick” and “aggressive”.

Regionally, businesses in the Middle East and Africa were the most optimistic, with 28 percent expecting aggressive growth.

They are followed by those in Asia Pacific (24 percent), Eastern Europe (17 percent), North America (16 percent), Central/South America (12 percent) and Western Europe (11 percent).

The survey also showed that 63 percent of Nigerian family businesses (FBs) would consider bringing in private equity as a source of funding over the next 1 to 2 years. This is higher than the global average of 39 percent. 40 percent of FBs also consider private equity as the most attractive source of funding for their busi-

ness. Currently, private equity (PE) is the most interesting form of investment for foreign investors, as a result of illiquidity in the capital markets.

Research from PwC in 2018 projected that traditional Assets under Management (AuM) in 12 markets across Africa would rise to around $1.1 trillion by 2020 from a 2008 total of $293 billion. This represents a compound annual growth rate (CAGR) of nearly 9.6 percent.

According to data from the Africa Private Equity and Venture Capital Association (AVCA), Nigeria recorded a total of 112 deals amounting to $7.8 billion over a five-year period. These deals, which occurred between 2012 and 2017 accounted for 32 percent of all private equity investment deals in Africa.

This amount was more than the combined equity investments to South Africa (US$2.8 billion) and Kenya (US$1.17 billion). Currently, 80 percent of FBs in Nigeria use internally generated funds for business activities, while 47 percent rely on bank lending/credit lines, which is significantly lower than the global average of 81 percent, the report says.

The report further showed that familyowned business are optimistic on the outlook of the business landscape in Nigeria, however, they see growth being limited by a number of challenges.

Respondents in the survey cited economic environment, corruption amongst others as key challenges over the next two years. Corruption is associated with lower investment, higher prices, as well as barriers to entry for businesses.

PwC estimates that corruption in Nigeria could cost up to 37 percent of GDP by 2030 if the trend continues. This cost is equated to around $1,000 per person

in 2014 and nearly $2,000 per person by 2030. Regulation was another issue cited by more than half of FBs. In addition to the economy, corruption and regulation, other challenges identified by family businesses include: accessing the right skills & capabilities, domestic competition and access to financing, among others.

Nigeria moved up 24 places in the World Bank’s Ease of Doing Business (EoDB) 2018 index to the 145th position from 169th. Despite this record improvement, the business environment remains challenging in the absence of structural reforms. The country dropped one spot on the 2019 EoDB index.

Tax & regulatory challenges continue to impact the growth of businesses in Nigeria. One of such regulatory challenges cited by family businesses (FBs) in the Nigerian Family Business Survey was tax and regulatory compliance obligations. Some issues cited include multiplicity of taxes, incoherent fiscal policies, cumbersome and inefficient tax administration system, high level of tax evasion, ambiguities in the tax laws and lack of transparency on the utilisation of tax revenues for social services and infrastructural development. These challenges have contributed significantly to the low tax compliance level recorded for businesses and individuals in the country.

In addition, FBs are usually exposed to potential tax leakages such as probate tax, inheritance tax, capital gains tax and stamp duties at exit or at the point when inheritances are transferred to the next generation. Hence, FBs need to implement structuring considerations that also take account of compliance with the relevant tax laws.

BusinessDay PRIVATE EQUITY & FUNDRAISING (Team lead: LOLADE AKINMURELE - Analysts: MICHEAL ANI, DIPO OLADEHINDE, ENDURANCE OKAFOR, DAVID IBEMERE ... Graphics: OGAR DAVID ) Businessday’s Private Equity and Fundraising section is a weekly publication that provides in-depth analysis on private equity trends and tracks deal activity in Nigeria.

Email the PE & F team loladeakinmurele@gmail.com

Continues on page 34

Wednesday 29 May 2019

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Wednesday 29 May 2019

BUSINESS DAY

NEWS

Millennial Hangout takes on business side of Nigeria’s tech ecosystem FRANK ELEANYA he Millennial Hangout, a quarterly event by BusinessDay Media that brings together young people between the ages of 23 and 38 (1981 and 1996), is focusing on creating sustainable businesses in Nigeria’s evolving tech ecosystem, on Friday, May 31, 2019.

The event, which will take place at Andela Nigeria headquarter - the Epic Tower, is the first edition focusing primarily on the tech ecosystem in Nigeria.

Despite the few notable strides accomplished by tech start-ups in a relatively short time, particularly in attracting foreign investment, a report from Small Business Association (SBA) has found that more than half of new businesses fail during the first year. The report suggests that it takes more than raising funds to run a successful business that scale.

T

L-R: Ade Ayeyemi, group chief executive officer, Ecobank Transnational Incorporated (ETI); Tei Mante, non executive director, ETI; Emmanuel Ikazoboh, chairman, ETI; President Muhammadu Buhari; Abba Kyari, chief of staff to the President; Lai Mohammed, minister of information, and Godwin Emefiele, governor, Central Bank of Nigeria (CBN), during an audience the President granted a delegation of the pan-African bank at the State House, Abuja, yesterday.

Experts say Aiteo, Agip strategy reducing crude oil theft Samuel Ese, Yenagoa

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shift in strategy by Aiteo Eastern Exploration and Production Company and Nigerian Agip Oil Company has aided in reducing crude oil theft inthepasttwoyears,someexperts have noted.

The new strategy being employed by the oil companies is to award their pipeline surveillance jobs to community-based contractors who work in synergy with security agencies, including the Joint Task Force (JTF), to thwart the activities of vandals.

Anenvironmentalist,Ayibapreye Yengizifa, in a recent interview with newsmen in Yenagoa, said observations at some oilfields in Bayelsa State operated by Aiteo and Agip were benefiting from such synergy.

Yengizifa stated that the combined efforts of the surveillance contractors and the military were more effective as the locals know the terrain and their people and joint patrols and raids were based on credible intelligence.

According to Yengizifa, such synergy has resulted in seizure of “largevolumesofstolencrudeand destruction of illegal refineries.”

Previous templates of giving surveillance contracts failed because

the contractors and their personnel were strange to the oil fields they were supposed to protect.

A community rights activist, Samuel Odusi, said governments at all levels should sustain current efforts at curbing pipeline vandalism by making further investments in clean up, remediation and pollution control activities.

Odusi also stressed the need forreviewofcommunitydevelopment strategies deployed by oil firms due to the marginal impact on target audience by the funds they spend on projects.

He noted the case of Oloibiri where Shell Petroleum Development Company of Nigeria claimed to have spent on Oloibiri Health Project, saying, “If you visit Oloibiri communities in Ogbia Local Government Area, you will realise that such figures merely exist on paper.”

Continuing, he stated that the “neglect of oil bearing communities should be stopped so that sabotage of oil pipelines due to the perceived injustice by the host communities would also stop.”

Odusi therefore called on the Federal Government to review the mode of releasing the 13 percent derivation funds to ensure that the impactwasfeltbyoil-bearingcommunities in the Niger Delta region.

Signal Alliance launches CloudGo suite for SMEs

S

ignal Alliance, a system integrator, has launched a new product called CloudGo built on the Microsoft cloud platform and targeted at small and medium scale businesses (SMEs).

CloudGo comprises of digital workplace tools bundled with managed support. The value delivered by this solution is the power to engage customers, reduced cost on IT infrastructure, enhanced collaboration and improved productivity.

According to Uchechi Nwaukwa, chief technology officer, Signal Alliance, “Huge investment in IT Infrastructure, upgrade challenges, data protection and security, disaster recovery form the core of major challenges faced by SMEs. Hence,

an efficient and secure solution that enhances the way employees communicate, collaborate and scale innovate solutions for the business, becomes an inevitable need.”

In addition, CloudGo users can benefit from Microsoft services, tools, and methodologies to determine business direction and implement communication, collaboration, and databased services that can change the way your employees work together.

Also, Cloud migration, adoption and on-boarding training, consumption analytics dashboard, managed support and cyber assessment are all managed support services bundled in CloudGo to provide a robust modern digital workplace for businesses. www.businessday.ng

The Nigerian tech scene has had a fair share of new start-ups that began with promise and failed before their first birthday.

Notwithstanding, hundreds of millennials see a lot of prospect in the ecosystem.

“Building the tech ecosystem in Nigeria is something we are passionate about and we believe it is important to have the young ones thinking of pursuing a career prospect or becoming entrepreneurs, listen to the stories of people that has some experience in building tech businesses,” says Frank Aigbogun, publisher of BusinessDay Media Limited.

The tech edition will be partnering Luno and Cordros Asset Management and will feature speakers from Verraki, Kelvin Balogun; Trium Networks, Adedeji Olowe; Signal Alliance, Uchechi Nwankwo; Luno Nigeria, Chinedu Obidiegwu, and Andela Nigeria, Olawunmi Onawunmi.

Buhari blames poor resources management for poverty, insecurity Tony Ailemen, Abuja

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resident Muhammadu Buhari, Tuesday said if assets and resources available to Nigeria were properly managed, the country would be prosperous and peaceful.

He however blamed the poverty and insecurity the country was experiencing on decades of neglect and poor resource mismanagement.

The President spoke Tuesday at State House, Abuja, while receiving in audience the board of Ecobank Transnational Incorporated, led by the group chairman, Emmanuel Ikazoboh.

The President, who stressed that government remained com-

mitted to the goals of securing the country, ensuring inclusive economic growth, and fighting corruption, noted that Nigeria was in a unique position as the most populous and resource-rich nation on the African continent to be great, if the resources were properly harnessed and managed, to engender a prosperous and peaceful country.

The President said his government was not only determined to reverse the trend of squander-mania and mismanagement, saying, “We have made progress in some areas such as agriculture.”

He, therefore, appealed to Ecobank Transnational Incorporated to “institute a special fund to develop agriculture, which will cement your legacy as a bank that

Edo harps on tech-driven civil service to support reforms … reassures on ongoing overhaul of state-owned institutions do State governor, God- arrangement to the Secretariat win Obaseki, says the state would be completed before the government is retooling end of the year. the state’s civil service to become Earlier, the chairman of Edo technology-driven so it can meet State Civil Service Commission, the demands of the global age Ekiuwa Inneh said there were and drive reforms of his admin- 3,217 civil servants in the state as at istration.

Dec. 31, 2018, which include 679, The governor disclosed this 2177, 336 and 25 in junior, senior, while receiving the 2018 Annual management and consolidated Report from the chairman of the cadres, respectively.

Edo State Civil Service CommisShe called for the recruitment sion, at the Government House, of professionals to further fortify Benin City, the state capital. the service and inject more life to The governor stated that the deepen reforms in the state. She civil service must be retooled to also commended the ongoing respond to demands of contem- reforms in the state civil service, porary age so it could better serve especially the renovation of the the people.

Secretariat and High Court buildHe said he was working to ings. ensure that civil servants were Meanwhile, the state governtrained regularly on modern ment has reiterated its committrends in management and work ment to a systematic overhaul of processes to ensure efficiency in somestate-runtertiaryinstitutions the discharge of their duties. for optimal performance, noting “There is need for transition that the revamp was methodical from manual record keeping to and dependent on the peculiarielectronic processes to conform ties associated with the state of the with global standards. We are schools at the start of the revamp working with foreign partners to exercise. provide world-class facilities at SpecialadvisertotheEdoState the Training Centre, being con- GovernoronMediaandCommustructed in the state,” he said. nication Strategy, Crusoe Osagie, He assured of continued sup- said the state government was port to the Commission, adding dedicated to the overhaul of the that work at the Treasury House, institutions so they can compete Blocks C and D of the State Sec- favourablywiththeirpeersaround retariat, as well as power supply the world when they reopen.

E

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helped to transform this region’s economic fortunes.”

President Buhari commended Ecobank for being active in promoting financial inclusion, noting that it was key to the government’s diversification agenda.

On requests by the bank for decongestion of Apapa ports and rebuilding of the transnational Lagos-Badagry-Seme road, the President assured of his administration’s efforts to restore sanity at the ports and environs, saying, “We are aware and are working in all those areas, and by the grace of God, you will start seeing results during my second term in office.”

Speaking earlier, Ikazoboh disclosed that the Ecobank Group was in 36 countries in Africa and

40 globally.

The bank, founded 30 years ago by private sector entrepreneurs, has over 20 million customers, with over eight million of them in Nigeria.

On what the bank is doing to support SMEs in the country, the Ecobankchiefsaid,“We’veimproved the capital of Ecobank in Nigeria. In the last six months, we have brought in about $150 million, all to drive borrowings and supporting the small and medium enterprises.”

He said President Buhari’s recent re-election was a testimony of the hard work done, adding that reforms embarked on by the administration across sectors, “will have deep, long-term impact on Nigeria, West Africa, and Africa.”

Airtel Africa weighs London, NSE listings Iheanyi Nwachukwu

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irtel Africa plc, secondlargest mobile operator in the continent by subscriber base, is planning a premium listing of its shares on the Official List of the Financial Conduct Authority (FCA) and admission to trading on the Main Market of the London Stock Exchange (LSE).

Thereafter, the telco will do a potential secondary listing on the Nigeria Stock Exchange (NSE).

Airtel Africa plc’s expected IPO registration document seen by BusinessDay shows that if the company decides to proceed with a listing on the Nigerian Stock Exchange (NSE), the earliest that this could happen will be at the time of Admission.

The syndicate firms in the transaction are J.P. Morgan Cazenove, BAML, Citi JBRs, Standard Bank, ABSA, Ba rc l ay s, BN P P, G S a n d HSBC. Announcement of the planned listing comes barely @Businessdayng

two weeks after MTNN listed by introduction its 20.35 billion units on the NSE at N90 per share.

In the initial public offering of the Ordinary Shares, Airtel Africa targets 100 percent primary proceeds with expected free-float of 25 percent minimum.

The move would see the continent’s second-biggest mobile operator freely float at least a quarter of its shares and use the proceeds to reduce net debt, according to the Offer document.

“Airtel Africa is a leading telecom and payment service operator with leadership and scale across our footprint,” said Raghunath Mandava, the Group’s chief executive.

“The 14 countries where we operate offer strong GDP growth potential and have young and fast-growing populations, low customer and data penetration and inadequate banking infrastructure.

These fast-growing markets provide us a great opportunity to grow both our telecom and payments businesses.”

Wednesday 29 May 2019

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news Nigerian students win 3rd prize in 2019 Huawei ICT competition James Kwen, Abuja

A

Nigerian team comprising three students from AhmaduBelloUniversity, Zaria, has emerged third place among the top three winners in the 2019 Global Final of Huawei ICT Competition.

The global final of Huawei ICT competition, a top-level event for students in the field ended May 26, atthecompany’snewheadquarters in Southern China City of Dongguan, China.

This is the only team that emerged winner in the global ICT contest,wheretheteamofNigerian students competed with 49 other teams with a total of 147 students, representing 30 countries racing for the global trophy.

There were four first-prize winners, from China, Malaysia, Peru and Algeria. Participants from Nigeria won the 3rd prize. They are the only winner team in the five Southern Africa representative teams.

These world-class ICT talents who return home Tuesday were given a warm reception at the Nnamdi Azikiwe International Airport,Abuja,bytheHuaweiTechnologiesCompanyNigeriaLimited.

Tank Li, general manager of Huawei Technologies (Abuja office), said, “Talent eco-system is the core supporting of the strategy platform + AI+ eco-system.”

AccordingtoLi,“Peoplearethe most important factor in eco-system and the foundation for maintaining the vitality and sustained growth of the industrial chain.

Huawei understands the value of a good talent ecosystem, which is the foundation for a smart future.

“In the past 30 years, Huawei has made a lot of efforts to cultivate ICT talents by sharing accumulated knowledge systems and best practices. Faced with the challenges of the future ICT industry, Huawei has established a global ICT talent certification standard, and combined with educational institutions, industry associations and various partners to establish an ICT talent training platform to jointly build a benign ICT talent eco-systemthis ICT competition is part of our innovative initiatives to support and promote ICT skills.

“We believe that this event will inspire more students interest in ICTlearninginAfrica.Thisplatform providesstudentswithaworldclass stage to showcase themselves and consolidatethevitalICTneededfor Africa’s development.”

Ibrahim Garba, vice chancellor of the Ahmadu Bello University who led the Nigerian, team expressed satisfaction with the performance of the students who despite being new to some of the technologies but remained resoluteandbeatsomebestuniversities in the world.

Garba said, “I pity my boys be-

cause they went with very limited preparationfromenvironmentthat issolimitedwithinfrastructureand thencompetingwiththebestofthe world. The China has about seven teamsinthebestoftheuniversities andwewerestillabletobeatsome.

“My boys met new technologies that they were never conversantwithbuttheystilldidtheirbest.

This competition has opened our eyes.Wehavemadealotoflinkages with our sister universities who are also been supported by Huawei”.

AdebayoAbdulqudus,22-yearold Nigerian university student on theteam,describingthededication and hard work it took the team of Nigerian students heading for the top trophy, said: “For the past eight months, we left our families, we left relatives, we leftourfriends,weleftoutsociallives, we want these and we want to win.

Thoughwegotthe3rdtheprize,but our participation, the experience and the opportunity to learn is the most important thing of all.”

Huawei ICT competition is an annual routine ICT event for studentscreatedbyHuawei.Itaimsto provide an international competitive and communication platform for Huawei ICT Academies and the colleges and universities that are willing to become Huawei ICT Academy to increase students communication technology and improve their practice, application skills and innovation awareness.

This is the fourth ICT com-

petition held by Huawei. Since its launch in June 2018, Over 100 thousanduniversitystudentsfrom 61 countries participated. Most of them are from the developing countries. Using what they learn to change their countries is a common wish for them.

The Huawei ICT Competition is a global ICT talent competition exchange event, which comprises ofHuaweiAuthorizedInformation and Network Technology Academy universities College (Huawei ICTAcademy)andrelatedcolleges universities (Huawei ICT Academy). Since the first Huawei ICT contest held in 2015, the number of participants in the competition has grown exponentially and this has become one of the largest ICT events in the world.

The 2018/19 event has attracted more than 1,000 universities in more than over 50 countries aroundtheworldundertheslogan Connection,GloryandFuture.The totalnumberofstudentsparticipating globally was 80,000 students, including 28, 000 students from sub-Saharan Africa.

The best Nigerian participants that join the competition won the national competition with the full scores, which is rare in the global.

Andtheywonregionalcompetition with the first prize. Eventually, they got the chance to attend the global final and compete with 49 teams from 30 countries, a total of 147 students on the same stage.

As Nigeria’s ICT sector bids farewell to Adebayo Shittu FRANK ELEANYA

F

rom today, May 29, Adebayo Shittu, will cease to be Nigeria’s minister of information and communications technology (ICT).

Depending on how President Buhari wakes up today, Shittu has a slim chance of being reappointed as a member in his the cabinet. Most ministerial appointments and reappointments are determined by the individual’s or his sponsor’s stewardship during a major election, and if the loss the ruling All Progressives Party (APC) suffered in Oyo, the minister’s state, is anything to go by, then Shittu’s return is highly unlikely.

ICT. Part of that frustration is the general perception that his appointment as minister in 2015 was largely a compensation for his role in the election of President Muhammadu Buhari, rather for his competence. Throughout his four years in office Shittu has done very little to disabuse the minds of many that he was not the right man for the job.

Instead, his most documented achievements include political upheavals in his home state Oyo and a failed attempt to clinch the APC party ticket for the state’s gubernatorial election, which led to fallout with the leadership of the party. He had also

ANALYSIS

That is an outcome many stakeholders in the booming tech ecosystem in Nigeria are hoping to become reality. Bosun Tijani, co-founder of Co-Creation Hub recently showed how deep the frustration with Shittu as minister had become.

“Building a base for science and technology for Africa shouldn’t be business as usual,” Tijani tweeted from his handle @bosuntijani. “It is probably the only way to guarantee any sort of future for the continent. This is why the DNA of the ecosystem matters. It is why it is disservice to appoint Shittu as Minister in 2019.”

Oluyomi Ojo, co-founder of Printivo and Victor Asemota, Africa partner at Alta Global Ventures and prominent voice in the tech ecosystem, have also called for better leadership in Nigeria’s ministry of

confessed to not attending the one-year compulsory service and getting his National Youth Service Corps (NYSC) certificate.

Nonetheless, it should be said that the ICT ministry under Adebayo saw a few positive developments. One of them was the plan to rebrand NIPOST from mere transmission of letters and postal materials to a profitable venture. The plan was to create new business arms including NIPOST Banking and Insurance Company, NIPOST Property and development, NIPOST Transport Company, and NIPOST e-Government Services Company. As far as reality goes, none of those new businesses has seen the light of day. However, many people who have used the services of NIPOST in recent times have noted the improved services.

Continues online @ww,businessday.ng

South West under siege of Fulani terrorists, PDP raises alarm YOMI AYELESO, Akure

T L-R: Abdulqudus Adebayo, Shaibu Usman Abbas, Abdulqadir Babagana, Mohammed Mustapha, Kamaludeen Umar and Fahad Danladi, all students from Ahmadu Bello University (ABU) who represented Africa and Nigeria at 2018/2019 Hauwei Global ICT Competition in China, on arrival in Abuja.

