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Bangladesh’s $33bn fabrics industry holds lessons for Nigeria’s textile dreams M

markets

Analysts got it wrong on Nigeria fx call

LOLADE AKINMURELE

ODINAKA ANUDU & GBEMI FAMINU

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igeria’s total nonoil export earnings from more than 25 commodities in 2018 was $3.3 billion (N1.19 trillion), according to the National Bureau of Statistics (NBS), but Bangladesh, once among the poorest countries on earth, earned almost 10 times as much ($33bn) from exporting

one product – textiles.

Bangladesh has 5,000 garment factories, employing about 20 million people, mostly women, which pushed the extreme poverty in the Asian country down to 12.9 percent, according to the World Bank, compared to Nigeria’s nearly 50 percent.

Yale economist Ahmed Mushfiq believes that Bangladesh’s recent economic success is in part attributable to the flour-

ishing garment manufacturing industry.

These are the things Bangladesh did right that Nigeria can emulate.

The South Asian country deemphasised the primary product, cotton, and paid attention to the entire textile manufacturing value chain.

The raw material for yarn is cotton but in Bangladesh only 5 percent of cotton needs are

met by local production and the rest imported, according to a 2015 value chain analysis report by SNV Netherlands development organisation based in Bangledesh.

For knit products, 80 percent of the yarn requirements is met by domestic supplies because the country has a competitive advantage in that area.

Continues on page 38

onths to the February 2019 general elections in Nigeria, analysts largely forecast a slowdown in foreign portfolio inflows that would see the local currency – naira – take a beating against the dollar.

Inflows did slow leading up to the elections but it’s the rate at which those outflows reversed since the conclusion of the elections that caught analysts by surprise.

It would have been difficult for any analyst to predict otherwise given the underlying Continues on page 38

Inside Nigeria’s Diaspora remittances exceed oil receipts for 4yrs running P. 4

L-R: Bola Adesola, CEO, Standard Chartered Bank Nigeria; Herman Kambugu, winner of the Standard Chartered Belt and Road Relay, and Leke Ogunlewe, head, global banking, Standard Chartered Bank Nigeria, at the Standard Chartered Belt and Road Relay event at Teslim Balogun Stadium in Lagos.

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news Nigeria’s Diaspora remittances exceed oil receipts for 4yrs running …highlight need to harness human capital potential MICHAEL ANI

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emittances by Nigerians in the Disapora have for the fourth year running exceeded the country’s receipts from oil. Analysts say this is an indication that the country will do well to tap the potential in its greatest asset – human capital – rather than concentrating on oil that has over time failed to lift its citizens out of the poverty trap. Nigeria currently boasts of a population of about 190 million, with a population growth rate of 2.6 percent.

Since 2015, at the peak of the collapse in oil prices that started a year earlier, the amount of money sent in by Nigerians

living overseas through official means has continued to outstrip receipts from oil, considered the country major foreign exchange earner.

While Diaspora remittances intothecountrysurged20.6percentto$25.1billionin2018,from $20.8 billion in 2014, revenue from oil plunged 57.4 percent to $18 billion in 2018, from as high as $42.7 billion in 2014, according to data obtained from the Central Bank’s quarterly reports and analysed by BusinessDay. These remittances naturally exclude transfers made through unofficial channels.

A similar trend was recorded in the preceding years of 2017, 2016 and 2015 when

L-R: Colette Orji, head, Accelerate TV; Abiola Oshunniyi, chief operating officer, Parallel Point Consult; Lolade Awogbade, head, sustainability and citizenship, Union Bank; Bankole Alibay, CEO, Translantic Development Limited; Omobolanle Victor-Laniyan, head, sustainability, Access Bank; Joel Ogunsola, senior special assiatant, innovation and partnership to Ondo State governor, and Natalie Beinisch, senior researcher, NMB Consulting, at the Day 1 session of The Access Bank Sustainability Summit tagged ‘Financing Sustainable Development’ held at Access Bank headquarters, Lagos, yesterday.

Niger Delta crisis threatens Failure to create jobs in Kano, Taraba, 20 others sends Nigeria’s unemployment rate to all-time high Nigeria’s oil revenue amid rally Continues on page 38

…Akwa-Ibom overtakes Rivers as state with highest unemployment rate OLUWASEGUN OLAKOYENIKAN & BUNMI BAILEY

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he inability of 22 Nigerian states to create fresh jobs as they continually devoted more of their meagre funds to recurrent expenditure has impacted negatively on the country’s unemployment rate, BusinessDay analysis shows.

Despite recording larger labour force, latest data from the National Bureau of Statistics (NBS) show that the number of the employed persons in Kano, Taraba, Adamawa, Ogun, Katsina, Zamfara, Edo, Osun, Sokoto, Kwara, Yobe, Anambra, Delta, Gombe, Abia, Borno, Ekiti, Cross River, Niger, Kebbi, Bauchi, and the Federal Capital Territory, Abuja, fell in the third quarter of 2018 compared with the same period a year earlier.

“Nigeria just came out of recession and there is nothing to drive growth in these states,” said Yinka Ademuwagun, a macroeconomic analyst at United Capital, a Lagos-based investment house. “What they earn is small and they don’t have a viable sector to kick-start that growth that they need, especially in the northern side where there is still insecurity.”

Nigeria emerged from recession in Q2 2017 but its unemployment rate

continued to soar steadily, reaching an all-time high of 23.1 percent in Q3 2018 from 6.4 percent in Q4 2014. Most states in the country depend on the federal allocation to meet their financial obligations, which are mainly recurrent. This leaves little or nothing for capital projects, thereby affecting their chances of creating new jobs and worsening the nation’s high unemployment rate.

The statistics bureau defines the unemployed as persons within the labour force (aged 15-65) who were actively looking for work but could not find work or did something but not up to 20 hours in a week, and the underemployed as persons within the labour force who work less than full time (40 hours a week) but work for at least 20 hours on average a week.

In addition, persons who work full time but engaged in an activity that underutilises their skills, time and educational qualifications can also be categorised under the unemployed, while the employed are persons within the labour force who work full time, according to the NBS. In the review period, Taraba recorded the big-

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

DIPO OLADEHINDE

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espite rallying crude oil prices, Africa’s biggest oil producing country looks set to suffer a decline in oil revenue, no thanks to perennial militant crises in the country’s Niger Delta. This is as exports of two Nigerian crude grades are suffering significant disruptions following a turbulent week in the oil-producing delta region.

Renewed attacks on oil installations by militant groups in the Niger Delta would inevitably result in a drop in Nigeria’s oil production capacity and revenue generation from oil, going by past experience.

Royal Dutch Shell on Monday declared force majeure on exports of Nigeria’s Bonny Light crude following the closure of one of two export pipelines, according to Reuters, while Amenam, operated by oil major Total, is also under force majeure.

Both grades of crude are light and sweet, typically suitable for gasoline production.

Bonny Light exports had been planned at 222,000 barrels per day (bpd) in June and 184,000 bpd in May, but

trading sources said they were awaiting new loading plans.

Shell said the export terminal continued to run.

A port source told Reuters that oil-well shutdowns had reduced Amenam’s daily production and led to force majeure. Exports of Amenam are typically around 100,000 bpd, and trading sources said loadings had been delayed by roughly 25 days.

“After elections there is always interest and conflict which is part of the terrain. Also, as oil prices rally, it’s always attractive to vandalise pipelines because there is higher demand and incentives,”AdemolaHenry,team leader at the Facility for Oil Sector Transformation (FOSTER), told BusinessDay on the phone.

The Nigerian National Petroleum Corporation-operated joint ventures with Shell, Exxon Mobil Corp., Chevron Corp., Total SA, Eni SpA and other indigenous players pump most of the nation’s oil.

Aiteo, an independent oil producer, declared a force majeure on Nembe Creek Trunk line following a fire outbreak on April 21, while Shell said it had declared force majeure on April 25 after two of its oil workers were

kidnapped, an escalation that helped prompt state police to step up security operations.

“Oilpricewasabovethebudget benchmark last year. What did the present government do withtheexcessmoneytheywere making?” Henry queried.

Attacks on pipelines and other facilities in the Niger Delta in 2016 cut the nation’s crude oil output from a peak of 2.2 million barrels per day to near 1 million bpd.

That, combined with low oil prices and other factors, pushed the country into its first recession in a quarter of a century. Crude sales make up two-thirds of government revenue and 90 percent of its foreign exchange.

However, while prices of oil today are rather going northwards, a southward movement in crude production as a result of the new threat by the militants would see Nigeria lose vital production advantage and revenue to fund its budget.

Although Federal Government key assumptions and micro-framework for the 2019 budget are based on a projection of 2.3 million bpd oil production, oil price benchmark of $60 and exchange rate of N305 to the dollar, the

country’s crude production remains below 2 million bpd.

Secondary sources say Nigeria recorded 1.73m bpd in March, while S&P Global Platts survey puts the nation’s output at 1.84m bpd from 1.88m in February.

“You can’t bury the Niger Delta issue. What alternatives have you created for them? Have you created jobs or solved the problem of unemployment?” Henry said.

Successive governments have failed for decades to deal with the Niger Delta problem since ethnic minorities in the area began protesting against environmental damage and its impact on their fishing and farming livelihoods.

After the military government in 1995 executed nine Ogoni activists, including the writer Ken Saro-Wiwa, regional unrest spiralled into full-blown armed militancy in the past 15 years.

While armed assaults in the region have eased, sabotage, protests and crude theft for local refining and sale to rogue vessels offshore are undermining Africa’s biggest oil industry.

•Continues online at www.businessday.ng

NPA to open Lilypond Terminal, Trailer Park for use this week …as Senate Committee commits to ending Apapa gridlock CHUKA UROKO & AMAKA ANAGOR-EWUZIE

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s part of its efforts at easing the notorious gridlock in Apapa, Nigeria’s busiest port city, the Nigerian Ports Au-

thority (NPA) says it is perfecting plans to put Lilypond Terminal and Tin-Can Trailer Park into use as temporary parking spaces for trucks coming to both Apapa and Tin-Can Island Ports.

The Lilypond Terminal, which will be made available

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to service trucks carrying containers that have business to do in Apapa port, will be open for business on Thursday, May 2, 2019 while the trailer park, billed to service trucks going to Tin-Can Island Port, will be opened on Friday, May @Businessdayng

3, 2019.

The Senate Committed on Works had, at an expanded stakeholders meeting last weekend, committed to ending the congestion and gridlock in and around Apapa, rais-

Continues on page 38

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NEWS

Caverton pre-tax profit climbs by 156% to N1.22bn for Q1 IFEOMA OKEKE

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averton Offshore Support Group plc (COSG), a leading provider of marine, aviation and logistics services to local and international oil and gas companies in Niger ia, has announces its unaudited quarter end results for 2019.

The results show a profit before tax of N1.22 billion (and an after-tax profit of N793m). Revenue jumped by 83 percent. In the same vein, direct operating costs also climbed by 74 percent, supporting the earnings per share that also increased by 170 percent when compared with same period in 2018.

Commenting on the recent events, Bode Makanjuola, COSG’s CEO, said, “With the 2019 general elections behind us we look forward to favourable government policies in the oil and gas, aviation and financial sectors that will enable us continue to provide the quality of service our clients have become accustomed

to as well as positive returns for our shareholders.”

Revenue for 2019 is N8.3 b i l l i o n , ( N 4 . 6 b n Ma rc h 2018), op erating profit, (excluding other income), is N1.88 billion, (N849.2m March 2018), EBITDA for the period is N2.2billion, (N1.2bn March 2018), Profit before tax of N1.22 billion, (N476.5m March 2018) and EPS is 24 kobo, (nine kobo March 2018).

Profitability ratios include gross margin of 43 percent (40% March 2018), EBITDA margin of 26 percent (25% March 2018), net profit Margin of 10 percent (6%, March 2018) and EBIT/ Interest Expense of 3.61x, (2.14x March 2018).

Capital Structure ratios include net debt/EBITDA of 7.2x (13.9x March 2018), net debt and equity of 0.81x (0.99x March 2018), total debt and total capitalisation of 51 percent (52% March 2018) and asset turnover of 14 percent (8%, March 2018) COSG is one of Nigeria’s leading oil services companies providing solutions

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for a range of multinational companies across avia tion and marine services.

Caverton Marine Limited, one of the fastest growing indigenous shipping companies commenced operations in 1999, while Caverton Helicopters Limited is a helicopter charter, sales and Maintenance Company established in 2002.

Both companies were consolidated to form Caverton Offshore Support Group on 2ndJune 2008. The Group’s focus and primary business is to provide logistics and environmental support services to oil and gas fields with broader plans to support energy operations along the West African shelf as well as other ancillary support services.

Caverton has a young and growing fleet of vessels and aircraft operating out of nine locations. The company has an impressive oil and gas client base, which include Shell, Total, ExxonMobil, NNPC, Aiteo, Aje-Folawiyo, and Chevron, among others.

CBN to establish collateral management regime to regulate Fintech SEGUN ADAMS

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n order to encourage more innovations in the payment system, the Central Bank of Nigeria (CBN) is putting in place a Collateral Management Regime (CMR) to regulate the activities of Fintech firms and start-ups in the country.

Sam Okojere, director, Payments System Management Department (PSMD), who represented the Governor of the CBN, Godwin Emefiele, disclosed in his keynote address at the inaugural Lagos Fintech Week in Lagos, that the “CMR is being developed in line with on-going efforts to evolve a robust collateral management regime which will be proportionate to transactional level of participants within the payment system.”

L a g o s Fi n t e c h We e k (LFW) is an invigorating week of distinct Fintech events that delivers exciting discussions, stimulating demos and insightful debates.

According to Okojere, the consequences of the new regime are that both incumbents and new entrants will operate without unnecessary collateral burden.

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As the bill establishing federal polytechnic in Aba passes second reading

Okechukwu Keshi Ukegbu

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nce again, another good news is reverberating across the 17 local government areas of Abia State. From Umunneochi to far Ukwa: the bill to establish a federal Polytechnic in Aba, Abia State, Abia State has scaled through the second reading. Abians have rolled out their drums to celebrate this feat.

The bill entitled:”A bill for an Act to Provide for Establishment of the Federal Polytechnic, Aba, Abia State; and for Related Matters (HB.1613)” the bill emanated from the Senate and was seeking concurrence in the House for second reading.

Many thanks to the House of Representatives members who lent their support to the bill scaling the second reading despite strong opposition from the member representing Ukwa

West and East federal constituency, Uzoma Abonta.

Many factors favoured the citing of the federal Polytechnic in Abia.

Unarguably, Aba is noted for its ingenuity, and one can only leverage on science to improve this. Besides, there are factories littering the nooks and crannies. The establishment of the federal Polytechnic will go a long way in assisting this.

Aba, indisputably, is the home of artisans which the expected upgrade in the status of the polytechnic will help enhance. Abia State Polytechnic has recently signed a memorandum of understanding (MoU) with two organizations: the Association of Tailors and Fashion Designers (ATFAD) and Leather Products Manufacturers Association of Nigeria. The MoU is part of the institution’s numerous efforts to boost the business activities of Aba metropolis.

The three-month programme targets small and medium manufacturers in the city and would ensure that every member of the associations in the city is acquainted with the basic skills of doing business. Also, the courses outlined in the MoU are Basic Mathematics, Basic Management Principles, Basic English and Basic Book-Keeping.

The three months certificate pro-

gramme is a transformation process for the artisans, upgrading them from local artisans to world- class entrepreneurs, who are empowered with certificates.

The new federal polytechnic will contribute immensely in the current stride of Aba to sustain its status as the SME-hub of the country. The institution will provide manpower for the state’s drive towards technology.

It will be recalled that the House of Representatives had earlier began the process of upgrading the Abia State Polytechnic to a federal polytechnic status.The adoption of a motion sponsored by Uzo Azubuike ( who was then representing Aba South/ North federal constituency. Azubuike said that the” only federal presence in Aba are the Nigeria Police and Federal Prisons Service, despite teeming population of youths yearning to gain tertiary education”.

A resounding applause to Senator Theordore Orji for sponsoring.

The Senate, before now, had passed two bills establishing Federal polytechnics in Aba, Abia and Silame, Sokoto State. This followed consideration of reports of the Senate Committee on Tertiary Institutions and TETFUND at plenary.

The Chairman of the Committee, Senator Jibrin Barau, said the bills

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Aba, indisputably, is the home of artisans which the expected upgrade in the status of the polytechnic will help enhance

scaled second reading on different dates and were referred to the committee for further legislative action.

According to him, public hearings were held on the bills and the committee drafted its report based on the positive outcome of the public hearings.

Barau in his words said:”The committee and participants agreed with the intention of the bills to establish the polytechnics to facilitate technical education to accommodate those who are unable to gain admission into higher institutions”.

On the opposition by Hon. Uzoma Abonta, it is unbecoming for a legislator who hails from Abia State to oppose such laudable project for selfish reasons, but we do not rule out the natural possibility that in every laudable project, there must be Sanballahs and Tobiases.

The response by the Speaker of the House,Hon. Yakubu Dogara, aptly addresses his opposition: “”God forbid that I should be sent to the arena of conflict. It even baffles me that we don’t have a polytechnic already in Aba. The location shouldn’t be a problem. If there is a place to establish a federal polytechnic in Nigeria, it should be in Aba. It is long overdue.

When it gets to committee level, you can raise those issues”.

Unmasking resource control

Tony Ademiluyi

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any supporters and friends of Chief James Onanefe Ibori contend that his incarceration in the United Kingdom was political. They opine that the real reason he was a Guest of her Majesty was because of his belief in resource control and his clamour for true federalism which would make the centre less attractive. The current thirteen percent is too minute for the development of the Niger Delta and the governors want much more of the large pie.

One of the errors that the Late General Johnson Aguiyi-Ironsi made was in making Nigeria a unitary state. That decision is still haunting Nigeria till date.

Abuja is too powerful and it makes nonsense of the constitutional powers that the governors are supposed to possess. Many states are insolvent because the mindset of the governors has been conditioned to running to the centre to collect bailouts to pay salaries and run recurrent expenditure. How tragic!

The 1963 constitution was a locus classicus for true federalism and should have been retained rather than the 1999 constitution that is a unitary state favoured document. The military had a strong hand in the drafting of the 1979 and 1999 constitutions as they didn’t totally want to relinquish power to the ‘bloody’ civilians.

Governors weren’t elected to just pay salaries.

Many are handicapped as they hardly generate sufficient revenue from their respective states to

do massive infrastructural developments.

Let’s take a critical look at the security challenges. Most governors are the chief security officers of their states in name but not in practice as the commissioners of police take their orders from the Inspector-General of Police. This gives armed bandits the time and leeway to kill and maim innocent citizens since the governor isn’t in control of the police. While I personally support veteran journalist Kadaria Ahmed’s position in blasting the Zamfara state governor, Alhaji Abdulazeez Yari for being irresponsible for ruling from Abuja, his hands would also have been tied if he had sat in Gusau as the bureaucracy in the police force would have made him extremely helpless.

Some aspects of the exclusive list will also be divested to the concurrent. For instance the issue of seaports building. Imagine if there were seaports in Anambra, Bayelsa and Ondo amongst other states that have easy sea access, Lagos will automatically become decongested as businessmen will move to these other cities in droves. The rural-urban migration will be drastically reduced as well as the crime rate.

Resource control will inadvertently lead to state or community policing whereby the policemen are indigenes of the states they work in and live and are well acquainted with the neighbourhood. Many crimes including the herdsmen crisis would have been forestalled if this police model was the reality.

Chief Obafemi Awolowo would not have built the entire infrastructure in barely five years under this unitary system arrangement.

Dr. Nnamdi Azikiwe wouldn’t have declined entering into the alliance with the Action Group to become Prime Minister if the regions were weak. Alhaji Sir Ahmadu Bello would have become the nation’s first Prime Minister if the nation operated a unitary structure.

Before independence, there was healthy competition among the three regions. The west had its cocoa, east had its coal and oil palm while the north had its groundnut pyramids and cattle.

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A certain percentage was remitted to the centre and the premiers were not going cap in hand to Lagos, the then capital to beg for funds to meet the needs of their civil service.

The thirteen percent derivation currently given to the south-south zone is rather small and smirks of a great injustice. The lopsided unitary system has made the nation witness the ugly scenario where the holders of the highest oil blocs hail from outside the Niger-Delta. The zone has been raped with all manner of oil spills and long lasting damage to her rivers so that her inhabitants can no longer fish anymore. Resource control would mean that the states will control the allocation of the oil blocs and there will be more justice as more indigenes would be owners of them. Also the international oil companies operating in that area would be forced to do more in terms of corporate social responsibility since they would be dealing directly with the state and not the centre.

It will also correct some imbalances currently plaguing the system. Lagos state for instance remits the highest VAT on alcohol and cigarettes but the biggest beneficiaries are the northern states which are supposed Sharia law bound.

States will be forced to look inwards to generate their internally generated revenue while still remitting some to the centre. We will also witness the shift from natural resources to human resources. The reality is that this is where the world is heading to and we mustn’t be left behind. Oil would most likely lose its global relevance two decades from now. What is the supposed ‘Giant of Africa’ doing to diversify her economy from the sole dependence on oil?

A state like Ondo with a seaport will become a major exporter of bitumen as it has one of the highest deposits in the world. If a dry port is built in Osun state, it will enable her become a major exporter of agricultural produce. Consider the fertile lands in Oyo and Benin and if a dry port is built in these places. It will solve our current major challenge of food rejection at the international market when the states know that there

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won’t be any bail out funds for them coming from Abuja.

Nnewi will become an automobile hub and the vehicles made there will be exported abroad while the government gains through taxes. The seaport in Anambra will bring in lots of businesses which will translate into more jobs for the people especially the restless youths. Aba will be a cluster for the production of clothes and footwear and there will be a nationwide campaign for the wearing of clothes and shoes produced in Nigeria which will make these industrious traders up the ante of their game as their eyes will be set on capturing a fair share of the export market. The need to imitate foreign clothes and shoes will be totally eliminated as Nigerians will take pride in putting them on.

The individual states will identify their areas of comparative advantage and develop them accordingly. There will be healthy rivalry amongst the states as they strive to outdo one another to provide nothing short of the best for their inhabitants and indigenes. The urge to go abroad at all cost – going by road to Europe will be reduced as the enabling to succeed at home will be greatly enhanced.

In every dysfunctional system there are beneficiaries who don’t want the party to cease.

There are politicians, special interest groups and businessmen who are profiting from this current political structure. It will be a herculean task to dislodge them but it’s not impossible to do so.

The onus rests on the National Assembly to prepare the grounds for the holding of a Sovereign National Conference so that this thorny issue of resource control can be heartily debated on for a more peaceful coexistence. The occupiers of the red and green chambers are elected representatives who should be recalled if they end up doing the bidding of the conservatives who want the current structure to subsist.

Power should indeed ultimately belong to the people.

Ademiluyi wrote in from Lagos.

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comment Created for the benefit of man STRATEGY & POLICY

MA JOHNSON

“Ocean, a body of water occupying two-thirds of a world made for manwho has no gills”- Ambrose Bierce he foundation of the earth and everything that dwells in it was laid on the sea. So the sea affects the entire world greatly. Throughout history, people have always been drawn to the sea for food and other resources, and as a means of travel. Parker, in his book titled The Power of the Sea, states that: ‘The sea has been known to man to be a veritable source of food and the path to exploration, trade, prosperity, but has the power to end life and destroy property at any time without an early warning.’

The birds of the air, the fish in the sea, and other creatures were made by the Creator for the pleasure of man.

As more scientists learn about the planet, they discover that the sea was custom-made and uniquely suited for the existence of man.

The sea covers almost 75% of the earth’s surface, contains approximately 97% of the earth’s water, and almost 90% of the world’s trade travels is by sea, according to the International Maritime Organization. Africa and other continents of the world namely America, Europe, and Asia are bounded by sea. The Atlantic, Pacific, and Indian Oceans including

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the Mediterranean Sea have provided challenges and opportunities for seafarers, merchants and explorers.

“More than 80,000 merchant ships involving 1.5 million seafarers in more than 150 nations carrying and transporting about 10 billion tonnes of cargo ply the oceans for commercial purposes.”

Maritime nations with a reasonable knowledge of how to explore and exploit living and mineral resources within their maritime environment are rewarded by the sea.

Some nations make good use of the sea through trade and commerce, adventure and discovery, while others do not possess the wherewithal to benefit from the rich minerals and natural resources beneath the seabed. The sea, thus, presents opportunities and challenges to maritime and landlocked nations.

For many years, storms have posed enormous challenge at sea.

The waves running ahead of storms always move with a warning cry, but seafarers have learnt to read the “language of waves” in a scientific manner. Although, those who go to the sea in ships for business face challenges, they still appreciate the work of the Creator and His wonders in the deep sea. These challenges are from stormy winds which lift up the waves of the sea. As a result of the changing pattern of the wave, shipsroll, pitch, and yaw. And in the turbulent situation at sea, seafarers reel to and fro, stagger like a drunk, and they are at the wits end. They are demoralized, and at times miserable and frustrated. Their souls melt away in their misery. Most seafarers cry out to the Lord in troubled waters, He brings them out of their miseries. When the storm calms down through divine intervention, the waves are still. Once the storm calms down, seafarers are

glad, and they are able to navigate their ships to the desired haven.

Closely linked to the state of the sea is the climate change phenomenon. Some experts have admitted that the interaction between the sea, the land, and the atmosphere shape global climate. To live with the sea, man needs the capacity to forecast when it will revolt against him. Electronic devices have been made to know exactly what is going on at sea, but predictions are not always accurate. Despite advancement in technology, the sea cannot be entirely be predicted, therein lie one of its challenges. As a result, no man is endowed intellectually to provide adequately against devastating effects of earthquakes or volcanic eruptions or pestilence or famine.

When the sea turns its enormous power against humanity, the best protection for man is to get out of its way. To accurately predict the power of the sea and its actions, man must learn how and why the sea works in so many complex ways.

The complex nature of the sea and its elements have been of great concern to naval strategists. An accurate knowledge of wave conditions will enable the conduct of activities such as naval operations, merchant vessel routing, seaplane landings, offshore drilling near construction and commercial fishing more efficiently and safely.

An experienced sailor will observe that there are many signs that will help him or her have an idea of what kind of weather is approaching. Signs that a weather is approaching includes a drop in weather temperature, formation of large billowy clouds, drop in atmospheric pressure, and darkening of the clouds amongst others. Professional meteorologists take into account all

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‘

To live with the sea, man needs the capacity to forecast when it will revolt against him

the above criteria in addition to having access to other sophisticated devices such as satellites and Doppler radars.

So it is necessary to understand what drives those movements visible to man, and where its power comes from. The power of the sea comes from the sun, the moon, and the earth. The sea plays a vital role in climate change, forcing weather patterns around the globe to change. Climate change is also responsible for coastal erosion and flooding. If man is to come up with defences against climate change, he must evolve accurate prediction methods. Whether the cause of the current global warming is occasioned by increased carbon dioxide from the use of fossil fuels, or many years of deforestation, or all the stated reasons, the sea still plays a key role in climate changes experienced globally.

The effects of climate change are already evident in world oceans.

Predicted increases in storm intensity and rising sea levels will worsen coastal erosion and flooding with implications for both natural and manmade heritage features. Changes in sea temperature and salinity will have significant impacts on marine organisms and food chains, fishing, and aquaculture activities. Africa, the least economically developed continent, and other parts of the world, face extreme risks from climate change including drought, crop failure and flooding.”

• Excerpt from Sea Power and the Development Question in Africa, by MA Johnson currently undergoing publication.

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

Nigerian State and its many orphans: Reflecting on Helen Paul

Tunji Olaopa

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lmost every Nigerian knows who Helen Paul is. She is that star comedienne. Just one out of the few ladies in the trade, who burst the male dominated genre to prove the age-old saying that what a man can do, a woman can do even better. And Helen Paul is very good at stand-up comedy. I have listened to her jokes several times. Her uniqueness derives from her capacity to mimic the piping voice of a teenage girl. One that is widely celebrated is where she presented herself as a child who caused trouble between her parents because she told her mum that when she called her dad, it was a female voice that responded.

On hearing this report, the mother went into a fit of tantrum: “This man is cheating on me!” Helen Paul delivered this “mother’s” lament in a mother’s voice before reverting to the child’s voice. When properly queried by a neighbour about what the female voice on the phone said, the “child” responded that

the female voice always says “the number you are calling is not available at the moment.”

This is hilarious! And what is all the more so is the perfect mimicry of innocence the comedienne is able to generate through the voice of the child.

However, Helen Paul is far from being an innocent child. Or, to put it more brutally, her innocence was dashed immediately she surfaced into the world from a society that stigmatized those who have been unfortunate to have fallen to society’s twisted sides. From her own testimony, her mother gave birth to her as a child of rape. We live in a society that is so puritanical but so hypocritical that it polices rape and immorality which it permits within its dark crannies. This is a society that allows the raped to be traumatized while the rapist goes free. When the woman caught in adultery was brought to Jesus, the man she committed adultery with was not there for persecution. When a rape occurs, the victim is compelled by the prospect of society’s scorn and stigma to hide in shame and remained traumatized by forced silence and the consequent inner psychological agony. The society forces the victim of rape to blame herself.

All those who take delight in Helen Paul and her comedy would never have known about her mother’s many years of pain and shame.

They would never have been able to imagine the horror of giving birth to a child conceived out of rape. No one would be able to imagine the pure agony of raising Helen in silence and without the full joy of being able to narrate www.businessday.ng

the circumstance of her conception. Maybe only mothers would be able to imagine the trepidation with which the mother behold her child every day, always wondering what she would turn out to become.

Well, Helen Paul broke free of that stigma and rose high as a stand-up comedian. She brought laughter to many hearts and home whereas her mother never had the benefit of laughter while raising her. If this story had ended here, it would not have merited more than a first glance as one of those stories that come out of Nigeria as a postcolonial state.

We came to know about Helen Paul’s mother’s situation because Helen herself bagged a doctorate in creative arts at the University of Lagos, the first comedian that I know to have achieved this feat. And she went on her Instagram page to celebrate and dedicate the degree to her longsuffering mother. I cannot reproduce the message here, but it is a piece of heart-wrenching message that speaks beyond her mother to the Nigerian state at large: “I Helen Paul dedicate this to my mum. You gave birth to me out of rape.

They told you I wouldn’t amount to anything.”