Picture by TUNDE ADENIYI

Governance starts immediately – Sanwo’olu JOSHUA BASSEY overnor-elect of Lagos State,Babajide Sanwo’olu, says his administration will hit the ground running immediately after being sworn in.

The swearing-in and oath of office ceremony holds this morning at the Tafawa Balewa Square (TBS), Lagos Island, to be administered by the chief justice of Lagos, Opeyemi Oke. Sanwo’olu stated this Tuesday when the outgoing governor, Akinwunmi Ambode, handed over to him, in what was described as “private handing over ceremony.”

Sanwo’olu rode into the Lagos Housealongsidehisdeputy,Obafemi Hamzat, at 12:15pm and held a closed-doormeetingwithAmbode for about an hour before emerging

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… as Ambode hands over toassuredLagosiansthatitwouldbe an exciting four-year journey.

“We are excited to be here for thissymbolicceremony.Wehada private handing over, very private.

We’re happy with what we have seen.Aftertheswearing-intomorrow (today), governance will start in earnest,” Sanwo’olu said.

To quickly breathe life into governance in the state, the state House of Assembly would be expected to transmit the 2019 appropriation bill to the new governor for his assent. The budget consists of N479.691 billion capital expenditure and recurrent expenditure of N393.841 billion.

The lawmakers passed the budget on April 29, after raising it www.businessday.ng

from N852.317 billion presented totheHousebyAmbodeinFebruary, but did not to transmit it back to the governor for assent.

Governance in Nigeria’s economic nerve centre has been in a lull since October 2019, in the aftermath of the primary election of the ruling All Progressives Party (APC), worsened by somewhat frostyrelationshipbetweentheexecutive and legislative arms in the last months of Ambode’s tenure.

Meanwhile, Ambode has said that all the decisions, plans, programmes and policies of his administration in the last four years were taken with the best interest of Lagos in mind and for common good of all residents.

In a farewell state broadcast to marktheendofhisadministration, he said the driving force with respecttoprogrammesexecutedwas to lift more people out of poverty and make every part of the state economically viable and livable.

“Afewofourpoliciesmighthave been unpopular but these were decisionstakenwiththebestinterest ofourStateinmind.Withthebenefit of hindsight, maybe we could have done some things differently but our intention was always clear, for the good of Lagos,” said Ambode.

He commended the people for the constructive feedback to some of the policies of his administration,which,accordingtohim, helped to surmount challenges, saying it had been a remarkable journey to serve the state.

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he People’s Democratic Party (PDP) has raised the alarm that the South West geo-political zone of Nigeria has been taken over by Fulani herdsmen.

The main opposition party said the people in the region were now being terrorised as the six states of the zone were under siege without any aid from the Federal Government.

It said this while appealing to President Muhammadu Buhari, the security chiefs and the governors of the six states of the region to take measure to save the people from terrorists’ attack.

The national vice chairman (South West) of the party, Eddy Olafeso, in a statement said the last four years of the Buhari government was unfavourable.

According to Olafeso, “Nigerians are full of fear and trepidation as insecurity across the length and breadth of the nation continues to grow in alarming proportion and with no sign that the President is in any manner ready, equipped and prepared to bail the nation out of the violence, war, destruction and needless deaths.

“It is unfortunate to state that the South West is today under the siege of Fulani terrorists or herdsmen who perpetrate criminal actions daily in the most unfettered manner.

“In our region, kidnapping, assault and rape by these marauders remain unchecked; this lethargy has @Businessdayng

even emboldened them to even attack a traditional ruler in his palace, without repercussions, thus egregiously making a bold statement that we the Yoruba have become their captives. This we condemn out rightly as a direct assault, insult and desecration of our corporate heritage as Yoruba people.

“Much as we know that we cannot use the activities of these criminals to judge the entire Fulani people, many of whom are accomplished and responsible leaders in our party and nation, we however restate that the average Yoruba man is now compelled to believe that plans remain afoot to conquer and subdue us in our fatherland.

“This belief is further reinforced by the fact that government’s security agencies directly under the control of Presidenthassofardonealmostnothing to challenge and outrightly put a stop to these insidiously dangerous actions of the so-called herdsmen.

“President Buhari must as a matter of fact, know that Yoruba people have confidence in his ability to make peace reign in our nation which continues to sink every day. And there is the danger that resort to self help may soon become the order of the day, except he takes concrete security actions in the South West immediately.

“It is important that we put on record that when we contemplate the horrors of Rwanda in the 1990s and the possibility of same in our nation today, our hearts sink; we must begin to put in place, actions to safeguard our nation and particularly our God-given fatherland.

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Wednesday 29 May 2019

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NEWS

FG signals additional borrowing following N90bn budget raise by N/Assembly Onyinye Nwachukwu & Cynthia Egboboh, Abuja

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igeria’s Federal Government has signalled a possible raise in its planned borrowing to enable it implement the N8.92 trillion, 2019 budget signed by President Muhammadu Buhari on Monday.

The National Assembly raised the N8.83 trillion total spending earlier proposed by the executive to N8.92 trillion, a N90.33 billion increase, which resulted to an overall increase of N58.83 billion.

Overall budget deficit is N1.918 trillion, as against N1.859 trillion in the Executive Proposal, representing 1.37% of GDP. Budget deficit is to be financed mainly by borrowing N1.605 trillion split equally between domestic and foreign borrowing.

The lawmakers reduced it from the executive planned borrowing of N1.649 trillion, leaving a financing gap of N102.84 billion.

President Buhari, while signing the appropriation bill, had expressed reservations that the budget would be difficult to implement and would be engaging the incoming National Assembly members on how to fund the budget, labelled “budget of continuity.”

Minister of budget and national planning, Udoma Udo Udoma, speaking at the public presentation of the budget on Tuesday, signalled the possible raise in borrowing so that government could fund development.

“To fully fund the budget, the level of borrowing may therefore have to increase,” he stressed. “Executive revenue assumptions were generally approved and adopted by National Assembly, except for unexplained increases totalling N31.5 billion on some non-oil revenue lines,” he said.

Udoma re-emphasised Buhari’s concerns that the lawmakers, particularly reduced allocations for some executive projects chosen after critical appraisal and linked to the Economic Recovery and Growth Plan (ERGP). But they introduced a large number of new projects, mainly the constituency projects, which they handle themselves.

“Mr President intends to engage the leadership of the ninth National Assembly as soon as it emerges, to effect any amendments necessary to ensure he delivers on the election promises,” said Udoma, who exited as the planning minister on Tuesday except if reappointed by the President.

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Apapa gridlock: Presidential taskforce ill prepared as NPA raises concerns CHUKA UROKO, JOSHUA BASSEY & AMAKA ANAGOR-EWUZIE

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here are indications that the presidential taskforce mandated to clear the gridlock in Apapa is illequippedornotadequately prepared for the task as gridlock resurfaced forcefully in the port city after what looked like a gradual return of sanity on the roads and bridges on Monday.

The situation on Tuesday was such that motorists, residents, business owners in the port city were alarmed at the resurgence of the trucks and the resulting gridlock, likening the experience to what Apapa was two years ago.

The taskforce, which set out to work last weekend, has the Nigerian Police, the Federal Road Safety Corps and officials of the Lagos State Transport Management Authority (LASTMA)asmembersandtheyhave been authorised to impound and tow any vehicle on the roads.

The taskforce was also directed to ensure that all the trucks were moved

to the Lilypond Container Terminal, which has been opened for this purpose, and the 400-capacity Tin Can Trailer Park.

But there are challenges on their way to achieving success. LASTMA says the task of removing the trucks from Apapa and environs has been daunting, citing absence of logistics required to carry out the task.

Amajorchallengeforthetaskforce is inadequate packing space for the trucks. Though the Lilypond Terminal is open for use, the trucks seem not to becomplyingwiththedirectives,asthe terminal is largely empty.

The Trailer Park, which has capacitytoabsorbcloseto500truckshas remained in perpetual construction as the contractor continues to wait for money from the Federal Ministry of Works, Power and Housing for the completion of the park which has reachedabout80percentcompletion.

Hadiza Bala Usman, managing director, Nigerian Ports Authority (NPA), has said that truck queue and

traffic congestion in Apapa will not reduce unless efforts is put in place by concerned authorities to provide trailer parks.

Usman at a media programme on Monday frowned at the delay in completing the Trailer park 10 years after the Federal Ministry of Works, PowerandHousingtookovertheproject. “I want to use this opportunity to call on the Federal Ministry of Works, Power and Housing to conclude the trailer park inside Tin-Can Island, being constructed for the past 10 years,” she said.

According to her, the NPA has put upseveralrequests,withoutluck,tothe Ministry to hand over that trailer park tothePortsAuthorityforittocomplete the shore protection and have it ready for use since December 2017.

“ThetrafficsituationinApapawill notreduceunlessthereisaconcerted effort in providing trailer parks,” she noted, calling for the construction of more truck parks outside the port environment, which she said, would go a long way in decongesting the Lagos ports access roads.

Lawal Afolabi, the general secretary of Nigeria Union of Petroleum andNaturalGasWorkers(NUPENG), corroborated this, saying that his members were facing the challenge of parking space, which explained why some trucks were still on the roads.

“The union is fully cooperating withthetaskforce,butithasbeenvery difficultforpetroleumtruckdriversto access Apapa to lift products for distribution,” he said, disclosing that the union had constituted a committee to drive the process.

He lamented that the parking space provided for trucks within the axis was barely enough to take the number of trucks heading to lift fuel, hence some were still on the roads in their bid to get to the various tank farms within Apapa.

Another major challenge for the taskforceislogistics,whichishampering their efficiency. “This task was not meant for LASTMA alone as other security and traffic management agencies are involved,” Chris Olakpe, CEO of LASTMA, told BusinessDay.

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R-L: Funmi Adewole, deputy treasurer, Risk Management Association of Nigeria (RIMAN); Victor Olannye, executive secretary, RIMAN; Grace Ademola, treasurer, RIMAN; Magnus Nnoka,CRM, president, RIMAN; Olukayode Pitan, MD, Bank of Industry (BoI); Ezekiel Oseni, chief risk officer, BoI, and Kola Ajimoko, 1st vice president, RIMAN, during the RIMAN members courtesy visit to Pitan MD, BoI, in Lagos.

FirstBank convenes fireside chat, promotes awareness on cyber security JOSEPH MAURICE OGU & DESMOND OKON

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igeria’s premier financial services provider, First Bank of Nigeria Limited, has announced that the fourth edition of its Fireside chat would hold on Friday, May 31, 2019, at its Digital Innovation Lab in Yaba, Lagos.

The topic, Cyber Security in Digital Payments, would be delivered by Obadare Peter Adewale, co-founder of Digital Encode, who is the guest speaker at the event.

The FirstBank Fireside Chat had its inaugural edition in 2018 with Tosin Eniolorunda, founder, TeamApt Limited, and subsequently with Ope Adeoye, managing partner, 2iLabs, and Bunmi Akinyemiju, MD, Venture Garden Group. The FirstBank Fireside Chat is a congregation of players in the technology and fintech ecosystem.

Lola Ekugo, head of Digital Innovation Lab at First Bank of Nigeria Limited explained that the FirstBank Fireside Chat is a public conversation that convenes active players and influencers in the technology ecosystem in order to have thoughtprovoking discussions.

These discussions aim to reveal new perspectives on a range of discussion points with a view to pulling out genuinely relevant insights on trends and recent happenings in the industry.

The FirstBank Digital Lab is an innovation hub and workspace for stimulating innovative solutions to real-life challenges in the financial services industry. The Lab will continue to serve as a platform for the bank to collaborate with start-ups looking to innovate around financial systems and create solutions for the Nigerian customer.

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NAPTIP decries trafficking of Nigerian girls in Mali … calls on ECOWAS Parliament to tackle menace Innocent Odoh, Abuja

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he National Agency for the Prohibition and Trafficking in Persons (NAPTIP) has lamented the trafficking of thousands of Nigerian girls in Mali for forced prostitution, even as it calls on the Parliament of the Economic Community of West African States (ECOWAS) to immediately tackle the scourge.

Director-general of NAPTIP, Juli Okah-Donli, made this call while presenting a report of the fact-finding mission to Mali on the upsurge of human trafficking in Africa to the ECOWAS Parliament in Abuja on Monday.

Okah-Donli said over 2000 girls from Nigeria, forced into prostitution in Mali, were deceived on the guise of going there to get better job opportunities in the West African country only to be trafficked @Businessdayng

by unscrupulous people.

The NAPTIP directorgeneral, who presented the report during plenary, stated that some of the girls were kidnapped in their school uniforms and forced into prostitution, stressing that the girls were going through harrowing experiences.

Okah-Donli pointed out that Nigerian girls were trafficked mainly to the mining areas in the South and Central parts of Mali, adding that a greater number of the victims were trafficked to rebel-held areas in the North, where they became radicalised.

She urged ECOWAS member states to sign a memorandum of understanding (MoU) with Nigeria to help them embark on sensitisation campaigns and repatriation of the Nigerian girls, not only from Mali but also from other member states.

Wednesday 29 May 2019

FT

BUSINESS DAY

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FINANCIAL TIMES

World Business Newspaper

MEHREEN KHAN, ALEX BARKER AND JIM BRUNSDEN

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arty chiefs in the European Parliament have warned EU leaders meeting in Brussels not to try and foist their own candidates for the bloc’s most senior job.

In a joint statement released hours before a summit kickstarting the race for the EU’s top jobs, the heads of the conservative, socialist, green and leftwing parliamentary groups insisted the European Commission presidency should go to one of the lead candidates who ran in last week’s elections.

The statement underlines how fraught the appointment of the EU’s most senior roles is likely to be, with some heads of state and government led by the French president rising against the parliament’s process and favouring instead a negotiation among government leaders.

It will test the resolve of EU leaders as they gather for a dinner in Brussels on Tuesday to discuss appointments and the result of the elections. Under the EU’s treaties, heads of state and government have the task of picking a candidate to become Commission president, but that person then needs approval from MEPs. The European Council, on which national leaders sit, has before concluded that lead candidates have no automatic right to the Commission.

The statement is a boost for Berlin-backed conservative politician Manfred Weber, who as leader of the largest grouping in parliament, the European People’s Party,

EU leaders warned against imposing candidates for Commission job Statement by party chiefs comes ahead of Brussels summit to discuss appointments

feels entitled to vie for the agendasetting Commission job, currently held by Jean-Claude Juncker. But it stopped short of naming him as the parliament’s pick.

The ambiguity reflects the power struggle between the parliament’s different political forces, which also led to the cancelling of a dinner on Monday between Mr Weber and other party chiefs. In the wake of Sunday’s elections, that

Bloc has historically sought to punch above its weight in parliament JIM BRUNSDEN

Critics accuse CDU’s leader of advocating online censorship

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nnegret Kramp-Karrenbauer, leader of Germany’s centreright CDU, faced a massive backlash on Tuesday after calling for tighter rules on politicking on the internet, with critics accusing her of advocating online censorship.

Her comments came after European elections in which the CDU and its main left-of-centre rival, the Social Democrats, slumped to their worst results in a national election since the second world war, as voters defected in their droves to the Greens.

Ms Kramp-Karrenbauer, who succeeded Angela Merkel as leader of the Christian Democratic Union last December, admitted the party had made mistakes in the election campaign and failed to connect with younger voters.

She said it had failed to come up with an appropriate response to the “Fridays for Future” environmental protests and to a controversial video by prominent German YouTuber Rezo lambasting the CDU for its inaction on climate change. The video, which dominated the final days of campaigning for the Eu-

ropean election, has been viewed nearly 13m times.

But in the same press conference, AKK, as she is universally known, also took aim at the 70 high-profile German YouTube influencers who called on supporters ahead of the election not to vote CDU or SPD. Ms Kramp-Karrenbauer asked what would have happened if 70 newspapers had issued a similar appeal. She said that would have been seen as a “clear attempt to influence public opinion” ahead of the election. German newspapers traditionally do not endorse particular parties or candidates before polls.

Ms Kramp-Karrenbauer went on to ask whether rules on influencing opinion for analogue media should also apply to digital platforms. “This is a fundamental issue which we will have to talk about,” not only within the CDU but more broadly in German society, she said.

The comments proved hugely controversial, with critics accusing her of promoting censorship. Christian Lindner, leader of the liberal FDP party, said Ms Kramp-Karrenbauer was “considering regulating the expression of opinions before elections”. www.businessday.ng

lead candidate.

Mr Weber said on Tuesday that the statement showed parliament was looking for “a candidate that practised democracy, that showed up before the elections [to campaign]”.

But he refrained for any public demand that other political groups rally behind him, saying that “we have to sit together and find a common understanding.”

Green parties emerge as big winners in European Parliament elections

Germany’s AKK rebuked over comments on internet campaigning GUY CHAZAN

failed to deliver a clear majority for one political group, the centre-left is fighting for its own candidate, Frans Timmermans, to secure the presidency.

In a sign that a compromise might still be envisaged, the parliament group leaders in the statement refrained from raising the threat of a veto against any nominee by the European Council who did not run in the elections as a

His biggest hurdle remains Mr Macron, whose top campaigner Pascal Canfin on Monday said the Bavarian MEP was “totally disqualified” after a poorer showing than in previous European elections in 2014.

The liberal group in the European Parliament linked to the French leader chose not to sign the joint statement on Tuesday, reiterating arguments that the system was flawed in the absence of transnational electoral lists.

Its leader Guy Verhofstadt : “The EPP is pushing hard for the Spitzenkandidaten-system, but unfortunately they killed its legitimacy when they voted against transnational lists. They try to ride to power on a horse that they already slaughtered themselves.”

Ska Keller, co-leader of the Greens, who have recorded big gains in the European elections, backed the Spitzenkandidat process saying that it ruled out Frenchman Michel Barnier, the EU’s chief Brexit negotiator who has often been mentioned as an alternative choice for the centre right.

The statement “goes for lead candidates, not just anyone who goes around and holds speeches, no matter how nice they may have been,” she said.

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he Greens may only have come fourth in Sunday’s European Parliament elections, but no one in Brussels was in any doubt about the scale of their victory.

After years of operating from the periphery of the EU’s corridors of power, the parliament’s Green group has secured enough seats to make itself a near-essential partner in any functioning coalition.

Bolstered by an exceptional result in Germany, where only Angela Merkel’s Christian Democrats won more seats, and a strong third-placed finish in France, the Greens increased the number of their MEPs by almost 40 per cent at the same time as the parliament’s main centre-left and centre-right groups shrank.

The upshot, parliament chiefs acknowledge, is that its 69 MEPs are crucial to forming a pro-EU alliance in the assembly that can shape and implement the agenda of the next European Commission.

While, mathematically, the parliament’s centre-right, centre-left and liberal groups could try to work together without the Greens, the majority would be fragile, and highly vulnerable to internal splits.

Ska Keller, the Green group’s copresident, said the result was “a man-

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date for change in the European Union” and that the Greens now had “a great responsibility” to “put that trust into action”.

The Greens’ opportunity to shape the agenda stems from the rules that govern the appointment of the next president of the European Commission, the EU’s executive arm. The new president must secure the assembly’s approval before taking office. Parliament also has a binding say over almost all areas of EU policymaking.

Having had little presence over the years in the commission’s political college, or around the summit table of EU leaders, the Greens have sought to punch above their weight in the parliament.

The group’s limited size has meant that it has focused on securing targeted victories on draft laws, either by striking a hard bargain for its support when the assembly was evenly split, or by successfully harnessing the weight of public opinion.

It was a strategy that secured notable victories, and not just in the field of climate change. Bank lobbyists grudgingly acknowledge the skill with which the Greens rode a wave of public fury after the 2008 financial crisis to secure an EU-wide cap on banker bonuses, overriding objections from the UK government. @Businessdayng

But for Philippe Lamberts, the Greens’ other co-president, the group is now well positioned to enjoy greater influence. “We have been in a transactional mode so far,” he told the Financial Times. “Now we have the chance to be in a more stable relationship [with other political groups]. We want to be closer to the source of the legislation.”

Whether that relationship comes about depends on other groups, and prospective candidates for the commission presidency, bowing to its demands.

Green policy priorities include more climate taxes and a sea-change in the bloc’s approach to negotiating trade deals — one that would prioritise the alignment of environmental and labour standards over market opening.

It will also depend on how the group handles reservations about coalition deals among its most prominent members. During the election campaign, Yannick Jadot, the leader of the French Greens, publicly ruled out an alliance with the centre-right European People’s party, but Sunday’s results mean it is difficult to see how a majority could be formed without the EPP. Mr Lamberts said a key priority for the Greens in any arrangement would be that the group secures “fundamental”, bankable concessions on policy.

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NATIONAL NEWS

Dimon calls Wells Fargo ‘irresponsible’ for lack of CEO plan JPMorgan chief hits out at rival for failing to have replacement ready for ousted Sloan LAURA NOONAN

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PMorgan Chase boss Jamie Dimon said it was “irresponsible” for Wells Fargo to announce the departure of its chief executive before having an alternative in place.

Wells Fargo announced the departure of Tim Sloan in March, after years of tussles with regulators over a mis-selling scandal.

Wells’s legal boss took over on an interim basis, and several former JPMorgan executives have been linked with the job.

“I think Tim Sloan was doing a good job,” Mr Dimon told Deutsche Bank’s annual financials conference in New York. “I think it’s not responsible for a company to have a CEO leave with no plan in place . . . I’d be surprised if regulators wanted that to happen because it’s irresponsible . . . It’s not the way to run the railroad.”

Mr Dimon also warned that second quarter investment banking fees would be $200m lower

than some analysts had pencilled in, coming at around $1.7bn, describing the business as “episodic”.

The bank reported investment banking fees of $2.2bn in the second quarter of 2018.

Mr Dimon stuck a more optimistic tone on the overall US economy and said “it isn’t like you have to have a recession . . . It might be we’re in the last third [of the economic cycle] — that third could be five more years.”

Mr Dimon, who runs America’s biggest bank by assets, warned that ongoing trade tensions had gone from “a skirmish to being far more important than that.”

“You already see businesses trying to think about moving their supply lines and things like that,” he added.

In a spirited Q&A session, Mr Dimon also repeated his well known criticism of overregulation in the financial system, bemoaning the “mind numbing paperwork and bureaucracy that is sucking this country dry”.

Mexico reaps gains from US-China trade war Manufacturers seize opportunity to increase exports to neighbour JUDE WEBBER

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milio Isais of Gonher, a Mexican auto parts company, has Donald Trump to thank for the meetings with US companies that he is looking forward to this week: America’s trade tensions with China could put some valuable business his way.

“Some US companies, big producers, are considering moving production from China to Mexico,” said Mr Isais, executive director of Gonher’s filter plant. “We could have some opportunities there. We don’t manufacture in China — we’re trying to get the extra business.”

His company is just one of the Mexico-based manufacturers that are seizing the chance to increase their exports to the US as the tariff war between Washington and Beijing heats up.

The value of Mexican imports to the US overtook that of those from China in March for the first time and Mexico is gaining a share of the US market as China’s flags. In recent months, Mexico has studiously focused on promoting its trade with North America and on not antagonising its northern neighbour and top trading partner.

It has not succeeded in all areas — the US recently imposed a 17.5 per cent duty on Mexican tomatoes — but its manufacturing industry is benefiting.

“The US hitting China represents an opportunity [for Mexico] without a doubt,” said Ken Smith Ramos, Mexico’s chief negotiator for the USMCA trade pact, which was agreed last year to update the 25-year-old North American Free Trade Agreement and now awaits ratification.

Exporters of engine filters, such as Gonher, are among the biggest winners from the US-China dispute, in which both sides have imposed tariffs of as much as 25 per cent on key exports from the other country.

Mexican engine filter companies’ US market share rose 15.8 per cent in March compared with the month earlier, while their Chinese competitors lost 9.3 per cent, according to data analysis by Mexican trade

consultancy De la Calle Madrazo Mancera (CMM).

Other beneficiaries include exporters of cash registers, car radios and vehicle air conditioning units.

CMM managing director Luis de la Calle, a veteran Mexican trade negotiator, said these were the “unintended consequences” of Mr Trump’s spat with China. “We have noticed some improvement, a small increase in exports,” said Mr Isais. “Our clients have increased some orders.”

Mexico, whose economy has become highly integrated with the US under Nafta, stands to benefit from the US-Sino friction in three ways.

“You can replace China in the US and the US in China — if you look at the numbers for the last three months, that already shows,” said Mr de la Calle.

In addition, he said, Chinese and other Asian companies could also use Mexico as an export platform to reach the US. Even if they do not comply with the rules of origin required to be able to export duty-free under Nafta, Chinese companies exporting out of Mexico would pay significantly lower tariffs than the punitive 25 per cent they would face when exporting from China.

Luis Enrique Zavala, directorgeneral of the National Association of Importers and Exporters, said some companies had approached him to discuss using Mexico in this way.

They include makers of plastic toys, perfume makers, and textiles and electronics companies, which are considering distributing to their US and Latin American markets from Mexico. In some cases this involves “redirecting [business] within the same company”, he said.

Mexico’s national confederation of chambers of commerce, Concanaco-Servytur, has also received inquiries regarding auto parts, electric vehicles, electronics and mobile phone components, its president José Manuel López Campos said.

“They are worried tariffs will continue to rise and are telling suppliers in China to increase exports to Mexico,” said Mr Zavala. www.businessday.ng

Matteo Salvini, Italy’s deputy prime minister, wants to reduce income taxes to a flat rate of 15 per cent, a measure that would cost up to €50bn

Brussels set to intervene over Italy’s ‘fiscal shock’ plans

Matteo Salvini stokes tension on public spending after League’s election triumph MILES JOHNSON AND MEHREEN KHAN

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atteo Salvini has called for a “fiscal shock” of tax cuts in Italy as he exerts his influence after a resounding victory in the European elections, but Brussels is preparing to hit back over Rome’s budget plans.

Italy’s deputy prime minister and leader of the anti-immigration League party said that Italy “must lower taxes”.

“We need a Trump cure, an Orban cure, a positive fiscal shock to restart the country,” Mr Salvini said in a radio interview on Tuesday.

“Not everything all at once, but the goal is in the government contract.”

Brussels is preparing to send a letter warning Italy it is in breach of debt rules within the next 24 hours.

Rome will have about two days to respond.

Next Wednesday the European Commission will publish an analysis of Italy’s debt levels which is likely to show the country is in serious breach of eurozone budget criteria, given its growing debt-to-GDP ratio.

Should the commission conclude Italy risks “serious non-compliance”, Rome will have to submit new bud-

get plans to reduce its borrowing.

“The numbers are clear-cut,” said one commission official who cautioned that Brussels might still back away from starting a sanctions procedure against Italy.

Jean-Claude Juncker, commission president, is reluctant to revive last year’s budget clash after he concluded a deal with Italy’s prime minister Guiseppe Conte to step back from sanctions in late 2018.

Hawkish EU governments led by the Netherlands have been fiercely critical of Brussels’ decisions and have demanded the commission fully enforce the EU rule book or risk the credibility of the eurozone’s budget discipline.

After news of the Commission’s forthcoming letter broke on Tuesday, Mr Salvini hit back.

“I am going to ask the new European Parliament and the new European Commission for a grand European meeting to discuss work, growth, investment and about public debt,” he wrote in a Facebook post. “And about the role of the ECB as a guarantor of stability and wealth, and as the guarantor of debt. Are we all equal? Yes. I don’t understand why the bonds of Ger-

many should be negative while the bonds of the Italian state should be costing us 2 per cent.”

Mr Salvini has been emboldened by his League party coming first in Italy in this weekend’s European elections. As a result, he is planning to push ahead with reducing Italian income taxes to a flat rate of 15 per cent. The measures would cost between €30bn and €50bn, he said, and would in part be funded by cutting other spending.

Italian financial markets came under pressure on Tuesday as investors anticipated a revival of Rome’s budget battle with Brussels. The FTSE MIB index fell 0.5 per cent, while Italy’s benchmark 10-year bond yield rose for a second day, up 6 basis points to 2.719 per cent.

The premium investors demand to hold Italian debt over German paper widened, as the spread between yields on Italian 10-year government bonds and German Bunds of the same maturity rose to 2.862 percentage points.

Mr Salvini said he would reduce Italian unemployment from 10 per cent to 5 per cent by focusing on “the real economy” and not on the “old parameters” of the European budget deficit rules.

Crackdown sinks plans by ‘seasteaders’ to create Bitcoin investor’s offshore home towed over concerns couple intended to establish sovereign state STEFANIA PALMA AND JOHN REED

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o all those out there who want to control people’s lives through force, here’s my big finger to you,” Chad Elwartowski declared in a YouTube video this year.

The “finger” in question was a tall black column floating off the coast of Thailand.

Mr Elwartowski, a former bitcoin investor who says he made enough money to retire at the age of 45, lived in a fibreglass pod on this platform, a breakthrough for the so-called seastead movement whose ultimate goal is to create a floating independent nation state in international waters.

But last month, the Thai navy towed the structure ashore, voicing concerns that Mr Elwartowski and his partner Supranee Thepdet planned to set up a sovereign state in what the government said was its territory. The pair have not yet been formally charged with violating the country’s sovereignty but could face

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the death penalty if convicted. Thailand’s attorney-general has appointed officials to lead an investigation.

With Mr Elwartowski and his partner now out of sight, the utopian dreams of seasteaders appear to have run aground.

“The minute we saw the accusation we got out of there and went into hiding,” Mr Elwartowski told the Financial Times in a phone interview.

Rüdiger Koch, the legal owner of the sea-home and the engineer behind the $250,000 project, has fled Thailand although he has not been charged.

The Thai case has raised questions about national security and prompted criticism of the seasteading movement, whose backers include billionaire tech investor Peter Thiel.

“They don’t contribute to any common good, tax or land development based . . . They are simply designed to enable wealthy people to have a place in the sun, and water,” said Peter Newman, professor of sus@Businessdayng

tainability at Australia’s Curtin University. He added that the practice needs to be regulated “or else it will be doing more damage than good”.

But Joe Quirk, president of the San Francisco-based Seasteading Institute, an organisation founded in 2008 by Mr Thiel and Patri Friedman, grandson of Nobel Prize-winning economist Milton Friedman, says the case for building a floating nationstate is clear.

Governments are inflexible and slow, he says, and excessive and outdated regulation hampers progress.

And — in a suggestion that has laid the cause open to criticism — if a facility is built in international waters, seasteaders do not have to pay taxes to other nation states. “If [the seastead] is recognised as a new country there is no obligation to pay taxes to countries that are far away,” he said.

“Seasteading is a way to apply evolution to governance itself,” he added, with people choosing to join or leave societies simply by moving their mobile home.

Wednesday 29 May 2019

BUSINESS DAY

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FINANCIAL TIMES

COMPANIES & MARKETS

@ FINANCIAL TIMES LIMITED

Papua New Guinea turmoil puts key LNG projects at risk Political crisis threatens to delay $12bn-$14bn expansion led by ExxonMobil and Total JAMIE SMYTH

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xxonMobil Corp and Total SA have become embroiled in a political crisis in Papua New Guinea that risks delaying a $12bn-$14bn expansion of the nation’s liquefied natural gas industry.

The government of prime minister Peter O’Neill appeared to be in jeopardy with opposition MPs set to hold a no-confidence vote against him in parliament next week. Mr O’Neill on Tuesday applied to the Supreme Court seeking an injunction to block the move, which could bring an end to his eight years in charge.

The revolt by the opposition, which says it has the numbers to bring down the government, was sparked in part by allegations Mr O’Neill mishandled the financing of the LNG projects.

Analysts warn that if he is ousted, there could be a delay in finalising the requisite contracts for the multibillion-dollar expansion that is critical to the Pacific nation’s finances.

The Supreme Court is due to hear Mr O’Neill’s appeal on Friday.

David Low, an analyst at Wood Mackenzie, forecast that the prime minister’s resignation would delay first gas from the LNG projects by as much as two years, to beyond 2025.

Any delay would be a blow to the oil majors, with Wood Mackenzie projecting 2019-20 will be record years for LNG investment decisions, unleashing 100m metric tonnes a year of new capacity. The risk is that the PNG projects miss out on this wave of investment and a new administration seeks to extract more taxes or royalties from the projects.

“While we still expect the project to go ahead, the political turmoil opens the door to competing projects and increases the risk of knock-on delays,” Mr Low said.

ExxonMobil and Total are spearheading the PNG LNG and Papua LNG projects, in partnership with Australian listed resources companies Santos and Oil Search, spending an estimated $12bn-$14bn on expansion.

The opposition MPs support development of the projects for the investment they would bring to the resources-rich but poverty stricken country. But they have demanded Mr O’Neill stand down after a report, drafted by the PNG Ombudsman and leaked to the press, that concluded Mr O’Neill acted improperly by securing a A$1.2bn ($831m) loan from UBS to buy shares in Oil Search in 2014 without seeking formal parliamentary approval.

According to the Ombudsman — an independent body established under the constitution that protects citizens’ rights against administrative injustice — the PNG government used the loan to buy a 10 per cent stake in Oil Search, enabling the company to buy into a gasfield being developed

by Total.

Oil prices subsequently crashed, and the government lost hundreds of millions of dollars when it sold the shares in 2017 during a fiscal crisis that forced widespread cutbacks.

“The A$1.2bn UBS deal represents all that is wrong with Peter O’Neill’s prime ministership,” Mekere Morauta, an opposition MP, told the Financial Times. “PNG did not benefit. It lost K1bn ($297m).”

UBS declined to comment on the loan, on which the bank earned A$100m in interest and fees. Finma, the Swiss financial markets regulator, said: “It is familiar with the financing business mentioned, and we are in contact with the bank”.

Mr O’Neill did not reply to a request for comment. He has previously denied that the loan was unlawful, saying the matter had been clarified in parliament and the ombudsman investigation was “flawed”.

Oil Search said on Tuesday it had breached no laws, and no allegations had been made against the company or its officers. It said that contrary to the requirements of PNG law, Oil Search and others were not contacted by the Ombudsman Commission during its investigations or given any opportunity to provide evidence or comment.

10-year Treasury yield retreats to lowest level since September 2017

Sino-American trade tensions weigh on investor sentiment PAN KWAN YUK

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he yield on the benchmark 10-year Treasury fell to a 20-month low on Tuesday as escalating trade tensions between the US and China continued to sour appetite for risk assets.

The yield on the 10-year note, which moves inversely to price, fell as much as 4.9 basis points to 2.271 per cent, the lowest since September 26, 2017. That on the 30 year was down 4.8 bps at 2.7023 per cent, a 17-month low. The two-year yield was 3.3 bps lower at 2.1307 per cent.

Treasury prices have been rallying all through the month of May amid growing fears the deadlock in trade talks and the escalating tit-fortat tariff battle will throw a spanner into US and Chinese economic growth. The latest moves in bond

yields come after President Donald Trump warned on Monday that US tariffs on goods from China could still “go up very, very substantially, very easily.”

“As far as China is concerned, they want to make a deal. I think they probably wish they made the deal that they had on the table before they tried to renegotiate it,” said Mr Trump during a state visit to Japan.

“We’re not ready to make a deal.

We’re taking in tens of billions of dollars in tariffs, and that number could go up very, very substantially, very easily,” he added.

The heated rhetoric has kept equities under pressure. Meanwhile, the 10-year bond yield has fallen by nearly 23 bps since the start of the month, putting it on track for its biggest monthly drop since March. www.businessday.ng

The government of prime minister Peter O’Neill appears to be in jeopardy with opposition MPs set to hold a no-confidence vote against him in parliament next week

British Steel rescue hopes fuelled as deadline set for potential buyers Liquidator says contact has been made with more than 80 prospective purchasers MICHAEL POOLER

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opes of a rescue deal for British Steel have been fuelled after its liquidator said contact had been made with more than 80 potential purchasers, who have been given until early June to register their interest.

The official receiver said that “good progress” was being made in the hunt for a new owner for the UK’s second-largest steelmaker, which entered into compulsory liquidation last week after its request for a state bailout was rejected.

“Multiple parties have signed non-disclosure agreements giving them access to a detailed information memorandum and virtual data-room that my team

has developed to inform their bids,” added the court-appointed civil servant in charge of the insolvency process.

British Steel employs around 5,000 people, mostly at the giant Scunthorpe plant in north Lincolnshire.

Industry figures believe possible bidders could include Liberty House, the private equity fund Endless and Indian steelmaker JSW. The accountancy firm EY, which is assisting, has sent NDAs to 60 of the prospective buyers.

British Steel has blamed its problems on Britain’s delayed departure from the EU, which has caused a slump in orders from customers on the continent.

It was granted a short-term

£120m loan by the government this month to help meet payments under an EU environmental scheme, after Brussels suspended the allocation of carbon credits until a Brexit withdrawal agreement is finalised.

But talks between ministers and its private equity owner, Greybull Capital, over an additional £30m broke down.

The government has however provided an indemnity to underwrite the liquidation process, which has enabled British Steel to continue trading.

“The company retains good support from its customers,” added the official receiver. “I would like to thank the workforce for their ongoing support.

All staff have been retained and continue to be paid”.

Global markets cautious as investors weigh EU election results Italian assets face heavier losses than peers on concerns over fiscal discipline PHILIP GEORGIADIS AND SIDDARTH SHRIKANTH

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uropean stocks and Wall Street futures inched higher, with investors weighing continuing uncertainty over the Sino-US trade and technology dispute and the implications of European election results.

The broad Stoxx 600 index in Europe rose 0.1 per cent having flicked between gains and losses earlier in the day, while the FTSE 100 rose 0.4 per cent in its first session of trading this week.

S&P 500 futures turned around to point to a rise of 0.1 per cent at the opening bell in New York.

Italian assets were under pressure after a victory for the rightwing League party in the European elections, which investors said could embolden its leader and deputy prime

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minister Matteo Salvini to step up a budget battle with the EU, or push for early elections. The FTSE MIB index fell 0.5 per cent, while the benchmark 10-year bond yield rose 5 basis points to 2.706 per cent.

The premium investors demand to hold Italian debt over Germany’s widened as German Bund yields hit fresh two-anda-half-year lows. The spread between Italian 10-year government bonds and German Bunds of the same maturity rose to 2.857 per cent. If it closes at those levels it will be the widest spread since February.

Elsewhere in Europe, auto stocks built on Monday’s gains after Fiat Chrysler confirmed it had proposed a €33bn all-share merger with Renault. The index tracking Europe’s automotive industry was up 1.2 per cent. @Businessdayng

China-focused stocks overcame a slow start, with the CSI 300 and Hang Seng indices rising 1 per cent and 0.2 per cent, respectively.

The boost came after data showed that profits for China’s industrial firms shrank in April, raising hopes of further stimulus, and ahead of a planned weighting increase of Chinese stocks by index provider MSCI after the close of trading on Tuesday.

Japan’s Topix was up 0.3 per cent after slipping into negative territory earlier in the session. Carmakers Mitsubishi and Nissan rose 6 per cent and 2.3 per cent respectively after Renault, their alliance partner, announced plans for a merger with Fiat Chrysler on Monday.

Brent crude hovered either side of the $70 a barrel a mark through the day.

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Wednesday 29 May 2019

BUSINESS DAY

ANALYSIS

FT

Return to service of Boeing 737 Max could depend on pilot training Aircraft manufacturer faces costly delays if regulators demand crew practice on simulators repaired by Boeing.

Boeing has said it has completed work on an MCAS fix, but hat kind of training pilots has not yet submitted it to the FAA receive could determine for approval. The fix will prevent whether Boeing’s ground- the MCAS system from repeatedly ed 737 Max aircraft is back in the forcing the nose of the Max down air by the end of the northern under certain circumstances and hemisphere summer, or only would also prevent it from being much later, according to airlines, triggered by only one of the two pilots unions and aviation indus- exterior sensors that measure the plane’s angle with the ground. try experts.

But with only one Max simuWhether pilots should be retrained in a few hours on iPads, lator in airline hands in North Pumped hydro can generate electricity to offset irregular wind and solar power. But critics worry it is too expensive or on costly and scarce 737 Max America — at Air Canada — an tive coalition, led by Prime Minister by the government, the station’s flight simulators, has emerged as FAA mandate requiring simulator JAMIE SMYTH Scott Morrison, is a staunch sup- employees have been busy demone of the biggest unanswered training as a prerequisite for lifting porter of coal, which still generates onstrating to politicians, media and t took 100,000 construction the grounding order could lead to questions surrounding the return 60 per cent of the nation’s electric- other dignitaries how the compaworkers a quarter of a cento service of the aircraft, after 33 severe delays, US airlines said. tury to bore through the Snowy ity and was its top export earner last ny’s existing pumped hydro facility Up to now, the US regulator global regulators met in Texas on is already helping to keep the lights Mountains to build Australia’s year worth A$69bn. has said computer-based training Thursday last week. on in the nation’s capital Canberra, But A$31bn of investment on relargest hydroelectric scheme. The vast nation-building project links newable energy since 2017, driven which is about a two hours’ drive nine power stations and 16 dams by falling prices and the resump- away. The plan is to build an advia a network of 145km of tunnels tion of a green energy target set by ditional 2,000 megawatts of genand pipelines, providing irrigation the previous Labor government, is eration and quadruple the amount of electricity storage — enough water and energy that has helped changing the nation’s energy mix. capacity to power 500,000 homes Just over a fifth of Australia’s transform the country’s economy electricity is now generated by re- continuously for about a week. The since it began operating in 1974.