She narrated that she grew up being called a bastard, and people taunted her always that she would not amount to anything in life. Yet, she declared, her mother was confident that if the child of the mentally challenged can survive, God will watch over Helen. Well, that God watched over her not just to grow to be tops in her chosen profession, but to be able to get a doctorate as well, and to dedicate it

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to her mother.

Helen Paul’s story is just one out of thousands that comes out of Nigeria. Indeed, her success is just a rare one out of millions of children—abused, helpless, hapless, orphaned, homeless, raped and born out of rape—that are narrated on the daily news as a staple for already bruised consciences. Nigeria is home to abandoned children, single mothers, pregnant teenagers, miscreants, vagabonds, the mentally, physically and visually challenged, armed robbers, thugs, touts, destitute, drug addicts, party hoodlums and so many other socially impoverished persons that now serve as the badge of Nigeria’s profile of misery. Despite Nigeria’s return to democratic rule in 1999, and the flag off of democratic governance, there is no definite transformation of the country’s productivity profile in ways that could empower its citizens to transform their own conditions.

Unfortunately, democratic governance in Nigeria comes with the added crises of unbridled killings from ethnic rivalry, unmitigated bloodshed as a result of terrorism, unending electoral violence everywhere, and the unceasing looting of the common weal by those saddled with the affairs of state.

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

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South Africa – Mmusi’s DA (2) Rafiq Raji

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Figurehead with little influence n response to a question about one of his points about Maimane not being an effective leader thus far, Wits’ Southall has this to say.

“There was always a suggestion that [Maimane] was backed as a relatively inoffensive black successor by Zille, and he has to try to span the awkward divisions across race within the DA, wherein there is quite a powerful old white guard. So the battles within the DA tend to reflect that.”

New African also sought to know why Wits’ Southall thought Maimane had thus far failed to capture the public imagination.

“Maimane is a preacher, so has some reasonable ability to capture the public imagination in public speaking, but is not particularly ‘charismatic’, and in fact is less publicly appealing in many ways than Zille in her prime, who speaks fluent Xhosa, was a very good campaigner in the townships, and could dance with the best of them.”

“Maimane is a bit stilted. To be fair, it’s a difficult role he has to fill.

And as an opposition leader, he has to compete with [Julius] Malema, who is bombastic, full of fiery speeches, and makes a public spectacle, and is always in the news. In fact, he creates news, Maimane doesn’t.”

A recent incident vindicates some of the points raised by Wits’ Southall.

No, the pertinent example is not the “forty-four out of ten South Africans don’t have a job” slip of the tongue Maimane suffered on the campaign trail in March.

It is rather the faux pas Maimane committed during Ramaphosa’s question and answer session in parliament in early March, when he attempted to ask a question in the local language. He made a mistake in the use of the right protocols in his reference to Goodwill Zwelithini, the Zulu king.

His error forced Mandla Mandela, Nelson Mandela’s grandson, who is a member of parliament (MP), to point out the difference between a ‘King Zwelithini’ and a tribal chief like himself.

“The honourable member just misled the house”, echoed Mandela, “there is a difference between a king and a traditional leader being a chief…King Zwelithini is addressed as such ‘His Majesty’”. Thereafter, national assembly speaker Baleka Mbete ruled that Maimane“be sensitive to the protocols”; amidst laughter by some of the black MPs. Maimane asked the remainder of his question in English afterwards.

The slight error on the right protocol was not the substance of Maimane’s question; which was on land expropriation. But to be corrected on such small but very important local nuances is probably evidence of why Maimane still does not appeal very much to the hearts of many black South Africans.

He should not have to be corrected on these things.

Maybe a slight bump So what are the DA’s chances in the upcoming elections in May? New African asked Langelihle Malimela, Johannesburg-based Senior Africa Analyst at IHS Markit.

“The DA is unlikely to progress much further than the 22 percent that it managed in the 2014 poll. I would hesitate to put a number to this, but I think that they will climb by perhaps three to five percent.”

“This is largely because the DA has done the majority of its growth over the years by eating into the share of other smaller parties, rather than eating into the ANC. In this regard, they have probably approached a ceiling and are unlikely to grow a lot more, at least for the time-being.”

“They have encroached a little in recent times on ANC votes, but not substantially. This is because the data shows that as ANC voters have begun to punish the ANC for corruption etc. in recent times, the majority of them have done so by not voting at all, rather than voting for another party, including the DA.” “This tells you that the opposition

‘

Where the DA has tended to fall short is in the realm of Black Economic Empowerment (or BEE)

in South Africa still struggles to take advantage of the ANC’s blunders.”

“In terms of manifestos, really the ANC and DA cancel each other out.

Both place great emphasis on growing the economy, cleaning out corruption and improving education.”

“Where the DA has tended to fall short is in the realm of Black Economic Empowerment (or BEE). This is a policy regime that aims to transform South Africa’s economy by giving preferential access to economic opportunities to people of colour in South Africa.”

“Given that the DA is an historically white party, it has always been equivocal in how it approaches this matter and voters have tended to pick up on this.”

“The latest manifesto flatly rejects BEE in the manner that it has been implemented by the ANC, which has resulted in the enrichment of a quite small, politically connected elite, increased corruption and largely failed to change the demographic make-up of the South African economy.”

“But in its place, the DA has not been able to suggest a coherent alternative that prioritises redress, and speaks to the aspiration of a rapidly urbanising black middle class.”

• An edited version was published in the April 2019 issue of New Africa magazine “Dr Raji is chief economist at Macroafricaintel.

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

Nigeria: Arbitration review and outlook for 2019 (Part II) Joseph Onele

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n my previous article, I mentioned that 2018 was quite an interesting year for the arbitration community in Nigeria, considering the considerable developments in the Nigerian arbitration space. I wrote about the imminent birth of an era in the history of arbitration in Nigeria, which could ensure that Nigeria becomes one of the preferred seats for arbitration. I made a case for the House of Representatives (HoR) to pass the Bill to amend the Arbitration and Conciliation Act before the end of the Quarter 2 of 2019. I opined that the passage of the muchawaited Bill would provide the much-needed boost desired to increase foreign investment in Nigeria. I mentioned that foreign investors would do well to look in the direction of Nigeria post 2019 general elections. I started the discussion on the $8.9 billion arbitration award against the Nigerian government and promised to provide more update in this regard, particularly, as it relates to enforcement of international arbitral awards are to be expected.

For the purpose of this publication, however, I will start with continuation of the conversation on the $8.9 Billion Arbitration Award. I will equally proceed to consider the $1.69 Billion Arbitration Award in favour of the federal government of Nigeria by an arbitral tribunal sitting at the Lagos Court of Arbitration. Thereafter, I will briefly discuss the lawsuit between ‘The Chartered Institute of Arbitrators (UK)’ and conclude.

Update on the $8.9 billion arbitration award against the Nigerian government As previously mentioned, one of notable incidents of 2018, which has already surfaced in 2019, is the $8.9 billion arbitration award issued against the Nigerian government. In my initial publication, I alluded to a report where it was

stated that Nigeria risks losing about $9 billion worth of assets in the UK to a British firm, Process and Industrial Developments Limited (P&ID).

Given that I had provided the background on this award in my last publication also accessible here, I will proceed straight to what transpired when P&ID sought to enforce the award in the UK. One of the issues that surfaced when P&ID sought to enforce the award in the UK was whether P&ID could seize Nigeria’s commercial assets in the United Kingdom (UK) notwithstanding the defense of sovereign immunity by the Nigerian government. The position of the Nigerian government raised through its legal team was that it was immuned from enforcement of judgment or arbitral award given the provisions of Section 13(2)(b) of the UK State Immunity Act. It would be recalled that a similar argument had been raised by the Nigerian government during the enforcement proceedings P&ID instituted in the United States (US) where the Nigerian government equally relied on the provisions of the US Foreign Sovereign Immunities Act of 1976 (as amended in 1988).

Attorneys often engaged by clients, for the purpose of dispute resolution with the government and particularly, the international arbitration community, would be well conversant with the fact that commercial parties who contract with states as well as state-controlled entities and then seek to arbitrate disputes and/or execute judgments are often faced with the reoccurring issue of state parties raising the defense of sovereign immunity to challenge the jurisdiction of the arbitral tribunal or court, with a view to avoiding enforcement of an arbitral award or judgment.It is for this reason that in my next publication, I shall be considering the issue of sovereign immunity under international law, while drawing inspiration from the celebrated decision of the English Court in Trendtex Trading Corporation v. Central Bank of Nigeria, the UK State Immunity Act and the US Foreign Sovereign Immunities Act (as amended),

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together with State Practices in this regard.

Coming back to recognition and enforcement proceedings instituted by P&ID in the UK Commercial Court, the matter came up last on 15 February 2019 and resulted in the Nigerian government being reportedly granted an extension of time to file its arguments on the merits at a subsequent hearing now re-listed and scheduled for hearing on the merits for 21 May 2019 but originally scheduled for 15 February 2019. It is worth noting that the UK Commercial Court’s jurisdiction encompasses all aspects of commercial disputes and serves as the principal supervisory court for international arbitration, with a seat in England and Wales. The UK Commercial Court equally deals with the granting of freezing orders and other relief in aid of arbitration, challenges to arbitration awards and enforcement of awards.

While the efforts by the Federal Government of Nigeria (FGN) to defend its interests in the UK is arguably commendable and taking into consideration that it is well within the FGN’s rights to raise all available and proper defenses in law, it is quite uncertain how the recognition and enforcement proceedings before the UK Commercial Court will go. However, if the precedents of the English Court(s) and attitude to the defense of sovereign immunity by states are anything to go by, it may augur well for the Nigerian government to see to an amicable resolution of the $8.9 billion award. Such a lingering matter does no good to the commercial attractiveness of Nigeria and an affirmative nod by the UK Commercial Court, granting P&ID access to assets belonging to the Nigerian government to satisfy the arbitral award will most certainly not be pleasant to the FGN. It does remain to be seen, however, whether the Nigerian government would prudently leverage on this seemly little window of grace and work towards an amicable resolution of this matter with P&ID or leave matters to chance by trusting its fate in the hands of the UK Commercial Court.

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$1.69 Arbitration award in favour of the Nigerian government An Arbitral Tribunal sitting at the Lagos Court of Arbitration (LCA) recently awarded the FGN $1.69 billion in an arbitration. The arbitral proceedings, which was in Nigeria, before the Arbitral Tribunal sitting at the LCA, was instituted on15 August 2016, by the claimants, Atlantic Energy Drilling Concepts Nigeria Limited and Atlantic Energy Brass Development Limited, against the Nigerian Petroleum Development Company (NPDC).

The dispute, which resulted in the arbitral proceedings, started when NPDC entered into several SAAs with Atlantic for the development and production of hydrocarbon resources with respect to OMLs 26, 30, 34 and 42 (the “Forcados Assets”) and OMLs 60, 61, 62 and 63 (the “Brass Assets”). The SAAs created obligations for Atlantic Energy to remit to the government the revenues from the crude oil lifted.

In resolving the dispute in favour of NPDC, the Arbitral Tribunal dismissed Atlantic Energy’s claims and awarded the sum of US$1,690,900,391.39, US$200,000 and N1,500,000 as costs in favour of NPDC.It directed that the amount be paid within 21 days from the date of the Award for crude oil lifted from the Forcados Assets) and OMLs 60, 61, 62 and 63 (Brass Assets).The Arbitral Tribunal further held that Atlantic Energy and its sister companies were indebted to NPDC for their failure to perform their financial obligations under the respective Strategic Alliance Agreements (SAAs).

Lawsuit between ‘The Chartered Institute of Arbitrators (UK)’ and ‘The Chartered Institute of Arbitrators (Nigeria)’

Note: the rest of this article continues in the online edition of Business Day @https://businessday.ng Onele is a Legal Practitioner based in Lagos. He wrote via thejosephonele@gmail.com

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EDITORIAL Publisher/CEO

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

Nigeria’s Marie Antoinettes

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n 2 0 1 7 , t h e Wo r l d Health Organisation’s analysis of health systems ranked Nigeria 187 out of 191, ahead only of Democratic Republic of the Congo, Central African Republic and Myanmar. Its verdict was damning: “Nigeria lacks a serious approach to healthcare.”

The WHO also put maternal mortality rate in Nigeria as 814, per 100,000 live births only outperforming Chad with 856, Central African Republic; 882, and Sierra Leone; 1360.

War torn countries like Somalia and Democratic Republic of Congo even outperformed Nigeria.

Also, while Botswana and Mauritius have the proportion of births attended by skilled health personnel as 100 percent, Nigeria is again down the pyramid with 35 percent, competing with countries like Eritrea, Ethiopia, South Sudan, and Chad.

The statistics get worse, for every 1000 births in Nigeria, 108 infants (and children) die before the age of five, and

again, the country sits comfortably close to the bottom of the ladder in Africa.

Data from WHO world health statistics 2017 further shows that over 72 million Nigerians are at risk of malaria, with 380.8 at risk out of every 1000 Nigerians, whereas, malaria has ceased to be a health concern for many other countries. Yet, Africa’s largest economy shares the three bottom slots on the continent with Burkina Faso and Mali.

The figures for cancer are even more mind-boggling. Nigeria has a cancer death ration of 4 in 5, one of the worst in the world. According to the WHO, over 100, 000 people are diagnosed with cancer annually in Nigeria, and about 80, 000 die from the disease, amounting to 240 daily. Furthermore, cervical cancer, which is virtually 100 percent preventable, kills one Nigerian woman every hour while breast cancer kills 40 Nigerian women daily.

What is more, due to the terrible working conditions, Nigerian doctors have been deserting the country in droves in search for better working conditions

in other countries. According to the Nigerian Medical Association, more than 40, 000 out of the 75,000 registered Nigerian doctors were practicing abroad while over 70 percent of those in the country were thinking of picking jobs outside. BusinessDay research shows that an average of 12 Nigerian trained doctors register for practice in the UK every week.

This means Nigeria is light years behind the WHO recommendation of one to 600 doctor patient ratio. We’re currently doing about one to 6000. Yet, the Nigerian system has no capacity to absorb the 3000 medical doctors churned out yearly by Nigerian universities. Many of them cannot even find places to do their compulsory National Service not to talk of further training in medical schools.

Instead of the government to invest in the health outcomes of Nigeria and make greater investments in medical training and absorptive capacity of the healthcare system, its health officials are busy making a caricature of the situation and playing Marie Antoinette (the

last French Queen who spite her suffering people with “Let them eat cake” when told the people have no bread) over the people. Last time out it was the minister of health himself – a so-called professor of medicine, Isaac Adewole, saying Nigeria doesn’t have shortage of doctors and that it can’t even train all its doctors, advising some to take to tailoring, business and politics. This time, it is another medical doctor and minister of labour and productivity saying pointedly Nigeria does, in fact, have excess supply of doctors and that’s why they are exporting doctors to other countries.

With such ludicrous interventions by high ranking public officials who should know and who should be worried sick with Nigeria’s collapsing health system, we wonder what goes on at the federal executive council meetings every Wednesday. We hope it is not just an avenue for back-slapping, praise-singing, and competition for allocation of resources? Or is it a case of sleeping on duty, like the Catholic Bishop of Yola recently accused the president of?

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Media business Forbes, Global 100 to list Nigerian most sustainable, community-impactful companies … Over N50 billion spent on CSR in Nigeria but low impact Stories by Daniel Obi Media Business Editor

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igeria’s most sustainable and community supportive corporations will now be listed in both Forbes’ top 50 companies and Global 100 Index.

Forbes is American business magazine while Global 100 is a ranking of the world’s most sustainable corporations compiled by Toronto-based media and investment advisory firm, Corporate Knights (CK).

The listing of the Nigerian companies is on the ground of recent partnership between both organisations and Sustainability Enterprise Responsibility Awards, SERAs. Established 13 years ago, SERAs mission is to lead the drive towards actualization of the sustainable development goals in Africa by enabling a platform that promotes, measures and harmonizes the contributions of private sector, governments/public sector and non-governmental organizations to attain set targets.

Speaking to BusinessDay in Lagos, Ken Egbas, initiator of SERAs and Founder/CEO of TruContact CSR Nigeria said the picking of some Nigerian organisations by Forbes

and Global 100 will create more social value about those companies and their projects. “This is good visibility and it is a very good way to position Nigerian brands and the country”.

He said sustainability projects have become very key brand differentiator and many organisations are keying into the SERAs.

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ne of Nigeria’s foremost PR agencies, LSF|PR has been announced as the winner of four SABRE Awards, the world’s largest PR awards program, recognising superior achievement in branding and reputation in North America, Europe, the Middle East and Africa.

LSF|PR did Nigeria proud as it led in the African category for its innovative and outstanding work for the Darling ‘Find Your Beautiful’ campaign for Godrej Nigeria, winning in the Diamond category for Superior Achievement in brand building and emerging as a finalist in the Platinum category for Best in Show, a category which recognises the best African campaign of the year, alongside global agencies such as Atmosphere and the King James Group, Ogilvy, Burson Cohn&Wolfe and WE communications. In the Gold category, LSF|PR, earned a Certificate of Excellence for Media, Arts and Entertainment.

The company, known for mak-

low on society. He agrees that companies mean good but may lack understanding of community needs.

According to him, many companies therefore need to rethink their community engagement model.

Advising organisations to solidify their embrace on community projects, Ken said “we cannot develop our society depending solely

L-R: Lekan Ajisafe, director, Terminal 3 Restaurant; Abdallah Ahmad, brigadier general; Bunmi Ajisafe, chief executive officer, Terminal 3 Restaurant and Opeyemi Bamidele, senator, cutting the ribbon to officially open Terminal 3 Restaurant in Ogudu, Lagos .

LSF|PR wins big at SABRE Awards Africa and EMEA Jumoke Akiyode-Lawanson

Ken further said that about 180 organisations in Nigeria have spent about N50 billion in CSR and sustainability projects over the last 10 years, with highest investment coming from oil and gas sector followed by the Telecoms.

He said though Nigeria and South Africa have the highest spend on CSR but regrets that the impact is

NIMN conference to emphasise importance of marketing Nigeria’s multi-billion Naira non-oil sector

ing a lasting impression with its communications strategies and thoughtful planning, also emerged as a finalist in Diamond Category of the SABRE Awards EMEA, competing against top agencies across Europe, Middle East and Africa, such as Teneo, a company that represents 24 of the FTSE100 and Hope&Glory, one of UK’s best Independent PR agencies.

In addition to being shortlisted in the Diamond Category for superior achievement in Brand Building (SABRE Awards EMEA), LSR|PR’s ‘Find Your Beautiful Campaign’ for Darling earned two Certificates of Excellence for the best use of social network and best use of influencer program and endorsement (paid) in the IN2SABRE Awards, EMEA. The IN2 Sabres celebrates EMEA’s best content and engagement work, shining a spotlight on the biggest and best ideas and the most creative execution and providing a glimpse at what’s next in branding, reputation and engagement.

Speaking on the awards, Bidemi Zakariyau, founder and CEO of LSF|PR said, “We are extremely honoured to be receiving such awards. www.businessday.ng

on government. Responsibility starts individually into workplace as no individual lives and succeeds alone”.

On the argument that organisations pay taxes and therefore it is the responsibility of government to develop the society, Ken said if organisations wait on government and it is not working, time will eventually come when organisations will not be able to run their businesses. And that is why UN looks at continents like Africa where poverty is pervasive and recommended strategic partnership for development.

Ken who was also speaking at his organisation’s engagement with company representatives on winning and making impact with community- based CSR projects therefore said the new theme this year is about partnership. The theme is Driving sustainability through inclusive growth: Partnership as catalyst for unlocking opportunities. Discussion will focus on poverty reduction, employment, agriculture, social sector, protection of environment and gender equality.

He strongly believed that businesses should be a source of growth in any society and changes will come from those who make critical decisions

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fter Nigeria’s elections, the Nigerian Institute of Marketing of Nigeria, NIMN will next week Thursday bring to the fore, once again, the crucial need and urgent importance of Nigeria to diversify its economy from mono-product reliance.

Believing that diversification of Nigeria’s economy has not been more significant than now in the country’s developmental journey, the Institute has therefore centred the discussion of its 2019 annual conference on ‘marketing Nigeria’s non-oil sector for sustainable growth and development’.

“The choice of the theme is informed by the Institute’s belief that concerted and deliberate efforts at marketing Nigeria’s non-oil sector will diversify the economy and make it less vulnerable to fluctuations

in crude oil prices”, the Institute’s President, Tony Agenmomen told BusinessDay in Lagos. Stating that the conference is scheduled in Port Harcourt, Rivers State, he said the discussion strongly supports public quest and government’s efforts at driving a diversified economy.

“Though there is current national discourse about what to do to diversify the economy, however the nation can continue to talk about the weakness of the economy, but unless the nation does things that are solid and substantial, nothing will change. We have been talking about the diversification but the Institute believes that the time has come given the reality of the time as the world is moving out of oil”, he said. Olusegun Adeniyi, former presidential spokesman for the late President Umaru Musa Yar’Adua and

currently the chairman of the editorial board of ThisDay newspapers will lead discussion at the conference expected to be a congregation of marketing professionals from different sectors of Nigerian economy, other professionals, the academia, government functionaries and students.

Agenmonmen further said that the summary of the actionable conference conclusions will be presented to the government as Institute’s input to policy making and execution.

The over-reliance on crude oil means that Nigeria’s economy is susceptible and vulnerable to international shocks.

It also means that any economic growth arising from sales of crude oil is fragile as Nigeria could lose balance and slip into recession if there is any shock in that sector.

MTN Nigeria holds leadership gathering for top-level management

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undreds of top-level management staff of MTN Nigeria gathered at the Intercontinental Hotel, Victoria Island, Lagos, on Friday, 12th April 2019, for the company’s inaugural leadership

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programme.

‘The Leadership Gathering (TLG)’ was a special, first-of-its-kind event designed to inspire ideas and connect the dots around the company’s BRIGHT strategy (a well-defined six-pillar strategy), strengthen bonds @Businessdayng

amongst colleagues and deepen the connections between staff and the company.

Themed, ‘Together Towards Tomorrow’, TLG featured a robust discussion led by MTN Nigeria CEO, Ferdi Moolman.

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Branding

‘Over N9bn investment in backward integration has made us attain market leadership’ De United Food Industries Limited, Dufil , part of Tolaram Group came into noodles business in 1996 and today it controls over 50 percent of the market with about other 12 players. In this interview, Pawan Sharma, the CEO – Consumer Goods business, Tolaram - West Africa, tells Daniel Obi the success factors of the group. He also spoke on the group’s acquisition of land in Edo State for palm oil plantation, acquisition of Dangote and May and Baker noodles and other issues. Excerpts Could you tell us about the journey towards your company’ backward integration? e started this business in 1996 from first factory in Otta, Ogun State. Since then we have been in a lot of backward integration. As today we have 15 manufacturing plants in Nigeria. Out of these 15 factories, only three produce noodles and others are involved in backward integration activities producing packaging materials, refining crude palm oil, and flour. Earlier we used to buy these materials from third party. The recent step in this backward integration is going into palm plantation. Government is giving a lot of push in going into agriculture to reduce importation.

Today, some of us in Nigeria including other players are importing the crude and refining it here and using it. Government is giving us a lot of support to put up plantation in the country to have our own crude oil rather than importing it.

We have taken a large piece of land in Edo State to plant palm oil trees and government is helping in that direction in providing low interest loans from Bank of Industry for this purpose. Nigeria can go back to the old glory days of being the largest palm oil producer with the help of government if all industries will come together and work as a team.

Presently, what percentage is your company’s raw material sourcing and what other raw materials are you importing?

As today, the raw material we are importing is wheat. This is because Nigeria does not produce wheat.

Nigeria consumes 4 million tons per year in terms of biscuits, bread, noodles but Nigeria produces only 100,000 tons per year. You can imagine the gap. Plantation of palm oil is comparatively easy to do in the country but wheat needs temperature. Even with good intention to produce wheat in Nigeria, it will come with its weather challenges.

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Pawan Sharma

The percentage of raw material sourcing is 70 percent foreign when flour is factored in and the rest is 30 local.

What other challenges are you encountering in your journey to backward integration?

As today, we are not facing many challenges because we have started it. All the backward integration assisted us to become cost leader in Nigeria’s market. Our products are the least that have taken price increases compared with even garri and other consumer goods.

Could you kindly share the investment profile of your backward integration so far?

Different subsidiaries in our group have theirs. For instance the ton of palm oil refinery has been expanded from 500 to 1,500 and we have invested more than $40 million

(about N5 billion). Flour mill has taken another N2.5 billion investment. Our packaging plant where we produce wrappers is another N2 billion investment.

How are you managing your transportation logistics in the country?

It is really difficult to transport goods from one part to another considering the poor road network.

The kind of volumes we move, we cannot depend on third party alone and we did backward integration in that sector also by creating our own haulage company, Blackwood House Limited. We have more than 1,200 trucks in that logistics company that transport our goods from factory to our distributors.

We hear that Olam is making moves to acquire Dangote Flour mill, what will that portend in the

market considering competition?

I think it will not make much change as it is a consolidation exercise. There are other players in the flour business and I don’t think the move will be a game changer.

Olam and Flour Mill are two big players but none of them is utilising full capacity.

What are the potential opportunities of your land acquisition in Edo State to the country?

We have done a lot in manufacturing but we don’t have the raw material in the country. This forces us to go into agriculture and this is why we are going into palm oil plantation because we are heavy user of palm oil for different production but in the country we don’t have enough palm oil. Many people are not going into the palm oil plantation investment because of its long gestation period. In terms of economic impact, palm oil consumption in Nigeria is to the tune of 2 million tons and the country can only produce 600,000 tons and there is short fall of 1.4 million tons. If therefore, different companies can come up with their plantation exercise, then Nigeria will not import it and government will save forex and it will become huge raw material for different industries which is locally available.

How many tons will your farm add to the industry?

We have taken 18,000 hectares of land and we will be doing plantation in phases. Firstly, we will cultivate 5,000 hectares, then other hectares.

This government will be doing another 4 years, what are your expectations of the government?

Government has been supportive as it is giving tax free import allowance for those in Lekki Trade free zone. Second support is providing loan from Bank of Industry on low interest rate. Another area government can support on agriculture is for example in palm oil plantation. This is in banned list as government does not provide forex for its importation. We should push for the plantation and once

the plantation is going, then slowly the product can be banned as the country presently does not have the plantation size yet. But if the banned continues, how will the requirement be fulfilled. The ban can be done in phases.

Dufil is known for its innovativeness, what do consumers expect in 2019?

Recently we launched Indomie Relish based on consumer demand who want ingredients already in the Indomie. All flavours have their special ingredients and this gives the complete taste and consumers don’t feel like adding something else.

You have successfully held Indomie Heroes Award for 13 years, what impact has this created in the society?

We choose children of certain age who have done something bravery which is a selfless act and we reward them. This will inspire other children and create a community of selfless people. Our objective in this award was to make big impact on children because Indomie is a brand which is all about children.

The impact is that as children grow up, they need to think selflessly and understand that it is their duty to contribute to the society. Further in CSR, we play major part in education, health and community development projects.

You acquired Dangote Noodles and May and Baker Noodles, what is your intention on these acquisitions and what did you do with them?

We did not buy Dangote brand, what we bought was Dangote machinery. The arrangement was that the company had machinery for production of its noodles and they want to get out of the business. They also gave us permission to use their brand name for 2 years. For couple of months, we were using the brand name and based on the agreement, we have to get out. Our intention was not to kill the brand. In case of May and Baker, we acquired the brand.

Chi Limited says Hollandia Yoghurt Mixology product excites consumers

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hi Limited has said that a recent survey at several lounges and bars across Nigeria showed increasing use of yoghurt, either enjoyed directly, or as a taste-enhancing mixer. “Hollandia Yoghurt Mixology has become a mainstay for consumers who are increasingly embracing yoghurt and drink-mixing culture as their taste evolve”, the company said in a statement.

It said since its launch in 2016, consumers have commended Hol-

landia Yoghurt Mixology for its novel taste and smooth texture. The brand has been consolidating the yoghurt and drink-mixing culture among Nigerian consumers who are thrilled to get the nourishing goodness of yoghurt mixed with a variety of beverages.

In its 315ml pack size, Hollandia Yoghurt Mixology is convenient and handy, with a specially designed prismatic shape and an attractive screw cap that consumers can feel proud to be seen with. www.businessday.ng

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The release quoted Chijioke Silva, a bar manager in Rivers State, who acknowledged the growing demand for Hollandia Yoghurt Mixology at his bar, adding that from the onset of its launch on the shelf, the brand quickly established a strong connection with consumers because of its attractive packaging, great taste, smooth texture and its ability to bring out that satisfying taste when mixed with other beverages of consumer choice.

“We all know that Nigerians love drink mixes, so it is commendable for @Businessdayng

a brand to see that gap and respond with a truly innovative product. I can tell you that Hollandia Yoghurt Mixology has been a runaway success at my bar in Port Harcourt and that loyalty has been sustained till date,” Silva said.

This sentiment was also echoed

by Dele Yusuf, a fun loving IT executive based in Ikoyi, Lagos. Yusuf said he was introduced to Hollandia Yoghurt Mixology by his friends during a hangout in Ikoyi, the statement further said.

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BUSINESS DAY

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property&lifestyle Pay attention to innovation and intellectual property rights, professionals tell FG

Office Space

Kingsway Towers defies economy, enters market to offer retail, office spaces ISRAEL ODUBOLA

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he slowdown in the Nigerian economy coupled with challenges that have kept the real estate market in recession and negative growth territory since the last quarter of 2016 were not enough reasons to hold back promoters of the iconic Kingsway Towers from launching into the struggling prime office market.

The property market in Nigeria has, in the last five years, seen prime office space supply surge and a sharp drop in demand, reflecting the state of the country’s economy. The Grade A office space market has also experienced a decline in both asking and achievable rents from $1,000 per square metre to between $700 and $850 per square metre, depending on location and other value propositions.

Knight Frank, an international real estate firm, in its Q1 2019 Lagos Property Monitor, notes that vacancy rates for Grade A offices have remained high, because the market is yet to recover sufficiently enough to support effective demand for rentals per square metre which is quite high.

Amidst these odds which also include stiff competition for the few tenants available, Kingsway Towers, in the first quarter of 2019, made its way into the market, standing tall on 15 floors and contributing 13,317 square metres space to an already oversupplied market place.

The office complex which stands strategically on the intersection of Kingsway and Glover Roads in Ikoyi Lagos, has come into the market to compete with the likes of British American Tobacco’s Rising Sun, Lake Point Towers, Heritage Place, Temple Tower, Alliance Place, and Wings Towers.