Now, almost half a century later, newables. Over the past two years upgrades, which involve building Australia’s newly elected govern- the country has deployed wind and an underground power plant and ment is placing the state-owned solar generation up to five times 27km of tunnels, would make the Snowy Hydro plant at the vanguard faster than the US, China or the EU scheme one of the largest pumped of another energy transition by on a per capita basis. This shift away storage facilities in the world.

“The beauty of hydro is that it is from coal, a reliable and easily disAmerican Airlines 737 Max jets parked in Oklahoma, US. The Boeing aircraft has been grounded transforming it into a massive “waa renewable energy supply that is patchable power source, to interter battery” that will help keep the worldwide since March, leaving 400 planes idled © Reuters lights on as the country shifts from mittent wind and solar, combined available on demand. So when the with weaknesses in transmission market needs electricity we simply The US regulator’s safety review would be enough: the FAA Flight an electricity grid based mainly networks and lack of storage, has use the water that we have in our on fossil fuels to one built around of the Max goes well beyond how Standardisation Board said in April made the power system vulnerable. upper storage to drive the turbines to fix the anti-stall system, which that simulator training would not renewable energy.

A statewide power cut in South in this power station, providing “We are betting the whole complayed a role in two crashes in five be necessary. All three US pilots pany on it,” says Paul Broad, Snowy Australia in 2017 and outages in electricity to the market,” says Mr months that killed 346 people. The unions that fly the Max concurred Hydro’s chief executive, who con- Victoria in January demonstrated Boardman, the area manager for US Federal Aviation Administration that simulator training should not founded critics by persuading Can- how the nation’s electricity system Snowy Hydro. “When we have all (FAA) is reviewing an emergency be a prerequisite for its approval for berra to back an expansion worth has become exposed at times of six units pumping there is enough procedure used by all 737 pilots in flying, but should happen as part of more than A$5bn ($3.5bn) that was peak demand amid questions over water flowing through our plant circumstances similar to the two later training. dismissed just a decade ago as too the reliability of solar and wind to fill an Olympic-sized swimming pool every two seconds.” crashes, in which the nose of the But aviation experts say the FAA expensive and risky. “You can’t farms in adverse weather.

These dramatic numbers have Coalition backbenchers have plane is forced down erroneously. appears to be backtracking. “The have renewables without reliable Pilots traditionally learn a pro- international community seems storage and the best form of stor- lobbied for construction of a new failed to impress critics who say coal power station to stabilise the that not only is the state-owned cedure to deal with what is known very willing to entertain a proposal age is water.”

Pumped hydro is a century-old system but there is little support mega project too risky, but that it as “runaway stabiliser”, which that includes simulator training could also affect earlier gen- before returning the Max to ser- technology, which provides about for such a controversial project is crowding out more cost-efficient given the need to reduce emissions. pumped hydro projects. Others say erations of the 737, a plane which vice,” said Captain Jason Goldberg, 95 per cent of worldwide energy Faced with a political dilemma the competing storage technologies, has been flying since the 1960s. spokesman for the pilots of Ameri- storage linked to electricity grid coalition turned to Snowy Hydro to such as lithium-ion battery farms Changing that procedure could can Airlines, the second-largest US systems. It works by using excess provide enough storage to boost and solar thermal-energy storage, have implications for the 737 NG, Max carrier. Daniel Elwell, the act- or cheap power at off-peak times the grid’s resilience when the sun as well as increased investment in the predecessor of the Max. ing administrator of the FAA, went to pump water into raised water isn’t shining and the wind isn’t transmission networks, could proBut the focus is the 737 Max, out of his way after the Texas meet- basins, from where it can be re- blowing. vide a more cost-effective solution. which has been grounded world- ing to stress that simulator training leased to generate electricity when “Australia is one of the first “Snowy 2.0 should dominate demand and prices are highest. wide since March 13, leaving 400 remained an open question. countries heading towards a mainthe storage market, placing it in an The need for storage is expected planes idled. Any further delays “This is more than just an issue to accelerate massively with the ly solar and wind based renewable incredibly powerful position for a could seriously exacerbate the of pilot training, this is also a po- greater use of renewables — and energy system, so in a sense we state-owned company,” says Tony crisis faced by Boeing, the world’s litical and a public relations issue,” while there has been a lot of hype are the international pathfinder Wood, energy expert at the Grattan largest commercial aircraft manu- said Vaughn Cordle, a Boeing 787 surrounding lithium batteries, to move towards a solar and wind Institution, a Melbourne-based facturer, in the wake of the Max pilot who advises investors on the pumped hydro is expected to re- future,” says Andrew Blakers, pro- independent think-tank.

“It’s also a big risk for taxpayers,” crashes in Indonesia in October implications of the 737 crisis. main the backbone of the renew- fessor of engineering at Australian National University. “Snowy Hydro he adds, citing the technical difficullast year and Ethiopia in March.

Mr Elwell is “trying to be re- ables revolution.

“At least do something other sponsive to what other countries Advocates argue that pumped is important because if we don’t ties in digging tunnels and the possithan fly an iPad,” Mary Schiavo, are feeling — and they may be feel- hydro represents a 20th century put in more energy storage then bility that future administrations will former inspector-general of the ing political pressure. That’s why solution to a 21st century problem: the electricity system will run into be less supportive of the renewables US Department of Transportation, he’s vacillating,” said a representa- how to bridge the gap and provide serious trouble by the mid-2020s.” industry — a move that would limit The floor begins to shake and future demand for storage. constant power, when using intertold the Financial Times in an in- tive of one big US pilots’ union. a loud rumbling forces people to In the 1960s and 1970s, pumped mittent sources such as wind and terview, a reference to the fact that The issue of training is sensiscramble for ear plugs when Guy hydro was typically deployed by US pilots had received only one to tive because most pilots were solar. And for its backers, Snowy Boardman starts up one of the six publicly-owned utilities alongside 2.0 — which is scheduled to be three hours of training on an iPad to not informed of the existence of generators at Snowy Hydro’s Tumut nuclear or coal power stations, prepare them to fly the Max before MCAS before the crashes. One completed by 2025 — will act as a 3 power station. Under the floor which provided low-cost electricity showcase for the technology and the crashes. of the few exceptions was Brazil, thousands of cubic metres of water to pump water up hills at night durNow the FAA, the lead regulator whose regulator mandated that encouragement for other nations gush through enormous pipes that ing off-peak periods that could then for the Max, must decide whether pilots be trained on MCAS. The to begin the shift to a grid based 100 run up to a reservoir at the top of a be used when consumer demand per cent on green energy. to require US pilots to be trained Brazilian regulator, ANAC, said the It is the centrepiece of Can- nearby mountain, rotating turbines spiked. But as companies deploy in a Max simulator after the faulty MCAS system constituted such a berra’s energy policy, which op- to generate electricity. Power can wind and solar energy on to national manoeuvring characteristics aug- significant difference from the Max position parties, business and be dispatched to the grid within a grids pumped storage is enjoying a renaissance as a means to help mentation system (MCAS), which predecessor, the 737 NG, that special environment groups criticise for few seconds.

Since Snowy 2.0 was announced stabilise electricity systems. played a role in both crashes, is training was required. lacking coherence. The conservaPATTI WALDMEIR, JOSH SPERO, SYLVIA PFEIFER AND ANDRES SCHIPANI

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Renewable energy: Australia bets on a ‘water battery’

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ENERGY intelligence oil

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Wednesday 29 May 2019

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BUSINESS DAY

OIL

Sierra Leone: After initial suspension, Sierra Leone restarts 4th licensing round Page 50 GAS

L-R: Timothy Okon, special adviser to Minister of State for Petroleum Resources; Onyebuchi Okereke, chairman, Society of Petroleum Engineers (SPE), Lagos section; Audrey Joe- Ezigbo, president, Nigerian Gas Association; Olatunji Akinwumi, executive general manager, GSR/Asset Management, Total E&P Nigeria Ltd and Debo Fagbami, chairman, SPE Nigerian Council, at the SPE technical symposium in Lagos recently.

Ghana: Ghana Gas gets more gas Page 51 Market Insight

Debrief

Robots are taking over.

But Nigeria is not done fiddling with PIB FRANK UZUEGBUNAM

Oil prices rise amid OPEC supply cuts, but trade worries weigh Page 55 OPEC weekly basket price DAY

PRICE

24/5/19

67.42

23/5/19

68.56

22/5/19

71.03

21/5/19

71/71

20/5/19

72/47 Source: OPEC

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hile the world is prepping for an oil and gas industry where completely unmanned platforms are operated, inspected and maintained by teams of autonomous robots, Nigeria is not done fiddling with the Petroleum Industry Bill (PIB), a legal and regulatory framework which seeks to change the organizational structure and fiscal terms governing the industry.

Though automation is not really new in the oil and gas industry, the future is autonomous robotisation. The industry now stands on the verge of fully unmanned platforms as exciting advances continue to be made with more agile and intelligent robots are taking on

increasingly complex roles.

French oil major, Total through ARGOS (Autonomous Robot for Gas and Oil Sites), came up with ANYmal, a robot weighing 30kg which can operate with a high degree of autonomy, using lasers and cameras to navigate. Its flexible joints allow it to get flat to the ground and inspect areas other robots may find difficult to reach, as well as crawl upstairs with an incline of up to 45 degrees. Also, Chevron has been testing a snake-arm robots for inside vessel inspection in the North Sea. But the launching of Oseberg Vestflanken H platform by Equinor on October 2018 ushered in a new high in the drive for innovation and artificial intelligence in the oil and gas industry. The platform became the first fully automated oil and gas platform entirely unmanned and requiring only one or two maintenance visits in a year.

The platform, located 8km north-west of the Oseberg field, was built in just a few years, without the need to construct many common aspects of an offshore platform.

“Oseberg H is the first platform of its kind with no facilities, like living quarters, drilling plant, or a helideck, not even a toilet,” Anders Opedal, Equinor’s executive vice president for Technology, Projects and Drilling, said.

The platform has a predicted volume capacity of 110 million barrels of oil equivalent, which lies some 110m below sea level and is accessed via 11 wells. It is managed via a control centre in the middle of the oil field, and will rarely have any personnel aboard.

Oseberg Vestflanken H platform was delivered 20 percent less than expected and this will ensure that its production over the next 22 years is more economical, predicted to be below

$20 per barrel.

So as the rest of the world move on with artificial intelligence and innovation, Nigeria cannot get it hands off the PIB after over 16 years after the bill was initiated. The 8th National Assembly finally ended without delivering the long awaited PIB. Also, the Petroleum Industry and Governance Bill (PIGB) passed by both chambers of the assembly did not receive the president’s assent.

Hon. Fred Agbedi, chairman, House of Representatives Committee on Natural Gas suggested that all stakeholders in the industry need to work together to make PIB a reality in the unfolding 9th national assembly.

“We need to identify returning legislators who can work on the PIB in a caucus from the onset of the 9th assembly so we do not miss the target again”, Agbedi said on the sideline of 2019 Offshore Technology Conference (OTC) in Houston, US.

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Wednesday 29 May 2019

BUSINESS DAY

oil

WEST AFRICA

Outlook

Sierra Leone: After initial suspension, Sierra Leone restarts 4th licensing round

Brief Ghana: Unreliable data threaten 500,000 barrel of oil per day target

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ierra Leone has put on a brave face and announced a rehashed package for bidders interested in taking part in its fourth hydrocarbons licensing round that was suddenly put on the ice in September 2018 after a new administration took charge of the West African country following successful Presidential elections.

The country says it is now ready to restart last year’s suspended fourth licensing round targeting offshore prospects after what the government says was broad consultation process involving domestic and international petroleum industry players.

It has this week come out to reaffirm the soundness of its new regulatory and fiscal framework on which the success or failure of the new licensing round will be hinged on.

Getech Group, a partner with government hydrocarbons agency Petroleum Directorate of Sierra Leone (PDSL) - which coordinates the award of petroleum licenses, negotiates the terms of all hydrocarbon permits, monitors, regulates and facilitates upstream oil activities on behalf of the government – publicized the official announcement of the stalled licensing round suspended in September 2018 and follows on the footsteps of similar undertakings in 2003, 2004 and 2012.

Last year’s suspension of the oil block’s auction was ostensibly to allow

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for wider consultations on how best to re-structure the bidding to ensure heightened interest of international explorers and independents.

“Following the conclusion of a sixmonth industry consultation that was designed to collate international industry feedback and ensure the success of this round, companies are now invited to re-engage with the Fourth Licensing Round,” Getech said in a statement.

The previous three bids attracted mixed response with four blocks awarded in the first round of 2003 while only one block was awarded in 2004 followed by one more in 2006 that was allocated through direct negotiation in 2006.

However, during third round of 2012, eight blocks were awarded and a more robust response is expected this time round especially after PDSL said it has “collated international industry feedback to ensure the success of the bidding round.”

Sierra Leone is restarting the fourth licensing round at a time when PDSL has in stock four undeveloped offshore discoveries made between 2009 and 2013.

They include Venus-B1, Mercury-1, Jupiter-1 discovered by Anadarko in Block SL-07 and Savanaah-1 by Lukoil in Block SL-05/11 all of them in Sierra Leone waters that PDSL says “contain proven petroleum systems.”

overnment’s new policy to accelerate growth in the oil and gas sector to help it meet its target of half a million barrels of oil per day may be derailed by some unfavorable factors confronting the sector.

The existence of unreliable data and low level of documentation on exploratory fields continue to hamper government bid to bargain higher returns from global oil exploratory companies.

This is as a result of a strategic legislative review which government has commissioned for the oil and gas industry.

The review process which has begun with stakeholders and industry players seeks to examine the prospects of meeting government’s target.

John Peter Amewu, Ghana’s Energy Minister, at the first stakeholders meeting in Accra indicated that government had identified lack of accurate and reliable data on Ghana’s oil fields among others as it weaknesses which continue to hamper the prospects of the country to attract adequate capital to develop the oil fields.

South Africa: South Africa searches for partners for South Sudan oil block

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outh Africa’s Strategic Fuel Fund is welcome to bring in partners to help it execute a $1-billion agreement to drill for oil and build a refinery and pipeline in South Sudan, the central African nation’s oil minister said.

Under the agreement, signed between the two governments on May 6, the Strategic Fuel Fund holds 90 percent of the project in B2 Block with the Nile

Petroleum Corp., South Sudan’s national oil company, owning the rest, Ezekiel Gatkuoth, Minister of Petroleum, South Sudan, said in an interview at Bloomberg’s office in Johannesburg after earlier meeting his South African counterpart. The project, which Gatkuoth expects to reach production in about six years, includes the construction of a 60,000-bpd oil refinery in Pagak, he said.

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“They have room to farm in” a partner, the South Sudanese minister said, adding that his government has the right to approve any partners and that a transaction would be subject to capital gains tax.

The partnership should benefit South Sudan by boosting production in a nation where output is half of what it was before a civil war, while securing energy supplies for South Africa, which imports crude for its refineries as it has little oil production of its own. Gatkuoth acknowledged that the project is likely to cost more than $1 billion.

In addition to bringing new partners into its oil fields, South Sudan is trying to diversify export routes for its oil.

Currently it exports oil through Sudan, the country from which it seceded acrimoniously in 2011, at a cost of $24/ bbl, but it is now considering paying Uganda a fee to transport crude south to a port in Tanzania when new pipelines are built, Gatkuoth said. Exports through Ethiopia could also be an option.

The B2 Block was once part of an area held by Total SA until 1985 that was the size of Pennsylvania.

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“As a country and as a Ministry, we continue to face fiscal challenges and risk to the oil industry. Our basins as we are all aware, are largely not completely de-risked. Significant data gaps and low data quality still exists. And many companies continue to cite our fiscal regime as a disincentive to attract global fund and capital for investment,” he said.

According to the Minister, the low interest shown in the last bidding rounds for the nation’s oil blocks is a testimony to the fact that all is not well with the sector.

“The recent results for our first licensing round, although not satisfactory in terms of the response rate, has confirmed the fears about developing the industry and the risks associated with the frontier area,” he stressed.

@Businessdayng

Wednesday 29 May 2019

BUSINESS DAY

gas Brief LNG market: Flood of spot cargoes push prices to sevenweek low

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sian liquefied natural gas (LNG) prices slumped this week on a flood of spot volumes amid subdued demand. rices for delivery into northeast Asia in July are estimated at $4.50 per million British thermal units (mmBtu), the lowest level in seven weeks. The August price is in a slight contango but is also below $5.00 per mmBtu. Price spreads between Europe and Asia shrank to below 50 cents from over $1 earlier in May, reducing opportunities for spot trade between the Pacific and Atlantic basins.

Cargo offers came from a variety of sellers around the world, with oversupply absorbing supply curbs from Russia’s Sakhalin 2 and Malaysia’s Bintulu LNG plants following outages.

In the Pacific, the BP-operated Tangguh LNG project in Indonesia offered three cargoes for loading in August and September, while state-owned Pertamina offered two cargoes for loading from

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ENERGY intelligence

Ghana: Ghana Gas gets more gas

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he West African Gas Pipeline (WAGP) Reverse Flow Project at Aboadze in the Western Region is almost complete.

The project is aimed at transporting dense gas from the Aboadze power area to the gas-powered plants in the Eastern enclave anytime the supply from the West African Gas Pipeline Company (WAPCo) is interrupted.

The Ghana National Gas Company has, therefore, initiated a test run of the pipeline system installed to transport gas from the Western Region to the Eastern enclave to fuel electricity plants in the area.

Initially, gas from the oil and gas fields offshore Cape Three Points in the Western Region was not available for use by thermal plants sited in Tema.

There was, therefore, the need for the construction of a reverse gas pipeline between Aboadze and Tema.

Engineers had since May 16 this year been testing the safety and efficiency of the system with a flow of 37 million standard cubic feet of gas daily.

Ernest Owusu Bempah, head of communications at Ghana Gas, noted that with the completion of the project, the company would be able to supply gas anytime it was called on to supply gas.

He explained that the testing and commissioning of the gas pipelines were being done to check for leakages and durability of the pipelines that have been tied to the WAPCo pipelines.

“What we are currently supplying is not for consumption. WAPCo is using the 37 million standard cubic feet of gas to pressurize their station. It will take some days before they will be able to stabilize their station. Once that is done, then they will move to the offshore pipelines,” he explained.

He stressed that Ghana Gas would do

its best to always transport dense gas to Tema anytime it was called on to ensure there was no interruption in power supply. Bempah disclosed that the capacity of the Takoradi Regulating and Metering Station had also been expanded from the original 130 to 405 million standard cubic feet of gas a day to support the reverse flow project.

Algeria: Algeria to block Total from buying Anadarko’s Algerian assets the Bontang plant in June and July.

Brunei LNG offered a cargo for late June loading and may have awarded it at $4.50 to $4.60 per mmBtu, sources said.

In the Middle East, offers came from Oman where two spot cargoes were made available for loading from the end of June to the end of August.

In the Atlantic, Egypt’s natural gas company (EGAS) awarded its sell tender for 13 cargoes loading in June and July.

Prices for some cargoes might have been as low as $3.50 per mmBtu, trade sources said, with the low prices being a result of a drop in European gas prices.

Trading houses Gunvor and Trafigura won seven and two cargoes respectively, and Vitol might have also won two cargoes, three trade sources said.

Angola LNG continued to offer spot volumes and will close a tender for June delivery on May 29.

Algeria’s Sonatrach is actively offering spot cargoes as some of its long-term buyers backed out from taking the volumes linked to the oil price, sources said.

In Europe, Norway’s DEA Norge offered a spot cargo on the free-on-board (FOB) basis for July loading, two trade sources said.

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lgeria will block Total from acquiring Anadarko’s assets in Algeria, Mohamed Arkab, the country’s energy minister said.

Occidental Petroleum has agreed to sell Anadarko Petroleum Corporation’s assets in Algeria, Ghana, Mozambique and South Africa to Total for $8.8 billion if the US oil company succeeds in completing its plan to take over Anadarko.

“Our ministry has contacted Anadarko to get explanations on this information, but so far we got no answer,” Arkab said.

“It means there is no contract between Total and Anadarko. We have good relations with Anadarko and we will do the utmost to preserve Algeria’s interests, including using our pre-emption right to block the sale,” the minister said.

Anadarko holdings in Algeria represent about 260,000 barrels of oil per day, more than 25 percent of the country’s crude production estimated at 1 million barrels per day.

In 2018, Algeria’s state energy firm Sonatrach and Total signed new agreements, including a contract to develop the Erg Issouane gas field and plans to create a joint venture.

Total said at the time that the development represented an investment of $400 million. It said it would also form a joint

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venture company called STEP for a joint petrochemical project in Arzew, western Algeria.

But the relationship between Algeria and France remains scarred by the trau-

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ma of the 1954-1962 independence war in which the North African country broke with France. Hundreds of thousands of Algerians were killed and both sides used torture.

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Wednesday 29 May 2019

BUSINESS DAY

power

WEST AFRICA

ENERGY intelligence

Senegal: Senegal imports turbines for West Africa’s first big wind farm project

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enegal has started importing turbines for its first large-scale wind farm, the biggest such project in West Africa that will supply nearly a sixth of the

country’s power.

Privately-owned British renewable power company Lekela expects the wind farm, located in Taiba Ndiaye, about 100 km from the capital Dakar, to reach

158.7 megawatts (MW) by 2020.

President Macky Sall is keen to make Senegal a leader in renewables in Africa, with a 30 percent target for clean energy in the coming years, of which this project will provide half. A smaller solar project underway aims to produce 30 megawatts.

“On the environmental level, Senegal has never had a project on this scale,” said Massaer Cisse, Lekela’s Senegal head. “This farm will avoid 300,000 tonnes of carbon emissions.”

The 200 billion CFA franc ($342 million) farm will be roughly half financed

by Lekela, and the other half split between US-based Overseas Private Investment Corp and Danish export credit company EKF. Lekela also has renewable projects in Egypt, Ghana and South Africa.

Renewables currently make up a tiny portion of Africa’s power generation, but several projects aim to increase that share. South Africa, Morocco and Tunisia are all developing industrial-scale wind farms.

The unassembled parts of the 46 white wind turbines are already in the Dakar port, ready to be shipped to the 40 hectare farm.

As part of the project, young locals will be trained in electrical engineering and computer science to help with Senegal’s chronic unemployment, Cisse said.

Botswana: Botswana cancels 100mw solar power tender, plans to reissue

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he Botswana Power Corporation (BPC), has cancelled a tender in which it was seeking private investor partners to build a 100MW solar power plant, and plans to reissue the tender to make the project fully private owned, the state-owned utility said.

“The project which was initially structured as a joint venture between BPC and private producers will now be implemented through independent power producers, meaning it will be 100 percent privately owned,” the BPC said in a statement.

“A new tender is anticipated to be floated by end of June 2019,” said the BPC. The tender in the southern African country had received 166 bids from both local and international power producers.

The state power supplier forecasts energy demand to more than double to 1,359MW by 2035 from around 600MW currently, and is modernising its power grid and sources to meet the surge.

It will be recalled that last year, Botswana approached Mozambique and neighbouring South Africa for assistance in beating a looming power crisis. Botswana’s newly built power station, Morupule B, experienced technical challenges that resulted in three

of its four generation units being nonfunctional.

Botswana, which in the past had relied on imports to meet its electricity needs, has in recent years banked on Morupule B. Meanwhile, South Africa’s power crisis is affecting Botswana border areas.

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Towns in Botswana near the South African border are reported to have experienced a prolonged energy crisis as a result of load-shedding in Pretoria.

South Africa’s state-power company, Eskom, is facing generation capacity constraints and South Africa has been plagued by power cuts in the past year.

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Ethiopia: Ethiopia secures grant to roll-out hydropower projects

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he Sustainable Energy Fund for Africa (SEFA), managed by the African Development Bank, recently approved a $995,000 grant to support the roll-out of a sustainable procurement framework for Independent Power Producers (IPPs) in Ethiopia.

The SEFA grant is aimed at encouraging private investments into hydropower projects through Ethiopia’s Renewable Energy Programme.

It will strengthen the government’s capacity to undertake bankability and technical analysis including feasibility assessments of projects in the hydro priority pipeline.

The grant also provides for environmental and social impact assessments, resettlements action plans, and preparation of bidding documents for hydro projects.

“A well-structured procurement framework is crucial in mobilising the investments necessary to achieve universal energy access in Africa,” said Wale Shonibare, the Bank’s acting Vice-President for power, energy, climate change and green growth.

“The SEFA programme will boost private IPPs participation, and spur investments into the Ethiopian hydro power sector. The programme also complements the assistance provided by the Bank’s Institutional IPP/PPP Support Project, as well as the Bank-financed Mekele-Dallol and Semera-Afdera Power Supply for Industrial Development and Access Scale-up Project”, Shonibare added.

Ethiopia has a vast but untapped renewable energy potential. Under a long-term development strategy, the government has outlined a National Electrification Programme (NEP), targeting universal access by 2025 through a 65 percent on-grid, and 35 percent off grid combination.

The goal is to transform the country into a regional energy hub by 2030.

The Ethiopia Renewable Energy Programme, supported by the SEFA grant, is in line with the country’s Growth and Transformation Plan (GTP II) 2015/16 – 2019/20 and with the NEP targets.

It also aligns with the Bank’s Energy Sector Policy (2012), the New Deal on Energy for Africa, especially focusing on Renewable Energy and Early Stage Project Finance.

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Wednesday 29 May 2019

BUSINESS DAY

53

POLICY

WEST AFRICA

ENERGY intelligence

Nigeria can learn how to record great strides in wind energy from Houston DIPO OLADEHINDE

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hen people think of Houston’s energy sector, its oil and gas almost automatically come to mind, given that it holds about one-third of the publicly traded oil and gas companies in the US, yet wind energy is making inroads in the city, a scenario that holds much lesson for Nigeria.

With over 4,600 energy-related businesses employing more than 237,000 people, Houston has earned recognition as the “Energy Capital of the World” with wind energy gaining more momentum, a template for Nigeria energy space whose government has over the years being making frantic efforts to resolve its electricity challenges.

Wind energy (or wind power) is a form of renewable energy that uses airflow to generate electricity. Wind turbines are typically about 120 metres high to capture stronger winds and their blades span about 45 metres.

Susan Davenport, senior vice president for economic development at the Greater Houston Partnership, says more than 30 companies in the Houston area operate in the wind energy sector.

“Houston is actively working to grow this sector, so we hope people will seriously think of Houston when they think of renewables in this new era of energy,” Susan Davenport said at an April 9 news conference in Houston where the American Wind Energy Association released its 2018 state-of-the-industry report.

Davenport noted that as global energy forecasts continue to show an everincreasing need for energy, “we know oil and gas will be critical for years to come.

But at the same time, as that energy mix gets larger, we know an increasing share of energy will come from renewables and we’re already capturing a sizable share of that market.”

According to a nongovernmental organization Greater Houston Partnership, out of the $5.2 billion in venture capital reeled in by Houston businesses

from 2015 to 2017, renewable energy accounted for more than 35 percent.

Davenport said Houston is “uniquely suited” to support companies involved in wind energy and other types of renewable energy, thanks to its deep pool of energy-oriented talent.

The American Wind Energy Association’s annual report for 2018 shows the

Electricity generation for Nigeria’s grid is largely dominated by two sources - nonrenewable thermal (natural gas and coal) and renewable water or hydro. Coal and natural gas make up the largest portion of energy production in Nigeria, while energy generated from hydro is well below potential www.businessday.ng

wind energy sector employs between 25,000 and 26,000 people in Houston and elsewhere in Texas, up from 24,000 to 25,000 in 2017, with the total investment in Texas wind energy projects sitting at a whopping $46.5 billion. More than one-fifth of wind energy jobs in the US are located in Texas.

Also, information from American Wind Energy Association revealed 38 non-utility companies have bought or are planning to buy 4,900 megawatts of wind energy in Texas, including Shell Energy, AT&T, Budweiser, ExxonMobil, and Walmart.

“Texas continues to lead the nation, with hard work and ingenuity, in harnessing this great American renewable energy resource, literally out of thin air,” says Tom Kiernan, CEO of the Washington, D.C.-based American Wind Energy Association.

“Texas has a long history of energy production and as [our] report demonstrates, wind is an important part of the state’s energy success story. In many ways, the Texas wind story is the story of American wind power.”

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While Texas seems to be growing and expanding its renewable energy space, Nigeria still depends on non-renewable energy despite its vast potential in renewable sources such as solar, wind, biomass and hydro. The total potential of these renewable is estimated at over 68,000MW, which is more than five times the current power output.

Electricity generation for Nigeria’s grid is largely dominated by two sources - non-renewable thermal (natural gas and coal) and renewable water or hydro.

Coal and natural gas make up the largest portion of energy production in Nigeria, while energy generated from hydro is well below potential. As a result of wide gap between demand and output, only 45percent of Nigeria’s population have access to electricity.

This power deficit has also weighed negatively on business operations in the country making users seek alternative energy means, primarily through buying gas or diesel-powered generators which are relatively expensive as most businesses that use them incur high production costs.

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Wednesday 29 May 2019

BUSINESS DAY

finance people appointments

WEST AFRICA

ENERGYintelligence Brief

Tullow Oil Ghana appoints Kweku Andoh Awotwi as Executive Vice President

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he Managing Director of Tullow Ghana has been promoted to the position of Executive Vice President of Tullow Oil Plc. This follows a reorganization of the group’s structure.

As the new Executive Vice President, Andoh Awotwi is now part of the Tullow Group Executive team which runs the company’s activities and is headed

by CEO, Paul McDade.

Awotwi will also be directly involved in all executive matters while retaining full oversight of Tullow Ghana. His promotion makes it the first time Tullow Ghana’s leader has been part of Tullow’s Executive leadership.

Acknowledging his appointment, Awotwi said he was not only looking forward to representing Tullow Ghana as part of Tullow’s Executive Team but was also grateful for the oppor-

tunity to take part in the wider leadership and management of Tullow.

“Tullow Ghana has a bright future as we look to increase oil and gas production from Jubilee and TEN fields, explore for new hydrocarbons and continue to play a leading role in Ghana’s fast growing oil and gas industry.”

On his part, the Chief Executive Officer for Tullow Oil Plc, Paul McDade commended Mr. Awotwi on his new appointment.

“I am delighted to welcome Kweku to Tullow’s Executive Team where he will provide a strong voice and leadership for our Ghana businesses. We will also benefit from his extensive experiences across a range of industries in Africa and the US. This change also recognises Tullow Ghana’s importance to our company’s structure.”

Tullow Ghana has a bright future as we look to increase oil and gas production from Jubilee and TEN fields, explore for new hydrocarbons and continue to play a leading role in Ghana’s fast growing oil and gas industry www.businessday.ng

South Africa’s Eskom CEO resigns

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he chief executive of South Africa’s struggling power utility Eskom, Phakamani Hadebe, has said he was stepping down for health reasons after leading efforts to stabilise the highly indebted state firm.

Eskom is regularly cited by ratings agencies as one of the main threats to the country’s creditworthiness and economic growth.

“It is no secret that this role comes with unimaginable demands which have unfortunately had a negative impact on my health. In the best interests of Eskom and my family, I have therefore decided to step down,” Hadebe said in a statement.

Hadebe added that he was “humbled and grateful to have contributed towards the stability for an organisation that is critical for our economy.”

He will step down at the end of July this year, the company’s board said. There was no mention of an interim CEO. The government appointed Hadebe as chief executive in May 2018, ending a string of interim appointments that stretched back to 2016.

Eskom board chairman Jabu

Mabuza said Hadebe should be commended for his “dedication and passion”.

Eskom faces generation capacity constraints and South Africa has been plagued by power cuts in the past year, undermining broader efforts to kick-start growth.

The economy grew an estimated 0.8 percent in 2018 after recovering from recession.

Growth is forecast at 1.5 percent this year, and one factor in hitting that target will be how the government manages Eskom’s restructuring.

Battling to preserve Pretoria’s last investment-grade credit rating, President Cyril Ramaphosa has pledged to restructure Eskom with a 23 billion rand ($1.60 billion) a year bailout over the next three years.

NCS West Africa Limited announces Nigeria launch

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autical Control Solutions (Fueltrax), has announced launch of the new business entity NCS West Africa Limited (NCS WA) in Nigeria located in Lagos and Port Harcourt. NCS WA provides in-country presence and support for clients in Nigeria and surrounding areas using Fueltrax solutions.

There is a growing need for dedicated local support for the users of Electronic Fuel Management Systems (EFMS) in Nigeria.

NCS WA will be the first - ever subsidiary for Nautical Control Solutions, LP, the makers of Fueltrax, and will provide the first EFMS maintenance and calibration facility in West Africa.

A head office has been established in Victoria Island, Lagos, with a facility in Onne, Port Harcourt. The services to be offered at the Onne facility include a turn-key calibration process for Coriolis mass flowmeters, which will allow for Fueltrax meters to be calibrated locally to ensure that instrument measurement is accurate and within the required limits. Providing this service locally will help clients to reduce overall business costs by minimizing system downtime and

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associated costs of out-of-country calibration options. Periodic calibration is required in areas where high quality and safety standards remain mission-critical to operatives.

Fueltrax currently operates on over 130 systems on vessels in offshore Nigeria. International Oil Companies (IOCs) in West Africa are driven by the need to demonstrate compliance and ensure fuel accountability. IOCs require the installation of EFMS, such as Fueltrax, on vessels in West Africa to achieve this goal.

Fueltrax maintains its position as the market leader in West Africa and around the globe. The development of NCS WA heightens its services in Nigeria, by delivering additional @Businessdayng

assurance and support through advanced calibration services.

“I recall our Nigeria clients requested for an in-country presence, and we promised to deliver that at the Fueltrax Symposium held in Lagos in June 2018. We are proud to say we have now fulfilled that promise. This also demonstrates our quest to be closer to our clients. With this in place, we will maintain Fueltrax uptime for our Nigeria vessel operators, assist them to meet their client’s needs, and carry our local and regional vessel owners along as we lead the global Electronic Fuel Management sector,” Bene Okorie, West Africa Operations Manager, NCS WA, said.

Wednesday 29 May 2019

BUSINESS DAY

marketinsight Oil prices rise amid OPEC supply cuts, but trade worries weigh

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il prices rose as ongoing supply cuts led by producer club OPEC kept markets relatively tight, but Brent remained below $70 per barrel on concerns over an ongoing trade war between the United States and China.

Front-month Brent crude futures, the international benchmark for oil prices, were at $69.10 per barrel, up 41 cents, or 0.6 percent, from their last close. US West Texas Intermediate (WTI) crude futures were up 10 cents, or 0.2 percent, at $58.73 per barrel.

A group of producers led

by the Organization of the Petroleum Exporting Countries (OPEC), known as OPEC+, has been withholding supply since the start of the year to tighten the market and prop up prices.

But the gain could not make up for falls last week, when both crude futures contracts registered their biggest price declines this year amid concerns that the Sino-American trade dispute could accelerate a global economic slowdown.

Beyond financial markets, there are also signs on the ground of a slowdown in oil demand growth.

China’s automobile sales, a

key driver of global oil demand growth, will reach around 28.1 million units this year, unchanged from levels seen in 2018, when the country’s auto market contracted for the first time in more than two decades, state news agency Xinhua reported.

The outlook for flat car sales may be too optimistic still, as monthly sales have so far declined for 10 consecutive months.

A bright spot for carmakers, although not for the oil industry, is that sales of new energy vehicles are likely to grow by about 27 percent to hit 1.6 million units, from 1.26 units in 2018, the report said.

Iran stores more oil on land and at sea as exports slump

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ran’s oil storage on land and at sea is on the rise as US sanctions on exports bite and Tehran battles to keep its ageing fields operational and crude flowing, according to data and industry sources.

Washington announced in May the end of sanctions waivers for foreign countries importing Iranian oil, hitting Tehran’s biggest source of income.

With creaking infrastructure and an ageing fleet of ships due to increasing isolation from much of the world, Iran will need to park unsold stocks of oil until it can find buyers.

It is vital for Tehran to keep oil flowing as any disruption would damage its future activities due to the high costs and complexities of restarting production.

Data from Kayrros, a company which tracks oil flows, showed onshore storage in Iran was 46.1 million barrels, from total capacity of 73 million barrels, its highest since mid-January.

Iranian oil exports fell in May to 500,000 barrels per day (bpd) or lower, more than half the level seen in April, according to tanker data and industry sources.

Data based on AIS tracking

by shipping intelligence platform MarineTraffic showed 16 Iranian tankers, holding some 20 million barrels, were estimated to be used for floating storage after being stationary between two to four weeks.

Ten of those tankers with nearly 11 million barrels had been stationary for four weeks.

This compared with 12 Iranian tankers holding at least 13 million barrels of oil in March, which had been stationary from two to

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four weeks, MarineTraffic data showed.

Analytics company GlobalData said Iran had planned investment of around $900 million in capacity additions on new build storage projects between 2019 to 2023.

Analysts have estimated that over 50 percent of Iran’s oil production comes from fields that are over 50 years old with billions of dollars needed to develop additional capacity.

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WEST AFRICA

ENERGY intelligence OPEC Flakes

Saudi-Russian oil alliance marks a historic shift for OPEC

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he Organization of the Petroleum Exporting Countries (OPEC) is now a completely different organization in comparison to one founded 60 years ago. Not much has left from the sense of discipline and solidarity according to Albert Bininachvili, a professor of political science at the Columbia University.

“The important thing to recognize is that it also has a new identity that may reshape oil geopolitics for years to come.”

The new alliance between Saudi Arabia and Russia in managing world oil markets marks an important shift. Deepening and possibly formalizing the SaudiRussian oil alliance marks a potentially historic shift for OPEC, as the decision-making power is almost completely concentrated

in the hands of Riyadh and Moscow to the detriment of other members left with little or no say.

Formally not an OPEC member Moscow, nevertheless has a say in its decisions through the OPEC plus mechanism and actively influences the policy of this organization through coordination agreement it has with the OPEC’s leader Saudi Arabia.

Russia also has willingness not to miss at any opportunity to challenge the US interests.

Russia is in a prime position to deliver the oil removed from markets because of US sanctions against Iran, which will result in development of cooperation between Moscow and countries important to American foreign policy. Thus, Russia will gain new leverage against the United States.

OPEC exports hit 4-year low as Venezuela and Iran drop further

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PEC exports are hitting a 4-year low this month with Iranian exports falling below 1 mb/d and Venezuela exports falling to a new record low.

While the final May export figures are still early, we are seeing a near-term drop in Iranian crude exports, which is also corresponding to a buildup in floating storage. Venezuela exports also continue to suffer from US sanctions, which is pushing volumes to a record low.

All of this comes at a time when the Saudis have just reiterated the policy of keeping everything the same going forward. Our expectation is that OPEC+ will keep the production cut agreement of 1.2 mb/d into year-end 2019. There will likely be very little objections as Russia is suffering from its own crisis resulting from the contaminated oil issue. Everyone appears to be on board for an extended cut. @Businessdayng

The key focus for the Saudis will be to drain US crude storage, which we are seeing in the export data. Saudi/Iraq/Venezuela crude exports to the US are ~1.2 mb/d lower y-o-y.

Finally, unlike last year, Saudi, UAE, Kuwait, Russia, and Iraq are not able to offset the declines in Venezuela and Iran crude exports: May exports could be more than 2 mb/d lower than where they were in November 2018.

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Wednesday 29 May 2019

BUSINESS DAY

WEST AFRICA

talking points

ENERGY intelligence

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

STEPHEN ONYEKWELU

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

At a roundtable recently organised

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

According the a 10year Transforma-

tion Roadmap developed by the NCDMB (2017 – 2027), the Board seeks to be a catalyst for industrialisation of the Nigerian oil and gas industry and its linkage sectors through technical capacity development, compliance and enforcement, enabling business environment, organisational capability and sectorial and regional market linkage.

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

The philosophy of Nigerian content was borne out of necessity. This arose because of the fact that there were some gaps. “These were gaps in terms of skills, capacity and infrastructure in the industry. Gaps with regards to what we can do in-country against what was obtainable in the industry”, Adelana said. “You cannot effectively enforce compliance when these gaps still exist. The focus is more on development now.”

Interpretation of some sections the law has posed challenges. Adelana claims that some people tend to interpret the Nigerian content law in ways

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that suit them. They want to continuously look out for loopholes or gaps in the law to take advantage of. Yet there are templates that provide guidelines, procedures and processes meant to help industry players comply.

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

Non-review of the law has generated some level of confusion. A company that provides aviation services to offshore oil rigs has found itself in a situation where the implementation of provisions of sector 104; sub-section 2 is making it pay more for aviation fuel and less competitive. The sub-section of 104 states: (2) The sum of one per cent of contract awarded to any operator, contractor, subcontrac-

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tor, alliance partner or any other entity involved in any project, operation, activity or transaction in the upstream sector of the Nigeria.

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

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

@Businessdayng

Wednesday 29 May 2019

BUSINESS DAY

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Buhari’s Reforms and Transformations, Four Years After

Prologue:

President Muhammadu Buhari, Nigeria’s fourth president in the Fourth Republic will be sworn-in for a second four year term in office today in Abuja. Today’s ceremony will however not witness the usual pomp and pageantry

associated with the swearing in of presidents in Nigeria. This will be done on June12, Nigeria’s new Democracy Day.

the Buhari Administration but it represents a fact-file of the achievements of the administration viewed from the perspective of the achievements of This publication is not a cri- Ministries, Departments and tique of the achievements of Agencies (MDAs) of the Federal

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Government.