The building, already catching interests from mid and large corporate occupiers, is designed as an oval tower on a rectangular podium. It has a north and south orientation to lessen the solar load and is effectively shaded with feature screen and planters to limit the amount of direct sun on it.

The mixed-use theme of the structure is aimed to keep up with trends seen in many new commercial developments in Lagos both existing and those expected in the coming years.

Designed by Stefan An-

toni Olmesdahl Truen Architects (SAOTA), Kingsway Towers aims to give occupiers a one-of-a-kind experience with state-of-the-art facilities and, according to the South Africa-based designers, who have footprints in six continents, “the building’s façade is covered by a screen to add both aesthetic value and shading, thereby lessening the amount of direct sunlight.”

Business Day’s visit to the office building at the weekend revealed that finishing activities were still on-going in some inner parts, and there were available spaces for leasing.

Fawzy El-Hoayek, Business Development Executive at Skyview Tower Limited, explained that spaces between the third and fourteenth floors were available for rent, and that current occupiers range from midsized organizations to multinationals that desire to have presence in Nigeria’s economic hub.

“The minimum leasing space is 300 square metres, and spaces are only allowed to be divided from third to sixthfloors , while seventh to fourteenth floors cannot be divided”, El-Hoayek informed.

El-Hoayek explained that available spaces between the

third and sixth floors were partitioned, while the spaces starting from the seventh floor could not be shared as tenants will have to rent them as a whole.

He explained further that the cost of renting largely depended on the kind of space tenants wanted. He did not reveal the rent, say-

ISRAEL ODUBOLA

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ing however that, “it is a market price, and our price is negotiable.”

The serenity of the work environment, as well as high-level security and exclusivity of facilities make Kingsway Towers one of the special havens for corporates seeking prime office space in Lagos.

Green Building

Opportunities, benefits available to developers for building, branding green CHUKA UROKO

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esides property technology (proptech), which is fast gaining global application, the next initiative that is currently defining the future of real estate, particularly housing, is green building and branding/ certification which ensure construction efficiency and sustainability.

In other economies, including Ghana, green building, which incorporates design techniques, technologies, and materials that reduce dependence on fossil fuels and nega-

tive environmental impact, is common, but Nigeria is still playing a catch-up, especially in residential developments.

Apart from the economic sense which building green makes with about 20 percent reduction in energy, water and material cost, branding or certifying a building also makes business sense to developers through product differentiation that sets them apart from the crowd.

This explains the commitment of the International Finance Corporation (IFC), a member of the World Bank Group, to their global green

building standard and certification programme called EDGE which is an acronym for Excellence in Design for Greater Efficiencies.

The corporation has been trying, in the last couple of years, to promote the EDGE programme to Nigeria developers . At a one-day IFC’s EDGE Discovery Workshop hosted in partnership with GreenSquareMetre in Lagos recently, Dennis Quansah, IFC Lead for EDGE, Nigeria and Ghana, offered useful insights on the programme.

“For a building to be certified as green according to our

L-R: Bibi Ikkuemonisan, Communications Analyst, GreenSquareMetre; Dennis Quansah, IFC Lead for EDGE, Ghana and Nigeria; Eka Okoro, Director, External Affairs; Shaninomi, Founder/CEO; Sotonye Bristol, Director, Business Development, all of GreenSquareMetre; Benjamin Van Der Auwera, EDGE Manager, Africa, SGS; and Temilola Tsonola, EDGE Green Buildings Market Transformation Programme, IFC, at the EDGE Discovery Workshop in Lagos recently www.businessday.ng

EDGE green building standard, it must achieve a 20 percent reduction in both energy and water consumption, as well as 20 percent less embodied energy in the materials used in construction,” he said, announcing that EDGE was being implemented in over 140 countries around the world.

In additional to lower building operating costs, developers who building and brand green enjoy the benefit of getting global branding opportunities as certified projects are celebrated across all official EDGE digital media platforms including Facebook, LinkedIn and Twitter.

Also IFC’s EDGE software and certification standard offers the benefit of reducing transaction costs for accessing green finance and is ideally suited for raising finance through green bonds, as EDGE already complies with standards such as the Green Bond Principles.

“Such developers get recognition by international development partners including the UN, World Bank and IFC (and climate investors) for measurable reductions in resource use, mitigating the potential effects of climate change in

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Nigeria, and contributing to the achievement of the Sustainable Development Goals (SDGs),” Quansah assured.

There are also significant opportunities that building and branding green avail developers. In his presentation at the workshop, Shaninomi Eribo, CEO, GreenSquareMetre and EDGE expert, quoted IFC CEO, Philippe Le Houérou, as saying that out of a total $29.4 trillion Climate Investment potential up to 2030 in emerging markets, there is a $24.7 trillion investment potential for green buildings alone which represents 84 percent of the total climate investment opportunities.

Eribo, an EDGE green building expert licensed by the IFC to provide green building advisory services to property developers interested in certifying their projects as green, added that, in its analysis of 21 emerging markets, the IFC’s Climate Investment Opportunities Report estimates the commercial investment potential in the construction of low-carbon buildings in Sub-Saharan Africa at nearly $153 billion, with Nigeria’s climate smart investment potential at $104 billion from 2016–2030 in selected sectors. @Businessdayng

he Business Assets and Intellectual Property Valuation (BA &IPV) Division of the Nigerian Institute of Estate Surveyors and Valuers (NIESV) has charged the Federal Government to attach importance to intellectual property rights in the sports industry, saying it will have positive impact on the economy.

This call was made at a press briefing with journalists in Lagos to commemorate the World Intellectual Property Rights Day, celebrated every year, across the globe.

The World Intellectual Property (IP) Rights Day is observed to explore the importance of IP rights in innovation, while ensuring that inventors are fairly rewarded for their efforts in order to earn a living from it, and also protect the goodwill that is vested in brands.

This year’s event, themed ‘Reach for Gold’,aims to appraise the usefulness of innovation and creativity in sports development, and IP rights that will enhance development in the industry.

In his opening remarks, Bamidele Ogunleye, Chairman, BA & IPV Division, represented

by Olalekan Akinwumi, Secretary, BA & IPV Division, noted that enormous opportunities abound in sports, as it involved a lot of contracts, rights, and obligations, underpinning the need for IP rights development to exploit the opportunities.

“Sports involve huge investments, innovation, players and athletes whose rights must be protected. It becomes imperative to recognize and protect IP in sports.

“Since sports are interwoven with human endeavors and the economy, the role of IP valuers cannot be undermined in determining the value of intangible assets involved”,said Akinwumi.

He disclosed that the division, which was established two years ago, has embarked on many advocacy programs to deepen IP rights awareness among inventors.

“We are engaging agencies in charge of IP, trademark registration and copyright registration, to make people know about the value of their rights, and how it can be protected,” he said, adding that the division would soon launch a multi-IP forum that would involve inventors, valuers, and lawyers.

Biodun Adeniran, a member of the division, lamented that IP was at an infant stage in Nigeria. “A lot of people are willing to invest in sports, but set-backs such as administrative bottlenecks, deplorable infrastructures, and poor IP culture draw them back.”

Adeniran maintained that IP could be used to secure loans in financial institutions, asserting that Nigeria would have grown beyond current levels if she had known the benefits of IP rights way back.

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property&lifestyle Infrastructure

Increased property development opportunities, capital appreciation seen in Lagos-Ibadan railway Temitayo Ayetoto

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s the Lagos-Ibadan railway line nears completion, real estate investment analysts say there are potentials for expansion and investors are already taking position to tap from the opportunities of capital appreciation of existing investments along that corridor and the door of new estate developments to open on back of the project.

Hinging the prospects of an additional market on the ruralurban migration of professionals, job-seekers and entrepreneurs’ attraction from other states to the heavy commerce commanded by Lagos, the industry stakeholders project that the rate of estate developments along the inter-state rail track will double in the next five years, especially in value.

They also bank on the capacity of the infrastructure to give a new lease of life to businesses, entertainments, culture and life that can stimulate highdensity development of properties along the line.

The toast of real estate industry on the route would be in locations such as Isherri towards Arepo, Asese, Ogere in Ogun state further down

towards the big city of Ibadan.

Therefore, for whoever has the capacity, the time is here to acquire properties in those areas because in the next couple of years, the rental income to be generated on those properties will keep appreciating.

“Considering the congestion in Lagos, it makes more sense that people live outside Lagos, even if they transact businesses in Lagos. The introduction of the rail system is going to ease traffic on the Lagos-Ibadan expressway and aid movement of goods and services from Lagos to Ibadan and vice-versa,” Deji Fasuwon, managing director, Propertymart, told BusinessDay. “It is going to encourage developers to look outside of the city centre of Lagos and begin to move towards Ogun and Oyo states, precisely Ibadan, and develop projects there, where people can live and commute to and from Lagos easily,” he added.

The helmsman at the burgeoning real estate investment company cited opportunity for developers to begin to build housing estates along the corridor such that people will be able to build their businesses.

Affirming the appreciation in real estate value to be gener-

ated from the rail line, Kunle Awobudu, former president at the Nigeria Institute of Building (NIOB) posited that the area was potentially a prime haven for investors anticipating future returns “Once the rail line is completed, it will attract a lot of interest. I don’t think they will regret it. The only prayer is for Julius Berger construction company to increase pace of construction,” Awobudu told BusinessDay, noting that the rail project would ensure unhindered access to key neighbouring cities such as Ibadan, Ijebu-Ode, Benin, Abeokuta and Lagos.

The construction of rail transit infrastructure usually improves conectivity of communities like those on the Lagos-Ibadan expressway. The route connecting Lagos to both neighbouring southwest states and far-off states in the southsouth and south-east of the country is one of the most notorious for fatal accidents and is typically fraught with high congestion of vehicles and loss of productive hours in traffic.

The 132 kilometre rail line is a N458 billion project facilitated

by N386 billion Chinese loan and N72 million equity requirement from the federal govern-

ment. It received real boost in 2017 following the Kemi Adeosun, the former minister of Finance release of Nigeria’s total counterpart payment.

Due to the competition to be part of the economic activities in Lagos, the road infrastructure is overburdened. But experts see the untoward trend lowering with the coming on stream of this major transport infrastructure.

BusinessDay finding shows that rents on some high-profile

Developer takes a shot at Banana Island, plans 56-room luxury hotel CHUKA UROKO

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anana Island is, increasingly, receiving what is clearly the ‘new normal’ in the real estate sector which ensures residents of planned communities, like this exclusive neighbourhood, do not have reason to go outside to look for any of their needs.

Such communities are made self-contained and self-sustaining.

Though predominantly residential, Banana Island has, in recent time, seen significant commercial developments in office and retail.

Today, plans are being perfected to complement these developments with a luxury hotel facility to be developed

by Gilead Global, a frontline real estate firm in Nigeria.

The 56-room luxury development, known as The Cavendish – Banana Island Hotel,

will feature art and design as core attributes and is being designed by prominent British Architect, Peter Bishop in collaboration with renowned Nigerian architectural firm, Wole Esan & Associates.

Consistent with the exclusive, expensive and luxurious nature of the Banana Island environment where affordability is not a big issue, The Cavendish will boast the latest technology in guest management, from keyless entry to automated curtains while still maintaining the highest levels of energy efficiency.

The hotel is designed in such a way that there are 4-room categories ranging from 30-square metre standard rooms to a 400-square metre 3-bedroom suite with minimalist furniture and earthy colour schemes, floorto-ceiling windows, woodpanelling, 42-inch flat-screen televisions and tablets pro-

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vided by Silicon Valley-based technology company, Intelity, which guests can use to order room service or fresh towels by just pushing a button.

There will be free Wi-Fi throughout the hotel, while the fifth floor contains an ultra-modern fitness centre, indoor swimming pool and an outdoor barbeque (BBQ) terrace.

Banana Island is Nigeria’s most expensive enclave and is home to some of the wealthiest residents and top bluechip corporates within the Lagos metropolis. It’s no surprise, therefore, that its welltended gardens and good road network continue to command the highest rental yields in the country.

What is, however, surprising is the fact that there is no upscale hotel within the entire estate. Expatriates working within the estate are restricted to commuting whilst residents who want to hold meetings go to the gym just as those that want to have fine dinner need to exit the gated community.

The hotel will be managed by an international hotel administration company, Starwood Group— owners of the Sheraton, St Regis, Le Meridien and W Hotel brands. “We are committed to ensuring the ground-breaking for the project takes place as promised in the third quarter of 2019, ” Tomiwa Idowu, Gilead Global’s Country Manager,

told BusinessDay in Lagos at the weekend.

“We have taken our time to develop a unique and muchdesired product, which the market thirsts for. This is evident in the number of sales and enquiries we have recorded since we launched the marketing suite. The Cavendish – Banana Island Hotel offers owners the rare opportunity to own a luxury rental property with yields north of 15 percent annually and average capital appreciation upwards of 30 percent per annum,” he added.

Banana Island is known for its extremely tight security, underground electrical cabling, central sewage system and water treatment plant. The Cavendish is situated in close proximity to other major residential and commercial developments such as The Adunola – Airtel Offices, Bella Vista, Lake Point Towers, Ocean Parade and Desiderata. Some of its corporate neighbours include Airtel, Olaniwun Ajayi LLP, Ford Foundation, Uber, etc.

Prices at the luxury development start from N75 million for 1-bedroom condominium and go up to N140 million for a 3-bedroom suite.

These prices reflect a heavily discounted rate prior to the scheduled ground-breaking event. After this, prices are expected to sky-rocket.

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estates along the Lagos-Ibadan expressway were already hitting well above N1 million per annum, particularly within the OPIC area of Ogun state.

On the average, since Lagos is the centre of attraction, value proposition will also be benchmarked on proximity to Lagos. But with increased accessibility promised by the rail line, property value will enjoy competitive rates based on distance from Lagos.

Estates have been develop-

ing along the Lagos-Ibadan corridor long before the rail project was started. The route is a major development corridor in Lagos. Others are LagosBadagry expressway, LekkiEpe, Ikorodu Road and Abule Egba – Abeokuta.

“Of all, Lagos-Ibadan is the fastest growing after the Epe corridor and more promising.

Because of that, real estate investments have been growing there”, said Akinola George, a real estate expert.

Zero616 Realty woos buyers with luxury, smart homes at Fortune Bay CHUKA UROKO

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fter a successful outing with its Fortune Bay 1 Estate, Zero616 Realty has returned to the property market with smart and luxury homes at Fortune Bay 1 Extension described as first ever smart estate in Nigeria.

Zero616 Realty, a leading real estate company that develops high-end residential properties, is a commercial real estate company in Lagos engaged in the acquisition, development and management of classy but affordable luxury high-end residential property.

The company is out to create a complete real estate experience beginning from the decision to purchase land, property development to products handover to clients.

As an innovative real estate firm that is responsible in its approach to meeting and exceeding client’s expectations of its clientele in banking, Oil and Gas, and high net-worth individuals, Zero616 Realty embraces smart and innovative technology as demonstrated in Fortune Bay project.

A major real estate investment destination in Nigeria, Fortune Bay was launched into the property market late 2018 and, by the first quarter of 2019, it was sold out. This, according to the developers, @Businessdayng

was a great milestone for both the company and the project.

“We are very pleased that our customers have absolute trust in what we do and have recognized the value we provide in our estates. This well-deserved expression is the result of our commitment to ensuring that Fortune Bay is the smartest estate in Nigeria and this has boosted our motivation to continuing innovations,” said Benneth Okobi, Zero616 Realty’s managing director, in Lagos.

Okobi disclosed that Fortune Bay Estate had been involved in providing serviced plots and was set to give complete real estate experience for the buy-to-sell investor, first time landowner and an owner-occupier. “Our most recent development , Fortune Bay Extension, is in great position to soar higher in terms of return on investment. We are definitely on our way to building a community where civil living is a way of life,” he added.

Okobi believes that the future is now and it is completely accessible, revealing further that the company perfecting plans to smarten its estate and has started home automation roadmap which is a step towards Internet of Things and a home where everything utilizes the power of technology to make life easier and more enjoyable.

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Tuesday 30 April 2019

BUSINESS DAY

EDUCATION

Weekly insight on current and future trends in education

Primary/Secondary

Higher

Human Capital

What NUC’s Code of Corporate Governance portends for private varsities Stories by KELECHI EWUZIE

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ational University Commission (NUC) says the Code of Corporate Governance document for private universities is to guide the Proprietors, the Board of Trustees, Governing Council and university management in the governance of the universities.

NUC opines that the code was produced to tackle challenges of governance in private universities, saying the document clearly delineates the role of each level of governance structure of a university to improve university governance in Nigeria.

Abubakar Rasheed, NUC Executive Secretary says the commission has also developed a new blue print aimed at rapidly revitalising the university education in Nigeria between 2019 and 2023.

Rasheed said the document was produced in a bid to rejuvenate Nigerian universities.

According to the document by 2023, access to university education should have increased by a factor of 20 percent over 2018 figures.

The report also indicate that the curriculum of Nigerian universities should be rated among the best three in Africa in terms of its relevance to producing nationally and regionally-relevant graduates who are high-level human resources for delivering on Africa’s Vision 2063 and addressing global SDGs. “By 2023, at least 30 percent of facilities for

teaching, learning and research should have been upgraded to meet international standards and maintained thereafter.

Speaking at the third convocation of the Elizade University, Ilara Mokin, Ondo State, Rasheed, who was represented by Noel Saliu, director, Quality Assurance in the commis-

sion, said the development of the blueprint was thought on an extensive multi stakeholder base and that input were sought from students, parents, teaching and non-teaching, vice-chancellors and other stakeholders in the education sector.

According to him, “Data were gathered

L-R: Perpetua Aji, permanent secretary, Cross River State Ministry of Education; Andrew Enahoro, Head Legal and Corporate Communications, Promasidor Nigeria Limited; and Charity Ottoho, director of Schools Services, Cross River State Ministry of Education during the fifth edition of Promasidor Harness Your Dream initiative, a career guidance workshop for Junior Secondary school students held at the West African People’s Institute (WAPI), Calabar

to determine Nigeria’s rank and challenges faced in the system at present as well as to seek practicable and sustainable solutions to the challenges and the cost implication for the solution.

He further solicited support of all stakeholders, government, the academia, the industries and all well-meaning Nigerians “To achieve the strategic objectives of the blueprint so that the document will not go the way of past strategic documents that were not implemented.”

“The participation of the private sector has, to a very large extent, expanded accessibility of education to many Nigerians, even though the carrying capacity of all the private universities put together is less than the public universities.”

The NUC executive secretary further expressed the government belief that as the private universities grow and develop, they will be able to admit many students as the public institutions.

He assured that the federal government was not just interested in increasing access, but equally achieving expanded assess without compromising quality.

He said since universities are quality assurance institutions by design, they must be seen to reflect quality in all their operations, be it academic or non-academic in order to ensure that graduates of Nigerian Universities will be both nationally relevant and globally competitive.

“The federal government will continue to be grateful to the private sector for their involvement in the delivery of quality university education in Nigeria”, he said.

Greensprings School awards educational scholarship to two exceptional students

Promasidor commits to youth development in Secondary Schools

reensprings School as part of its effort to help indigent students excel in their academics and sports has awarded an educational scholarship worth over N20 million naira to two exceptional students.

Quadri Araromi, from Lahinde Primary School, Oshodi and Light Chijioke from Gbaja Boys Junior School, Surulere Lagos State would resume at Greensprings School, Lekki on full scholarship for being adjudged the best footballers at the recently concluded Greensprings/Kanu Football Camp.

While Quadri Araromi will start primary six at Greensprings, Light Chijioke will start from junior secondary two come September 2019.

Lai Koiki, executive director, Greensprings School, while speaking at the award gala event said the Greensprings/Kanu Football Camp is in line with the school’s objective of reaching all Nigerian children so it engages in activities that will extend its reach, including sports.

Koiki said the scholarship worth over N20 million includes; the provision of accommodation, school uniforms, pocket money and other necessities that will get them immersed in the system, as well as help them to succeed and excel in their academics and sports.

She further said that though the students were awarded the scholarship based on their exceptional skills in football, the school however prioritises education and would ensure that the students put their studies first.

Emmanuel Essien, sector lead, education and religious institution, Union Bank said the bank is committed to education and sports

romasidor Nigeria Limited says it remains committed to the development of Nigerian youths through support for initiatives in secondary schools across Nigeria.

Andrew Enahoro, head of Legal and Corporate Communications, Promasidor says the various projects embarked by the company were informed by the desire to stimulate children mentally and intellectually.

Enahoro while delivering his welcome address at the fifth edition of Promasidor Harness Your Dream in Calabar said the management realise that it is important at an early age to address career choices.

According to him, “Always best to start with the basics which is why this initiative is targeted at JSS3 students. It is at that stage they need to know whether they want to be science, arts or commercial-inclined”.

He said that projects such as Cowbellpedia Secondary School Mathematics competition are executed pan-Nigeria.

“We started Harness Your Dream as a pilot scheme in Lagos in November 2017 and we have done one edition per school term since then, which has taken us to Ogun and Enugu States as well as the Federal Capital Territory, Abuja. This year, we have started with Cross River State. In the next three to four years, we would have covered many more states,” Enahoro further said.

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while ensuring it provides the needed opportunity for everyone to be the best that they can be.

Essien observes that the Kanu football camp is an example of inclusion because it brought together children from different backgrounds.

He opines that apart from sponsoring five students to the camp, the bank have presented cash reward of N100,000 each to the most valuable female player and four others.

On his part, Dotun Coker, the Chairman, Technical Committee of the Lagos State Football Association, observed that since the inception of the programme, the state team has always produced the beneficiaries of the scholarship.

Coker said the Lagos Football Association endorsed the initiative by Greensprings School because it is a way of giving back to the society, adding that the state sponsors 20 students to the camp annually.

He said the Eko Football cuts across all parts of the state and is aimed at creating an effective marriage between education and football.

The Greensprings/Kanu Football Camp was established in 2012 by Greensprings School and Kanu Heart Foundation to enable children between the ages of five and 17 enhance their football skills.

During the five-day camp, children get first class training by coaches from West Bromwich Abion Football Club, UK and Dutch Football Association, Netherlands, supported by coaches from the Lagos State Football Association.

The participants also get a lifetime opportunity to receive direct mentoring and coaching from Nwankwo Kanu.

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The Calabar edition, which was held at West African People’s Institution (WAPI), also attracted JSS3 students of three schools within Calabar municipality. These are: Big Quo Girls’ Secondary School; Government Secondary School, Akim; and Government Secondary School, Atekong.

About 2,000 students of 15 schools have so far benefitted from the project, which is targeted at those in the final class of Junior Secondary School education, who are at the verge of choosing the subjects informed by their future career choices.

Godwin Ettah, Cross River State Commissioner for Education in lauded Promasidor Nigeria Limited for conceiving and sponsoring Harness Your Dream and extending it to the state, which demonstrated its belief in the future development of the young ones.

On her part, Mercy Etim, Principal of WAPI, described the participants as lucky because they now understand what was required to become successful professionals and entrepreneurs.

“We thank Promasidor and the facilitators for looking in our direction and we will be glad to have this opportunity anytime they call on us,” Etim said.

The primary objective of “Harness Your Dreams” is to help public school students understand varieties of career options and guide them along their career paths.

@Businessdayng

Tuesday 30 April 2019

BUSINESS DAY

23

EDUCATION ‘PPP model is best alternative to tackle Nigeria’s massive education sector challenges’ Meadow Hall Foundation (MHF) is strategically set up to improve the educational outcomes of the Nigerian Child.

In this interview with KELECHI EWUZIE, Omotola Oni, head MHF explains the vision, mission of the foundation and their future plans to enhance teacher quality and advocacy for the teaching profession. Excerpts: What are some of the sustainable initiatives/projects that Meadow Hall Foundation have executed? s a non-profit organisation in the education space, Meadow Hall Foundation is part of Meadow Hall Group, an educational company with five subsidiaries. At MHF, our main aim is to improve the educational outcomes of the Nigerian Child through enhancing teaching quality, changing mindsets about teaching and advocating for the teaching profession.

MHF partners with individuals, public and private organisations to implement sustainable initiatives, projects and programmes that support teachers, students, schools and communities. MHF has impacted 41,850 school pupils, 56 school leaders, and 331 schools, trained 1,395 teachers and adopted 1 school.

We have done a lot in this regard mainly by implementing various developmental and advocacy-based initiatives. Some of our programmes include our Graduate Teacher Trainee Programme (GTTP) where we develop young graduates for entrance into the education sector. As part of their training, these trainees learn about best educational practices and also teach at Meadow Hall and Ilasan Primary School (our adopted school).

This programme has an absorption rate of over 96 percent into the education sector.

We have a Teacher Professional Development Training (TPDT) whereby teachers from lowcost private schools and public schools receive free training on the best 21st century teaching and learning practices and skills. We also have the School Adoption Programme (SAP), which is a school improvement programme aimed at providing support (infrastructure, adequate teacher training, teaching aids and educational technology) to public school students and teachers. Our pilot adopted school is Ilasan Primary School in Jakande, Lekki and some of the developmental initiatives that have been carried out there include building of a school fence, training of their teachers, distribution of resource packs, book donations, ongoing library and sick bay projects.

According to the United Nations, there are about 13.2 million out of school children in Nigeria. Through our Core Centre programme, the Foundation develops and partners with churches, mosques and other organisations to provide out of school children a comfort zone where they can have access to acquiring the core academic skills of numeracy, literacy and ICT including vocational skills and civic education.

The first centre which kicked off on the 18th of February, 2019, is providing education to at least 35 children. At the moment, the Foundation is collaborating with other organisations for the establishment of more Core Centres across the country. We also have the Education Convention and Inspirational Educator Awards (INSEA).

Looking at the policy of education in Nigeria, do you think it is working? What is the way forward?

Nigeria has a robust education policy which unfortunately isn’t working as it deserves to.

Successive administrations have brought up various policies to improve access to education, often not looking at enhancement of quality of education. In 2004, the free Universal Basic Education (UBE) was introduced and the present administration launched a free school meals

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Omotola Oni

programme for pupils. However, these policies have not translated to improved quality of education. The achievement gap has continued to widen and deteriorate.

It is my view that government should adopt the Public Private Partnership (PPP) model which has relatively been successful in general infrastructural development in the country; this could be a way forward for the education sector.

Corporate bodies should adopt schools to improve on the infrastructure and also ensure that the quality and standards of teaching are increased and sustained for the benefits of the pupils. The Government in collaboration with the private sector should come up with a qualitative and structured school adoption policy, a win-win policy. This will endear corporate bodies to the public and serve as an enviable corporate social responsibility programme.

The third sector should be more involved in the education system; as the invaluable roles of NGOs, religious organisations cannot be overemphasized. Teacher motivation and professional development should be the number one priority of our education policy because the quality of your educators determines the quality of your education.

As a concerned stakeholder in the development of human capital, how best do you think the Nigerian education system needs to be managed to achieve productivity and competitiveness?

Nigeria has three critical challenges; these are lack of energy (electric power), leadership challenge and inaccessibility to quality education which is the most critical. If we can get education right then every other thing would fall in place. Education is our main tool for human capital development. This begins from ensuring and being intentional about access to quality

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learning by our citizens, the encouragement of lifelong learning.

This cannot be achieved without looking at the quality of our educators; the quality of your educators determines the quality of your education. Any nation that does not prioritise the professional and personal development of teachers is set to wallow in mediocrity and underdevelopment.

The creation of an enabling environment, motivation and opportunities for the qualitative training of teachers are the basic elements for the achievement of productivity and competitiveness in the Nigerian education system.

What is The Inspirational Educator Awards (INSEA) concept all about?

The Inspirational Educator Awards (INSEA) is aimed at elevating the teaching profession and motivating school teachers and school leaders to continue to strive for excellence in their profession. The awardees emerge from a merit-based competition and are rewarded for their commitment and passion for the profession and for the children. We award Four Million Naira in total to inspirational educators; the Foundation encourages teachers to strive for excellence and professionalism always.

One of your targets with The Inspirational Educator Awards (INSEA) is to support teachers to achieve professional excellence. How successful have you been in this regard, considering the challenges that public education system still grapples with in Nigeria?

Teachers in Nigeria are heroes and heroines.

The teaching profession is one that has been looked down upon in our country. Teachers make the doctors, lawyers, engineers and all other professions but they are the most marginalised. Over the years as we receive thousands of nominations for INSEA we read the story of

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several inspirational and outstanding educators.

Individuals who have sacrificed and gone out of their way to ensure our children get the best possible education within their capacity and ability. Despite the challenging environment these teachers thrive and we believe that they deserve to be celebrated and encouraged.

In the last two years, we have been able to show that a teacher’s reward is not just in heaven; it starts from here. By the time we hold this year’s INSEA, Meadow Hall Foundation would have awarded 13 inspirational teachers and school leaders with the sum of 13 million naira.

What are some of the strategies you think managers of Nigeria’s education system need to put in place to boost opportunities for teachers, students to achieve their full potential?

The first thing is for them to be genuinely passionate about the development of the education system. Without passion and empathy, we cannot make appreciable progress in the sector.

Also, quality assurance must be established in the Nigerian education system. This must be a key focus for policy makers and all stakeholders.

Private sector engagement is very important.

In addition, Government should put incentives in place for corporate bodies and individuals who support education especially the public school system while also ensuring that private sector involvement is well structured and planned.

Furthermore, education must be made affordable and accessible for all. Quality improvisation is essential at this point. An example is the Meadow Hall Core Centre initiative where we partner with churches, mosques and other religious organisations to provide spaces where out of school children can access quality learning.

We provide the learning content and teachers while our partner organisation avails us their space. These religious bodies are spread all over the country, so this serves as an opportunity to reach the nooks and crannies of Nigeria with quality education and give our citizens access to same.

Managers of the Nigerian education system must think outside the box, they can’t just fold their arms; they must be strategic and tactical.

What is Meadow Hall Foundation’s Education Convention about? How can someone participate?

Meadow Hall Foundation’s Education Convention provides an opportunity for teachers, school owners, parents, government officials, policy-makers and other stakeholders to gain fresh perspectives on pertinent educational issues from their interactions with educational experts and various stakeholders. This is the third edition. The theme for this year’s convention is “Accelerating National Development Through Education”. It promises to be a refreshing opportunity to discuss national development through education.

The Education Convention comprises: keynote address, panel discussions, workshop, networking and professional interactions. Some of the topics to be discussed include Optimising Students’ Achievement through Formative Assessment, Preparing for Disruptive Teaching, Features of an Outstanding School, Leveraging on Digital Marketing to Promote Your School, Cyber Safety, Parental Control in the Digital Space, Improved Access to Quality Teaching and Learning, and Closing the Achievements Gap in Education.

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Tuesday 30 April 2019

BUSINESS DAY

Executive education that fits around your lifestyle A start-up is taking on business schools by teaching workplace skills through a web tutor Jonathan Moulds, FT

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lon Alperovitz took a business masters degree at London School of Economics because he wanted to switch career.

By the time he graduated, in 2018, the former operation and relationship manager at the Academic College of Tel Aviv Yaffo had started two new jobs.

From Monday to Friday, Mr Alperovitz is the business improvement architect at the London headquarters of Ted Baker, the UK clothes retailer.

On Sundays, he is an entrepreneurship tutor, logging on from his living room sofa to lead a classroom of a dozen students in Tel Aviv.

“I love it,” Mr Alperovitz says about his weekend teaching role. He works for Jolt, an Israeli technology start-up that brings students into physical classrooms to be taught from a screen by experts working remotely.

The gig economy-based business model works for Mr Alperovitz, who took on the job as a way of sharing his knowledge and passion for start-ups. He did not expect to make a living from it.

The set-up is easy. He just needs a highspeed internet connection. “We have a six-month-old baby so my wife takes her to a separate area of the house while I am online,” he says.

Jolt was founded in 2015 in Tel Aviv and has expanded into London and New York. Students attend the classes in person and are taught key workplace skills, such as negotiation techniques, time management and how to solve problems faster.

Jolt aims to “reinvent learning”, according to Roei Deutsch, the company’s cofounder and chief executive. “In the 21st century, learning one subject at university just doesn’t cut it any more,” he says.

“Employees need to be constantly expanding their skills, and Jolt solves this problem with stackable classes that fit around your lifestyle.”

The company raised $7.2m in an equity funding round led by European tech VC Octopus Ventures, mainly to build the London classroom, which opened in January.

Developing each venue is expensive because everything in the teaching rooms, from the central table around which the students sit, to the web conferencing software, has been designed so that the lesson can be run remotely by one person.

“The learning and development market is ripe for disruption,” says Simon King, a principal at Octopus Ventures.

This is what business schools call executive education — and it is worth about $100bn, according to Mr King. Students

‘I love it,’ Alon Alperovitz says about his weekend teaching role

of Jolt, known as “sojis”, pay a membership fee of £100-a-month, for which they receive an allocation of “coins”, Jolt’s currency, to fund four 90-minute classes or buy Jolt stationery and merchandise.

Additional coins can be earned by turning up on time regularly and not cancelling bookings or can be purchased through the Jolt smartphone app.

Any coins left unspent at the end of a month are rolled over. Sophie Mackenzie, assistant digital fundraising manager at the British Red Cross, was an early Jolt member in London.

“Within my sector learning and development is fairly limited, due to the lack of funding for this type of extracurricular activity in non-profits,” she says.

Ms Mackenzie, who moved into her first management role last year, aged 24, was introduced by a friend who was a member and signed up at a taster event near Jolt’s London office in Shoreditch, the centre of east London’s tech start-up community.

“It completely busted all [my] prejudices against networking and panel discus-

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sions,” Ms Mackenzie recalls. “I actually really, really enjoyed it.”

Jolt sessions are run in a similar manner to business school seminars, where participants are encouraged to participate as much as possible.

They may seem like networking events

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Employees need to be constantly expanding their skills, and Jolt solves this problem with stackable classes that fit around your lifestyle

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but they are actually something different.

I meet Ms McKenzie at a public speaking class in the London venue, alongside a dozen other sojis.

For an education start-up that claims to be making learning more accessible, the room is difficult to locate, in a half-finished new office development in a side street around the back of the financial district’s hub station, Liverpool Street.

The only clue to Jolt’s existence is a sheet of A4 paper with ‘Jolt’ on it, stuck to the front door. Once inside, however, the decor is smart. A screen fills one wall of the classroom, from which extends a large curved wooden table.

The dozen or so students sit around this. There are also framed prints of motivational phases, such as “always learning”, and cabinets filled with Jolt merchandise.

Mr Deutsch runs a finger along the teaching table in the room, noting that its curved shape is specifically designed to enable the tutor to see each student.

It is attached to the screen at one end to emphasise the “connection” between the tutor on screen and the people in the room.

“This could be seen as a wasted piece of wood,” he says, measuring with his hands the width of the wood between the presenting screen and the first student’s chair.

“But because it is connected to the screen we have shown that it actually improves the amount of participation of the person sitting here by hundreds of per cent.” Jolt has entered a crowded market.

Taking a slice of the huge executive education market, previously dominated by business schools, has been an aspiration of many technology companies.

Only healthcare is a bigger market globally, according to Beauhurst, a London-based analyst for young high-growth companies. Out of the 399 “edtech” companies Beauhurst tracks, there are just 54 that are defined as professional development companies such as Jolt.

But these professional development companies have raised higher amounts on average than their peers in edtech, such as online coding clubs, and were more likely to achieve a successful exit in terms of an initial public offering or sale to another company.

Last year was the biggest on record for professional development start-ups in the UK, according to Beauhurst, with £25.4m raised over 15 deals.

Since the beginning of 2019, a further £5.1m has been raised in another four deals. The plan has to be to “go big or go home”, according to Mr Deutsch.

“This is like a military spectacle, an experience,” he says, casting an arm around Jolt’s London room. “We can only do this, however, if we do it at scale.”

@Businessdayng

Tuesday 30 April 2019

BUSINESS DAY

25

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Hiring right and what selfreflection has to do with it Step 3: Assess and audit your organisation fter you have decided your wants and needs, it’s time for give and take. You want ‘Competencies A,’ so ‘Task B’ gets done well. Fair enough. However, P-Square taught all of us the (somewhat) golden rule: “If you do me, I do you.”

In recruitment, the action-reaction loop starts even earlier: “As you dey measure me, I measure you.”

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Measuring up When you enter the recruitment process, you are opening up your business to the judgment of the prospective employee.

How can you volunteer to be measured, without having measured yourself? Though the process of assessing and auditing your business might seem like just another item in the list of tasks, it’s actually the most important one. You must give your organisation a thorough look, and make an honest assessment of what you bring to the table.

Why? Because the potential hire will be weighing whether what you can offer is as good as, or better than, the other options available to them. They will be checking whether it is commensurate with the value they perceive they are bringing to the table.

An integral part of the recruitment process is successfully attracting the people you want. To do that, you have to sell yourself.

In order to sell yourself, you have to know yourself.

Misan Rewane Misan Rewane is co-founder and CEO of WAVE, an organization focused on rewiring the education-to-employment system to create a level playing field for every African youth to access the skills and opportunity to become what they imagine.

The billion naira question A self-audit or self-evaluation might seem daunting. However, things get simple if you follow the direction Simon Sinek suggests in his book Start With Why. I know ‘why’ might seem like some existential question an oyinbo person would ask because they have too much time on

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their hands. But it has considerably more substance than that. Why did you choose to start this business, of all the businesses you could have launched? No, seriously, why? Sit down at your desk. Close your eyes.

Don’t stop asking yourself why until you know you’ve reached your core motivation for starting and running your business.

When you have figured out why you do what you do, it is time to think of who you are as a business. What are your reasons (WHY) your actions (WHAT) and your methods for executing those actions (HOW)? What do you stand for? What is your strategy, and how much progress have you made towards it? What was your vision when you started out? How has it changed?

What are your priorities as a business, and how will the role you are recruiting for help you to achieve them?

The long and short of it Oga/Aunty, I know you are thinking that I just came here to frustrate you this fine afternoon. What plenty navel-gazing is this? But, please, do me a favor and pause for a moment. Examine your frustration. Is it because I’m asking impossible questions that you do not know the answers to? Or is it because, even though I’m asking you to take stock of a business, it is starting to feel personal? Our businesses/companies are not a physical part of us, like our perfect smiles, or lack thereof. However, we experience similar feelings of inadequacy when we start to look at them critically. Because they are a product of our blood, sweat and tears. Our emotional investment in them is immense. And though, when it comes to looks, we can comfort ourselves with platitudes like “Beauty is in the eyes of the beholder” and “Money is the root of all evil,” in business, success is often defined by perception. Those held by others, and those we hold of ourselves.

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Perception, however, is nothing without perspective. When you start searching the soul of your business, it can be tempting to go down the rabbit hole of focusing on every tiny misstep till you are thoroughly discouraged. But let’s take it back to dating: If you were about to go out with one fine sisi or guy, would it be productive to spend the day telling yourself how uncool you were? Your business is more than just the sum of the targets it didn’t hit last year, the former manager who bashed you on social media, or the kinks in your supply chain. Your business is defined by its core values. Those core values are what dictate the experience your employees will have.

Not just packaging In order to evaluate your business successfully, you have to take stock of the good and allow yourself to be proud of it.

Then you have to admit the bad and dedicate yourself to fixing it. Having a holistic picture of what the successes and limitations of your business are, allows you to know what benefits you can emphasize to potential hires. More importantly, it gives you insight into what you need to overhaul or redo in order to attract the caliber of candidate that you require. It allows you to decide what you think is worth fixing, versus what you have decided is just what it is, and will be attended to later (or never).

This clarity doesn’t just give you currency in the employment marketplace. It also allows you to be upfront with candidates during the courting process, and paint an accurate picture of the good, bad and ugly.

Clear knowledge of your company’s entire reality, makes you more discerning about which candidates are best suited to join your business and thrive in it. It is the best weapon in your arsenal for a successful recruitment process.

@Businessdayng

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Tuesday 30 April 2019

BUSINESS DAY

Investments

ENERGY INTELLIGENCE OIL

GAS

PETROCHEMICALS

Market Insight Companies Commodity Tracker Policy

POWER

POLICY

Nigeria’s plan to sell flared gas will reduce climate change impacts – Derefaka country to the United Nations Framework Agreement for Climate Change (UNFCCC) [“Paris Agreement”] with a commitment to make “Intended Nationally Determined Contributions” for the reduction of greenhouse gas emissions (GHGs) and has ratified the UNFCC in May 2017.

In June, the FEC granted approval of the National Gas Policy and even gas flare out arrangement was a component of the Economic Recovery Growth Plan, the signature economic blueprint of the Muhammadu Administration.

Unlike previous declarations to end gas flaring, the NGFCP enjoys not only a political will from the highest echelons of authority in the country; it has provided investors and operators

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ver the next three years, the Nigerian Gas Flare Commercialisation Programme (NGFCP), an ambitious plan to sell over a billion scf of gas currently flared at 178 flare points across the Niger Delta, would cut Nigeria’s CO2 emissions by 13 million tons a year, which could be monetized under an emission carbon sale arrangement, Justice Derefaka, programme manager of NGFCP has said.

In his presentation at the Society of Petroleum Engineers Oloibiri Lecture Series and Energy Forum (SPEOLEF), held in Lagos on April 25, Derefaka said the programme would stimulate action in five areas of critical importance to the Sustainable Development Goals (SDGs) including people, planet, prosperity, peace and partnerships.

Derefaka said the flared gas sale programme is consistent with Nigeria’s commitment to reduce greenhouse gasses (GHGs) under the Paris Climate Change Agreement.

The programme is also designed as an important “climate change action plan” for the nation, allowing Nigeria not only to cut its CO2 emissions but halt a loss of $500million in emission credit value, Derefaka said.

According to data from the World Bank, CO2 emissions from Africa’s biggest oil producer were 96281 in 2014.

Nigeria has the world’s 7th biggest gas flares despite a 70% decline in gas flaring over the past decade.

In 2015, around 1,000 MMSCFD of gas was flared in Nigeria, exceeding the 800 MMSCFD utilized for power generation and around 450 MMSCFD used in the domestic industry.

The NGFCP is viewed as a critical signpost in the country’s road map to energy sustainability. It is the first market driven program undertaken on this scale globally giving bidders the flexibility of choosing which flare site(s) to bid for, the flare gas price to offer to the Federal Government (taking into cognisance the NGFCP floor price of US$0.25cents per thousand standard cubic square feet of gas) and the end market gas products as well as

the technology to be used.

But it is still untested and fraught with uncertainty despite the huge enthusiasm, investors say. To assuage these concerns, the Federal Government has declared it is ending gas flaring by 2020. Unlike the previous six times this declaration has been made since 1984, this time, it is backed by political will.

In 2016, Nigeria joined the Global Gas Flare Reduction Partnership (GGFR) and the Zero Routine Flaring (ZRF) Initiative and that same year, the Federal Executive Council approved the NGFCP programme.

Nigeria has become signatory

with a commercial motive to end the practice thus improving the chances of success.

“The strategic imperative of the NGFCP is to eliminate gas flaring through technically and commercially sustainable gas utilization projects developed by competent third party investors who will be invited to participate in a competitive and transparent bid process. The commercialisation approach has been considered from legal, technical, economic, commercial and developmental standpoints,” Derefaka said.

The NGFCP expected to see about $3.5 billion worth of inward investments is required to achieve the gas flare commercialization targets by 2020.

Five critical areas of the SDGs, the NGFCP could impact

INVESTMENT

Ghana, Mozambique, Tanzania, Uganda are new rookies competing for FDI with Nigeria - Deloitte DIPO OLADEHINDE

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eloitte, one of the “Big Four” accounting organizations and the largest professional servicing firm has named Ghana, Mozambique, Tanzania and Uganda as new countries that will be competing with Nigeria’s oil and gas sector for Foreign Direct Investment (FDI) in 2019 and beyond.

According to Deloitte, while established oil and gas countries like Nigeria look to reinvigorate FDI, the spotlight is also shining on Africa’s new contenders as the region’s newest oil producer; Ghana has seen the highest growth in oil production among its peers thanks to launching of its first offshore licensing round with six blocks in late 2018 which will contribute to a rise in exploration activity.

“A long-debated Petroleum Bill, passed in August 2016, is set to improve the broader regulatory environment and remove major barriers to exploration,” Deloitte said in its “The new frontier: Winning in the African oil and gas industry” report.

Another country on the spotlight to compete for FDI with Nigeria is Mozambique who also holds the largest gas resources in the continent, which implies it has the largest untapped potential in the region.

Despite domestic and governance challenges aside, Mozambique has recorded the largest flow of FDI over the past eight years among its peers as recent discoveries multiplied proven reserves which will underpin the country’s projected economic recovery.

“Plans for the coral floating liquefied natural gas development in the Rovuma Basin, as well as the Anadarko Petroleum project in the north are two prominent developments that will soon gather momentum,” Deloitte said.

For Deloitte, another country to obwww.businessday.ng

serve is Tanzania. The country boasts of one of the fastest-growing economy among its oil and gas-producing peers in the region and the second-largest natural gas resources.

“While production is low, the discovery of new offshore fields has the potential to transform the economy. It’s closer location to Asian markets gives Tanzania a geographical edge over peers, although exports of liquefied natural gas based on a planned onshore export facility have been delayed for at least five years,” Deloitte said.

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Next on the list is Uganda; Discoveries in 2006 proved the country has the fifth-largest oil resources in the region and new exploration licenses are being awarded. Production is expected to start in 2021 and the construction of a pipeline from Hoima (Uganda) to Tanga (Tanzania) began in 2018.

Deloitte also raised consideration about Cote d Ivoire were a favorable ruling in September 2017 on the longrunning maritime border dispute have brightens the country’s prospects however “refining capacity is constrained, and limited oil pipeline infrastructure may affect consumption.”

For established oil country like Nigeria with substantial foreign direct investment (FDI), Deloitte noted that delays in reforming the sector have deterred further investments as governance challenges, corruption, as well as economic, security and high cost concerns still hinder investment inflow.

“Improving economic conditions and transport sector growth could see domestic consumption increase by 31 per cent between 2017 and 2023 while investment in gas infrastructure, such as new pipelines, will boost production,” Deloitte said concerning Nigeria.

Deloitte noted that opportunities @Businessdayng

exist for players with the Nigerian government intending to privatize ten power stations as part of efforts to guarantee an effective and sustainable power supply in the country.

Despite, Angola having the second-largest oil resources and is the second-largest oil producer in subSaharan Africa, Deloitte believes Angola is less attractive from a regulatory perspective as Africa’s second largest oil producing county still grapples with corruption, high business costs, low growth and a lack of business diversification.

Generally, Deloitte admitted that there is no universal recipe for winning in the sub-Saharan Africa oil and gas sector. However, soft and hard skills, paired with the right timing, and an understanding of market-specific conditions will bring success.

According to Deloitte, factors considered by multinationals looking to invest and operate in Africa ranges from investing in local partnerships, capitalizing on local market knowledge, understanding local customs and business culture to developing local content and localization strategies, creating value beyond compliance, portfolio management and diversification, embracing digitalization, identifying risks and planning for uncertainty.

Tuesday 30 April 2019

BUSINESS DAY

27

ENERGY INTELLIGENCE Insight

Why FPSO is becoming so important for oil and gas companies DIPO OLADEHINDE

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he recent increase in international Brent crude is not only good news for oil producing countries or oil refinery companies in form of higher revenue but it’s also the beginning of new explorations with numerous economical and efficiency benefits of Floating, Production, Storage and Offloading (FPSO) vessels which are proving more important to operators in the oil and gas sector.

Three years ago it seemed FPSO market was dead in the waters thanks to downturn in oil projects from 2014 as the need for new FPSO vessels stalled and there were no new orders made for two years.

Fast forward to 2019, a report from Norwegian oil and gas intelligence firm Rystad Energy expects 33 FPSO vessels to be sanctioned from 2019 to 2021 as oil and gas activity picks up in the offshore sector which represents a significant increase for the global market.

Rystad Energy expects the high capacity demand to come mainly from the developments in Guyana and Brazil where operators such as ExxonMobil, Equinor, and Petrobras are stepping up their deepwater production.

Ry s t a d E n e r g y c r e d i t s t h e growth to “higher oil prices, tech-

nological advancements and lower costs.”

“The cost-cutting efforts implemented during the downturn are a major contributor to the favorable economics of most of these projects...The pipeline of projects indicates that FPSO awards are set for a strong comeback, driven in particular by South America,” Rystad Energy said.

Rystad Energy is not alone in their belief of the ongoing growth of the FPSO market. A separate report conducted by Wood and Offshore magazine also highlighted various reasons for the turnaround such as increased oil prices, new design concepts, fabrication and integration innovations at global shipyards, creative financing options, and industry partnerships

are all factors that are contributing to this projected upswing in activity.

“The momentum has already begun, with newly sanctioned projects on the rise. Cyclical and structural market changes are finally coming together to move major projects forward,” said Wood and Offshore magazine.

Another study by Market Research and strategy consulting firm Global Market Insights predicted that the FPSO market will surpass $30 billion by 2025 as global market is set to witness vigorous growth on account of shifting trends toward offshore exploration & production driven by depleting onshore oil & gas reserves.

“Development challenges including excessive costs, material transportation, environmental conditions

and decommissioning associated with fixed infrastructures will further shift the industry focus toward the utilization of these vessels as an alternative,” study by Global Market Insights published in January 2019 said.

“Furthermore, advancement in subsea technologies along with growing focus toward fast-track floating solutions will continue to stimulate the industry growth.”

Sources in the global oil and gas sector believes the global search for new sources of oil and gas is spreading to new areas, with operations shifting offshore to deeper waters, smaller fields and more difficult locations a situation which companies will be attempting to maximize their revenue from, as more attention will be turning to the benefits of FPSOs. For example, ExxonMobil discoveries in a country in South America’s north coast called Guyana are considered good news for suppliers and builders of floating production units, as there is potential for at least five FPSOs to be deployed at the Stabroek Block, expected to produce more than 750,000 barrels of oil per day by 2025 while first production is expected in March 2020.

Furthermore, the U.S. major’s Liza Phase 1 development is expected to begin producing up to 120,000 barrels of oil per day in early 2020, utilizing the Liza Destiny FPSO which is set to begin its journey to

Guyana in the summer while Liza Phase 2, expected to start up by mid-2022, will use a second FPSO designed to produce up to 220,000 barrels per day. SBM Offshore is expected to land this FPSO contract.

Also, during 2018 summer, Equinor said Brazil had become a core area for the company with a daily production from the company’s current fields of over 90,000 barrels per day. At that time, Equinor revealed plans to invest more than $15 billion in Brazil until 2030. According to the company, the field has the potential to produce between 300,000 and 500,000 barrels of oil equivalent per day in Brazil depending on phasing of projects and exploration success.

In December 2018, Brazil’s national oil company Petrobras recently showed its intent for further investments in FPSO units as the oil major decided to set aside $84 billion to spend between 2019 and 2023.

Two months ago, world’s largest FPSO supplier SBM Offshore ordered two Fast4Ward FPSO hulls with plans to order a third soon. One is ordered for the Exxon’s Liza 2 project while the order of the other one was based on increased confidence in the market.

SBM Offshore recently said the company was tracking 45 potential FPSO projects in 25 countries, which could materialize in the coming two to three years.

Market

Angola’s Sonangol Q1 2019 result shows what to expect from Nigeria’s NNPC DIPO OLADEHINDE

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n g o l a’s S t a t e - o w n e d o i l company Sonangol has announced that it generated $2.8 billion with the sale of 45.1 million barrels in the first quarter of 2019 giving a clue to what stakeholders and industry experts should expect from the company’s Nigerian counterpart, Nigeria National Petroleum Corporation (NNPC).

With oil averaging about $63 in Q1 2019, financial performance of Sonangol is expected to give insight to what to expect from Nigeria’s NNPC who have repeatedly failed to meet projected profits as its subsidiaries, particularly refineries, running cost at the headquarters and other arms are always left with whopping deficits.

According to data released by Sonangol’s chairperson of executive committee for International Marketing Luis Manuel due to decrease in average Brent price to $63 in Q1 2019, Sonangol generated $2.8 billion which implies there was a decline in revenue by $211.2 million compared to the same period of 2018.

In Q1 2019, Angola exported crude oil to 12 countries compared to 10 countries in Q4 2018 with China being the biggest buyer of 55.87 percent as compared to 71.28 percent in 2018, followed by India with 15.70 percent against 10.23 percent.

Also, in Q1 2019 Spain bought 7.5

percent of Angola’s crude oil compared to 2.16 percent in 2018, South Africa, United States, South Korea bought 2 percent, 1.96 percent, 1.95 percent respectively while France, Italy, Israel and Uruguay bought less than two percent.

Sonangol has also announce plans to intensify its efforts to focus on its core business by divesting from 52joint ventures and also reducing staff strength, in a bid to lure investment back to its oil and gas sector.

“We are going to sell, close or put out of our group a lot companies,” Carlos Saturnino Chairman of Sonangol told an oil conference in Paris. “Last year, we identified 52 joint ventures in which we want to sell our equity.”

“Instead of investing in Australia, United States etc, Sonangol wants to become an oil company of reference in the African continent. This is major change for us,” he said, adding the objective was to make Sonangol more robust and agile.

Production has been in steep decline due to maturing fields and lack of investments, which Saturnino also attributed to lack of efficiency in decision-making by the previous administration.

With international Brent crude currently trading near $75, which comes as good news for state owned corporation ranging from Angola, www.businessday.ng

China, Brazil, Russia, Norway and other countries as it signifies increase in revenue for oil producing countries however, regrettable Nigeria’s NNPC may not benefit from this largesse.

The news of rallying oil prices is even cheerier for Organization Petroleum Exporting Countries (OPEC) members who have had to bear the brunt of oil production cut in the past in a bid to rally up prices.

But, while countries with higher refining capacity may reap the gains of increased oil prices, same could not be said of Nigeria as the country is heavily dependent on imported petroleum products due to the poor state of the its refineries.

With such level of dependence

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on imported petroleum products, the gain that ought to have accrued to Nigeria is subsequently ploughed back into the payment of subsidies or what government has recently termed under-recovery.

When Brent crude averaged $71.19 per barrel in 2018; BusinessDay analysis of NNPC’s full-year 2018 report shows between January and December 2018, Africa’s biggest oil producing country spent N730.9 billion on under-recovery, popularly called subsidy, while N140.6 billion was also spent on old, perennial problems such as pipeline repairs and management cost.

Figures from the corporation’s operations and financial report for 2018 actual show gains of N393.5 bil@Businessdayng

lion made by its upstream and gasprocessing subsidiaries – Nigerian Petroleum Development Company (NPDC), Integrated Data Service Limited (IDSL), National Engineering and Technical Company Limited (NETCO), Nigerian Gas Company Limited (NGC), and Nigerian Gas Marketing Company (NGMC) – were wiped off largely by its downstream subsidiary operations which recorded deficits north of N351.7 billion.

“If we do not kill NNPC, NNPC will kill Nigeria,” Nasir El-Rufai said at the 2015 Wole Soyinka Media lecture series. “Any organization that takes 50 percent of federation revenue for itself and gives you the change has no right to exist. It is evil, it must die; it is just the manner of the death that we must talk about.”

For some strange reasons, no Nigerian president has been courageous enough to sign into a bill called Petroleum Industry Bill (PIB) which could have allow all this NNPC subsidiaries run efficiently.

To remove all the stumbling blocks against the bill, the National Assembly decided to disaggregate the bill into four parts: The Petroleum Industry Governance Bill (PIGB), the Petroleum Industry Fiscal Bill, the Petroleum Industry Administrative Bill, and the Petroleum Industry Host and Impacted Community Development Bill.

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Tuesday 30 April 2019

BUSINESS DAY

OFFGRID BUSINESS COMPANY

ColdHubs’ cooling vans to cut food waste by moving produce from farm to markets ISAAC ANYAOGU

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fter deploring five of its innovative solar walk in cold rooms in markets around Nigeria, and plans to deplore 35 others, ColdHubs, a social enterprise that designs, assembles, installs and commissions 100% solar powered walk-in cold rooms in markets and farm locations, to store and preserve perishable foods 24/7, has procured cooling vans to move produce from farms to markets across Nigeria.

“The second part of our development phase is cold logistics to bring food in a safe and hygienic way from the north down to the south of Nigeria and to take apples and grapes imported from South Africa from the South into the northern part of Nigeria,” Nnaemeka Ikegwuonu, CEO of ColdHubs told BusinessDay in Owerri.

ColdHubs recently received support, from the Global Alliance for Improved Nutrition (GAIN) Post-Harvest Loss for Improved Nutrition (PLAN) Project, for a small cooling van. As a pilot pro-

ject, ColdHubs wants to deploy the cooling van to support a perishable food aggregator to convey food from the north to southern parts of Nigeria.

This plans is however constrained by a difficult operating environment in Nigeria, Ikegwuonu said.

“I have been doing a scoping mission over the last two years looking at that sector, from Kano

to Owerri, there are more than 30 checkpoints of touts, revenue collectors, local government collectors, police, soldiers, civil defence, road safety, agricultural quarantine service, community youths - its like everybody is against the business man, these are the challenges we fail and why it is very difficult to do business in Nigeria,” Ikegwuonu said.

ColdHubs effectively commenced operation in 2015 after starting off as a small holder foundation for farmers in the Imo state which organises radio talks to broadcast information on agriculture commodity pricing and improved farming practices part of the founder’s work as a consultant.

It was in the course of these engagements with farmers and other

stakeholders that he discovered a critical problem of food waste and post harvest loss.

“Once cabbage is harvested with so much glut, those who cannot transport it dump it in the market, the cost of bringing back is more expensive and you cannot sell to make profit,” Ikegwuonu said.

As a result, “We decided to use solar from day one to achieve non reliance on grid and diesel generators. We are advocates of the green movement and environmentally conscious hence need for a technology that will achieve this goal,” Ikegwuonu said.

This led to the development of a solar powered cold room in 2015 with a pay as you store pricing strategy. The first cold room was launched in December 2016 and became operational in March 2017. It has the capacity to hold 150 crates and customers are charged N100 per day.

The company has deplored five operational cold hubs, three in Imo state, two in Kano and is building a set of 35 at the moment supported by grants from organisation such as All On and USAID.

MARKET

Five solar power trends to watch out for in 2019

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ccording to the electricity forecast prepared by the International Energy Agency (IEA), by the year 2022, the capacity for renewable electricity will increase by 43 percent, grow by over 920GW. New energy startups are also emerging on a daily basis. With various energy projects in place, the generation and implementation of solar power have already increased significantly in the last year.

There are two types of solar technologies usually used: concentrated solar power (CSP) and photovoltaics (PV). PV solar technology uses sunlight to generate electricity whereas CSP uses the heat of the sun to generate thermal energy that heaters and turbine can utilize. Other technological advancements in the field of electricity generation will allow the solar power sector to grow further.

Here are some of the solar power trends to watch out for this year: 1. Solar power energy costs will further decrease Customers are now more attracted to solar energy because now they can get this technology at affordable rates. Since the year 2009, prices for PV solar technology have decreased 62 percent and these price reductions will continue in this year. With increasing competition, companies have to reduce their prices in order to stay in the market. Meanwhile, developing countries like China and India are leading innovations in the solar industry, furthering improve-

ments at a lower cost.

2. The capacity for global solar power will increase Solar PV is, by far, the cleanest and the most reliable source of energy. It is in its maturity stage and is easy to implement at lower a cost than other technologies. Thanks to this, in 2019, the capacity for global solar energy is expected to increase further by 107 GW. Several companies are also incorporating the use of the internet of things (IoT) in solar energy usage in order to mitigate any risks.

An active internet connection helps organizations meet the demands of the customers more effectively and efficiently. Furthermore, it addresses

the challenge of asset management and maintains a well-balanced load on the utility grid.

3. Companies will increase the use of solar power Many businesses find solar power technology to be more economical and easy to operate. With the latest technological solar equipment, businesses can get a competitive edge over others, especially in terms of cost management, cost-cutting, and price reductions. Various companies around the globe already have implementation targets for solar power in order to perform better in the market.

U.S. businesses are also investing in solar power to keep the environ-

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

ment safe and clean, especially for future generations. Apple’s new facility in California uses clean energy to keep the nearby communities free from pollution.

4. Solar power energy will produce more jobs According to the International Renewable Energy Agency (IREA), the renewable power sector employs around 9.8 million employees globally each year. Jobs like technicians for the wind turbines, PV installation experts, and solar power professionals are already in high demand.

Currently, companies are in need of professionals in the sector. A manpower shortage in this area can have a

bad impact on the implementation of solar power in corporations so many businesses are seeking professionals who can handle solar power related tasks effectively and efficiently.