It speaks to the transformations and reforms recorded under the administration in various sectors of Africa’s largest economy.

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Wednesday 29 May 2019

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Wednesday 29 May 2019

BUSINESS DAY

Appraising the gains of President Buhari’s first term in office

On May 29, 2019, President Muhammadu Buhari will be sworn in for the second term in office. An inquisitive mind will ask: what land mark achievements did he record in the last four years? TELIAT SULE examines the impact of the policies of the Buhari-led administration in the last four years and suggests ways to further consolidate on the gains the Nigerian economy has recorded.

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igns that the Nigerian economy was heading for recession emerged in the second quarter of 2015 when the nation managed to record 2.35 percent GDP growth rate. That was just about a month after President Buhari was sworn in.

The following quarter witnessed a marginal increase in economic performance at 2.84 percent. But shortly after that, the real status of the Nigerian economy became apparent. The fourth quarter of 2015 recorded 2.11 percent GDP growth rate. And throughout 2016, the economy was in a recession. The GDP growth rate was -0.67 percent in Q1 2016; -1.49 percent in Q2 2016; -2.34 percent in Q3 and -1.73 in Q4 2016. For full year 2016, GDP growth rate was -1.73 percent. The negative growth rate extended to the first quarter of 2017 when GDP performance was -0.91 percent.

At that point the story changed for the better. The Nigerian economy picked up marginally at 0.72 percent which was the GDP growth rate in Q2 2017.

It was 1.40 percent in Q3 and 1.92 percent in Q4. For full year 2017, the Nigerian economy grew at 0.83 percent. Throughout 2018, economic performance, measured by GDP growth rate, was between 1.89 percent in the first quarter to 2.38 percent in the fourth quarter. For full year 2018, GDP was at 1.93 percent.

The first quarter of 2019 was better at 2.01 percent.

The pertinent question is: what were the policies of this administration, either directly or indirectly through its Ministries Departments and Agencies (MDA)? Have they returned Nigeria to the part of growth? We shall

how have these support programmes impacted the nation? The major challenge states were having was their inability to carry out the basic function of governance, which was the payment of workers’ salaries. For the majority of the states, this is now a bygone issue. The prompt payment of salaries and other emoluments reflected in Pay As you Earn (PAYE) segment of the states’ Internally Generated Revenue (IGR) of states.

In 2016, the PAYE segment of IGR of the states in the federation stood at N407 billion and that rose to N448.12 billion in 2017. It further increased to N669.2 billion in 2018. In other words, between 2016 and 2018, the Pay As You Earn (PAYE) component of IGR of states rose by 64.4 percent. While the private sector also contributed to this, majority of this payment came from workers with different government establishments. Since workers salaries and other emoluments were promptly paid, it follows that industrial actions were greatly minimized. examine these policies and programmes one after the other. An economy in a recession requires that the demand side be propped up so that individuals, households and businesses can buy more goods and services. When demand increases, firms will have money to pay workers, expand and the effects will trickle down to other sectors. President Muhammadu Buhari realised this. Inheriting a nation where state workers were not paid was in contradistinction to his ethos and values. Consequently, he embarked on bailout programmes through which he gave state governments’ www.businessday.ng www.businessday.ng

lifeline to be able to pay backlog of salaries they owed civil servants. Some states owed workers for as many as 22 months.

Nineteen states benefited from the first bailout packages, which amounted to N338 billion. On the list of these states were Abia, Adamawa, Bauchi, Bayelsa, Benue, Borno, Cross River, Delta, Ebonyi, Edo, Ekiti, Enugu, Gombe, Imo, Katsina, Kebbi, Kogi and Kwara.

Others included Nasarawa, Niger, Ogun, Ondo, osun, Oyo, Plateau, Sokoto and Zamfara. All the states have up to 20 years to repay the loans except Ogun State

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which opted for 10 years.

Another well-coordinated programme by the current federal government was the disbursement of the Paris Club refund. The first tranche of that fund involved the disbursement of N516.38 billion to the 36 states of the federation and FCT Abuja. The latest tranche of N691.56 billion was disbursed to states in March 2019.

Measuring the effects of bailout, Paris club refunds If the President is this committed to the nation, then @Businessdayng @Businessdayng

By diversifying financing options, infrastructure projects received a facelift The President diversified the financing options available to Nigeria when he opted for Sukuk as one of the means to finance road projects in Nigeria. One of the immediate benefits this generated for the nation was to bring into the financial system ethical investors who ordinarily wouldn’t have invested their money within the westernoriented financial system.

Apart from that, adopting Sukuk to finance infrastructure means that the money

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Appraising the gains of President Buhari’s first term in office

will not go down the drains as investors will demand for the projects before putting down their money. The first N100 billion Sukuk was used to finance 25 roads across the six geopolitical zones in the country. It was oversubscribed by 132.2 percent.

Some of the roads financed with Sukuk included AbujaAbaji-Lokoja Road, Obajana-Okene Road, SulejaMinna Road, Ibadan-Ilorin Road, Kolo-Otuoke-Bayelsa-Palm Road, Enugu-P/ Harcourt Road, Kaduna Eastern By-Pass, KanoMaiduguri Road as well as the Loko-Oweto Bridge over River Benue.

Rail projects upgraded In 2017, the President Muhammadu Buhari-led administration identified ten new standard rail gauge routes in its rail development plan. The routes are the Lagos-Sagamu-Ijebu Ode-Ore-Benin City EastWest rail line(300km); Lagos-Ibadan-Osogbo-BaroAbuja high speed line(615 km); Ajaokuta (Eganyin)Obajana-Jakura-BaroSiraj-Abuja rail; Ajaokuta to Otukpo (533km); ZariaKaura Namoda-SokotoIleila-Birnin Koni in Niger Republic (520km); BeninAgbor-Onitsha-NnewiOwerri-Aba rail with additional line from OnitshaEnugu-Abakaliki, 500km; Eganyin-Lokoja-AbajiAbuja(280km); and BeninSapele-Warri-Yenagoa-Port Harcourt-Aba-Uyo-Cala-

bar-Akampa-Ikom-Obudu Cattle Ranch coastal rail line( 673km).

The others are Port Harcourt-Aba-UmuahiaEnugu-Makurdi-Lafia-Kuru-Bauchi-Gombe-Biu-Maiduguri line; Ikom-ObuduOgoja-Katsina Ala-WukariJalingo-Yola-Maiduguri line as well as Kano-NguruGusau-Damaturu-Maiduguri-Gamborugala rail line.

One of these rail lines, the Lagos-Ibadan rail line, being handled by the China Civil Engineering Construction Corporation (CCECC) has reached an advanced stage with 79 percent work done and is due to be completed

by April 2020. Available records show that over 5,000 Nigerians are directly and indirectly employed by the Lagos-Ibadan rail project.

That axis of the Nigerian economy generates about 50 percent of the IGR of the 36 states of the federation.

In Lagos alone, over 60 percent of the nation’s value added tax (VAT) is generated; Lagos is home to the nation’s sea port complexesApapa and Tin can Island ports, and in addition, the state accounts for about 34 percent of the national IGR. Ogun and Oyo states are the industrial bases of the Nigerian economy. In one of the previous findings of BusinessDay Research and Intelligence Unit (BRIU), the Lagos port complex receives about 2,000 trucks on Mondays and Tuesdays,

which are off-peak period while starting from Wednesdays to Fridays, the number of trucks, trailers and tankers that come to the port complexes rises to 4,000 daily. Upon completion in the second quarter of 2020, one of the immediate impacts the rail project will have is to bring down the cost of transporting goods from the ports in Lagos to different industrial estates within Lagos-Ibadan axis.

It will also ensure the free flow of traffic within Lagos metropolis and along the Lagos-Ibadan axis.

Agriculture received huge boost Even when the Nigerian economy was in a recession, the agricultural sector performed creditably well. Its average sectoral real GDP growth rate during the period was about 4 percent. Crop production and livestock were majorly responsible for the noticeable growth within the sector. The Central Bank of Nigeria (CBN) passionately supported the sector and the support still continues till the present moment.

Through the CBN’s Anchor Borrowers’ Programme (ABP), rice farming which was a no-go area has turned many Nigerian farmers to millionaires.

The ABP has created over 2.5 million direct and indirect jobs through 862,069 farmers who cultivated over 800,000 hectares of land

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for rice, cotton, soya-beans, wheat, and cassava farming, among others. It should be noted that rice has been notable among the produce cultivated by farmers.

In 2017, the Kebbi State economy was reported to have generated over N100 billion from the sale of rice by farmers. The LAKE rice which is between the Lagos and Kebbi state governments has equally produced fantastic result. In just a week in Lagos State, over 70,000 bags of LAKE rice were sold. The success of the rice programme has reduced the nation’s food import bill significantly.

School feeding program boosts enrolment, creates jobs The federal government, in conjunction with 31 state governments are presently implementing school feeding programme. As at today, the nation’s school enrolment has risen by 20 percent. The scheme has employed 103,992 cooks, feeding 9,714,342 pupils in 53,715 government primary schools in 31 states.

School pupils are fed for 200 days in a year. This has ensured there is ready market for small holder farmers, empowered cooks and communities. Everywhere across the globe, governments in some ways have programmes to support farmers in the agricultural sector. For instance in the United States, due to the trade war between USA and @Businessdayng @Businessdayng

China, President Donald Trump recently announced $16 billion in aid to American farmers who are affected by the trade dispute.

N-Power programme reduces unemployment, depression The Buhari-led federal government at the beginning rolled out N-power programmes through which unemployed graduates were absorbed into the scheme. A participant is paid N30,000 monthly and the programme is non-political nor religious as all the 774 local government areas benefited from the N-Power scheme.

Participants were engaged to teach in public schools, support staff in primary care centres or serve as agricultural extension officers.

What Nigerians expect in the second term While the government has done well in many areas, more still have to be done especially in the areas of job creation as unemployment is still high; reduce crime rate just as special programmes should be designed for the manufacturing sector. The major need of the manufacturing sector is affordable loans, most importantly, at single digit.

In addition, the federal government needs to give state governments improved access to items on the exclusive list. This can be done by true federalism.

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How The Industrial Training Fund (ITF) Is Propelling Federal Government’s Job And Wealth Creation Efforts

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cross the world, arriving at unanimous judgements on the performance of office holders is always difficult as opinions are influenced and coloured by numerous factors.

And so it has been with assessing the first term of President Muhammadu Buhari. Whereas majority of Nigerians have scored the President excellently given the conditions he met upon inauguration in 2015, a minority hold vastly different opinions.

However, one area that nearly all Nigerians are unanimous in terms of his performance and achievements is in job creation and poverty reduction.

One reason that may have accounted for such

favourable rating is the roll out of numerous social investment programmes like the NPOWER TraderMoni Scheme, Government Enterprise Empowerment Programme (GEEP) and HomeGrown School Feeding Programme (HGSF) that have had varying impact on Nigerians across the country.

Equally fundamental to such positive assessment of his presidency are his policies that have buoyed public institutions with mandates for skills acquisition and capacity building to generate initiatives that have equipped Nigerians with skills for employability and entrepreneurship.

One Agency that has been at the forefront of this job creation and poverty reduction effort is the Industrial Training Fund (ITF).

Established on the 8th

October, 1971, by decree no. 47 (as amended in 2011), the ITF is vested with the mandate to provide, promote and encourage the acquisition of skills in industry and commerce with a view to generating a pool of indigenous trained manpower sufficient to meet the needs of the national economy; provide training for skills in management for technical and entrepreneurship development in the public and private sectors of the Nigerian economy; set training standards in all sectors of the economy and monitor adherence; and evaluate and certify vocational skills acquired by apprentices, craftsmen and technicians in collaboration with relevant organizations.

Throughout its years of existence, it has pursued this mandate with single mindedness and vigor, training over 20 million

His Royal Highness, the Longoemai of Shendam, Martin Shaldas being assisted by the ITF DG to present a start-up pack to a beneficiary of the Passion to Profession Programme (P2PP) in Shendam Plateau State.

Representative of the ITF DG, Hajiya Safiya Atta (1st Right), a Deputy Director with the Fund presenting a startup pack to a graduand of the Skills Training Empowerment Programme for the Physically Challenged (STEPP-C) during a closing ceremony of the programme.

The DG ITF Sir Joseph Ari (middle) in a discussion with His Excellency, the Vice President, Prof. Yemi Osinbajo GCON during the launch of the MSMEs in Jos recently. The ITF was instrumental to the implementation of the MSMEs clinics across the country.

Picture of start-up packs on display at a closing ceremony of one of ITF’s skills acquisition programmes.

The Secretary to the Federal Government Boss Mustapha who represented Vice President Osinbajo being assisted by the Director-General/Chief Executive of the Industrial Training Fund, Sir Joseph Ari to present a start-up pack to a beneficiary of the National Industrial Skills Development Programme (NISDP) in Abuja.

A cross section of graduands during the closing ceremony of one of the phases of the National Industrial Skills Development Programme (NISDP).

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INTERVIEW

Buhari has set Nigeria on the right economic, political trajectory -Adesina

Special Adviser on Media and Publicity to President Muhammadu Buhari, Femi Adesina, says that despite the challenges that confronted the President on assumption of office in 2015, he has set the nation on the path of economic revival and political stability. In this interview with John Osadolor, Onyinye Nwachukwu and Tony Ailemen, the presidential aide urges the media to be fair to the administration promising that the Buhari’s “Next Level” policies will deepen economic transformation of the country through diversification, strengthen the fight against corruption and tackle the lingering menace of insecurity. Excerpts:

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ow would you assess Mr. President, having worked with him for four years now, vis -a -vis his person, attitude to work, his love for and commitments to Nigeria, his programmes and their implementations?

out there to pull you or the President down and should therefore, been seen and regarded as enemies?

No, no, no, not at all. My belief is that if at all there are people like that, they can only try, they cannot succeed. Since I know that they won’t succeed, I don’t waste precious time to bother about that. Nigeria will continue to move on, the Buhari administration will continue to succeed and by the grace of God, when the President is exiting at the end of the second term, Nigeria would have been far better than he met it.

I will say that the very fact that I have come to work in government, shows that I am working with a man l believe in. This is because I am not a government person and never thought I will ever work in government. I really never wanted to. So, that I am working in government shows that the person I have come to serve is someone I admire and respect. President Buhari is a man that loves Nigeria and Nigerians passionately, particularly, the under trodden. Part of his working thoughts is how he can make a difference in the lives of people particularly those at the lower levels of the ladder and you can see that people love him passionately too.

If you see the trend of the last election, they were the ones who practically returned Mr. President. I am not saying that people in the middle class don’t like him or didn’t vote for him, but the larger number of those who returned him are at that lower level. That is why he is also passionate about how he can make a difference in their lives. That is why there are some economic decisions that should have been taken, but for people at that lower ladder, Mr. President temporizes over that kind of decisions. If he were not someone who has those people in mind, he will just close his mind and do it. But he will say no, I know the impact that will have in the lives of the people.

Of course you know he fought in the Army to keep Nigeria one and rose to the position of a general.

He loves the country and anything that will balkanize Nigeria must not be brought to his table at all. He is a good family man.

You need to see him, when he is with his grand children. You won’t believe that he is the same person they thought was stern unbending, unsmiling. I will just say he has a good heart. I like his simplicity. He is a very simple man. He does not hold power as if it will never end. Anytime we are holding meetings, he will say “while we are here” and you know what that means, it means he

So, if you were to score the Nigerian media in terms of understanding of government policies, appreciation and interpretations of government policies. How would you rate them?

recognizes that one day, he will be put off this place. He is a very religious man, very pious and serves his God very passionately.

I believe Nigeria is lucky to have him at this very time.

So, how would you describe your job, heading this very strong team that is managing Mr. President’s image?

It has not been a tea party. But you know what, it is people like you, my colleagues, who have been making things difficult for me...laughs...You, the media people. They make life most difficult for me here whereas they are the ones who should make things much easier for me, but the reverse is the case. But, I will say by and large, it is a responsibility I took on with every sense of commitments. I didn’t think it was going to be a tea party. I knew it would be challenging, but I take it in my stride. For me, the job of advising Mr. President on the media and interfacing with the www.businessday.ng

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media daily is like an extension of the newsroom. The only difference is that in the newsroom, you determine how the news would be given to reading public. But here, we give the material to the media who then determine how to use it. You can’t tell them how to use it. Often times, when I am about to issue a statement and I see a line inside the statement, I will say, this is where the media will take the news and I won’t be surprised the next day when l see that they have turned the statement around. It shows that one is still able to think like a media person. But the only difference is that instead of disseminating the news, you feed the media and Nigerians. The media disseminate the news the ways they like and allow Nigerians to interpret the way they like.

I am sure that the work itself comes with pressures. It will be good to know how you deal with the pressures

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Well pressure itself is part of life.

If you do anything that does not give you pressure, the tendency is to be lackadaisical and lay back is there. So pressure is what keeps you going. It is a pressure cooker job. You never knew where the pressures will come from, particularly with the coming of the social media. You can have the challenges of fake news, twisting things, in some instances creation of absolute fictions. All those things are there. But you need to know what to respond to and what not to respond to. You also need to know how to respond and how not to. I think deliberately at times, the intention of the social media is to get you so discouraged, dispirited that you begin to ask yourself ‘what have I let myself in for?’ But I have news for them...No! I have never regretted coming to take on this assignment for the President, No! But have you ever nursed this feeling that there are some people who are just @Businessdayng

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I will just say that the media is doing what it should do. The advantage I and some of my colleagues have had, speaking from this divide, is that we have seen both sides. We have headed the media at the highest point and we are now part of government policy team, so, we are able to form a more balanced judgment.

But I will say that the Media is doing its work. I have no problems with that, but it will be a lot better if they have a more balanced judgment of the issues. However, when they also display the lack of that grasp, one does not hold it against them, because at times, they are only seeing one side of the coin.

As we move to the “Next Level” and when you return, is there anything you will do differently?

I will say that in the “Next Level”, whether I am inside, or outside, the government, I remain a Buharist to the core. I have been a Buharist since he was in the military, even as Head of State. Since he has been contesting elections, I had been writing to support him even until 2015, when I was invited to work for the government.

So, even if I am no longer in the government, it doesn’t change my status as a Buharist. You know all those of us that follow the English Premier League (EPL), you find some people who say “ I am Arsenal for life, some say I am Man U for life” I am a Buharist for life.

That is what I am.

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Buhari has set Nigeria on the right economic, political trajectory -Adesina can tell you is that the economic direction of this administration is for self- sufficiency. You have seen that Nigeria for almost sixty years depends on one product for revenue which is oil. Every government that had come since 1960 talked about the diversification of the economy, but did they succeed? No! That was because they paid lip service to diversification. President Buhari came in 2015 and said he will diversify the economy. Four years later, he has gone so far. You can see the impact of agriculture on the economy so far. You can also see the impact of solid minerals on the economy.

So, whether I am in government or not, I will always support him.

Yes, if he says I should continue with this assignment, I will do it because that was why I left everything I was doing before I came to serve. What will I do differently?

I will say, I will continue interfacing with the media, managing the public image of the President. Do differently? I can’t put my finger on it. But I think you in the media are the ones who will answer that question so that I will know what I should do better. As far as I am concerned, all the things we have been doing, we will continue to do, but we can explore other areas of cooperation and collaboration.

forget the circumstances in which he got into office and what he met. Those circumstances are not the same now, therefore, we will not experience that time lag we experienced in the first term. In that first term, there was no proper hand over from the administration’s that left.

It was like coming and trying to grapple with so many things because you were not properly guided through. No briefs. Then they also had the problems of the economy suddenly collapsing because our mainstay is petroleum.

Petroleum which sold $143 per barrel, in 2013/2014, fell to as low as $27 per barrel. Now, how can things be the same?

There is this assumption or claims that you would have done better but for the activities of some cabals who dictate how you should do your job. What is your reaction to this?

First, the President had to merge the ministries from 42 to a manageable size of 24 and then he had to collapse some ministries. He then took a while to appoint the ministers because the prevailing conditions dictated that he did that. Today, the economy is out of recession now. So the situation is the not the same as in 2015. The economy is growing, it may be slow, but it is looking up. So, the circumstances and situation are different therefore, we can’t have that kind of delay. But don’t think it will happen a day or two or even one week after the May 29th inauguration. No, it doesn’t work like that, because he has to send the list to the Senate. The Senate itself will not be inaugurated until June 9th because that was the day the 8th Senate was inaugurated.

They will need to settle down and form committees which will screen these ministers. The ministers need to be screened, interviewed and all that, before the list comes back to him. That will be running into a couple of weeks after the inauguration. But I think in the shortest possible time, we will get the ministers

There is absolutely no external control, I tell you that as a matter of fact. There is absolutely no control from anywhere. One thing you will know about the President is that when he gives you an assignment, he leaves you to do it. At the valedictory meeting of Federal Executive Council, almost all the Ministers talked about it, that the President, not for once did he put pressure on them to do anything. The President is a man who keeps his eyes on things, but keeps his hands off. Once he has given you an assignment to do, he keeps his hands off it, but keeps his eyes on it to ensure that it is done. So, there is absolutely no pressure, no tele-guiding and nothing of such from anywhere, because it is not in the nature of the President.