5. The competition for energy storage will increase Investing and developing solar power also involves energy storage. Countries like China, Sweden, Poland, the UK, and Germany are putting money into energy storing technologies to enhance their productivity.

Tesla is one company that has invested heavily in this technology. It is set to complete its lithium battery factory, which is set to be the world’s largest battery factory.

Energy storage, however, is not limited to lithium batteries. Technologies like water batteries, solidstate batteries, and hydrogen fuel cell are also becoming increasingly popular due to their large capacity and reliability when electricity is not available.

China, Australia, Sweden, India, and the United Kingdom are taking huge steps implementation of solar energy to thwart a looming energy crisis. In particular, China ranks top in the list of greenhouse gas emitters and is consistently promoting the use of solar energy to address this. All of these countries have also agreed to phase out fossil fuels and to use renewable energy to reduce harm to the environment.

Feedback: 07037817378, 08137433034, 08135447789

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

Tuesday 30 April 2019

BUSINESS DAY

BDTECH

29

In association with

E-mail: jumoke.akiyode@businessdayonline.com

Verraki to solve Africa’s problems with business solutions across key economic sectors Toluleke Adenmosun is a partner, services at Verraki Partners, a new business and technology solutions firm formed by the former leadership of Accenture Nigeria and other corporate professionals. In this interview with Jumoke Lawanson, Adenmosun who used to be the managing director, financial services for Accenture Nigeria, talks about the decision to create Verraki as an independent entity for the purpose of providing business solutions uniquely tailored to solve Africa’s problems. Excepts.

What exactly do you mean when you say Accenture is not transformed and has not been taken over by Verraki? Does this mean that the company still retains the same management and operations? ccenture is a global firm operating in multiple countries including Nigeria. Accenture Nigeria continues to be a legal entity and its operations, up until 31st of March 2019 had leadership that included three managing directors, Niyi Yusuf, Niyi Tayo and Toluwaleke Adenmosun. Accenture has re-organised its business in Nigeria to continue to be a legal entity but not an operating entity in Nigeria. Verraki is an independent entity established by those former leaders of Accenture Nigeria, as well as other people who were previously in Accenture Nigeria and through partnership, we have established Verraki as a new business that we own.

Why has Verraki made the decision to focus and invest more in start-ups and ventures?

When you look at where things have been done, and one of our advisors always says that Africa is a continent that has not yet been built. Every single gap we see in this continent is because a solution has not been provided. So when you have an organisation that says ‘we do not do reports, we create and deliver solutions,’ that means that we must have the ability to go from just the idea and the intention to creating the organisations that actually achieve those results, and sometimes, the way to do it, is enabling the capacity, providing the capital, enabling the talent to build, operate and deliver those solutions.

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Could you please talk about the rationale behind the creation of Verraki, why the transitioning and why did it become important to restructure for Nigeria and Africa?

Accenture like any other business organisation reviews its operations periodically, and over time, it reviewed its business and presence across different countries and made strategic decisions about how to operate in each country and each geography. So, Accenture took a decision in consultation with the former leadership of Accenture Nigeria, to re-organise its presence, to remain a legal entity in Nigeria but not an operating entity.

Organisations make decisions based on the competitive terrain, areas of competitive advantage, on the local regulation and several things. Accenture looked at what is required to be competitive and to position to be impactful. Verraki is right now a Nigerian company, but our intention is to be an African organisation.

Toluleke Adenmosun

What are the specific industries that will be targeted for reform by Verraki in its bid to provide business solutions and ultimately transform Africa’s economy for good?

What we have done is that we have identified the largest and fastest growing sectors of the economy, sectors like Agriculture, Media, Health, Education, basically the five sectors that are more than 10 percent in terms of quantum. The fastest growing sectors of the economy are banking, oil and gas, utility and fast moving consumable items. I am focused mainly on services, so my scope of interest is around the invisibles. What we have done is that we have organised the business into invisibles – intangible services such as financial services, banking, insurance, investments and wealth management, telecommunications and media, and visible which is called the real sector – fast moving consumables, manufacturing, utilities, extractive industries etc. and then, there is the social sector, which is government and its parastatals, as well as non-government agencies such as health and education.

For Verraki, the mind-set is that we are in the most exciting time in the

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evolution of the economic development. Right now, we are in the intelligent economy that converges all the opportunities in digital, data, analytics and intelligence to create new ways of doing things. There might have been a way things were done in the past, but innovation is about taking all the opportunities around connectivity and data to identify the problems that need to be solved, and looking for new ways to solve those problems in a way that is unique to Africa. Verraki is poised to create solutions that focus on the right things and doing it in a productive manner to enable organisations to be efficient and effective in providing and delivering solutions.

Since Verraki is a local business, are you planning to set up shop in other parts of Nigeria apart from Lagos?

The beauty of technology is that it allows you to be ubiquitous. We are thinking through new ways of doing things, so where we need to be physically present, we will be there, however, where we don’t need to be physically present, we would not be there but we would be able to fully operate everywhere because of technology.

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Accenture took time to study trends, carry out research and release industry based reports. However, Verraki says it is not about reports.

Does this mean there will be no progress reports on the impact of start-up investments, technology and your solutions for business and economic development?

Those Accenture research and analytics on artificial intelligence and technology were rarely based on Africa and its markets. Secondly, we need to ask how many of those reports have actually been delivered to solutions for Africa. So, when we say we are not about reports, it is not that we would not do the research or have those insights, but that the value will not be achieved until we have turned those reports and analysis to actual results. When we talk about Nigeria, everybody on the street has an idea about what needs to be done to solve Nigeria’s problems, and there have been several committees and several reports on several issues, but reports do not solve problems. It is actually actions that solve problems. Our focus is that we work with enterprises and governments that don’t just want reports, but want the actions based on

@Businessdayng

already existing reports because that is exactly what delivers results. We will work with enterprises and government to create solutions.

What exactly is Verraki planning to do for Nigeria’s start-up community.

How many start-ups are you looking to work with and how would you identify these problem solving start-ups?

Our focus is actually not to raise capital for these start-ups. It is enabling the start-ups by providing talent, building capacity, helping them by connecting them and providing capital as needed.

In Nigeria, we think that solutions are solved by throwing money at it, but that’s not true. Capital is not what startups need. Fundamentally, they need to know what to do, and how to do it.

We will work with them to improve and refine their ideas and validate and build their ideas. We will identify viable ideas. The advantage that Verraki has, being a local company, is that we can choose the most impactful areas, create a list and prioritise. So, any ideas that meet the criteria and fulfils that will be supported. We would have both internally and external ideas from local hubs and individuals from across the network. We would work with our clients, hubs, accelerators, individuals and organisations for innovative ideas for problem solving.

What are your future projections for Verraki?

With Verraki, we see a transformed Africa that is a more improved place to live and work. We see a narrative for Africa and we see Verraki as part of that narrative. This is about transforming the African continent, so it’s not about us, it is about us working with other African enterprises and governments to identify areas that there are needs, and working with them to build and implement solutions to those areas. So we see transformations in the education sector, financial services availability, in financial inclusion and health inclusion.

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Tuesday 30 April 2019

BUSINESS DAY

BDTECH

E-mail: jumoke.akiyode@businessdayonline.com

Mastercard introduces partnership opportunities to fintech innovators in Nigeria, Kenya Stories by JUMOKE AKIYODE-LAWANSON

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hrough expansion of its Engage partnership platform, Mastercard, a multinational financial services corporation is creating a connection platform for local financial technology (fintech) innovators in Nigeria and Kenya to access broad technical support and partnership opportunities available to boost Africa’s payment innovation.

Mastercard Engage, recently launched to fintechs in Nairobi and Lagos, is a global partnership and development program that builds digital payment technology ecosystems and enhances speed to market. The program connects financial institutions, merchants and IoT manufacturers with the right technology partners that can help them deliver innovative payment solutions, for businesses and

L-R: Gbenga Adebayo; chairman, Association of Licensed Telecoms Operators of Nigeria (ALTON), Olusola Teniola; president, Association of Telecoms Companies of Nigeria (ATCON), Godfrey Efeurhobo; managing director, Smile Nigeria, Victor Inyang; CEO, Yfree Solutions Ltd, and Abdul Hafeez; chief marketing officer, Smile Nigeria, at the launch of international data roaming service by Smile in Lagos recently.

consumers alike.

Since its launch in February 2017, the platform has tripled the number of fintech partners. The capabilities of these partners include deploying digital wallets, enabling tokenisation, facilitating instant payouts and launching mo-

bile point of sale solutions, among others.

Omokehinde Adebanjo, area business head , Mastercard West Africa said; “At Mastercard, we believe partnerships – particularly with regional fintechs with a deep understanding of the local environment –

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mile communications Nigeria has assured its customers of the security and safety of connectivity on its network.

Acknowledging that some of its customers devices were affected by malware believed to have been instigated by Jisatsu, Smile Nigeria noted that the bulk of customers on its network

were unaffected by the malware as a result of its timely identification of the malware activities through its firewall.

Smile Nigeria nonetheless says it regrets any inconvenience caused by the incident over the weekend and advised customers that have noticed any service disruption to contact the nearest Smile shop or call the call Centre for prompt attention and solution.

In a statement, the com-

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the most innovative payment solutions for businesses and consumers.”

Mastercard Engage addresses three key challenges: the need for payment solution providers to constantly evolve their offerings; the growing pressure for financial services or-

Inlaks graduates 57 ATM engineers in free training program

Smile’s timely intervention halts spread of malware attack on network Jumoke Akiyode-Lawasnson

are crucial for ongoing innovation that delivers relevant payment solutions to empower communities.

Engage connects financial institutions and merchants with technology partners within a broad innovation ecosystem, helping companies create and launch

ganisations to harness digital innovation to offer secure, compliant solutions; and the need for advanced, convenient financial solutions to empower business and consumers.

Mastercard Engage uses a publically available website to help issuers and merchants find the right solutions, such as digital wallets, mobile POS, tokenised payment services, security solutions, and payment controls solutions, and identify qualified technology partners who can help them build those solutions in their markets.

These fully vetted, experienced companies offer interoperable solutions that meet industry and Mastercard standards and are able to evolve with Mastercard as the payment ecosystem continues to innovate. Use cases range from contactless payments, NFC wallets on wearable devices and secure card-on-file e-commerce, through to mobile POS and advanced commercial payment solutions.

pany reassured its teeming customers that it has always adopted the best technologies in enhancing its network infrastructure so as to withstand any attack.

The quick response from Smile and its willingness to support customers on its network who experienced service disruption due to the malware has received commendation from industry analysts.

Funsho Akomde, secretary of Business Renaissance Group (BRG), commended Smile for its swift response and willingness to stand by its customers at all times.

In a similar view, Smart Egbuchalam, president of The Telecoms Collective, noted that the robustness of the cutting edge technologies deployed by Smile ensures for its unmatched data quality, voice clarity and overall network integrity. He however, advised the company to always be wary of the antics of hackers who have insatiable appetite for destruction.

Jumoke Akiyode-Lawanson

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ith the objective to build the capacity of Nigeria’s unemployed population, Inlaks, ICT infrastructure solutions provider embarked on the Inlaks ATM Academy, a Corporate Social Responsibility (CSR) platform, and has recently completed its third edition, graduating a total of 57 Automated Teller Machine (ATM) engineers since it started in 2016.

The six month long program seeks to train technically-inclined graduates, giving them a complete knowledge of the rudiments of an Automated Teller Machine (ATM) service for the purpose of building a team of ATM experienced engineers who are well qualified for recruitment within Inlaks, locally and internationally. The curriculum of the program also involves customer management, store and inventory management, logistic operation, power system engineering and Printed Circuit Board (PCB) technology.

The Inlaks ATM Academy which is free of charge has

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efficiently graduated 57 students till date with 16 trainees from ATM Academy 3.0 being given an intensive and practical-based ATM training and eventually being inducted as ATM support staff in this leading ICT company.

Femi Adeoti, MD/CEO Africa operations, Inlaks expressed his pleasure at the successful completion of ATM Academy 3.0 while applauding the team for delivering a world-class training and congratulating the team on their new roles as the ATM Feeder Team.

Tope Dare, executive director, infrastructure business at Inlaks shed more light on the weighty significance of the program, saying that; “Unlike most things that can be searched out on the internet, adequate knowledge of Automated Teller Machine services will require a deliberate training to gain the status of an ATM engineer. It is a great opportunity for the selected candidates as the ATM training comes with a job opportunity.”

Inlaks, a partner of Hyosung TNS, a global leader in ATM manufacturing services is known for supplying, installing and maintaining @Businessdayng

over 6000 ATM’s within Nigeria and Africa. It is therefore needful to properly groom a well versed team capable of handling the ever evolving nature of the ATM industry and improve the company’s capacity to service its present and prospective customers.

Applicants to the Academy are required to hold an Ordinary National Diploma (OND) in Engineering or Physics as well as scale other assessment stages to be qualified.

Inlaks is a leading system integrator in Sub-Saharan Africa. The company partners leading OEMs in the technology industry to provide worldclass information technology solutions that exceed the needs of its customers.

Over the years, Inlaks has built a reputation as the foremost ICT and Infrastructure Solutions Provider, helping customers effectively seize new market and service opportunities.

With an impressive customer base that includes six Central Banks in West Africa, 18 of the 24 banks in Nigeria and other major customers in the West African region, Inlaks has become a well known Information Technology Company in Africa.

Tuesday 30 April 2019

BUSINESS DAY

31

Markets + Finance

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

CCNN Plc: Operating efficiency bolsters profit margin BALA AUGIE

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Historical Background ement Company of Northern Nigeria (CCNN or the company) started operations in the 1960s, with federal government as the major investors.

The company was listed on the Nigerian Stock Exchange in 1993 and the FG soon fully divested to a private investors in 2000. The company is the only cement company in the North West.

The total installed capacity of the company was 500,000 Mt/a and the plant ran at almost full capacity of 92.30 percent between 2016 and 2017.

But in 2017, the company entered into a merger with Kalambaina Cement with a capacity of 1.5 Mt/a, owned

by BUA, the majority shareholder in CCNN via stake in Damnaz Cement Company Limited (50.70 perent). This brings the total installed capacity of the company 2.0 Mt/a.

Analysts are optimistic that the merger will spur the cement company to growth while shareholders wealth will be maximized.

Operational Strategy and Outlook

Abdul samad Rabiu Chairman/CEO, CCNN

Following the merger of CCCN and Kalambaina Cement that saw total capacity surge to 2.0 Mt/a, the company’s shares outstanding now stands at 13.10 million shares, from 1.30 million shares previously held. If the new shares are multiplied by N17 market price as at Friday, the new market value of the cement maker will be N223.14 billion, this compares with N22.10 billion pre merger.

The upside of the marriage cannot be overemphasized as it would underpin operating efficiency, as the company had migrated from the use of LPFO that was very expensive and

susceptible to disruptions, to coal, a strategic plan that is responsible for lower costs and strong margins.

Financial performance for q1 For the first three months through March 2019, CCNN’s revenue surged by 213.17 percent to N16.88 billion from N5.39 billion as at march 2018, the highest revenue in the firm’s history.

The growth at the top line (revenue) was driven by price adjustment in the aftermath of the recession. Also, the company was able to leverage on the country’s infrastructure deficit to grow volumes, underpin earnings and magnify shareholders’ wealth.

In the past four years, CCNN has been spending less on input cost to produce each unit of products as cost of sales ratio fell to 54.45 percent in March 2019 from 58 percent in the corresponding period of 2018, and 62.50 percent in 2017.

Expectedly, gross profit followed the same growth trajectory as it moved to 45.50 percent in March 2019 from 42 percent in 2018, 37.50 percent in 2017, and 22.60 percent in 2016.

The improvement in operating performance is due to the new cement plant for which energy costs is cheaper due to coal usage.

Gross profit surged by 239.82 percent to N7.68 billion as at March 2019 from a year ago; which means the cement maker has minimized direct cost attributable to projects.

In the last five years, CCNN’s profit has been growing steadily although there were periods in which the bottom line slowed. Between 2015 and 2016,profit after tax fell to N632.04 million to N242.52 million, but profit began to rise after the country existed a recession brought on by lower crude price that stoked a severe dollar scarcity.

For the first three months through March 2019, profit after tax surged by 236.11 percent to N6.36 billion, as against N1.08 billion the previous year.

CCNN has been able to turn each Naira invested in sales into higher profit as net

margin increased to 21.50 percent in March 2019 from 20.10 percent in March 2018, 11.80 percent in 2017, and 6.80 percent in 2016.

Prex tax margin also followed the same growth trajectory as it increased to 31.70 percent in March 2019, from 27.90 percent in 2018, 15.70 percent in 2017, and 9.40 percent in 2016.

Operating profit margin, otherwise known as EBIT increased to 31.90 percent in March 2019 from 26.30 percent in March 2018, 16.40 percent in 2017, and 10.60 percent in 2016.

CCNN is utilizing shareholders’ equipment to generate higher sales. Its fixed asset turnover increased to 7.74 times in the period under review from 2.54 times as at March 2018.

The cement maker is liquid and it can easily pay off its current liabilities. Current ratio improved to 1.5 7 times in March 2018 from 1.50 times the previous year. A current ratio of 1.57 times means that CCNN has 1.57 more current assets than current liabilities. But the firm will have to strengthen its debtor collection strategy if it wants to further bolster liquidity and magnify revenue as trade receivables surged by 191.33 percent to N11.77 billion in March 2019 from N4.04 billion as at March 2018.

CCNN has reduced debt in its capital structure as total debt (long and short term) fell by 33.90 percent to N348.61 billion in March 2019 from N52.43 billion the previous year.

CCNN has enough cash to pay debts, reward shareholders in form of dividend, and fund future expansion plans as net cash flow from operating activities surged by 1,881 percent to N7.31 billion a year ago.

Shareholders and investors of the Northern cement giant will continue to drink ale poured from a flagon into a golden goblet. This is because the company’s strong working capital position, consistent earnings growth, solid margins means it has the financial strength to tap into the country’s huge infrastructure deficit.

BD MARKETS + FINANCE Analysts: BALA AUGIE www.businessday.ng

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Tuesday 30 April 2019

BUSINESS DAY

INTERVIEW

‘Nigeria needs to open its doors to outside world to jump-start the economy’ The lack of quality political leadership with good policies and right vision has always been blamed for the slow growth of the Nigerian economy.

In this interview, PAUL ONWUANIBE, CEO, Landmark Group, takes a hard look at the economy, saying that for the country to jump-start its economy, it needs to open its doors to the outside world. He points out, however, that for the outside world to come in, the environment needs to be friendlier and more transparent; the country’s tax system needs to be more transparent and less punitive. He also speaks about the Landmark Village—West Africa’s one-stop-shop for business, lifestyle and leisure. He spoke with CHUKA UROKO, Property Editor. Excerpts: Many people who walk through this axis on a daily basis may not know exactly why Landmark is a village and not an estate as they are used to. What makes this place what it is? andmark Village is a onestop shop live, work and play destination. The main theme of this development is business, leisure and lifestyle where you can come, conduct your business, and experience leisure and lifestyle. The products and services we have on offer here include residences, hotel, offices, retail where we have a new retail boulevard. We have shops not just for goods but also for convenience and apparels. There is a department store here and a family entertainment centre with an arcade. It crosses over all demographics starting from the age of four to 100 who can find his way to this place.

There is a five-screen cinema here which is the first 4D screen that will be in operation in one of Africa’s coastlines and will be managed by a film-house. All sorts of organisations will be coming here, including KFC, Chamberland, Rolex and an ice-cream factory. There will be all sorts of organisations that will be here to provide services like Hardrock and Shiroh.

There is an event centre here and there we have weddings, exhibitions, conferences, corporate affairs, parties and events like basketball, boxing competition like we had last Christmas. This, in itself, provides spread in activities not just weddings and parties.

The last two years have been quite difficult for those in financial services because of the challenges in the economy. Some of them have been squeezed down; some have even left the country and that has reduced their head count.

This has had impact on real estate because some of the spaces that would have been leased are empty, meaning that one has to find a way to ensure that they are occupied. This is part of the challenges we have in the market.

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You said that beyond business, this place is also for lifestyle and leisure.

Tell us about that.

We have developed our lifestyle and leisure elements to a great extent. An ocean front beach has been developed here with restaurants, bush bars, children’s playground, love garden, minigolf, etc. Usually, 1000-2000 people come to this place every weekend to have fun. It is a family affair where fathers, mothers, children and their grannies come to spend upwards of six hours and go home. People also come to play football on the football pitch here. It is always a good entertainment and the tournament we had here last Christmas was watched by over 150 people. Nigerians from outside the country also come here to have fun and leave quite delighted, wondering that such a place exists in Nigeria.

We believe that what we are trying to do here, from a leisure perspective, impacts positively on the tourism industry too. If we have to talk of the potential of what we are doing along the coastline here, if the enabling environment was provided, we would be big in service offering, not just in Lagos

Paul Onwuanibe

State but to the country in general in terms of investment which is not always physical in nature. This is helping to bring the Diaspora Nigerians home to see how Nigeria is developing.

In the past, everything one needed to do was to go to a restaurant or bar for social interaction. But now, there is so much more offering like boat-carting, beach lounging, mini-golf, volley ball, etc. This obtains in many parts of Lagos and these leisure and entertainment bring many people home.

Talking about the investment potential of the tourism sector, what do you think is the value of Diaspora Nigerians’ spending on yearly basis?

There is a statistics which reveals that the Diaspora spend $20 billion a year including their remittances and lifestyle. A substantial part of this amount is spent in Nigeria. This money is spent on sending parents for medical treatment abroad, sending children to school or building houses in the village. What we need is to get this into the commercial economy. This money it better used in goods and services that are provided within the country. It is things like this that bring the Diaspora back home.

Some of the people who come to our hotel here are first timers to the country. They don’t believe that there are things like this in the country and they are prepared to come and come again. So, in our own little way, we are helping to promote the image and economy of the country. The business environment is becoming a little bit friendly and we can only hope it becomes a lot better. We hope too that the incoming government will continue to promote the business environment.

What do you do differently here that www.businessday.ng

makes Landmark Village a preferred business or leisure destination?

Because we are a one-stop shop, when you come here, you don’t have to go anywhere else for anything until you leave the village or the country as a whole. We have shops, a medical centre, leisure and sports centre, a spa, a gym, bar, offices, a restaurant, a hotel, an event centre, a swimming pool, serviced offices, a beach, a cycling area, a boating area. From the live, work and play perspective, there is actually everything here.

Our unique selling point is that we believe we are Africa’s number one destination in the West African coast, in terms of business, leisure and lifestyle. Till date, there is nothing like that elsewhere in West Africa, but it is my hope and prayer that more of what we have come on stream in other parts of the country or even within Lagos and other cities of the country.

We should not be talking about competition but how to increase service offering and make sure it is accessible and affordable to everybody including students, workers, executives and other age and income groups.

Our beach is more or less free but you have to register to come in. You can also come into our shopping centre, look around and walk away.

For a village as large and diverse as this, the tenant mix must be diverse too. Who are your tenants?

We have all sorts of tenants ranging from the smaller local tenants to largest financial companies. We have here PWD, Sonny, Google, Botsch and many others. We have spread and a good mix of foreign and local tenants here. There is also a good mix of service offering from consultancy to IT, financial, industrial, manufacturing, etc.

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That is a macro-economic issue that needs to be addressed quickly.

What do you want the managers of the economy to do for us to get out of here?

The biggest thing Nigeria needs to do to jump-start the economy is to open its doors to the outside world but the environment needs to be friendlier and more transparent. The country’s tax system needs to be more transparent and less punitive. Taxes are too expensive.

A lot of investible funds are out there wanting to come into the country but they won’t come in unless there is a change. There is over $2billion to $3billion out there waiting to see that there is improvement in the country’s business environment before it can walk in.

Some quality discussions one has had in the last 6-8 weeks show that everybody is looking to see how things get better and easier. We are looking at $2-3 billion investment that is waiting to come into Lagos State alone.

How much impact do you think investment of that amount of money will have on the economy?

In real estate, that will make a huge difference. It is estimated that every one square metre space of construction creates employment for three people.

So, when there is a real estate activity on 1,000 square metres of real estate, 3,000 jobs are created. The Landmark Village sits on 50,000 square metres of land. So you can imagine the number of jobs this place can create in a threeto four-year cycle.

If you have a billion dollars, you can build 200 housing units. Those who are employed will be spending money they earn in the economy and the economy will be growing. Again, the multiplier effect of such jobs created on family and friends, environment and the economy is always huge.

It is understandable that the government here is still emerging and so needs money upfront, but it is important not to kill the future by over-taxing and punishing businesses.

Still on Landmark Village. Besides pricing, which is critical, what drives traffic into this village and what does @Businessdayng

it cost to be here?

Yes, pricing is one of the things that drive traffic here, but it is important to note that the level of service, quality of environment and the options you have to offer are key. This is because what caused a client to come in will also cause him/her to stay and to come again.

You can go into the shopping centres not to buy anything. But you can spend an hour or two, just walking around and feeding your eyes and thinking of how to make more money to be able to buy one or two things on your next visit.

Here, because we are a service community, we have to provide services. It does not cost you anything to walk through the gate, get to the beach, lie down and get some sand, listen to the music and go away from there.

Does that apply to every other service you render here? Tell us about other services If you want to watch movies, it will cost you N1,500 for two hours. If you eat a burger, depending on where you want to eat it, it will cost you about N6,000 in the Hardrock; N2,000 at the beach and about N500 off the beach. If you are staying in a hotel here, it costs N30,000 for a room and N60,000 for a bigger room.

If you are coming for a music show, some of them are priced, some others are free and sponsored. It costs between N2,000 and N30,000 to get in for a music show depending on what the sponsors have to showcase. At the Hardrock and Shiroh, many of the shows they do there are free, but they expect you to buy drinks and suya at the centre. In terms of offices, one can rent a space for N150,000 per month.

But if you are renting for a longer period, say a year, the price is much higher because it is measured in terms of per square metre.

There are opportunities, but the opportunity of a lifetime can only be realized within the lifetime of that opportunity. Some people will tell you they will come back when there is opportunity, but by the time they comes back, that opportunity must have gone.

So, once you see an opportunity, just go for it because the time you see an opportunity is the lifetime of that opportunity, meaning that opportunity has very short lifespan.

In Lagos, we have opportunity of a lifetime because the demographics, growing middle class, consumer finance is getting better even though it is not where it is supposed to be.

This is the time for the government to improve on all growth drivers including the quality of roads infrastructure.

There is opportunity now and we need to take it within its lifetime.

Tuesday 30 April 2019

BUSINESS DAY

Solid Minerals business Expert laments as Nigerian geoscience professionals not recognised globally JOSEPH MAURICE OGU

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ining reports made by the Nigerian professional geoscientists are not given global recognition by financial institutions for funding.

This position was made known by Gbenga Okunlola, a professor of geology at the University of Ibadan and a fellow of Nigerian Mining and Geosciences Society (NMGS).

According to Okunlola, geoscience reports on minerals in Nigeria are usually not acceptable by financial institutions and mining consultants in Europe and America, a situation which he described as embarrassing.

“Only a handful of professionals in Nigeria can successfully write reports that could be considered for funding in the mining industry by foreign stock exchanges such as Canadian, Australian, Johannesburg stock exchanges,” Okunlola noted.

He said such rejection comes because nearly all the geoscientists in Nigeria do not belong to the internationally recognised regulatory organisations.

“They (foreign stock exchanges) do not recognise anyone that does not belong to the global

reporting professional organisations such as JORC, CRIRSCO,” he said.

“They will not regard you as a competent person, even as a professor,” he said.

Even back home, the discrimination continues.

Okunlola lamented that government has equally neglected the professional body by always appointing non-geoscientist to head the ministry of mines.

“Has any of us been appointed as a minister?

No, most of the people who are now in the mining industry, holding the licenses, are not even professional geoscientists,” he lamented Despite their contributory efforts to the mining industry in Nigeria, geoscientists professionals continue to be rejected both by foreign countries as well as Nigerian government.

Okunlola said geoscientists in Nigeria want inclusiveness locally.

For this reason, the geoscientists in Nigeria under the aegis of Nigerian Mining and Geoscience Society (MNGS) met and developed mining road maps for government. Yet, government has not deemed it fit to appoint one of them as the minister of mines.

“We need to include

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the professionals at the governance level; we need professionals at the execution level too. Employ these competent persons into the ministries,” Okunlola appealed.

Unlike what is obtainable in health and justice ministries, Okunlola pointed out that geoscientist professionals are not being regarded while considering appointment into the mining ministry.

Non-professionals are being appointed to head the ministry.

“It is not like that with the medical people. A medical doctor or pharmacist will always be a health minister. The same thing with the attorney general of the federation. This is a knowledge industry for geoscientists. They must also take charge,” he said.

Also, international miners such as Barrick, Astra, Newsmont and Mitsubishi Materials do not see Nigeria as a mining country.

According to experts, investors also see Nigeria as an oil nation only, rather than a country with strong solid minerals potential, as they prefer countries such as South Africa, Democratic Republic of Congo, Ghana, Tanzania and Zimbabwe, known to have developed mining infrastructure.

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Tuesday 30 April 2019

BUSINESS DAY

Live @ The Exchanges Market Statistics as at Monday 29 April 2019

Top Gainers/Losers as at Monday 29 April 2019 LOSERS

GAINERS Company

Company

Opening

Closing

Change

N182

N166.1

-15.9

STANBIC

N47

N45.1

-1.9

CCNN

N17

N15.35

-1.65

DANGCEM

N186.9

N186

-0.9

GUARANTY

N34.2

N33.45

-0.75

Opening

Closing

Change

FO

N29.2

N32.1

2.9

TOTAL

JBERGER

N22.5

N24.7

2.2

N15.55

N17.1

1.55

N72

N72.5

0.5

N11.35

N11.8

0.45

DANGFLOUR OKOMUOIL CADBURY

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

29,521.90 4,302.00 290,189,797.00 2.164 11.094

Global market indicators FTSE 100 Index 7,440.66GBP +12.47+0.17% S&P 500 Index 2,946.99USD +7.11+0.24% Generic 1st ‘DM’ Future 26,559.00USD +42.00+0.16%

Investors lose N83bn as large cap stocks spur market’s new low Stories by Iheanyi Nwachukwu

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he Nigerian Stock Exchange (NSE) All Share Index (ASI) declined by 0.73percent at the close of trading on Monday April 29, 2019.

Investors lost about N83billion, pushing the local bourse to new low as sell pressure weighed largely capitalised equities.

The stock market return is now in the negative region of 6.07percent year-to-date (ytd). Monthto-date (MTD) the market has declined by 4.90percent.

The value of listed equities which opened this week’s trading at N11.177trillion decreased

to N11.094trillion as at close of trading on Monday; while the ASI decreased to 29,521.06 points from preceding trading day’s high of 29,740.41points.

Total Nigeria Plc led the basket of laggards after its share price decreased from N182 to N166.1, losing N15.9 or 8.74percent.

Stanbic IBTC Plc share price decreased from N47 to N45.1, losing N1.9 or 4.04percent.

Cement Company of Northern Nigeria decreased from N17 to N15.35, losing N1.65 or 9.71percent.

Dangote Cement Plc stock price dipped from N186.9 to N186, losing 90kobo or 0.48percent.

GTBank Plc stock price was also down, from N34.2 to N33.45, down by 75kobo or 2.19percent.

On the advancers list, Forte Oil Plc stock price moved up from N29.2 to N32.1, adding N2.9 or 9.93percent. Julius Berger Nigeria Plc rallied from N22.5 to N24.7, up by N2.2 or 9.78percent.

Dangote Flourmill Nigeria Plc rose from N15.55 to N17.1, up N1.55 or 9.97percent. Okomu Oil Palm Plc increased from

Fidelity Bank pays N3.19bn dividend

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he shareholders of Fidelity Bank on Friday April 26 unanimously approved the payment of a total dividend of N3.19 billion declared by the board of directors for the financial year ended December 31, 2018.

The shareholders gave the approval at the bank’s 31st Annual General Meeting (AGM) held in Lagos.

The dividend translated to 11kobo per ordinary share of 50kobo held by investors at the close of business on April 12, 2019.

At the meeting, the shareholders received the audited financial statements for the year ended December 31, 2018 and the reports of the directors, auditors and audit committee thereon.

The financial year in review marked the beginning of the second phase of the growth aspirations of the bank.

Its Profit Before Tax (PBT) increased to N25.09billion in 2018 from N19.21billion in 2017 financial year. Profit After Tax (PAT) increased by

29percent to N22.9billion from N17.8billion in 2017 financial year. Earnings Per Share (EPS) was up to 79kobo from 31kobo in 2017.

Speaking at the meeting, Patrick Ajudua, National Chairman, New Dimension Shareholders Association, commended the board and management for maintaining dividend policy.

Ajudua, however, expressed the need for payment of higher dividend by the bank in the years ahead.

He also urged the board to adopt strategies that would enable them to sustain growth and profitability in the industry.

Timothy Adesiyan, President of the Nigerian Share-

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holders’ Solidarity Association, said that the bank had maintained steady growth in spite of challenging environment.

Adesiyan also commended the bank’s effort in ensuring aggressive loans recovery which impacted positively on its non-performing loan.

“We have a solid bank handled by professionals and our bank is in good hands,” he said.

Nnamdi Okonkwo, Managing Director/Chief Executive Officer, Fidelity Bank Plc assured shareholders of consistent and enhanced dividend in future.

Okonkwo said that the bank had paid consistent dividend in the last 12 years, noting that the trend would be maintained. He noted that investment was for future, stressing that, the current dividend policy was to prepare for rainy days.

“We want the bank to be here tomorrow as going concern and we need capital to continue to be strong,” Okonkwo said.

N72 to N72.5, adding 50kobo or 0.69percent; while Cadbury Nigeria Plc rose from N11.35 to N11.8, adding 45kobo or 3.96percent. In 4,302 deals, stock traders exchanged 290,189,797 units valued at N2.164billion.

“Amidst the release of a flurry of mixed earnings results, the ASI dipped further to kick off the new

week, shedding 73basis points (bps) in today’s (Monday) predominantly down-trending session.

Market activity saw a mild uptick as volume and value traded rose 19percent and 40percent respectively”, said analysts at Lagosbased Vetiva Capital in their equity note to investors.

On what shapes the market on Tuesday April 30 being the last trading day of this month, the analysts said: “As earnings season begins to slow down, we expect investors’ second-quarter (Q2) intentions to begin to take shape. In line with this, we foresee another downward sloping session amidst the average Q1 results released. However, we do not rule out the possibility of bargain hunting in the market”.

…proposes N345.05million dividend

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Nikkei 225 22,258.73JPY -48.85-0.22% Shanghai Stock Exchange Composite Index 3,062.50CNY -23.90-0.77%

Stanbic IBTC earns N59bn in Q1 2019

May & Baker impresses market with improved financial scorecard igeria’s premier pharmaceutical manufacturing company, May & Baker Nigeria Plc has sustained its growth trajectory despite the loss of key products which hitherto accounted for about 35 percent of its revenue.

The company’s financial statement for the 2018 business year just released to the Nigerian Stock Exchange (NSE) shows 6.08 percent growth in turnover, from N8.06 billion in 2017 to N8.55 billion in 2018. This was achieved despite the fact that in 2018, the company lost three key products which contributed over N3billion in turnover for the 2017 business year.

The company discontinued the production of its foods business, Mimee noodles to concentrate on its core healthcare business

Deutsche Boerse AG German Stock Index DAX 12,328.02EUR +12.84+0.10%

while Maysedyl its codeine based cough syrup and Sulphanamides were stopped on account of industry wide regulatory requirements.

The company’s financial statement showed not only steady growth in turnover but also a sustained profitability. Profit before tax stood at N817.91 million while profit after tax from continuing operations was N342.7 million.

Add N242.5 million extra ordinary income from discontinued operations, the company made a comprehensive income of N585.20 million in 2018 compared to N336.62 million in 2017.

Shareholders’ funds also rose by about 10 percent from N3.29 billion in 2017 to N3.617 billion in 2018. At the same time, finance costs reduced by 33.67 per cent from N512.13 million in 2017 to N339.72 million in 2018. @Businessdayng

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tanbic IBTC Holdings Plc, a member of Standard Bank Group, has announced gross earnings of N58.7 billion for the first quarter of 2019 as it released its unaudited financial results for the period to the Nigerian Stock Exchange.

The financial report, which was released to the Nigerian Stock Exchange (NSE) on Friday April 26 showed the group grew its topline earnings for the first three months to 31 March 2019 to N58.7 billion, compared with the N57.4 billion it achieved in the same period of 2018. The group achieved profit before tax of N23.5 billion and profit after tax of N19.2 billion.

The result showed that the group’s liquidity position remained robust. Liquidity ratio increased to 130.06percent compared with the 110.68percent achieved in December 2018. This ratio is well above the regulatory minimum requirement of 30percent and is an indication that the group is strong enough to continue to meet its liquidity obligations in a timely manner. Net interest income of N20.2 billion compared with N18.9 billion in March of 2018 is a 7percent improvement year-on-year. While total assets decreased marginally by 5percent to N1,579.5 billion as against N1,663.7 billion in December 2018, gross non-performing loans slightly improved to N17.5 billion compared to N17.7 billion in December 2018.

Yinka Sanni, Chief Executive, Stanbic IBTC Holdings Plc said the slowdown in economic activities as well as the socio-political environment impacted the results.

“The operating environment in the first quarter of this year was challenging evidenced by the slowdown in economic activities which were impacted by the socio-political environment leading to muted client activity.

These factors affected the growth pace of our overall business volumes and earnings,” Sanni said.

Tuesday 30 April 2019

BUSINESS DAY

35

LEGALPERSPECTIVES With Odunayo Oyasiji

Insight into the use of ex parte applications and orders

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n ex parte application usually involves only one party- the party that files it. It is usually brought before the court for the said party to be heard without the presence of the party against whom an ex parte order is being sought.

Niki Tobi (JSC) in his book ‘The Nigerian Judge’ defines an ex-parte application as “proceedings brought on behalf of one interested party without notice to, and in the absence of the other party. This means that the application for interim injunction brought ex-parte is heard by trial judges in the absence of the adverse party”. Nnaemeka –Agu (JSC) in delivering the lead judgement in the case of Kotoye V CBN [1989] 1 NWLR pt.

98 gives a detailed explanation of an ex parte application when he stated that “by their very nature injunctions granted on ex parteapplications can only be properly interim in nature. They are made, without notice to the other side, to keep matters in status quo to a named date, usually not more than a few days, or until the Respondent can be put on notice.

The rationale of an order made on such an application is that delay to be caused by proceeding in the ordinary way by putting the other side on notice would or might cause such an irretrievable or serious mischief. Such injunctions are for cases of real urgency. The emphasis is on ‘real’.”

Is this not against the principle of fair hearing?- Audi Alteram Parterm (which means that both side must be heard) and Nemo Judex in Causua (which means that one cannot be a judge in his own case). The answer is no. Uwais (JSC) in the case of 7-Up Bottling Company Limited V Abiola & Sons Limited (1995) 3 NWLR (Pt.383) noted that “there is no doubt that the right of fair hearing under the constitution is synonymous with the criminal law rule of natural justice …in both civil and criminal proceedings, there are certain steps to be taken which are incidental or preliminary to the substantive case, such steps include, motion for directions, interim or interlocutory injunction. It is in respect of such cases that the provision are made in court rules to enable the party differed to make ex-parte applications… if the Supreme Court can dispose of an applications under S. 213 (4) of the 1979.

Constitution, without oral hearing of the application, then I see nothing wrong or unconstitutional for a trial court to deal with an ex-parte motion under its rule”.

It must be noted that the court at the stage of ex parte application is not going to delve into the merit of the case.

The application is usually brought to seek a temporary order of court in a situation where irreparable damage or

harm will occur if the other party is put on notice. It is usually used in urgent matters. Examples of such situation where ex parte order is usually granted are – where property is involved (to preserve the property), a spouse who is being physically abused can seek an order restraining the alleged abuser.

The order is granted pending the time when the court will hear both parties.

The Supreme Court of Nigeria in the case of Leedo Presidential Motel Ltd. v.

Bank of the North, (1998) 7 SCNJ 328 at 353 stated two circumstances where an application ex parte can be made. The circumstances are – when the interest of the adverse party will not be affected (e.g. applications for leave to serve processes by substituted means) and when time is of essence (this symbolises urgent situations where things can go wrong if an order is not granted without the other party being heard). Ex parte orders are usually meant to last for few days. The other party is expected to be put on notice before the expiration period of the order. The party seeking an ex parte order is expected to make full disclosure on the matter. Failure to do so will serve as a ground to set aside the order when the failure comes to the notice of the court.

Before an ex parte order is granted, the party seeking the order must show to the court that he has a legal right which is to be protected by law, that the situation is really urgent (that is why the affidavit in some situations is usually tagged ‘affidavit of urgency’), he must show that irreparable damage will be done if the court fails to intervene by granting the order and the applicant must show that

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there is a prima facie case (i.e. that on the basis of what is before the court there is a good legal claim). Furthermore, the applicant must undertake to compensate or indemnify the other party for any damage suffered should the substantive suit turn out to be frivolous or vexatious.

Balance of convenience must also be shown – the applicant must show to the court that he will suffer injury or damage if the application is denied.

The possibility of the abuse of the process (ex parte) is high and that is the reason why courts are often reluctant to grant ex parte orders. There have been instances of conflicting ex parte orders from the same court (but different judicial divisions). Ex parte orders had also been granted in situations where they ought not to be granted. An example of such situation is in the case of Honeywell Flour Mills Plc V Ecobank Nigeria Limited (2016) LPELR – 40221 (CA) - the Federal High Court granted ex parte orders freezing the assets of Honeywell Flour Mills Plc. Honeywell approached the court for the ex parte order to be set aside as the order is adverse to the guiding statute. The court instead of setting aside the order decided to vary the order to allow the company have access to some of its fund. The company being dissatisfied with this approached the Court of Appeal. It was argued before the Court of Appeal that by virtue of Order 4 of the Companies Winding Rules 2010 interim asset freezing orders are not to be granted ex parte i.e. without the presence of the other party. The Court of Appeal in delivering its judgement in favour of Honeywell stated that “the grant of in-

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terim orders of injunction by the lower court, particularly Orders no (1) and No (3) (whether varied or not) without any notice to the appellant thereby affording it the opportunity to be heard on a matter that seeks to paralyze and immobilise a functional and ongoing corporate organization is an exercise of discretion too extreme and injudicious to be allowed to subsist given the negative socioeconomic impact it will have not only on the appellant but on its employees and society at large”.

It must be pointed out that the fact that an order was granted without hearing the other side does not take away its veracity. It is an order of court and it must be obeyed.

A party that is aggrieved can approach the court for the order to be set aside provided it has genuine grounds. Therefore, disregarding an order of court on the basis that it was granted without hearing both sides will make the disobedient party to be liable for contempt of court.

In conclusion, ex parte applications are meant for situations that demands real urgency –where irreparable loss or damage will be done if an order is not granted in the absence of the other party.

Therefore, it is an essential part of our justice system. However, in granting ex parte orders, the court must tread with caution so as not to grant orders based on frivolous applications and thereby occasioning injustice. The integrity of the judiciary must be preserved and as such the court must be careful not to grant contradictory ex parte orders. Ex parte orders are granted with the aim of doing justice and therefore should not be turned to an instrument of confusion and injustice.

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Tuesday 30 April 2019

BUSINESS DAY

AVIATION GUIDE

in association with

Atlantic American Partners launches United States EB-5 visa investment program in Nigeria Stories by IFEOMA OKEKE

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tlantic American Partners (AAP) has launched its United States EB-5 Immigrant Investor Program in Nigeria; as a convenient means to help potential investors in Nigeria to secure a hassle-free immigration process to live, work, and attend school in the U.S., while also getting a reasonable return on their initial investment.

The EB-5 visa creates opportunity for foreign investors to invest in the United States and become legal permanent residents in America with a green card, along with several other benefits including the ability to travel to one’s homeland from the United States without a visa, ability to sponsor family members for a green card after becoming a citizen, access to low or no cost- high-quality primary and secondary public education; and thereafter public or private colleges and universities for participants and their children (21 years old and under, unmarried) at the same cost as US citizens.

Down the road, if the applicant desires, they can apply for US Citizenship and sponsor other family members to move to and live in America.

Daniel Ryan, managing director, Atlantic American Partners

Daniel Ryan, managing director, Atlantic American Partners, stated it is important to note that “dual citizenship” between USA and Nigeria is available, adding another tangible benefit to invest in this program.

During a business meeting to attract inves-

tors from Nigeria, Managing Director; Ryan explained in detail the EB-5 investor visa program, along with its remarkable benefits.

He stated that “the EB-5 visa was introduced in 1990 by the United States Congress and has since enabled a large number of families to live the American dream by granting them permanent residency through investments made in “trophy” new commercial real estate investments such as luxury hotels, luxury rental apartments/flats, and most recently; highquality student rental housing at American Universities. “The EB-5 program requires each EB-5 investor to invest 500, 000 dollars in the United States with projects that Atlantic American Partners oversees as “trustee” that will yield at least 10 permanent jobs, per applicant, for United States citizens.”

AAP partners with the highest quality property developers in the US. Annually, AAP reviews over 300 investment request submittals from high-quality property developers, and chooses only 3-4 per year, due to strict underwriting criteria and conservative financial strategic investing.

According to Ryan, acquiring the green card under the EB-5 investment program is a two-part process, with the first step referred to as the ‘I-526’ which is taking about 18-24

months at present for approval; after the 500,000 dollars investment has been made, along with a 45,000 dollars administrative fee payable to AAP. This covers the cost to provide audited financial statements and all administrative needs for the investor throughout the entire EB-5 process, including quarterly newsletter updates.

In addition, AAP will assist the applicant in hiring a top-notch international immigration EB-5 law firm, based in USA, that is familiar with African culture and provides excellent legal consultation and processing of the actual USCIS application documentation.

The immigration attorney will assist in filing the paperwork in this first step in the process, referred to as the ‘I-526’.

“Following approval, a conditional green card is then issued, which provides the full benefits of an actual green card, pending in due time the job creation requirement is proven. After 21 months from I-526 approval, the investor with the guidance by AAP and the immigration attorney can file for the second part of the application process referred to as the ‘1-829.’ Once the 1-829 application is approved, the conditional green card would then be converted into a permanent green card” he said.

Dana Air Passengers to Pay Less on tickets, Cab services with new product, partnership

Emirates to expand reach in India with SpiceJet codeshare partnership

ana Air’s guests are in for an exciting time with the airline’s recently introduced product ‘Cash plus Miles’ for members of its reward program called Dana Miles.

With the new initiative, passengers flying Dana Air who are also members of the airline’s Loyalty and Reward program- Dana miles can now top up their miles balance with a little cash to get low fares 24 hours to their flight.

Speaking on the newly introduced product, the Media and Communications Manager of Dana Air, Kingsley Ezenwa said, Dana Air stands out in the Nigerian aviation industry as a worldclass brand not because of its much-vaunted on-time performance, top-notch customer and in-flight services, but because of its knack for quality products borne out of the desire to ease booking, provide value added services and simplify processes for its teeming guests. ‘’The good news about the product is that with just 24 hours to your flight with us, you can use your miles to upgrade your ticket from economy class to business class, pay for your

mirates and SpiceJet have signed a Memorandum of Understanding (MoU) to enter into a reciprocal codeshare agreement, which is set to open new routes and destinations for passengers travelling between India and popular destinations across Africa, America, Europe and the Middle East.

Subject to necessary government approvals, the partnership will enable Emirates’ passengers to enjoy seamless connectivity on flights to India, leveraging SpiceJet’s strong domestic presence and adding six new destinations: Amritsar, Jaipur, Pune, Mangalore, Madurai and Calicut - to the nine existing cities in India served by Emirates.

This will bolster Emirates’ already-extensive network adding a total of 67 weekly connections between Emirates’ hub in Dubai to these six fast growing destinations in India.

This includes increased domestic connectivity from Emirates’ nine Indian gateways to points such as Goa, Hubli, Guwahati, Vishakhapatnam and Tuticorin which would allow for a greater variety of travel options between both Emirates and

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excess baggage or top up your miles balance with a little cash for very low fares. This is another reason why we ask our guests to book ahead and all they need do to visit our website flydanaair. com or chat with us on WhatsApp 07051190363 for details,’’ Ezenwa said.

Similarly, the Airline has also partnered a fastgrowing cab company Anu Plus in Port Harcourt to provide its Dana miles guests travelling to Port Harcourt with 50% discount on their cab fares.

The members of the loyalty program willing to take advantage of the reward are expected to download the Anu plus app on google play, IOS, book a ride with the phone number with which they registered for Dana Miles and with their boarding pass to get an instant discount.

The Dana Air spokesman said, ‘Anu Plus is a fast growing cab hailing company with a desire to expand across our existing route network hence the partnership.

For now, only guests flying to Port Harcourt will benefit first, after which it will expand to Abuja, Owerri, Calabar, Ibadan, and Uyo in the coming months.’’

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SpiceJet flights.“Our journey in India has been defined by progressive investment, partnership and growth. We constantly try to improve and provide our customers with greater flexibility and travel choices. This partnership with SpiceJet and the mutual expansion of our network will go a long way in further enhancing the travel experience of our customers in India as well as those heading into India, benefiting travellers and businesses alike,” Adnan Kazim, Emirates’ Divisional Senior Vice President, Strategic Planning, Revenue Optimization and Aeropolitical affairs said.

Passengers travelling from India will have more choice to travel seamlessly with minimum connection times, when flying to destinations in Emirates’ Europe network such as London, Paris, Frankfurt, Manchester and Amsterdam.

The codeshare agreement will also open up flights for Indian travellers to North and South American destinations such as New York, Washington, Toronto, and Sao Paulo as well as Middle Eastern destinations such as Jeddah, Kuwait and Amman, operated by Emirates.

@Businessdayng

Tuesday 30 April 2019

BUSINESS DAY

37

POLITICS & POLICY Controversy trails Ajeromi-Ifelodun rerun …INEC declares APC winner ... PDP kicks, alleges INEC violated court order Iniobong Iwok

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ontroversy has trailed last Saturday’s rerun election for Ajeromi-Ifelodun Federal Constituency in Lagos State, this is just as the Independent National Electoral Commission (INEC) announced the candidate of the ruling All Progressives Congress (APC), Kolawole Taiwo winner of the election.

This is, however, despite opposition from the People’s Democratic Party (PDP) alleging that the rerun election was in violation of a court order barring INEC from conducting a re-run poll for the constituency until the results already announced at the various polling units and collated alongside the result of the Presidential poll are declared in accordance with the extant provision

of section 69 and 71 of the Electoral Act 2010.

Rita Orji, the candidate of the PDP and her party had instituted the case.

However, Justice Bello Kawu of a High Court sitting at the Federal Capital Territory (FCT) Abuja, had dismissed the objection of INEC and three others against the motion for lacking in merit and substance and ruled against INEC’s decision to hold the rerun election.

Before the cancellation of the poll, Orji of the PDP was in an early lead with a difference of 3224 votes. The PDP candidate had polled 31, 982 votes, while Taiwo scored 28,758 votes.

INEC had, however, declared the February 23 election in the constituency, inconclusive due to overvoting, non-compliance with the usage of smart card readers and violence.

Mahmood Yakubu

However, after last Saturday’s election, the Returning Officer, Olusoji Ilori, announced that APC’s Taiwo polled a total of 36,115 votes to defeat his closest rival from the PDP, Rita Orji, who

‘How I sold valuable landed property to finance 2019 election campaign’ YOMI AYELESO, Akure

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he O ndo Nor th Senatorial Candidate of Action Alliance (AA) in the 2019 general election, Tunji Abayomi has denied an allegation that he was sponsored by Governor Oluwarotimi Akeredolu, using state funds, but lost the February 23, 2019 National Assembly elections to the incumbent Ajayi Boroffice.

Abayomi was a member of the All Progressives Congress (APC) before he defected to AA after failing to secure the senatorial ticket of the ruling party.

The Chairman, Governing Council of the state -owned Adekunle Aja-

sin University Akungba Akoko accused the Adams Oshiomhole-led National Working Committee of the APC of lacking internal democracy.

The human rights lawyer in a statement posted on his verified Facebook page said he financed his campaign by selling his landed property at Lekki, Lagos State.

“The truth is I am far too busy right now with my professional and personal life to engage in all the nonsensical dialogue going on with regard to Ondo State politics. I am a successful lawyer and no successful lawyer has anything to fear in victory or defeat. I have many second addresses.

got 32,557 votes.

Meanwhile, the PDP National Publicity Secretary, Kola Ologbondiyan, has faulted the conduct of last Saturday’s by-election in the constituency, describing it

as an abuse of court order and deliberate attempt to subvert the will of Nigerians.

“By going ahead to conduct an already concluded election in defiance of the ruling of the court, INEC has confirmed the fears that it had been compromised to create situations to subvert the will of the people and award the Ajeromi/Ifelodun Federal Constituency seat to the APC,” Ologbondiyan said.

Also, the Lagos State chapter of the PDP has rejected the result of the election, in a statement to journalists, Monday, by Segun Adewale, factional chairman of the PDP in Lagos State. He noted that Rita Orji had won the election but APC and INEC connived to cancel results in areas where PDP was leading with 3,224 votes during February 23rd election as declared by INEC. “ It ha s c o m e t o o u r

knowledge that whenever our party is leading, INEC calls for a rerun; it’s a plot specifically planned to rig the rerun with falsification of results, direct confrontation and disenfranchisement of electorates and outright rigging.

“The party calls for a cancellation of the rerun because such cannot be called an election. It is on record that in the affected 71 polling units, PDP voters were chased away by dangerous weapon-wielding thugs, some uncollected PVCs were distributed to APC members they used in voting which created mismatch with their thumbs. INEC has a lot of questions to answer over this matter probably in court,” Adewale said.

When contacted, the Publicity Secretary of the APC in Lagos State, Joe Igbokwe, refused to comment on the issue.

I remain the national chairman of ADP - Sani Innocent Odoh, Abuja

“But I want to correct the false representation that the governor used what they call APC money to sponsor AA before, during or after election. For me oooo, I sold a very valuable plot of land in Lekki to finance my campaign.

“I also know one House of Representatives AA candidate who sold his house abroad to do the same.

Maybe, if the governor had given us the so-called APC money, I would have won, after all, Senator Borofice beat me by only 10,000 votes from his Local Government Area. I am only correcting the false representation. Really, it’s not yet time to talk. I will, when the right time comes,” he said.

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midst the controversy raging in the Action Democratic Party (ADP), the National Chairman and Presidential candidate of the party in the last election, Yusuf Yabagi Sani, has debunked the statement credited to the former National Secretary of the party, James Okoroma, claiming that he (Sani) has been suspended as chairman by the party’s National Working Committee (NWC) over alleged misappropriation of funds.

Sani in a statement he personally signed on Sunday, noted that Okoroma and his cohorts have no such powers to suspend him as they have either been suspended or have ceased to be members of the party, according to the party’s Constitution, stressing that he remains the National

Chairman of the party.

“My attention has been drawn to the statement credited to the suspended National Secretary of the Action Democratic Party (ADP), James Okoroma and his cohorts, which claimed that I, Yusuf Yabagi Sani, have been suspended as National Chairman of the party by the National Working Committee (NWC) of the party.

“Let me make it clear that the purported suspension is self-defeating, dead on arrival and completely invalid for the following reasons amongst others: (I) The so-called NWC members are either former or suspended ADP National officers who are no longer members of the ADP NWC. For instance, James Okoroma knows he is no longer ADP National Secretary by the resolution of the National Executive Committee (NEC) of ADP which

has since several months ago been duly communicated to INEC. Barr Obadiah Bichi, who is purported to be the National Legal Adviser, has since withdrawn his membership of ADP,” he said.

Sani also said that by the ADP Constitution, the NWC cannot suspend the National Chairman, adding that in any event none of the signatories to the purported resolution suspending the National Chairman is a member of ADP NWC. He therefore, stated categorically that he remains the National Chairman of the ADP. “Finally, I will not want to comment about the false and damaging allegations made against my person including misappropriation, forgery and high-handedness in the running of the party; as those matters have already been submitted to a court of competent jurisdiction,” he said.

I won’t replicate Daniel’s manner of handover to Abiodun - Amosun RAZAQ AYINLA, Abeokuta

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overnor Ibikunle Amosun of Ogun State has declared that he would not toe the path of former governor Gbenga Daniel in handing over power to Governor-elect, Dapo Abiodun on the eve of May 29th, 2019 Nigeria’s official handover date, saying the Government House at Oke-Igbein in Abeokuta was not ready for occu-

pation in 2011 when Daniel handed over power.

The governor, who was represented by Taiwo Adeoluwa, secretary to the State Government at a meeting in Abeokuta on Monday with the transition committee of the Governor-elect being led

by Deputy Governor-elect, Noimot Salako-Oyedele, stated that contrary to what he and his cabinet members experienced during his reign as governor, he would ensure www.businessday.ng

that there would be a smooth handover of government to the Governor-elect and his followers.

While narrating the nasty experience he and his cabinet underwent immediately after the handover of government from Daniel, Governor Amosun disclosed that he, together with other cabinet members, squatted for several months after the handover due to the untidiness of the Government House which was not available

until he was able to put things in order himself.

He however, noted that the keys to the Government House and the Presidential Lodge are ready if the Governor-elect intends to move in tomorrow, just as the comprehensive handover note is ready to be presented to Abiodun on May 28 as part of effort to ensure a seamless transition of government in the state.

“We will be in position

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to hand over a comprehensive handover note to you on May 28, 2019. By God’s grace, 28th of May, 2019, we can’t sit down like this and hand over to you. We have not been sleeping so as to have a smooth running of the transition.

“Government House OkeIgbein is ready. If you want to move in tomorrow. Both the Presidential Lodge and Government House are ready. As soon as you tell us when you @Businessdayng

need the keys, we will make them available.”

Meanwhile, Noimot Salako-Oyedele, the deputy governor-elect, while speaking with journalists, expressed satisfaction with all the handover arrangements and on the government’s preparation for the transition on May 29, 2019, saying they would also on their part ensure a smooth transition of government from same All Progressives Congress (APC).

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Tuesday 30 April 2019

BUSINESS DAY

news Bangladesh’s $33bn fabrics industry holds...

Continued from page 1

However, only 20 per-

cent of the woven requirements for the garment sector is catered to by local firms.

The country’s parliament passed a bill specifying the level of quality which all export firms must meet in order to beat China to number one in competitiveness. Hence, emphasis was laid on competitiveness, with the government providing market access for companies through trade negotiations targeted at removing international barriers.

Moreover, some of Bangladesh citizens were sent to China and Europe to acquire the skills needed to run the mills.

Again,thecountrypaidcloserattentiontotheuseofmodern technology to lower costs.

Big global brands such as Walmart, H&M, Benetton, Gap and Zara were partnered

with to distribute Bangladeshi ready-made garments.

Stitch Dairy, a local Bangladeshi publication, said that the South Asian country was able to enjoy duty-free advantage to export garments to the European Union, the US and Malaysia.

Experts equally attribute Bangladesh’s success to a convivial business environment with minimal government influence and low taxes, which attracted Chinese and Vietnamese firms to Bangladesh.

Textile Today reported in 2015 that firms from Singapore, Japan, Taiwan and South Korea, which had traditionally relied on low-cost production in China, were shifting out of China and making their way to Bangladesh as a result of well-developed Bangladeshi textile value chain that guarantees three to five years

return on investments.

Another key factor in Bangladesh is cheap labour with minimum monthly wage of a garment worker at $197, which makes it have the last but one lowest wage among 21 textile-making countries in the world.

However, Nigeria has even more advantage than Bangladesh in terms of labour cost as its recent minimum wage hike to N30,000 amounts to only $83.3 per worker.

“The government of Bangladesh provides cash incentives as export subsidies, amid other supporting policies, to promote exports in various business sectors. There is no alternative to the export-led growth of the economy to achieve its goal of becoming a middle-income country by 2021,” said two researchers, Afsana Arafin and Belalur Rahman, in a paper entitled ‘Cash Incentives for Export Oriented Industries of Ban-

gladesh: A Critical Evaluation’.

However, the number of full-fledged textile mills in Africa’s most populous country has whittled down to two, from over 180 in 1985. Industry players say the number of players is 24, but findings show that most of them are manufacturers of rugs, handkerchiefs, sweaters, towels and stockings.

“Some of the mills have even gone into receivership as they could not repay their loans. The lesson is that we should deal with the fundamental issues of production competitiveness in our economy. The textile industry needs to be saved from the excruciating burden of high operating and production cost,” Muda Yusuf, directorgeneral of the Lagos Chamber of Commerce and Industry (LCCI), said.