People expressed the opinion that the President took a lot of time to constitute his first cabinet in 2015. Do you see the next cabinet coming much earlier than what we had in 2015?

People who talked about the delay by the President in forming his cabinet in 2015 seem to

Today, it is possible that in the nearest future, if the oil sector collapses, Nigeria does not have to collapse with it. The current situation, pre- 2015 was that if oil collapses, Nigeria collapses with it. But with the way the Buhari administration is going, we will get to a point that oil will not determine our future again. Oil will still remain important to us, but it will no longer determine our fate again as a country. That is what we need to recognize as the economic direction of our country.

Again, we have the Economic Recovery and Growth Plan, ERGP. The target of that is that by 2020, we will achieve 6% growth in our GDP. The fundamentals about that is that with our population hovering around 200 million, the least growth that can make the people feel the impact of your economy is 6%. But then if we fail to check population growth, we know that the challenges of GDP will also be there.

The last quarterly report of the National Bureau of Statistics (NBS) is that we grew by 2.01% in the last quarter. There were many times that the IMF, World Bank and all the economic institutions have even adjusted Nigeria’s growth possibilities upwards.

It shows that they are seeing something in the economy and I believe that the Nigeria economy is like a plane taking off with its nose in the air. If the right things continue to be done then, there is hope for the economy.

But then do you see the 6.0% being achieved by next year, 2020 which is the target. I ask this because as at today, we are at 2.01%?

It is achievable. But if we do not achieve it, it will not be because the government of President Buhari did not work hard at it. The government will try to achieve that target. But again, you know that a lot of variables will influence the outcome. Infrastructure is one and this play a big role in economic development- roads, rails, airports etc. Power will also determine how far we can go.

We hope we see those things work?

They are beginning to work.

That is why I think every focused government needs a second term under the system that we run.

One term will not be enough to complete all the works. In three budget cycles, we had budgeted about N3.5 trillion for infrastructure alone. But you will not begin to see the full results until few years later. By the time those things begin to burst forth, I am sure that Nigerians coming later will say you have been unfair to this government.

As the man who speaks for this government, at the time several agencies such as IMF, World Bank and others were churning out those “negative” reports, how did it feel like?

Well, when those negative reports come from those agencies, we just take it as it is because those agencies, when they say those negative things, take what you think is necessary and what you think is unnecessary, not factual or what they say because of lack of adequate information, you ignore and throw away. But the things you need as a country, you take. When negative information come, we just take it. Like the Philosopher, Marcus Aurelius said “Life is like being out in the sea, you take the stormy and the

How would you assess the economic policies of this government?

For me, that is better done from outside. Yours is a newspaper with economic bent, so, you would do that better than I can do. But as an insider, what I www.businessday.ng

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smooth sails as they come”. You keep going, it is like also flying.

There are times when the weather is not good and you run into turbulence and when this happens, you won’t say, I am not going again, Pilot turn. ....laughs.

Looking at 2015, there were issues around those who voted for Mr. President and those who did not vote for him, distributions of political patronage such as infrastructure on the basis of those who voted and those who didn’t. Going forward, what do we expect? Are we expecting that some will be favored above others or that everybody will be treated equally this time?

Our Constitution does not even permit the President to discriminate. This is because there are certain things the Constitution compels the President to do.

For instance, when a President makes up his cabinet, the Constitution expects that there will be a minimum of one minister per state. So, if the Constitution already compels the President to appoint a minister from every state, then you cannot say this state did not vote for me, so I will not give them a minister. They must have. But then in politics, there is also that window that when you give more votes, you can have more attention, but not with President Buhari. He scored about 198,000 votes only in the entire South East. But look at the ministers that came from South East. Four of them were made senior ministers. Only one is a minister of state. You will think that all the five South Eastern states should get the ministers of states position, but he did not do that. This shows that the President will only do that which is best for the country this time around irrespective of the voting pattern. What did he get from the South - South, yet you can see that the minister working with him in Petroleum Resources is from that region.

The Ministers of Niger Delta Development and Transportation are from the South - South. Look at the Ministers of North -West which was his vote basket, four of the ministers are ministers of states. You would think that he would concentrate all the key portfolios in those areas where he got the bulk of the votes, but he didn’t. So, it shows that the President will always do what is just. Your paper started the issues of lopsided appointments sometimes ago and then we released a list of all the appointments that has been made. A day or two days ago, some papers carried the spread of appointments and you see that, it is a fallacy to think that the North actually has more appointments than the Southern parts of the country. Some people have that angst that the security appointments are concentrated in one part, but they did not look

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INTERVIEW

Buhari has set Nigeria on the right economic, political trajectory -Adesina at the totality of the appointments.

of appreciating that this government saved the country from destabilization, they are saying that we said they are degraded but they are still there. But are they there in the same shape that they were in 2015? Anybody that wants to be honest will agree that they are not in the same shape they were in 2015.

In infrastructure, the emphasis will be on rails, roads, and airports. Let’s separate power, this is also part of the infrastructure, but it is a stand alone item now in the “Next Level” manual.

Now, there is no state in the country where a federal road is not under construction, none. The Minister of Power, Works and Housing says only two states have not made lands available for construction of houses. So, houses are being constructed in 34 out of the 36 states. See how many airports that have been fixed in the lifespan of this administration. The Port Harcourt airport that had become an albatross has been fixed. See the Abuja airport, it has been completed.

So, this administration will continue to work on infrastructure.

You know that there is the Lagos to Calabar, Kano to Maiduguri rail lines. The entire country will almost be covered by rails in the second term if this administration. Power is a stand alone. The target is that by 2020, Nigeria will have a minimum of 10,000 megawatts of power. You know we got to 7,000 megawatts just few weeks ago until the grid developed problems and dropped to about 2,000 megawatts.

Many are of the view that the fight against corruption by this administration has been mainly targeted at the opposition. How would you react to this?

I do not agree that government has concentrated on opposition, but on anyone who has soiled his or her finger. Whether they belong to the opposition, the All Progressives Congress (APC) or retired military men or anybody who has questions to answer will answer for it. Now, there may be a preponderance of the people in opposition in that list. This is because they were the ones that had the opportunity to run the treasury for 26 years. So, naturally there will be more people from the opposition answering questions because for 16 years, they were running the economy.

The Agriculture Minister himself told me today that Nigeria produced unprecedented million tons of grains this year. There was a time we were importing beans from Burkina Faso. We were spending millions of Dollars per day to import rice. Even maize, we were importing. But today, we don’t import these things again. Do you know how many trailer loads now leave this country daily for the West Coast from the Kano and other markets in the north? They come with trailers now to buy grains from Nigeria. Yet, we have not closed our borders against them. This shows that we do not only have enough to consume, but more to spare for exports to our neighboring countries. We are almost at food self-sufficiency. We are not accepting that at a time like this, we even have more than enough.

Why are the prices of food more exorbitant now?

Well, it may be because the prices are responding to other things in the country. He talked about the poverty of the pocket. Now, we have a new Minimum wage. You know this is a double edge thing.

There will be more disposable income and then inflation will set in. It is a double edge sword. But in terms of food self- sufficiency,

this country under Buhari has done a lot and he will do more.

In the next dispensation, there are some other food crops. But under the current dispensation emphasis had been on rice, maize and few other crops. Emphasis will be shifted to cocoa and others. Security is a major one. And you know Mr. President when he lists his priority, he starts with security. This is because he believes that you cannot run a country that is not safe. That is why he wants to first secure Nigeria, so that he can manage it efficiently.

Between 2015 and now, we know a lot of advances that were made in the area of security. When the administration came in 2015, do you know the number of bombs that was going off daily? Bombs went off as many as eight times daily in different parts of the country. But the administration took the battle to Boko Haram, which was the major threat then.

Boko Haram then was in North East, North West, North Central and even in Abuja and in Kogi state. From Kogi, it was advancing to the South West, especially, Lagos and it was ultimately heading for South South. So, what is left of the country? Nothing! It was the most potent threat to the continued existence of the country. A lot of people, instead

So, what do we expect to see in the fight against corruption, insecurity and efforts to fight poverty, including poverty of the mind, of the pocket and those occasioned by unemployment? This is especially so, as we are now seeing what Nigerians never expected, that is that, Nigerians are now committing suicide?

Other frontiers of security challenges also opened. The herdsmen clashes with farmers, armed bandits, kidnapping, armed robbery, etc. We recognize that these are challenges which government must deal with. The Constitution itself says that the protection of lives and properties is the responsibilities of government, but not just government at the center. We have governments at the states and also at the local government areas. All these levels must team up to battle insecurity. Even the traditional institutions must be part of it. Everybody is calling on President Buhari to put out the fire they lit in their local government. The President can’t be trying to bring peace to this country and you are stoking fire of discord in your states and local governments and you are expecting the President to come and put them off. No, this is unacceptable.

So if you were to score Mr. President from the scale of 1 to 100, were will you rate him?

No, I wouldn’t do that. I wouldn’t want to put a mark. Because he is my principal and I wouldn’t want to award him marks. It should be the other way round. What I will just say is that everything Mr President set out to do, he is doing and it is work in progress. The progress may be more advanced in certain areas than the others.

In agriculture for instance, see how much he had done. There was a time he went very far in security until more challenges came. That is why a good administration that is focused need more than one term. Fortunately, Nigerians have given him another term and he will get the job done.

Apart from insecurity, we also need more to be done in the areas of education and health. Don’t you agree?

Thank you! Those two areas you mentioned, you just need to look at the “Next Level” document or manual. If you have not seen it, I think you need to get a copy.

What are the areas of focus in the “Next Level”? It is said that those three fundamental areas of Security, fighting corruption and reviving the economy will remain fundamental, but added to it, is jobs, infrastructure, power, education , health care, inclusive government and entrepreneurs, and all that. All these things are stated. As a journalist, you must have the manual so that after six months, or one year, you can use it to monitor and score government achievements. In

Let me start with the issue of poverty of food. Unless we do not want to recognize what has been done. This government has done a lot in term of ensuring food security. As at today, Nigeria no longer imports any of the grains- rice, beans and maize. www.businessday.ng

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education particularly, it is said that the curriculum will change with more emphasis on science and technology. In health care, it is said that government must build a healthy populace which is ready to compete with the best in the world.

Yours is a very unique administration in the sense that this is the very first time we are having two eminently qualified media practitioners leading Mr. President’s media team. How have you been able to manage this?

Secondly, going forward, what do you expect from your colleagues in the media out there as we move to the “Next Level”?

Yes, this is a unique arrangement but there is a distinction in hierarchy. One is a Special Adviser while the other is the Senior Special Assistant. So, the hierarchy already shows you that we are going to work collaboratively, but there is a distinction.

So, about four years down the line, we have worked perfectly well together. We have strong similarities in our professional backgrounds. I have been an editor, he has been an editor. He has been President, Nigeria Guild of Editors, I have also occupied the same position. I have been an editor- in - chief, he has also been an editor- in - chief. So, you find that similarities in our backgrounds and what have we not seen in the profession that we will come and begin to fight? Nothing! We have not even had an issue that is unresolvable, none. If we disagree on anything, we discuss it and find a common ground around it.

I am not saying that it will always be like that with two people, no.

With two other people, may be the President will be separating fights every day, but with us, it has never happened.

Going forward, what will I require from the media? Like I always tell our editors, each time we have opportunities to stay together, the government just wants to be reported fairly, that’s all. Years past, in the military era and even under civilian regimes, when we were in active practice, do you know how many times we got called and they will say “please can you help us manage that story, can you kill it, don’t use it, please help us.” Do you know what that means? Since this administration, there has not been any call I made to any media house to help us manage that story. No! Anything this administration does, it is ready to rise up to it and accept it.

That is why you will never see us asking editors to kill any story for us. What we want is to be reported fairly. We should know that this is our country and if the editors contribute to throwing the country into war, where will they sell their papers? They too will be running for their lives and nobody wants that.

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Live @ The STOCK Exchanges Prices for Securities Traded as of Tuesday 28 May 2019 Company

Market cap(nm)

Price (N)

Change

Trades

Volume

Company

Market cap(nm)

Price (N)

Change

Trades

Volume

PRICES FOR MAIN BOARD SECURITIES (Equities) BANKING ACCESS BANK PLC. 225,712.18 6.35 9.48 326 41,771,132 UNITED BANK FOR AFRICA PLC 213,746.38 6.25 9.65 296 20,276,441 ZENITH BANK PLC 657,756.54 20.95 9.11 551 52,096,280 1,173 114,143,853 OTHER FINANCIAL INSTITUTIONS FBN HOLDINGS PLC 265,625.17 7.40 5.71 258 44,684,027 258 44,684,027 1,431 158,827,880 TELECOMMUNICATIONS SERVICES MTN NIGERIA COMMUNICATIONS PLC 2,697,990.70 132.55 1.96 357 7,168,989 357 7,168,989 357 7,168,989 BUILDING MATERIALS DANGOTE CEMENT PLC 3,435,366.29 201.60 5.00 183 6,591,291 LAFARGE AFRICA PLC. 168,326.46 10.45 4.50 46 371,013 229 6,962,304 229 6,962,304 EXPLORATION AND PRODUCTION SEPLAT PETROLEUM DEVELOPMENT COMPANY PLC 323,585.66 549.90 5.75 40 68,775 40 68,775 40 68,775 2,057 173,027,948 REAL ESTATE INVESTMENT TRUSTS (REITS) SKYE SHELTER FUND PLC 1,710.00 85.50 - 0 0 UNION HOMES REAL ESTATE INVESTMENT TRUST (REIT) 10,175.81 40.70 - 1 20 UPDC REAL ESTATE INVESTMENT TRUST 14,408.66 5.40 - 0 0 1 20 1 20 OTHER FINANCIAL INSTITUTIONS NIGERIA ENERYGY SECTOR FUND 411.91 552.20 - 0 0 VALUEALLIANCE VALUE FUND 3,312.39 103.20 - 0 0 0 0 0 0 1 20 CROP PRODUCTION FTN COCOA PROCESSORS PLC 440.00 0.20 - 0 0 OKOMU OIL PALM PLC. 70,589.34 74.00 - 6 12,581 PRESCO PLC 58,000.00 58.00 - 4 666 10 13,247 FISHING/HUNTING/TRAPPING ELLAH LAKES PLC. 511.20 4.26 - 0 0 0 0 LIVESTOCK/ANIMAL SPECIALTIES LIVESTOCK FEEDS PLC. 1,620.00 0.54 - 3 199,776 3 199,776 13 213,023 DIVERSIFIED INDUSTRIES A.G. LEVENTIS NIGERIA PLC. 794.19 0.30 - 3 57,000 JOHN HOLT PLC. 182.90 0.47 - 0 0 S C O A NIG. PLC. 1,903.99 2.93 - 0 0 TRANSNATIONAL CORPORATION OF NIGERIA PLC 47,558.15 1.17 3.54 56 2,796,943 U A C N PLC. 20,025.01 6.95 9.45 66 4,153,112 125 7,007,055 125 7,007,055 BUILDING CONSTRUCTION ARBICO PLC. 711.32 4.79 - 0 0 0 0 INFRASTRUCTURE/HEAVY CONSTRUCTION JULIUS BERGER NIG. PLC. 31,020.00 23.50 2.17 43 351,082 ROADS NIG PLC. 165.00 6.60 - 0 0 43 351,082 REAL ESTATE DEVELOPMENT UACN PROPERTY DEVELOPMENT COMPANY PLC 3,897.59 1.50 - 10 122,280 10 122,280 53 473,362 AUTOMOBILES/AUTO PARTS DN TYRE & RUBBER PLC 954.53 0.20 - 0 0 0 0 BEVERAGES--BREWERS/DISTILLERS CHAMPION BREW. PLC. 8,612.45 1.10 - 5 11,000 GOLDEN GUINEA BREW. PLC. 242.22 0.89 - 0 0 GUINNESS NIG PLC 110,614.33 50.50 - 33 81,292 INTERNATIONAL BREWERIES PLC. 171,917.24 20.00 - 12 25,620 NIGERIAN BREW. PLC. 479,814.12 60.00 3.45 38 2,374,006 88 2,491,918 FOOD PRODUCTS DANGOTE FLOUR MILLS PLC 83,000.00 16.60 - 64 568,585 DANGOTE SUGAR REFINERY PLC 160,800.00 13.40 0.37 60 715,390 FLOUR MILLS NIG. PLC. 54,740.07 13.35 -2.91 120 1,256,556 HONEYWELL FLOUR MILL PLC 8,643.92 1.09 - 12 174,200 MULTI-TREX INTEGRATED FOODS PLC 1,340.10 0.36 - 0 0 N NIG. FLOUR MILLS PLC. 766.26 4.30 - 1 20 NASCON ALLIED INDUSTRIES PLC 47,424.95 17.90 5.29 25 403,214 UNION DICON SALT PLC. 3,321.07 12.15 - 0 0 282 3,117,965 FOOD PRODUCTS--DIVERSIFIED CADBURY NIGERIA PLC. 20,566.31 10.95 - 38 127,821 NESTLE NIGERIA PLC. 1,149,351.57 1,450.00 3.57 96 340,990 134 468,811 HOUSEHOLD DURABLES NIGERIAN ENAMELWARE PLC. 1,680.31 22.10 - 0 0 VITAFOAM NIG PLC. 5,316.09 4.25 - 7 30,574 7 30,574 PERSONAL/HOUSEHOLD PRODUCTS P Z CUSSONS NIGERIA PLC. 32,160.86 8.10 -4.71 29 289,448 UNILEVER NIGERIA PLC. 193,606.68 33.70 - 21 62,797 50 352,245 561 6,461,513 BANKING ECOBANK TRANSNATIONAL INCORPORATED 222,029.57 12.10 10.00 96 7,372,114 FIDELITY BANK PLC 51,285.39 1.77 -1.12 96 9,335,185 GUARANTY TRUST BANK PLC. 971,228.91 33.00 5.43 276 67,123,989 JAIZ BANK PLC 14,142.84 0.48 2.13 29 3,282,800 SKYE BANK PLC 10,687.83 0.77 - 0 0 STERLING BANK PLC. 59,596.17 2.07 - 31 4,360,186 205,301.31 7.05 2.17 41 391,925 UNION BANK NIG.PLC. UNITY BANK PLC 8,299.43 0.71 - 8 181,051 23,916.17 0.62 -1.61 48 2,188,980 WEMA BANK PLC. 625 94,236,230 INSURANCE CARRIERS, BROKERS AND SERVICES AFRICAN ALLIANCE INSURANCE PLC 4,117.00 0.20 - 0 0 AIICO INSURANCE PLC. 4,712.54 0.68 - 16 430,000 18,900.00 1.80 - 6 41,608 AXAMANSARD INSURANCE PLC CONSOLIDATED HALLMARK INSURANCE PLC 1,869.90 0.23 - 1 500 CONTINENTAL REINSURANCE PLC 19,811.94 1.91 - 0 0 CORNERSTONE INSURANCE PLC 2,945.90 0.20 - 3 65,320 GOLDLINK INSURANCE PLC 909.99 0.20 - 1 500 1,228.00 0.20 - 1 500 GUINEA INSURANCE PLC. INTERNATIONAL ENERGY INSURANCE PLC 487.95 0.38 - 0 0 LASACO ASSURANCE PLC. 2,197.03 0.30 - 12 352,229 LAW UNION AND ROCK INS. PLC. 1,890.39 0.44 - 0 0 LINKAGE ASSURANCE PLC 3,840.00 0.48 - 7 103,483 MUTUAL BENEFITS ASSURANCE PLC. 2,346.27 0.21 - 4 116,666 NEM INSURANCE PLC 12,461.99 2.36 - 10 58,610 NIGER INSURANCE PLC 1,547.90 0.20 - 4 133,934 PRESTIGE ASSURANCE PLC 2,691.28 0.50 - 0 0 REGENCY ASSURANCE PLC 1,333.75 0.20 - 0 0 SOVEREIGN TRUST INSURANCE PLC 2,085.21 0.25 - 14 11,000 STACO INSURANCE PLC 4,483.72 0.48 - 0 0 STANDARD ALLIANCE INSURANCE PLC. 2,582.21 0.20 - 1 2,000 2,800.00 0.20 - 1 7,000 SUNU ASSURANCES NIGERIA PLC. UNIC DIVERSIFIED HOLDINGS PLC. 516.46 0.20 - 0 0 UNIVERSAL INSURANCE PLC 3,200.00 0.20 - 1 10,000 VERITAS KAPITAL ASSURANCE PLC 2,773.33 0.20 - 1 2,000 WAPIC INSURANCE PLC 5,486.92 0.41 5.13 21 253,693 104 1,589,043