The Central Bank of Nigeria (CBN) recently set up an additional N50 billion intervention fund to facilitate the takeover

of existing debt and offer additional long-term loans and working capital to existing companies in the cotton, textile and garment sector.

As of 2016, N3.4 billion had been disbursed to local firms.

Recently, the Central Bank of Nigeria (CBN) placed access to FX for all forms of textile materials on the FX restriction list.

Smuggling has turned textile hubs in the main cities of Kano, Kaduna and Lagos into solitary camps and event centres, the Manufacturers Association of Nigeria (MAN) said.

“The hitherto manufacturing hubs in Kano, Kaduna and Lagos are now solitary camps with most of their factory sheds now used as event centres and warehouses to store smuggled textile materials,” MAN, which is an association of over 2,500 manufacturers in Nigeria, said in its review of 2018 performance of the sector.

Hamma Kwajaffa, director-

general of Nigeria Textile, Garment and Tailoring Employers Association (NTGTEA), told BusinessDay that the problem is importation and smuggling.

“The level of importation and smuggling in this country are killing the few surviving companies. They used to run three shifts but they have closed down these shifts,” Kwajaffa said.

“The Executive Order 003, for instance, has been pronounced, but it is not being implemented. So we have low patronage in the industry,” he added.

Executive Order 003 mandates government agencies and departments to patronise local firms by as much as 40 percent during contracts or bids.

Independent checks show that a few Nigerian textile firms are still competing with imports. They include African Textile Mills, Angel Spinning and Dyers Limited, Sunflask, Nichemtex, among others.

Analysts got it wrong on Nigeria...

Continued from page 1

context at the time. The

US Federal Reserve said it planned three rate hikes in 2019, there were concerns about a trade war between the US and China, and the dollar was getting stronger.

Emerging market assets were haemorrhaging foreign cash and Nigeria was entering into an election that was expected to be keenly contested and largely unpredictable – just the recipe for foreign investors to take flight to safety.

The most dovish forecast was for the naira to weaken to N390 per US dollar while the most bullish forecast was closer to N500, as foreign inflows dried up leaving the CBN in a pole position as the net supplier of FX. But it never happened on the scale many projected, following a somewhat successful general election that saw President Muhammadu Buhari secure a second term. The US Fed Reserve, concerned about global growth, has also dumped plans for monetary tightening and emerging markets have turned the corner on a nightmare late 2018.

Oil prices have also put in a stronger-than-expected

performance this year, surging 33.6 percent year to date to cross $70 per barrel to a 24-month high.

Foreign money has gushed into Nigeria since the conclusion of the elections and the US Fed changed its initial hawkish stance, with portfolio inflows reaching a record of $4.7 billion in March alone, the highest monthly inflow on record. Most of that cash found its way into the bond market.

“After the elections, fund managers that were underweight Nigeria made the switch to neutral,” a fund manager who sits in South Africa told BusinessDay. “The bond market surge came off the back of attractive carry trade, driving average bond yields to 13 percent postelection from 16 percent,” the fund manager who was not authorised to speak on behalf of his company said.

The record inflows were reflected in the transaction levels at the Investors and Exporters window. The I & E window’s impressive showing defied projections, given that many had expected that because of the uncertainty around the general elections, that volume will dip, with some forecasting

Nigeria’s Diaspora remittances exceed oil...

Continued from page 4

remittances stood at $22 billion, $19.7 billion and $21.2 billion, respectively, as against oil revenues of $13.4 billion, $10.4 billion and $19.6 billion, respectively, within the same

periods.

This is contrary to the situation prior to 2015, when oil prices averaged around $100 per barrel and receipts from crude oil sales stayed well above Diaspora remittances. But with

NPA to open Lilypond Terminal, Trailer...

Continued from page 4

ing expectations among the traumatised and disillusioned residents, business owners and port users within the port community that a breath of fresh air was underway.

Apapa, for some time now, especially in the last three years, has been an occupied

territory with trailers and tankers taking over the entire community, causing congestion, occupying roads and bridges, denying residents access to their homes, killing businesses, degrading the environment, reducing the value of both residential and commercial properties, and www.businessday.ng

L-R: Vincent Omoike, non-executive director; Aidevo Odu-Thomas, company secretary; Femi Agbaje, chairman, and Hamda Ambah, MD/CEO, all of FSDH Merchant Bank, at the company’s annual general meeting in Lagos, yesterday. Pic by Pius Okeosisi

a challenging period for the local currency.

Total trades on the Importers & Exporters Foreign Exchange window surged to near $25 billion for the first four months of this year, according to data provided to BusinessDay by the FMDQ OTC, as the activity in March proved strong enough to lift total activity to new levels.

The figure of $24.46 billion

is 28 percent more than the level for the corresponding period of last year ($19.03 billion) and analysts say the I&E FX window has truly become a significant tool for Nigeria’s effort at a market-driven exchange rate management regime.

“Earlier expectations at the beginning of the year for a slowdown due to political uncertainty didn’t materialise,

thanks to a somewhat successful election, a dovish US Fed and the strong rally in oil prices,” said Omotola Abimbola, an analyst at investment bank, Chapel Hill Denham.

“The transactions were dominated by post-election portfolio inflows into the bond market,” added Abimbola.

Whether the trend is sustained into the remainder of the year will depend on the

movement in oil prices and if global central banks remain dovish.

FMDQ data showed that for the week ending April 26, 2019, a total of $1.61bn was traded on the market, a jump of 33 percent over the $1.21bn traded the previous week.

The figure is also more than the total trade of $1.31 billion recorded in the same week of last year.

the increasing number of paid Nigerians abroad and a fall in crude prices, remittances overtook revenue from oil, accounting for more than 95 percent of the total transfers.

Analysts argue that Africa’s second-largest economy (in monetary terms supposing the

market-determined exchange rate at $1/N362) is a human capital producing country rather than an oil producing one because Diaspora flows far exceed gross oil revenues.

Emeka Ucheaga, CEO at Lagos-based investment and advisory firm, EUA Intelli-

gence, said the growth in remittances can be traced to the rising wages abroad which are products of tax cuts in America and increases in the minimum wage in parts of America and Europe.

“With the increasing number of Nigerians in the Dias-

pora, I think this was bound to happen at some point.

However, the widening gap between remittances and oil revenue is a positive surprise,” Ucheaga said.

impoverishing their owners.

Worried about this situation which it has described as a “national embarrassment”,the Senate Committee said it was determined and committed to ending the gridlock which has been taking toll not only on Apapa and Lagos, but also on the fragile national economy.

“What is happening in Apapa is a national embar-

rassment; we have received several reports on how residents of Apapa sleep outside because they cannot access their homes; many businesses have been forced to either relocate from Apapa or close down completely. We cannot afford to allow that to continue to happen,” Kabiru Gaya, the committee chairman, said at an expanded stakeholders’

meeting in Lagos last weekend.

“We are here as part of our oversight functions and we are determined to end the Apapa gridlock with the cooperation of all the relevant stakeholders,” Gaya added, ordering the Federal Ministry of Works to ensure quick completion of the trailer park being constructed along the Apapa-Oshodi Expressway.

The trailer park, on which construction work started about eight years ago, is aimed to decongest the expressway by serving as transit park for trucks making their way into the ports.

On completion, the park is expected to take away from the expressway about 400 trailers.

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•Continues online at www.businessday.ng

•Continues online at www.businessday.ng

Tuesday 30 April 2019

BUSINESS DAY

39

news Results: JAMB warns UTME candidates against fraudsters … result not yet ready

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he Joint Admissions Matriculation Board (JAMB) has warned its 2019 Unified Tertiary Matriculation Examination (UTME) candidates awaiting their results against fraudsters who deploy various methods to dupe them.

The JAMB board disclosed this in its Vol. 1, No 17 weekly Bulletin of the Office of the Registrar and made available to the News Agency of Nigeria on Sunday in Abuja.

JAMB also advised candidates to jealousy guard their Registration numbers, as well as Profile Codes to avoid falling victims to the scam.

The board also said that the fraudsters, once establishing the information needed, open up a line of communication with the

candidates to dangle enticing offer to award them with higher scores in the yet to be released results.

“Candidates are to note that their Registration numbers and Profile Codes are essential data that should not be disclosed to unauthorised persons.

“What these fraudsters do is take advantage of candidates’ naivety and subsequently obtain their registration number with which they print their examination notification slips with candidate’s numbers and other vital data.

“These fraudsters then use the information to send messages to same candidates disguising as officials of the board or persons who have special information, access and capacity to inflate scores, among other things.

CWG emerges Infosys’s ‘Business Alliance Partner’ for Middle East, Africa Modestus Anaesoronye

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igeria’s CWG plc has been declared Infosys’ ‘Business Alliance Partner’ of the Year for Middle East and Africa’ at a global partner event held in India.

The declaration of CWG, the largest systems integration technology company in Africa as the ‘Business Alliance Partner for Middle East and Africa, is in recognition of its competency in successfully implementing the Infosys’s Finacle Banking Solution in over nine banks in Nigeria with branches in other African countries.

Apart from implementing the solution and accelerating the growth of the digital world in Nigeria and indeed African countries, where it operates, CWG has also displayed leader-

ship competence by ensuring that her staff are highly skilled in Finacle with proven certifications, hence the successful implementation across board.

A yearly-organised training is done for all CWG-Finacle staff and certification exams are written to ensure that the pool of Certified Professionals is maintained. In 2018/2019, about nine skilled staff were trained and certified on Finacle Core (Function and Technical) and Finacle E-banking Functional training at the Infosys Campus-Bangalore, India.

The Finacle Certified Professional Exam is aimed at setting up a benchmark and validation of the functional and technical expertise of various professionals, bankers, students, financial experts and Finacle Partners.

Finally, Lagos Assembly passes N873.5bn budget JOSHUA BASSEY

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agos State House of Assembly has finally passed the 2019 budget size of N873.5 billing almost three months after it was laid before the lawmakers by outgoing Governor Akinwunmi Ambode.

The 40-member House passed the budget during a plenary on Monday. The N873.532 billion budget size is about N21.215 billion up from the N852.317b originally presented to the Assembly

by Ambode in February.

The capital expenditure component of the budget is N479.691 billion while the recurrent is N393.841 billion There have been insinuations in some quarters that the budget was deliberately delayed so that Ambode will have limited time to

implement it. Ambode is billed to office on May 29 when the governor-elect, Babajide Sanwo-Olu will also be sworn in as the 15th governor of Lagos.

Although the House had said it was allotting another day for debate of the report of the appropriation committee because of its volume and technicality when the report was presented last week Friday, it was surprising that it did not take the house up to 10 minutes to debate and make few corrections before adopting the report, taking the third reading and passing the budget yesterday.

Speaker of the assembly, Mudashiru Obasa directed the clerk of the house, Azeez Sanni to send a clean copy of the passed appropriation bill to the governor for assent. www.businessday.ng

L-R: Wale Adeagbo, chief operating officer, Academy Halogen; Aliyu Gebi, senior adviser to the minister of interior; Samuel Agbanusi, head, corporate security and safety, Union Bank; Dennis Amachree, chief executive officer, Zoomlens Security Solutions; Wale Olaoye, group managing director, Halogen Security Company Limited, and Kunle Ajanaku, special adviser to the Lagos State governor on security and intelligence, during the recently held Securex West Africa Exhibition and Conference in Lagos.

FG pledges support for investors as group seeks permit to export donkey products

... to install framework to stop donkey smuggling Innocent Odoh, Abuja

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s the Federal Government and investors in donkey business meet on Tuesday, April 30, to map out modalities on how to regulate the breeding, processing, marketing and exporting of donkeys and donkey products, the government has pledged its support to investors to earn foreign exchange in line with its diversification agenda in agriculture.

Minister of State for Agriculture and Rural Development, Heineken Lokpobiri, gave this indication while on inspection tour of facilities established by Earthwheel Logistics Limited, a private company with multi-billion naira investment used in breeding, processing, marketing and the export of donkeys and donkey products located at Ufuma, in Orumba North Local Government Area of Anambra State.

Earthwheel Logistics in collaboration with its partners, Don-

key Skin Processors Marketers and Export Association, is seeking for permit from the Federal Government to breed and export donkeys and products along its value chain.

According to Destiny Izuchukwu Osili, director of Earthwheel Logistics, the investors have established donkey ranches in Bauchi and Jigawa states since 2012, including the mini-ranch in Ufuma.

The Export Permit will give them the necessary framework to operate within a regulated environment that will benefit the government as well as create the needed jobs, Osili said.

The investors also work with the Nigerian Animal Production Research Institute (NAPRI) for a structured framework to breed donkeys to preserve local stock and to tackle the menace of smuggling.

The minister, who expressed satisfaction with the quality of the facilities, lauded Earthwheel

Logistics for such investments, saying, “We have come today and we have seen and I want to express my gratitude to the director of this company for this investment. I also want to take the opportunity to encourage other people to make similar investments.

“We are here as a Federal Government to create the enabling environment for all those who want to invest in any value chain in agriculture to invest without any problem. The Federal Government will support this investment in any way we can,” he said.

Lokpobiri stressed that to bridge the funding gap, the Federal Government had put some policies in place to provide loans to investors at single digit, stressing that the government would work with Earthwheel Logistics and its partners so that they breed donkeys for export to any part of the world and to also ensure that the stakeholders work with government to guaran-

tee the required global standard to protect the country’s image.

“That is why we are here to install proper quality control, work with the company to ensure that they succeed in the business so that other people can also follow suit.

We need to substitute petro-dollars with agric-dollars,” he said.

The minister however, raised concerns over the threats of extinction being faced by donkey species in Nigeria even as he urged an intensification of a programme of donkey breeding by stakeholders in the business to replenish the declining donkey population in the country.

Osili, in his speech while welcoming the minister, appealed to the Federal Government to grant them the Export Permit to meet with the international needs of the market. “This will help us to continue to pay our workers numbering 220 and make us a foreign exchange earner in line with Federal Government policy,” Osili said.

INEC to release 2019 election report in August OWEDE AGBAJILEKE, Abuja

I

ndependent National Electoral Commission (INEC) says it would release the report of the 2019 General Election before the end of August this year.

Consequently, the electoral body would commence review meetings with various election stakeholders from May. Chairman of the Commission, Mahmood Yakubu, stated this in Abuja on Monday at the Nigeria Civil Society Situation Room Stakeholders Forum on Future of Elections in Nigeria.

This, according to the INEC chairman, will include review meetings of the Inter Agency Consultative Committee on Elections Security, the media, political parties, civil society organisations; retreat with its Assistant Electoral Officers and heads of departments in each of the six geopolitical zones in May. He explained that in June, the Commission would hold retreats for INEC National Commissioners,

Electoral Officers and debriefing of selected Collation and Returning Officers as well as meet with Resident Electoral Commissioners (RECs) and Administrative Secretaries of the Commission.

Yakubu was represented by INEC national commissioner and chairman, Information and Voter Education Committee, Festus Okoye.

“As required by law, the Commission will produce the report on the 2019 general elections and submit to the National Assembly,” Yakubu said.

He listed the issues that would dominate consultations with stakeholders to include: deployment of personnel and materials; opening of polls, voting processes and performance of equipment; counting, collation and declaration of results; operation of the national situation room, election management and support centre.

Others are: challenges of violence, disruption of electoral process, kidnapping of key election staff, non-use of Smart Card Read-

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ers; audit of key processes and procedures; reverse logistics; storage of election materials; addressing electoral offences; handling of election petition and review of election observation report and recommendation.

The INEC boss said the Commission would propose far-reaching changes in the nation’s electoral processes.

One of these is the disposal of all pre-election cases before elections, he said, adding that the extant law whereby pre-election cases are yet to be concluded on the eve of elections makes the Commission’s work difficult.

He stated: “This keeps the Commission on edge to the Election Day. It makes it difficult for the Commission to produce sensitive materials ahead of time. The Commission will prefer a timeframe and timeline that allows for the disposal of all pre-election matters before elections.

“The Commission will work with the National Assembly and propose alterations to the consti-

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tutional and legal framework on critical issues that pose challenges to the conduct of the 2019 elections.

“The Commission will also follow closely the pronouncements and judgements of the various courts and tribunals on novel constitutional and electoral issues and incorporate them into our proposal and electoral reforms.”

Earlier in his remarks, Convener of Situation Room, Clement Nwankwo, called on INEC to commence an independent inquisition into the conduct of the exercise, even as he condemned the role of the Nigerian Army in the polls.

He recommended that the Executive arm of government should not carry out the inquiry on the grounds that it is an interested party.

“Situation Room is calling for an inquiry into what happened with the 2019 election because against the background of what happened and we step over it and lay it under the carpet and claim we are heading to 2023, then we are going to be in serious disaster.

Tuesday 30 April 2019

BUSINESS DAY

COMPANIES & MARKETS

40

Arbico’s Q1 profit slumps despite revenue growth

COMPANY NEWS ANALYSIS INSIGHT

Pg. 41

CONSUMER GOODS

Nascon suffers profit decline in Q1 as costs bite ISRAEL ODUBOLA

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ig e r i a n food maker, Nascon Allied Industries Plc, saw its profitability falter in the first three months of 2019 as the food maker’s direct and indirect costs dwarfed top-line growth.

The food maker’s revenue grew marginally by 0.8 percent to N6.82 billion in the quarter review, failing to keep pace with the cost of sales, which rose 8.4 percent from N4.7 billion in the previous comparable quarter to N5.1 billion in the review period.

Analysis of revenue from contracts with customers across regions revealed that proceeds from North (N4.0bn) accounted for 59 percent of the firm’s revenue in the review period, followed by West (32%) and East (9%).

Operating profit of Nascon declined 29 percent to N999.4 million in the review period from N1.41 billion a year ago, driven by a decline in other income and elevation in indirect cost which grew by nearly 10 percent

to N729.4 million from N665.7 million twelve months ago.

Consequently, operating cost dipped 651 basis points to 14.7 percent in the first quarter of 2019, compared with 20.8 percent reported in the previous corresponding quarter.

This, therefore, means that the food maker retained about N15 from every hundred naira earned in revenue after settling variable costs.

Pre-tax profit of the food maker, which plunged 34.62 percent, was significantly battered by 73 percent dip in investment income to N41.6 million and N18.8 million expended as finance costs.

Even the 34.6 percent decline in tax expense was insufficient to save after-tax profit, which plunged by about 35 percent to N694.9 million in the review period compared with N1.06 billion a year earlier.

This rubbed off on the firm’s profit margin as the food maker was able to keep N102 from every thousand naira earned as revenue in the period as against N157, indicating 5.51 percent points decline.

L-R: Ooni of Ife, HRM, Adeyeye Enitan Ogunwusi; Lagos State Governor-elect, Babajide Sanwo-Olu; Chairman, Zenith Bank Plc, Jim Ovia and Chairman, United Bank for Africa (UBA), Tony Elumelu, during the 70th years anniversary ceremony dinner of UBA Plc, at Eko Hotel, Lagos.

Earnings per share, a metric that reveals the profit allocated to each unit of share, fell by double-digits at 34.4 percent to 105 kobo, relative to 160 kobo twelve months back.

A look at its balance sheet revealed that Nascon lost N500 million value in total assets, which reduced to N30.9 billion in the review period, triggered by a sharp decline in its most

liquid assets, especially its bank balances.

Total liabilities pared some 2.7 percent to N18.3 billion on reduction in contract liabilities and current tax payable.

Nascon Allied Industries Plc provides food products such as salt, vegetable oil, tomato paste, and seasoning products. Its shares have returned 5.6 percent since the start of the year.

(BSI), UK, and also Legal Entity Identifier (LEI) accreditation, was noted by the CEO. Presenting the company’s financials for 2018, Waziri said that as activities declined in the capital market, CSCS strategically refocused on traditional CSD business lines to enhance earnings quality and growth sustainability into the future.

Gross earnings grew 4 percent year on year to N9.08 billion despite income from depository fees and commissions on trade dipping in the period on the heels of a decline in market capitalisation below 2017 levels.

CSCS generates income in part from charges and fees on market valuation and commissions on trades.

While core income grew

4 percent year on year to N8.82 billion, non-core income surged 21 percent to N260 million in 2018.

Profit before tax(PBT) grew 7 percent to N6.09 billion as PBT margin improved to 67 percent in 2018 from 65 percent in 2017. “ We were able to grow our PBT by deliberately keeping cost down, bearing in mind the scarcity of revenue and the sluggish pace of the market,” Waziri commented. Personal expense fell 15 percent year on year and total operating expenses declined by 1.3 percent also.

However, excess dividend tax of N595.7mn in the period drove the company’s effective tax rate to 21 percent and total tax expense ballooned by 85 percent to

N1.27 billion.

The excessive dividend tax was due to initial tax exempt on CSCS investment in fixed income and government treasuries which became taxable when the board decided to pay a dividend of 70 kobo in 2018.

The increase in tax adversely impacted bottom-line and PAT margin fell to 53 percent in 2018 from 58 percent in 2017.

Waziri reiterated that the company’s performance has been strong and would remain so going forward.

“We are passionate about creating value for all our stakeholders. Over the period from 31 Dec 2015 till date, capital appreciation to shareholders has been c.19.3% on a CAGR basis.”

FINANCIAL SERVICES

CSCS outlines strategy for 2019 SEGUN ADAMS

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he Central Securities Clearing System (CSCS), the Clearing and Settlement House of the Nigerian Capital Market and the Nigerian Stock Exchange (NSE), has unveiled strategic steps to serve as a springboard in consolidating on its record of value delivery and in its journey towards becoming a globally recognised central securities depository in Africa.

Haruna Jalo-Waziri, The Managing Director and Chief Executive Officer of CSCS, at the 2019 Stakeholders’ Evening in Lagos on Tuesday highlighted strategy to drive the company’s next phase of growth as he briefed stakeholders and media on CSCS 2018 perfor-

mance, ahead of its Annual General Meeting to hold Tuesday, April, 30.

According to Waziri, “ Process optimisation, customer satisfaction, partnership through strategic alliance across business and stakeholders, improvement of technology in delivering corporate goal and revenue growth” remain crucial to the CSCS agenda for growth in 2019.

The helmsman of the Financial Market Infrastructure (FMI) quipped that the pillars would provide the platform for CSCS success story in 2018 to be surpassed.

Already putting the framework in place, the CEO explained that there is on-going talent repositioning at CSCS to identify the best talent that would deliver the most

value to stakeholders. And that CSCS has launched a customer centre and a resolution channel to improve overall customer experience.

In addition, CSCS has received a green light from international regulators to take the notch higher as earlier in April it received a central securities depository (CSD) rating upgrade to A+ from Thomas Murray, the leading provider of global capital market infrastructure data, post-trade risk assessments and analytics to banks, funds and capital markets.

The recertification under ISO/IEC 27001:2013 following a recent audit of CSCS compliance with information security risks controls by the British Standards Institution

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

Tuesday 30 April 2019

COMPANIES&MARKETS

BUSINESS DAY

41

Business Event

CONSTRUCTION

Arbico’s Q1 profit slumps despite revenue growth SEGUN ADAMS

A

rbico, a full-service building and civil engineering construction company quoted on the Nigerian Stock Exchange (NSE), recorded a nosedive in its topline and bottom-line in the first three months of 2019 making little of its double-digit growth in turnover.

Profit for the period fell by 80.89 per cent to N17.05 million in 2019 as against N89.24 million the construction company recorded in the comparable quarter of 2018 on the heels of rising cost which impacted earnings.

Revenue grew year on year by 17.06 per cent to N1.29 billion in the recently concluded quarter from N1.1 billion the year before but the cost of sales rose by 24.52 per cent in the review period and gross profit fell to N256.65 million, 5.67 per cent lower than 2018 figures.

The implication for Arbico was that it was only able to retain for meeting its N19.90 out of every N100 from revenue, compared to N24.70 per N100

as gross margin declined. A higher margin would have seen Arbico have more naira per sales to service its other costs and debt obligations.

Finance income for the construction company skyrocketed 285.5 per cent to N1.28 million from N331,000 year on year in the three months to March 31, 2019, while Arbico made 97.71 per cent less from sales of its scraps in the first quarter of 2019 compared to the preceding year where it recorded N785,000 turnover.

There was no income from attendance for Arbico in the just concluded although it made N1.08 million twelve months before. On the other hand, the company was able to generate N1.84 million from rent, N51,000 from Exchange gains and had an insurance claim of N234,000 in the 2019 quarter.

A 16.58 per cent surge in operating expenses from N137.93 million in the first quarter of 2018 to N160.8 million in the same period of 2019 coupled with a 56.61 spike in staff cost and employees benefit put pressure on Arbico’s operating

profit which declined 80.89 per cent to N17.05 million.

The company didn’t have any tax expense for the period, leaving its profit for the quarter the same as the operating profit.

Consequently, Operating Margin and Net Margin dropped from 8.10 per cent to 1.32 per cent year on year.

Operating margin measures how much of the generated sales is left when all operating expenses have been paid deducted while Net Margin how much a company makes as profit from every naira sales.

The performance weighed on the company’s earnings per share which fell to 11 kobo from 60 kobo in the review period.

Arbico delivers projects for government, multinationals, industrial groups, oil and gas majors and high net-worth individuals. Its services include pre-construction, designbuild, general contracting and construction management.

Arbico was established in 1958 and quoted on the Nigerian Stock Exchange in 1978.

CSR

Dangote donates multi-billion naira 2,160 bed space students hostels to Ahmadu Bello University

L-R: Tade Gbadebo, head, benefit processing department, Leadway Pensure PFA; Ogechi Ekwosimba, benefit analyst, Leadway Pensure PFA; Olukorede Odumosu, retiree; Olusakin A. Labeodan, executive director, sales and investment, Leadway Pensure PFA; Adewale Taiwo, Retiree and Sabiki Ogedengbe, head, operations unit, South-West Zonal Office, PenCom, during a Retiree Forum held at the company’s office in Lagos

L-R: Canada Police Super Shaun Narine presenting the black history Heroism Award to Dr. Ausbeth Ajagu President Academy for Entrepreneurial Studies, Nigeria in Toronto Canada at the 21st Black History Awards for a job well done recently while others looks

…bags doctorate degree

A

frica’s foremost businessman and Chairman of Aliko Dangote Foundation, Alhaji Aliko Dangote has made yet another critical intervention in the educational sector when he donated fully equipped 2,160 bed space hostel complex to the Ahmadu Bello University, Zaria at the weekend.

The students’ halls of residence comprising of 10 blocks of 360 rooms built at a colossal sum of N1.2billion is coming after similar gestures to Bayero University, Kano and University of Ibadan, where the business mogul donated multi-billion Naira business school complexes respectively as part of his contribution to the educational development in the country.

The new students hall of residence was commissioned to commemorate the 41st convocation of the University during which the university authorities reciprocated the act of philanthropy by conferring on him and the renowned labour leader, Hassan Sumonu, honourary Doctorate Degree.

Also 15,787 graduating students were also awarded various degrees.

The President of Dangote Group on the occasion explained that he was moved to build the structure having realized that the student population at the universities have recorded significant increase without a corresponding growth in terms of infrastruc-

ture lamenting that the situation has remained a subsisting and growing major challenge as Nigerian public universities continue to grapple with under funding.

“Thus, I will like to use this opportunity to enjoin the Federal Government to consider allocating special funds to the universities to enable them to improve on research and upgrade their infrastructure.

Such special intervention has become imperative given the perennial funding challenges facing our universities”, he stated.

Dangote posited that the Federal Government alone could not shoulder the entire burden of funding tertiary education due to competing needs of other sectors that also demand priority attention.

This is where Public Private Partnership (PPP) can and should come in to fill the gap.

He then enjoined the private sector to adopt a new approach towards supporting the federal government in tackling the funding deficit in the higher institutions of learning.

Said he: “I strongly believe the private sector must go beyond just the payment of the 2% Education levy and be ready to join hands with the State and Federal Governments in expanded funding for tertiary education in Nigeria. This will ensure that our institutions of higher learning are positioned to produce www.businessday.ng

graduates who can transform this nation.

“If there are two things that I am passionate about, they are education and entrepreneurship. I believe they go hand in hand. Some years ago, as Chairman of the National Committee on Job Creation, my committee strived to fashion out strategies for integrating entrepreneurship into our national educational curriculum, in line with what obtains in the Western world.

While expressing his gratitude on the award conferred on him, Alhaji Dangote described ABU as “an institution famed for its incredibly thorough academic tradition, the quality of faculty, and the enriching experiences of life within its walls. Today, the university has lived to its billing as a melting pot for ideologies by honouring a renowned socialist and champion of employees’ rights, Alhaji Hassan Sunmonu and Myself, for being a leading capitalist and investor in employment generating enterprises.”

Dangote noted that “It is also with a deep sense of fulfilment that today’s occasion is also being used for the commissioning of 10 blocks of student hostels which consists of 360 fully equipped rooms with capacity for housing 2160 students, built at a cost of N1.2 billion donated by the Aliko Dangote Foundation to Ahmadu Bello University, (ABU) Zaria.

L-R: Anthony Ekun, executive creative director, SO&U; Kemi Evbota, senior group head human resources, SO&U; Udeme Ufot, group managing director, SO&U, and Uche Osoka, group art director, SO&U, at the SO&U group Blood Donation Drive which held in Lagos.

L-R: Oluseun Lawal, senior brand manager, Maltina; Amuda Taiwo, winner of brand new Toyota Corolla, and Gbega Adeyinka, The First, actor and comedian, at Laffmattazz With Maltina In Ibadan.

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42

Tuesday 30 April 2019

BUSINESS DAY

NEWS

Tech Distribution schools young girls on limitless opportunities in ICT Jumoke Akiyode-Lawanson

T

echnology Distribution (TD) has urged young females to embrace opportunities inherent in the Information and Communication Technology (ICT) sector.

This is especially as females remain underrepresented in the fields of Science, Technology, Engineering and Mathematics (STEM) in African countries, including Nigeria.

Chioma Chimere, coordinating managing director, TD, who spoke with secondary school girls at the ‘This is Me – The Tech Talk’ programme organised by the company to celebrate International Girls in ICT Day on April 25 at the Zone Tech park in Lagos, said, “The girl child should pursue careers in ICT because the opportunities are limitless. ‘’I think the opportunities are already available because the ICT industry is such that admits its kind, it is attractive. So long as you are mentally prepared for it, then you can harness the opportunities. ‘’Most times it is not a question of educational qualification.