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MICRO-FINANCE BANKS FORTIS MICROFINANCE BANK PLC 11,799.67 2.58 - 0 0 3,086.96 1.35 - 3 17,700 NPF MICROFINANCE BANK PLC 3 17,700 MORTGAGE CARRIERS, BROKERS AND SERVICES ABBEY MORTGAGE BANK PLC 3,780.00 0.90 - 0 0 ASO SAVINGS AND LOANS PLC 7,370.87 0.50 - 0 0 5,796.93 1.39 - 0 0 INFINITY TRUST MORTGAGE BANK PLC RESORT SAVINGS & LOANS PLC 2,265.95 0.20 - 0 0 2,949.22 3.02 - 0 0 UNION HOMES SAVINGS AND LOANS PLC. 0 0 OTHER FINANCIAL INSTITUTIONS AFRICA PRUDENTIAL PLC 7,120.00 3.56 -1.11 84 1,572,058 CUSTODIAN INVESTMENT PLC 35,585.28 6.05 - 10 8,723 660.00 0.44 - 0 0 DEAP CAPITAL MANAGEMENT & TRUST PLC FCMB GROUP PLC. 32,674.47 1.65 1.85 74 5,029,981 ROYAL EXCHANGE PLC. 1,131.98 0.22 - 2 21,446 432,663.36 42.25 0.48 17 1,194,592 STANBIC IBTC HOLDINGS PLC UNITED CAPITAL PLC 13,620.00 2.27 0.89 146 9,480,015 333 17,306,815 1,065 113,149,788 HEALTHCARE PROVIDERS EKOCORP PLC. 1,680.29 3.37 - 0 0 UNION DIAGNOSTIC & CLINICAL SERVICES PLC 852.75 0.24 - 1 4,000 1 4,000 MEDICAL SUPPLIES MORISON INDUSTRIES PLC. 593.50 0.60 - 0 0 0 0 PHARMACEUTICALS EVANS MEDICAL PLC. 366.17 0.50 - 0 0 FIDSON HEALTHCARE PLC 7,575.00 5.05 - 1 3,000 GLAXO SMITHKLINE CONSUMER NIG. PLC. 10,164.95 8.50 - 12 18,928 3,933.54 2.28 - 10 195,000 MAY & BAKER NIGERIA PLC. NEIMETH INTERNATIONAL PHARMACEUTICALS PLC 1,063.53 0.56 - 3 50,900 NIGERIA-GERMAN CHEMICALS PLC. 556.71 3.62 - 0 0 PHARMA-DEKO PLC. 325.23 1.50 - 0 0 26 267,828 27 271,828 COMPUTER BASED SYSTEMS COURTEVILLE BUSINESS SOLUTIONS PLC 816.96 0.23 9.52 20 1,510,765 20 1,510,765 COMPUTERS AND PERIPHERALS OMATEK VENTURES PLC 1,470.89 0.50 - 0 0 0 0 IT SERVICES CWG PLC 6,413.06 2.54 - 2 530 NCR (NIGERIA) PLC. 648.00 6.00 - 0 0 346.47 0.70 - 1 87 TRIPPLE GEE AND COMPANY PLC. 3 617 PROCESSING SYSTEMS CHAMS PLC 1,690.58 0.36 9.09 44 12,180,082 E-TRANZACT INTERNATIONAL PLC 9,996.00 2.38 - 0 0 44 12,180,082 67 13,691,464 BUILDING MATERIALS BERGER PAINTS PLC 2,130.20 7.35 - 15 37,188 CAP PLC 21,770.00 31.10 - 15 60,258 184,009.01 14.00 - 6 18,510 CEMENT CO. OF NORTH.NIG. PLC FIRST ALUMINIUM NIGERIA PLC 844.14 0.40 - 0 0 MEYER PLC. 313.43 0.59 - 5 3,393 PORTLAND PAINTS & PRODUCTS NIGERIA PLC 1,959.74 2.47 - 0 0 PREMIER PAINTS PLC. 1,156.20 9.40 - 0 0 41 119,349 ELECTRONIC AND ELECTRICAL PRODUCTS AUSTIN LAZ & COMPANY PLC 2,256.91 2.09 - 0 0 CUTIX PLC. 2,906.18 1.65 - 17 385,162 17 385,162 PACKAGING/CONTAINERS BETA GLASS PLC. 37,497.90 75.00 - 1 10 GREIF NIGERIA PLC 388.02 9.10 - 0 0 1 10 AGRO-ALLIED & CHEMICALS NOTORE CHEMICAL IND PLC 100,754.14 62.50 - 0 0 0 0 59 504,521 CHEMICALS B.O.C. GASES PLC. 1,731.58 4.16 - 0 0 0 0 METALS ALUMINIUM EXTRUSION IND. PLC. 1,803.64 8.20 - 3 1,420 3 1,420 MINING SERVICES MULTIVERSE MINING AND EXPLORATION PLC 852.39 0.20 - 0 0 0 0 PAPER/FOREST PRODUCTS THOMAS WYATT NIG. PLC. 88.00 0.40 - 0 0 0 0 3 1,420 ENERGY EQUIPMENT AND SERVICES JAPAUL OIL & MARITIME SERVICES PLC 1,878.81 0.30 7.14 26 4,394,710 26 4,394,710 INTEGRATED OIL AND GAS SERVICES OANDO PLC 57,806.07 4.65 8.14 90 1,631,462 90 1,631,462 PETROLEUM AND PETROLEUM PRODUCTS DISTRIBUTORS 11 PLC 63,104.17 175.00 - 16 5,060 CONOIL PLC 15,266.95 22.00 2.09 124 233,936 ETERNA PLC. 4,760.13 3.65 -8.75 17 172,530 FORTE OIL PLC. 36,469.47 28.00 2.00 54 1,657,876 MRS OIL NIGERIA PLC. 6,354.80 20.85 - 0 0 TOTAL NIGERIA PLC. 55,002.54 162.00 - 24 57,876 235 2,127,278 351 8,153,450 ADVERTISING AFROMEDIA PLC 1,820.01 0.41 - 0 0 0 0 AIRLINES MEDVIEW AIRLINE PLC 17,551.17 1.80 - 0 0 0 0 AUTOMOBILE/AUTO PART RETAILERS R T BRISCOE PLC. 341.14 0.29 - 0 0 0 0 COURIER/FREIGHT/DELIVERY RED STAR EXPRESS PLC 3,242.23 5.50 - 7 100,622 TRANS-NATIONWIDE EXPRESS PLC. 342.26 0.73 - 0 0 7 100,622 HOSPITALITY TANTALIZERS PLC 642.33 0.20 - 0 0 0 0 HOTELS/LODGING CAPITAL HOTEL PLC 4,723.78 3.05 - 0 0 IKEJA HOTEL PLC 3,014.25 1.45 - 6 57,849 TOURIST COMPANY OF NIGERIA PLC. 7,862.53 3.50 - 1 100 TRANSCORP HOTELS PLC 41,042.18 5.40 - 1 2,000 8 59,949 MEDIA/ENTERTAINMENT DAAR COMMUNICATIONS PLC 4,800.00 0.40 - 0 0 0 0 PRINTING/PUBLISHING ACADEMY PRESS PLC. 151.20 0.25 - 3 117,834 LEARN AFRICA PLC 941.17 1.22 - 4 12,070 1,183.82 1.99 - 0 0 STUDIO PRESS (NIG) PLC. UNIVERSITY PRESS PLC. 776.54 1.80 - 2 31,406 9 161,310 ROAD TRANSPORTATION ASSOCIATED BUS COMPANY PLC 464.16 0.28 - 7 22,600 7 22,600

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POLITICS & POLICY

May 29: As fresh journey begins Zebulon Agomuo

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oday, President Muhammadu Buhari and Vice President Yemi Osinbajo will be sworn in for a second term of four years in the Federal Capital Territory (FCT), Abuja.

While the inauguration ceremony will be on at the FCT, it will also be taking place in other 30 states of the federation where a large number of the incumbents and a few newly elected governors will have oath of office administered to them.

Today’s event will be the sixth time since Nigeria’s return to civil rule. It was first done in 1999; then 2003, 2007, 2011, 2015 and 2019 in tow. In all of these years, the wordings of the oath administered on the presidents and governors have remained the same. The pledge by those who received the oath at that time, or those receiving it today for the first time, has also remained unchanged.

What has always changed is the commitment to delivering on the wordings of the oath.

For the President and the returning governors, it would be their second and final four-year term, which will round off their constitutionally approved eight-year tenure in 2023.

The All Progressives Con-

gress (APC) has been in power since May 29, 2015.

The party rode to power on the crest of a vaunted mantra- ‘Change’. It defeated the People’s Democratic Party (PDP), which presided over the affairs of the country for 16 straight years.

At the time the APC joined the fray in 2015, many Nigerians had lost confidence in the PDP government, needing a change of government by all means, hence the easy victory recorded by the then newly formed opposition APC. Since taking over the reins of power, the APC government has however, not excited many Nigerians by its style of leadership and lethargic governance which has continued to attract criticisms to it.

Observers speak in tandem that the ‘change’ promised Nigerians has refused to come or refused to come all through the first four years occupation of the power stool by the APC. It was against this backdrop that when the President was returned winner of the February 23 Presidential election, many analysts alleged it was not a true reflection of the reality on ground and/or the will of the people.

Criticisms of the Buhari administration have not only come from members of the opposition. Perhaps, the most scathing of all the criticisms have come from the First Lady, the Presi-

Muhammadu Buhari and Yemi Osinbajo

dent’s wife, who has, on several occasions, let out her frustration over the state of affairs in the APC and in the country in general.

So, as the President takes his final oath of office today, he has another chance to remedy what had gone wrong in the first tenure. He must fulfill the promise he made to the people.

The lack-lustre performance of the administration is not hidden to anyone. The ‘Next Level’, the new mantra upon which he anchored his campaign in the last

election, must be well interpreted and pursued with verve and vigour.

In the next four years, the President is expected to, if possible, perform magic, by turning things around 360 degrees. The next four years must be defining. Nigerians expect him to transform their lives in a twinkle of an eye.

Many Nigerians were disappointed that government did not sufficiently wear its thinking cap in the areas of economy, security, job creation, education, among others.

Today, the country is at a

Politicians created problems for INEC in 2019 polls - Oyo REC ...says political actors approached him with ‘big money’ REMI FEYISIPO, Ibadan

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ajority of the problems faced

by Independent National Electoral Commission (INEC) during the concluded 2019 elections were caused by politicians, Mutiu Agboke, Oyo State Resident Electoral Commissioner, has said.

Agboke, who spoke at the symposium put together by the Lanre Oladoyinbo executives of the University of Ibadan, Senior Staff Club titled ‘2019 elections: A postmortem,’ insisted that the commission performed well in the recently-concluded elections.

The REC, who claimed a few of the political actors approached him with “big money” however, noted that only a foolish INEC staff will be hobnobbing, visiting and running after politicians.

He stated that over 200 staff of the commission had been

dismissed.

“Between 2015 and last week, over two hundred of them (INEC staff ) were on interdiction. They were not alive, they were not dead. Just last week, they were recalled because their issues were revisited. There are some that are still in court and over two hundred plus of them were dismissed. People did not see that majority of the problems INEC faced were orchestrated by political parties. What is the reason for my success in the last elections? I will tell you it is engagement, re-engagement and over engagement. If you keep quiet you allow people to suspect you.

How would they (politicians) not come? If you tell them (INEC staff ) it is only those that are foolish among them, that will be hobnobbing with them, visiting them, and running after them.

“As a REC, I am the king in my own right. One or few of them made an attempt to www.businessday.ng

bring very huge amount of money, but I look at them.

I am contented with what I have. The highest level of joy I had was the day I presented the certificate of return to the person that will become the governor tomorrow (today).

With that I have achieved a lot”.

The REC, who spoke alongside Francis Eghokhare, Segun Ajiboye, all professors and Bayo Okunade, Demola Aremu disclosed that the commission was ready to defend the results of last 2019 elections conducted in Oyo State in court.

He noted that at the moment, there were 32 election petitions comprising one petition for governorship, four for senatorial election, 12 House of Representatives and 15 houses of assembly petitions.

“We have 32 election petitions, one governorship, four senatorial, 12 House of Representatives and 15 Houses

of Assembly. We are going to defend what we did at the tribunal and that is not to say that there were no infractions, but I will not agree with you if you say nothing was good about the elections,” Agboke submitted In his contribution, Professor of Political Science, Bayo Okunade reiterated the need to unbundle INEC and relieve it of the many roles it is playing to enhance its performance in line with the Uwais Report.

Okunade maintained that there was nothing wrong with the infractions which occurred during the polls, saying these were not features of political contestations.

The Registrar/Chief Executive Teachers Registration Council, Segun Ajiboye also noted that progress has been made in Nigeria’s conduct of elections and called for the review of the participation of University staff as ad-hoc staff in future elections.

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very difficult state. Bandits are overrunning the country; kidnappers, killer herdsmen and Boko Haram are all on rampage. These enemies of the people are collectively making life difficult as they daily prosecute bloody campaign, and security agencies have only been reactionary in their approach.

A columnist, commenting on ‘Next Level’ in a national newspaper, recalled that the hope of many Nigerians was dashed as things did not really change contrary to lavished promise of “change”.

“They promised CHANGE; the people took them on their word, expecting instant change. But such change does not come like instant coffee. If it were that easy, our country would have been transformed by now. What with the promise to ensure regular power supply within six months and statements such as any government that cannot guarantee that should simply pack and go within a few months! Those who talked like that now know better,” the columnist said.

One of the greatest mistakes of the Buhari administration in the first term was the penchant to pass the buck. It never was ready to accept responsibility for anything. It was always pointing fingers at past government and administrations.

But from today, such fin-

ger-pointing may no longer be tolerated by Nigerians.

They will no longer be interested in hearing government officials heap the blame for everything that is wrong on the past administrations.

What the people are interested in is to hear how the next four years will improve their lot significantly before the next elections in 2023.

They want to know how the President is taking them to the next level from their present position.

The President and, indeed, all the governors in their various states, can deliver on their campaign promises by facing the issue of governance squarely without blaming the previous government for every problem that rears its head.

Perhaps, the most urgent task before Buhari is to restore peace and order in all the parts of the country. And this must be done within the first few months after his inauguration today.

“Government is a continuum. It is the beauty of democracy for power to change hands between parties. This is not a big deal. It happens elsewhere in the world and it does not disrupt governance.

Nigeria’s case should not be different. A change in the party in power should not be an excuse for not delivering dividends of democracy to our long-suffering people,” the Columnist noted.

Kaduna: PDP to challenge court ruling on recount of ballot papers, appeals on application Abdulwaheed Olayinka Adubi, Kaduna

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ollowing the court ruling not to grant the application of the People’s Democratic Party’s (PDP) gubernatorial candidate, Isa Ashiru in the last election seeking recount of the votes cast, the applicant has said he would challenge the ruling.

In his ruling, the Chairman of the tribunal, justice I. M. Bako noted that the court does not have the power to grant the application for recount of ballot papers.

Speaking to journalists on the Court’s ruling, counsel to Hon. Isa Ashiru, E. Kurah said the legal team will study the ruling and take the necessary action.

Kurah, who frowned at the ruling, said it is strange because other tribunals have done that in the past and that has also been sanctioned by the court of appeal in a number of cases. @Businessdayng

“So, we wonder at this stage why the tribunal would say it doesn’t have the power to recount. So we have to take it up so that the issue will be trashed out”, he said.

The legal luminary argued that tribunal has an inherent power to grant the recount, saying that the court of appeal has even agreed that they have the powers.

He said the claim of the court not to have powers to grant the application and to assume that there is no specific provision in the electoral act that talks about recount is strange.

While quoting section 6(17) of the constitution, he said the inherent powers of the court is clear, explaining that judicial powers conferred on the court to do justice to the case and this one cannot be an exception.

Counsel to Nasir El-Rufai, Abdulhakeen Mustapha (SAN), expressed satisfaction with the ruling, saying the PDP’s motion lacks merit.

Thebigread

BUSINESS DAY Wednesday 29 May 2019 www.businessday.ng

Muhammadu Buhari’s challenge to keep Nigeria’s lights on FT

B

abatunde Fashola’s office was buzzing like so many Nigerian workplaces, humming and whirring as diesel generators and batteries clicked on when the power cut out. That he is Nigeria’s power minister was an irony not lost on him. The fact that even the Power, Works & Housing Ministry cannot secure a reliable electricity supply from the national grid is a consequence of decades of under-investment by the state. For critics of the government, it is proof of President Muhammadu Buhari’s failure to fulfil his promise to bolster Nigeria’s decrepit infrastructure.

The Buhari administration argues that it has done more than previous governments. But as it begins a second term today, supporters and critics alike say it must intensify efforts to fix the power shortages that make Nigeria one of the least electrified countries in the world per capita and serve as a brake on Africa’s largest economy. Mr Fashola said his ministry was following the advice it gave Nigerians by going off-grid.

“Hopefully by this time next year, all of these buildings will be completely solar,” he said.

It is part of a plan by the government to bypass the moribund power sector with a “massive deployment of off-grid systems”, with policies that encourage the private sector to do the same. The ministry has also partnered with private sector to electrify markets containing tens of thousands of family-run shops, and secured $550m in funding from the African Development Bank and World Bank for rural electrification.

Even critics agree that the government has good policies but implementation has been slow. A potential $1bn World Bank loan to fund reforms is in limbo because it is linked to structural changes to the sector.

“The plan is good, on paper, but as always, [there’s been] poor implementation,” said Cheta Nwanze, partner at consultancy SBM Intelligence.

Nigeria has the capacity to produce 13,000MW of power, compared with more than 50,000MW for South Africa, which has a similar-sized economy and a quarter of the population. But it’s ageing grid delivers only about 4,000MW of power to its 200m citizens — roughly what the city of Edinburgh provides for 500,000 residents.

Nigeria’s grid has collapsed at least six times this year, including twice in May. Diesel generators are the staple coping mechanism not just of Nigerian ministries but of industrial estates, housing developments and shopkeepers, spewing pollutants while costing more than twice what power from the national grid would.

The International Monetary Fund estimates that Nigeria’s economy loses about $29bn a year because of electricity supply problems. Ninety per cent of industry provides its own power. The Manufacturers Association of Nigeria says that roughly 40 per cent of the cost of production goes to power.

“The inadequacy of electricity supply is one of the biggest impediments to the competitiveness of the manufacturing sector,” said Mansur Ahmed, head of Man.

and improve collection rates of about 60 per cent.

Mr Fashola said the Buhari administration was trying to improve supply. It approved a N27bn ($75m) payment to the 11 distribution companies for the government’s unpaid power bills and another N72bn for equipment, along with a N701bn payment guarantee for the power producers, among other measures.

“We’re just expanding the transmission network now that was installed 40

‘

Since Nigeria privatised the power sector in 2013, the price set for electricity has not increased even as the naira has fallen by half against the dollar and inflation has hit double digits. It is so low that distributors operate at huge losses, according to the Association of Nigerian Electricity Distributors At every point along the power chain, Nigeria suffers from lack of investment.

It does not have adequate pipeline infrastructure to transfer some of the world’s largest natural gas reserves to power plants. Distribution companies are so deeply indebted and underpaid — to the tune of nearly $4bn, according to their trade association — that they do not invest in plants, or meters that would enable them to collect from customers,

years ago so it’s serving five, six times what it was installed to serve,” he said.

This year, Tony Elumelu, one of Nigeria’s richest men, announced plans to invest $2.5bn in power. His company Transcorp won a $293m bid in May for a second power plant, in which it plans to invest $190m, roughly doubling the firm’s capacity to about 2,000MW. “We can do a lot more — we just want the sector to be totally in an economic

way a free market,” said Mr Elumelu.

“Nigeria is a huge market. If we can create the right environment, capital will come to Nigeria.”

Since Nigeria privatised the power sector in 2013, the price set for electricity has not increased even as the naira has fallen by half against the dollar and inflation has hit double digits. It is so low that distributors operate at huge losses, according to the Association of Nigerian Electricity Distributors.

“We are compelled by law to sell electricity below the cost price and every day, there is a shortfall that goes on and on,” Sunday Oduntan, spokesman for the trade group, told Punch Newspapers last month.

Mr Fashola dismissed the complaints of the distributors. If the companies are unable to invest or expand, he said, they should sell or be relieved of their licences. As part of its off-grid push, the government passed rules that would allow power companies to strike deals directly with large industrial groups.

But the pace of reform has been glacial and will not solve the broader problem, said Deepak Khilnani, chief executive of Cummins Cogeneration, which produces more than 100mw at its power plants in Nigeria.

“What they’ve been trying to do is come up with schemes or regulations to bypass the condition,” he said. “If your arteries are firming up with cholesterol, you can either try to exercise and go on a diet or you get a bypass . . . but the thing about bypasses is they’re never as good as the original and there’s only so many you can do before the system collapses.”

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