You don’t have to be an Electrical Electronics Engineer or a Computer Engineer to find a career in ICT. I am a graduate of English Language and Literature and I have been in IT for 23 years. ‘’Our industry is very dynamic.

So any woman who is hard working and dynamic in character would

flourish naturally in ICT.” TD brought together over 150 girls from Senior Secondary 2 (SS2) to educate them on self love and ICT opportunities, and future career growth.

“We decided to talk to these young girls about loving yourself, talks about the perspective of a man, and then we had highly acclaimed CEOs give them stories of their growth from grass to grace. This is so that the girls understand what life is all about, so that they can start young to create values and live by those values,” she said.

Giving examples of female CEOs in global tech companies, Stanley Opaleke, group executive director, Zinox Group, said the young girls should aspire to be leaders like Susan Wojcicki, CEO of YouTube, Ginni Rometty, CEO of IBM, Safra Catz, co-CEO of Oracle, and Chioma Ekeh, CEO of Technology Distribution Africa.

“These are all women heading global ICT companies worth billions of dollars and doing very well at it. I believe that we are in a female take-over dispensation and real men are happy about that,” Opaleke said.

Chidalu Ekeh, head of marketing, Konga, urged the girl-child to always love herself, so as to break barriers, saying, “’Loving Yourself’ is a journey, a process that needs to be nurtured.” She said the female gender should apply the principle of potentiality.

How bureaucracy affects quest for urgent bridge of Nigeria’s infrastructure gaps JOSHUA BASSEY

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sides frequent changing of cabinet members leading to Nigeria having 34 ministers of works in 67 years (1952 to 2019), inbuilt bureaucracy in the system plays a role in limiting Nigeria’s quest to urgently bridge its huge infrastructure gaps, Babatunde Fashola, minister of works, power and housing, says.

Fashola made the observation, Monday, in Abuja, at the presentation of a book: ‘Proof of infrastructure delivery across Nigeria,’ which essentially captures most of what have been done by the Ministry of Works, Power and Housing under his watch in nearly four years.

According to Fashola, although the three-pronged ministry has had better funding in the last four years compared with past administrations, leading to improved power supply and com-

pletion of abandoned and new road projects across the country, in-built processes and procedures as well as external factors outside of government’s control still pose a challenge to early delivery of projects.

“When a road is identified for construction, it has to be surveyed by land surveyors to identify the right of way, soil tests have to be conducted to determine what is under before a design is commissioned and the owners of the land have to be enumerated for compensation of crops and buildings that have to be removed and paid for, including existing utility assets like electric poles and installations and petroleum and water pipes.

“All of these are items of cost in addition to the cost of materials like sand, laterite, cement, labour, iron rod, lubricants and asphalt that will be used to build the road.

“When the cost is determined from design and allied costs, it forms part of the budget presented

by the president every year.

When the budget is passed and the cost is approved, then we follow procurement process, which includes advertising, evaluating tender and submission to the Bureau of Public Procurement to get a Certificate of No Objection.

After this, depending on the total cost, once it exceeds N500 million, the minister must seek Federal Executive Council (FEC) approval to award the contract.

If successful, the award is made, and then legal department draws up a contract, which must be signed. After this, the contractor must go to a bank to get an advance payment guarantee in order to get a mobilisation fund, not exceeding 15% of the contract sum.

When all of these have been done, we await the release of funds from the ministry of finance if they have money. If not, we wait for the approval of the National Assembly for the country’s borrowing plan for the year before ministry of

finance can go to the market to raise money by loans (local and external), bond issuances or special borrowing like Sukuk. This takes weeks and months.

When money is finally released to the contractor, he begins to place orders with quarry owners to produce laterite, sand, rock and stones; and asks iron rod, cement dealers, and asphalt producers to supply him.

Contractors don’t usually stock these materials. They order them when they are paid and when they run out of money and exhaust their stock, work stops, while they await the next payment cycle.

They also do not keep labour, except their core staff in order to manage their overheads. They employ labour when there is work to do.

Apart from the tedium of the above process, there are community issues, court cases, civil rights agitations that affect the continuous delivery of construction work.

Nigerians urged to leverage coming London Tech week for economic growth …British Airways CEO, others to speak IFEOMA OKEKE

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ondon-based firm, Vivacity PR, has stressed on the need for Nigerians to leverage the opportunities offered by the upcoming London Tech Week to fast track economic growth and improve daily activities.

The Tech Week, which holds June 9, 2019, is expected to address series of issues across sectors of economy, especially information and technology, oil and gas, finance and others.

Kemi Areola, CEO of Vivacity PR, the event partner and consultant to the organisation responsible for assisting Nigerians participate at the event, noted, “Nigeria stands to benefit from the conference and exhibition.”

The international community from across the spectrum would be present at the event to address how access to tech for all can have a profoundly positive impact in society and business with the line-up of renown speakers such as chairman/CEO, British Airways, Alex Cruz; executive director, AI, UBS Group Technology, Artificial Intelligence; Annika Schröder, EMEA vice president, Twitter; Bruce Daisley, and many others, Areola said.

The event would feature issues around ‘Blockchain for Business Summit’, The AI Summit’, ‘5G World’, ‘Future of Work Summit’ and other emerging issues; particularly on the fourth industrial revolution. The event aligns with the mandate of the ministry of Communications as well as ERGP of our government.

She said: “This is one of the best opportunities we Nigerians have in terms of improving our businesses and the economy at large. We have witnessed remarkable growth in the telecommunication sector, we need to consolidate on this.

We equally need to learn how to use technology to improve our economy and the way we live; this London Tech Week offers that opportunity.

“Technology is impacting communities and markets in unprecedented ways in Nigeria and at such remarkable speed that sets the country apart and propels the entire African continent forward; this transformation comes with a massive commercial potential for both local and international business.”

According to her, as Nigeria’s facilitator for the event, Vivacity PR would assist as many Nigerians, who are willing to attend the event. “We are open”. www.businessday.ng

L-R: Adeoye Adefulu, secretary, Bar Association-Section on Business Law (NBA-SBL); Oscar Onyema, CEO, Nigerian Stock Exchange (NSE); Seni Adio, chairman, NBA-SBL; Justina Lewa, council member, NBA-SBL; Ozofu Ogiemudia, vice chairman, conference planning committee, NBA-SBL, and Baba Alokolaro, chairman, conference fund raising, NBA-SBL, during the closing gong ceremony by the council member of NBA-SBL, at the NSE floor in Lagos.

Pic by Olawale Amoo

Osinbajo, NGF chart way for newly elected governors Tony Ailemen, Abuja

V

ice President Yemi Osinbajo Monday presided over a strategic initiatives aimed at charting the right road map for the newly elected and returning governors.

The programme, an initiative of the Presidency and the Nigeria Governors’ Forum (NGF) tagged “Induction of new and returning Governors,” is aimed at exposing the governors to the challenges and prospects of governance.

It is also aimed at brainstorming on how to deal with the challenges, drawing from the experience of the incumbent governors.

It is also aimed at supporting incoming governors

to develop key governance and management skills that will enable them transit from campaigning to managing the processes of governance.

It will help in preparing governors to make the most of their transition from campaigning to governing and building bridges for effective leadership.

Deepening the knowledge and skills of governors on the principles of governance and shaping their disposition and outlook to align with their work and motivation levels, and create a platform that will enable governors to fully understand the philosophies, responsibilities, organisation, and cultural values, along with key processes of

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governance.

Others include creating an opportunity for peer learning, promotion of global best practices and networking with national and global leaders, and point the governors to relevant contemporary national priorities in critical sectors of the economy and driving consensus on opportunities to achieve desired outcomes.

T h e f o u r d a y s p ro gramme, according to the NGF, will be multi-layered and interactive.

It will feature plenary presentations and discussions by key stakeholders with diverse experiences.

This is aimed at generating conversation among the newly elected governors, respected national and in@Businessdayng

ternational leaders, heads of national institutions and development partners, among others.

Critical stakeholders, including current and past governors of Nigeria and the United States, are also expected to provide the opportunity for Nigerian governors to, not only network with national and global leaders, but also to gather useful information that will help them transition into their new roles as chief executives of states.

Former governors are also billed to share their knowledge and skills honed on the nuances of governance to better equip the new ones to hit the ground running

Tuesday 30 April 2019

FT

BUSINESS DAY

43

FINANCIAL TIMES

World Business Newspaper

SoftBank’s cash has poured out — it’s starting to come back

Shares up 41% since December as ‘conglomerate discount’ finally begins to narrow KANA INAGAKI AND SIDDARTH SHRIKANTH

S

ince SoftBank founder Masayoshi Son launched his $100bn Vision Fund in 2017, the business world has been fixated on the outflows: billions have gone to companies that range from Grab, the Singaporean carhailing service, to WeWork, the US shared office provider.

The critical view of Mr Son as an opportunistic and even whimsical investor was given fresh ammunition last week with the revelations that he had lost $130m of his personal fortune on a bitcoin investment and poured €900m of SoftBank funds into Wirecard, the German payments group fighting an accounting scandal.

But the money is now also starting to flow the other way.

Armed with cash from the $23.5bn listing of SoftBank’s mobile unit and Japan’s largest-ever corporate bond sale to retail investors, and with Uber’s blockbuster IPO around the corner, Mr Son is finally starting to dispel the notion that his Japanese technology conglomerate is risk-addicted and debt-laden. So flush is Mr Son feeling that he launched a $5.5bn share buyback in February.

“Until now, SoftBank was viewed as a group loaded with debt and doing dangerous things,” Mr Son said in February. “In time, all that noise will go away.”

Mr Son has consistently complained that investors do not appreciate the group’s true worth.

In February, when its market capitalisation was ¥9tn ($80bn), he argued that SoftBank shares were undervalued by nearly 60 per cent. His calculations put the company’s net debt at ¥3.6tn

and its trove of equity holdings including Alibaba, WeWork and Uber at ¥25tn, implying ¥21tn of value for shareholders.

Now, more investors are beginning to buy into his view.

Since the public offering on December 19 of stock in its mobile subsidiary, SoftBank Group shares have risen 41 per cent to a 19-year high.

The cost of five-year creditdefault swaps to insure against non-payment of debt by SoftBank has dropped by nearly 100 basis points since the start of the year to 170 bps, according to data from Bloomberg, having risen sharply after the murder of journalist Jamal Khashoggi prompted concern about the group’s ties to Saudi Arabia.

Richard Kaye, a portfolio manager at French asset manager Comgest, a SoftBank shareholder with a $50m stake, said that events, including the flotation of SoftBank’s mobile unit and the filing for an IPO by Uber, where SoftBank is the largest shareholder, have given investors confidence in the Japanese group’s ability to monetise its assets.

“This could be the beginning of a rather long reassessment by investors of SoftBank’s potential,” Mr Kaye said.

The company’s $4.5bn bond issuance to Japanese retail investors this month was fully subscribed on the first day, even though SoftBank is still rated below investment grade by Moody’s and S&P. Given the coupon of 1.64 per cent, well above the country’s near-zero interest rates, analysts said the scale of retail demand was not unexpected but was

D

mental shift was required at the investment bank, Mr Achleitner replied: “No”. However, he said this was his personal view and that the management board was responsible for the lender’s strategy.

Large investors and regulators for months have been calling on Deutsche Bank to step up its efforts to turn the investment bank around.

After his appointment last April, chief executive Christian Sewing pushed through a restructuring of Deutsche’s corporate and investment, shrinking its balance sheet by 12 per cent and sacking 8 per cent of its front office staff, particularly in US equities.

However, in the first quarter of 2019, revenue continued to fall faster than costs, while trading revenue plunged another 19 per cent.

JPMorgan analyst Kian Abouhossein estimates that Deutsche’s US equities operations burn €200m-€300m a year before tax.

“They have no option but to address some underperforming assets,” he told the Financial Times. www.businessday.ng

with these investments in volatile internet companies,” Mr Yanase added.

The Vision Fund contributed 40 per cent to SoftBank’s operating profit last quarter, but most of that is unrealised gains that do not pass through the group’s books as cash. If Uber’s IPO is followed by others such as Chinese rival Didi Chuxing and Slack, the workplace messaging app, SoftBank will be armed with more actual cash.

“The biggest issue SoftBank faces is how they can ensure steady cash flow since its investments are just going to keep on increasing,” said Satoru Kikuchi, analyst at SMBC Nikko Securities.

Alibaba and Sprint do not generate dividends, and its cash-cow mobile unit is now likely to generate only about half the cash it used to following its listing.

Researchers can study social network’s effect on elections but only from 2017 onwards

Paul Achleitner defends turnround plan after collapse of merger talks with Commerzbank

eutsche Bank’s investment bank does not need a fundamental strategic overhaul in the wake of the collapse of merger talks with rival Commerzbank, according to the German lender’s chairman.

Pa u l A c h l e i t n e r, h e a d o f Deutsche’s supervisory board who has been seen in Frankfurt as a supporter of the Commerzbank merger, defended the current turnround efforts at the investment bank, which has been lossmaking for two consecutive quarters.

“Every executive has to constantly adjust to a changing market environment . . . But in this regard, we are not talking about strategy, we are talking about execution,” he told the Financial Times in an interview. “In particular in a business like the capital markets one, which is so volatile and so rapidly changing, there will be permanent adjustments.”

Asked whether a more funda-

end up with a stake worth nearly $11bn if the US group achieves its planned IPO valuation of $91.5bn. Filings show it may also sell about $272m of shares at the IPO if there is sufficient demand.

But if SoftBank decides to sell a larger part of its Uber stake following the 180-day lock-up period, it is unclear whether those gains would be used to make big new bets in technology, pay down debt or return money to shareholders.

“Since SoftBank is the kind of company that could aggressively make new investments, possibly through a Vision Fund II, we’d like to see how it will use the cash,” said Motoki Yanase, Moody’s vice-president and senior credit officer.

“The Vision Fund investments have gone well so far but there is no guarantee that will continue

Facebook opens its data to academics for first time

Deutsche Bank chairman rejects investment bank strategy overhaul OLAF STORBECK

still impressive considering that SoftBank has already sold more than $40bn in bonds to individual investors.

In a sign of some lingering investor concern, however, SoftBank shares fell 3.6 per cent late last week after reports of opposition from the US Department of Justice’s antitrust staff to a merger between T-Mobile and SoftBank’s US mobile carrier Sprint.

Despite the recent rally, shares in SoftBank remain undervalued by 40 per cent, applying Mr Son’s metrics. For that remaining “conglomerate discount” to narrow, Uber’s planned IPO in early May, in which the US car-hailing group is aiming to raise as much as $9bn, could be crucial, according to investors and analysts.

SoftBank, which invested $7.7bn for a 16.3 per cent stake in Uber via the Vision Fund, could

HANNAH MURPHY

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acebook is opening up its data for the first time to more than 60 academics from around the world, who will be able to look, among other things, at how the platform influences elections.

The world’s largest social network, used by 2.4bn people each month, will allow academics to see which websites were linked to by Facebook users from January 2017 to February 2019.

They will also be able to look at the system that advertisers and marketers use to plug into Facebook’s data, and at Crowdtangle, a tool that shows publishers how content is spreading across the site.

The academics, drawn from 30 institutions, were chosen by the Social Science Research Council, a nonprofit US organisation. They include researchers who are studying the role that Facebook played in elections in Italy and Germany.

The researchers will have access to one of the biggest troves of information about human behaviour online,

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and the move may pave the way for other companies with enormous data sets to follow suit.

It comes as Facebook has sought to fend off criticism that it has been too opaque about how its platform has been a host to fake news, following evidence of co-ordinated Russian disinformation campaigns designed to manipulate the 2016 US election.

However, the timeframe selected

by Facebook for the links database means the academics will not be able to analyse the most contentious information from the run-up to the 2016 US election or the UK’s Brexit vote.

Facebook has also had to balance concerns over user privacy in the wake of the Cambridge Analytica data scandal.

Facebook’s social science initiative was initially launched a year ago, but faced delays as the company weighed up how to guard against privacy breaches and guard user confidentiality.

Chaya Nayak, Facebook’s strategic initiatives manager, said the company had been “slow out of the gate on the project” in order to spend more time @Businessdayng

getting “privacy right”.

Facebook’s data sharing partnerships were attacked after it emerged that Cambridge Analytica, a political consultancy that worked for the Trump campaign, had improperly obtained the personal data of some 87m Facebook users via a third party.

On Monday, Facebook said it planned to apply so-called “differential privacy” to the way in which researchers could query its data, by introducing “noise” to the information that prevents them from being able to personally identify individuals.

Ms Nayak said that the timeframe for the URLs database, which does not include the US 2016 election, was selected in order to “prioritise getting the data out as fast as possible,” adding that the possibility of extending the data set further back in time was “under discussion”.

While academics will not require approval from Facebook before publishing their insights, Ms Nayak said that the company would log how the database is used to ensure it is not abused by academics, who will be required to sign strict legal agreements.

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Tuesday 30 April 2019

BUSINESS DAY

FT

NATIONAL NEWS

Airlines face profit hit over Boeing 737 Max grounding Hundreds of millions of dollars in costs raise prospect of compensation claims PATTI WALDMEIR AND JOSH SPERO

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S and European airlines have warned that the grounding of Boeing’s 737 Max will shave hundreds of millions of dollars from their combined profits this year, raising the prospect that the aircraft manufacturer will face significant costs for compensating customers.

Boeing is expected to come under fire from investors at its annual meeting in Chicago on Monday.

The company faces calls for a boardroom shake-up from leading shareholder advisory groups in the wake of the two crashes.

Glass Lewis has recommended the removal of Lawrence Kellner , the board’s audit committee head, for failing to foresee safety risks with the 737 Max aircraft.

The total amount of compensation due to 737 Max operators is impossible to estimate, according to airlines, aerospace analysts and aviation industry sources, since the date when the plane can return to service around the world is still unknown.

All Max aircraft have been grounded worldwide since March 13 and will remain so until Boeing completes a software fix for the flawed anti-stall system that played a role in bringing down two Max aircraft in the past six months, killing 346 people. Once that fix is complete, the Federal Aviation Administration must recertify the plane as safe, and other global regulators have said they want to

make their own independent assessment of airworthiness.

Compensation was “unlikely to be in the form of a pile of cash”, said one person briefed on the process, noting that Boeing had in the past offered discounts on the price of future aircraft purchases or agreed to defer purchases to adopt a timetable that better suited carriers. A combination of both is also possible.

Cash-strapped low-cost airline Norwegian Air Shuttle, one of the biggest Max carriers, said this week that Boeing had agreed to postpone deliveries of 14 Max 8 jets due in 2020 and 2021. Industry sources said some other carriers could be planning to delay deliveries or switch to other Boeing models as a result of the grounding.

American Airlines chief executive Doug Parker told analysts on an earnings call on Friday that he had not yet had conversations with Boeing about compensation, though the carrier warned 2019 pre-tax earnings would be lower by $350m as a result of the grounding. “At some time perhaps we will, but right now we’re focused on working together to get the airplane back and recertified,” he said.

Southwest Airlines chief executive Gary Kelly said on Thursday that the Max grounding, the US government shutdown and several other factors had cost the company $200m in revenues in the first quarter. He did not break out the Max costs, but Morningstar airline analyst Danny Goode estimated it at about $60m.

JPMorgan bans staff from Bruneiowned hotels over gay law US bank joins boycott after kingdom enacts death by stoning for homosexuality and adultery STEPHEN MORRIS AND MARK VANDEVELDE

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PMorgan Chase has banned its staff from staying in any of a dozen hotels owned by the Sultan of Brunei, joining a backlash against the Asian kingdom that has enacted death by stoning as a punishment for gay or extramarital sex.

The decision follows a similar move by Deutsche Bank, days after the law took effect at the beginning of April, and puts swanky retreats including London’s Dorchester and the Beverly Hills Hotel in Los Angeles off limits to executives at America’s biggest bank.

A growing boycott of Bruneiowned hotels has been spurred by singer Elton John and actor George Clooney, who has called for “banks, the financiers and the institutions” that do business with the hotels to be shamed out of supporting the “murderous regime”.

JPMorgan’s decision was communicated to staff earlier this month in a low-key message on its internal booking system.

“We have banned Brunei hotels from our booking system, but have not said anything publicly,” said a senior manager at the bank who requested anonymity to discuss the unannounced move. “So we are quietly doing the right thing, which is good I suppose.”

A JPMorgan spokesperson confirmed that the move was a reac-

tion to the new law, which also authorises amputation of the limbs of convicted thieves and sanctions certain forms of black magic with the death penalty.

Among the other organisations that have barred bookings or cancelled forthcoming events at Dorchester Collection hotels are the UK Police Federation and the country’s ruling Conservative party.

The Financial Times said it would cancel an event it planned to hold next month at The Dorchester, and that no other hotels within the group would be used.

Brunei, a wealthy oil nation with a population of just 430,000, began phasing in a version of sharia law in 2014, but delayed implementation of the penal code amid an international outcry. The country has not carried out an execution since 1957, when it was still a British protectorate, according to the UN. The sultan — who is also prime minister and one of the world’s richest men — has defended the new legislation.

Brunei “is a sovereign Islamic and fully independent country and, like all other independent countries, enforces its own rule of laws”, said a statement from the prime minister’s office, a few days before the law went into effect.

It added that the legislation aimed to respect and protect individuals’ “legitimate” rights while “deterring acts that are against the teachings of Islam”. www.businessday.ng

Staff protest against Google’s handling of sexual misconduct allegations at the company’s California headquarters © AP

How Big Tech is struggling with the ethics of AI

Companies criticised for overruling and even dissolving ethics boards MADHUMITA MURGIA AND SIDDARTH SHRIKANTH

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fter Jack Poulson quit Google, he was ushered into a meeting with Jeff Dean, the head of the company’s artificial intelligence division.

Mr Poulson, a former Stanford professor who worked on machine intelligence for Google, had resigned in protest at “Project Dragonfly”, a plan to develop a censored search engine for China, saying the company had promised just two months earlier not to design or deploy technology that “contravenes [ . . .] human rights”.

The meeting, according to Mr Poulson, was supposed to make him “feel better about Google’s ethical red lines”.

“But what I actually found was the opposite,” he said. “The response was, ‘[human rights organisations] are just outsiders responding to public information, [and] we just disagree that that’s a violation.’

There was no respect for them on this issue.”

He left the company the next

day. In recent months, other Google employees have protested at its bid for a Pentagon cloud computing contract, and its involvement in a US government AI weapons program.

The development and application of AI is causing huge divisions both inside and outside tech companies, and Google is not alone in struggling to find an ethical approach.

The companies that are leading research into AI in the US and China, including Google, Amazon, Microsoft, Baidu, SenseTime and Tencent, have taken very different approaches to AI and whether to develop technology that can ultimately be used for military and surveillance purposes.

For instance, Google has said it will not sell facial recognition services to governments, while Amazon and Microsoft both do so. They have also been attacked for the algorithmic bias of their programmes, where computers inadvertently propagate bias through unfair or corrupt data inputs.

In response to criticism not only from campaigners and academics but also their own staff, companies

have begun to self-regulate by trying to set up their own “AI ethics” initiatives that perform roles ranging from academic research — as in the case of Google-owned DeepMind’s Ethics and Society division — to formulating guidelines and convening external oversight panels.

The efforts have led to a fragmented landscape of efforts that both supporters and critics agree have not yet had demonstrable outcomes beyond igniting a debate around the topic of AI and its social implications.

In Google’s case, its external advisory council on AI lasted only a week before its employees revolted at the appointment of Kay Coles James, from the conservative Heritage Foundation think-tank, and shut it down earlier this month.

Luciano Floridi, who was one of the advisers and is director of the Digital Ethics Lab at Oxford, said the board has been planning to help Google navigate its trickiest dilemmas. “Some projects are perfectly legal, but may not be what people expect from a company like Google or the values it has committed to,” he said.

Anadarko agrees to $55bn takeover talks with rival Occidental Planned sale of Texas-based oil and gas company to Chevron in jeopardy JAMES FONTANELLA-KHAN AND ERIC PLATT

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nadarko Petroleum said on Monday that it will enter into $55bn takeover talks with its US rival Occidental Petroleum, caving in to pressure from the hostile bidder that is likely to kill off a previously agreed sale to oil major Chevron.

Texas-based Anadarko said that its board had “unanimously determined” that the latest cashand-stock offer by Occidental was expected to be deemed superior to the $50bn deal agreed with Chevron earlier this month.

Anadarko said: “The Occidental proposal reflects significant improvement with respect to indicative value, terms and conditions, and closing certainty as compared to any previous proposal Occidental made to Anadarko.”

The decision by Anadarko to endorse the Occidental offer marks what would be a rare win for a

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hostile bidder, which are often rebuffed. Anadarko acknowledged last week that it had received an offer from Occidental, weeks after it had rejected takeover advances from the group.

Occidental, one of the five largest US oil and gas production companies, offered to pay Anadarko shareholders $76 per share, a 22 per cent premium to the bid from Chevron, which is worth roughly $63 per share.

The bid from Occidental was evenly split in cash and stock.

Chevron offered to pay 0.39 of its own stock and $16.25 in cash for each share of Anadarko outstanding. Anadarko has agreed to pay Chevron $1bn if it backs out of the deal.

It is unclear if Chevron will increase its bid for Anadarko. However, people with knowledge of the oil major’s thinking have said Chevron was unlikely to enter a bidding war for the assets, the Financial Times has previously reported. Chevron @Businessdayng

had earlier refused to raise its bid when it had heard Occidental had offered more than $70 a share for Anadarko.

A deal would give Occidental valuable shale oil acreage as well as assets in the Gulf of Mexico and a natural gas project in Mozambique.

It would be the largest and boldest bet yet by Occidental chief executive Vicki Hollub.

“This is much more synergistic for us than any other company that might look at this,” Ms Hollub told the FT last week.

Occidental’s interest emerged just minutes after Anadarko announced its sale to Chevron earlier this month, but analysts warned at the time that they did not see how Ms Hollub could outbid her larger rival.

Ms Hollub has promised to sell assets worth up to $15bn if a deal to take over Anadarko is agreed, in part to win backing from Occidental shareholders who must sign off on the cash and stock deal.

Tuesday 30 April 2019

BUSINESS DAY

45

FINANCIAL TIMES

COMPANIES & MARKETS

@ FINANCIAL TIMES LIMITED

Bart Chilton, former CFTC commissioner, 1960-2019 Flamboyant, folksy image signalled his identification with the ‘little man’ PHILIP STAFFORD

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art Chilton, one of the most distinctive and controversial figures in financial-market regulation, has died at the age of 58.

Easily recognised with his shoulder-length white-blond hair, loud enthusiasm, folksy comments and cowboy boots, Chilton was a singular character as a commissioner at the US Commodity Futures Trading Commission.

The television channel RT America, for which he hosted its main financial show Boom Bust, announced Chilton’s death on Saturday evening, saying it followed a sudden illness.

Walt Lukken, chief executive of the Futures Industry Association and also a former CFTC commissioner, compared him to a big-haired 1980s rock star, “always colourful, always funny and always passionate . . . the David Lee Roth of the CFTC”.

A Democrat, Chilton regularly appeared on TV and at industry conferences as a critic of highfrequency traders, calling them “cheetahs”. Although he privately said his flamboyant image in the largely grey world of regulation was partly for show, it also signalled his identification with what he saw as his key constituents: America’s farmers and ranchers.

They, he said, were disadvantaged in Washington’s policymaking machinations. Powerful and rich interests would try to roll policies

back over time, he argued.

Chilton said being the “little man” was a key part of his life, firstly as a worker in a steel mill in Indiana after college and then as a long-serving government official in the agriculture industry. He was also chief of staff at the US National Farmers Union, which represents family farmers and rural communities, from 2006-07.

He was appointed as a commissioner in 2007 by President George W Bush, as technology was beginning to revolutionise trading and the global financialmarket meltdown was beginning to simmer.

From 2010, the CFTC, which had previously been a sleepy backwater agency, took on new powers to oversee the US derivatives market, which had been blamed for exacerbating the crisis.

The era of rapid change was further underscored by the flash crash of May 2010, in which US stocks abruptly dived. Although an official government report blamed the poor execution of a trade from Kansas, many of America’s retail investors pointed the finger at high-frequency traders, which dart in and out of bets and execute deals in milliseconds.

From his position, Chilton vividly spoke out against such activity, labelling those market participants as “cyber cowboys” and “high rollers”, and calling out a rampant “Ponzimonium” in financial markets.

Wall Street stocks tick up to new record peak S&P 500 climbs above previous intraday high set last September MICHAEL HUNTER AND ADAM SAMSON

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all Street’s benchmark stock index rose on Monday to a new record peak, exceeding the intraday high that was set last autumn.

The S&P 500 climbed 0.05 per cent to reach a high of 2,942, ticking above the previous historic intraday high that was set in September 2018. The index had reached a record closing high last week after stronger-than-expected US growth data for the first three months of 2019. The tech-heavy Nasdaq Composite also struck a new high, rising 0.1 per cent to 8,154.

The gains in the US bucked a more muted performance in Europe, where the continent-wide Stoxx 600 index was flat.

Frankfurt’s Xetra Dax 30 fell 0.3 per cent, while London’s FTSE 100 inched up by 0.2 per cent. Property and utility stocks led the declines, while banks offset losses after S&P left Italy’s credit rating on hold.

Spain’s Ibex 35 was 0.4 per cent lower after the result of the country’s general election.

The Federal Reserve’s preferred

inflation indicator was published in the run-up to the New York open. The core personal consumption expenditures price index for March read 1.6 per cent, slightly softer than forecasts of 1.7 per cent, and still under the central bank’s 2 per cent target, playing into the existing dovish outlook for US monetary policy.

The dollar held around some of its strongest levels in two years after the data, with the index tracking the world’s reserve currency anchored just over 98 points.

Meanwhile, in Asia, China’s CSI 300 was up 1.2 per cent after posting its biggest weekly decline in six months last week, falling 5.6 per cent. Figures released over the weekend showed Chinese industrial profits returned to growth in March, rising 13.9 per cent year on year, following four consecutive months of falls. Further clues on the impact of Chinese stimulus programmes will come on Tuesday with the official manufacturing purchasing managers’ index.

Brent crude fell 0.1 per cent to $71.98 a barrel after Donald Trump urged Opec to bring down prices. www.businessday.ng

Bart Chilton spoke out against rampant ‘Ponzimonium’ in financial markets © Bloomberg

Shareholder adviser attacks Metro Bank over pay and governance Investors urged to vote against re-election of Vernon Hill as chairman NICHOLAS MEGAW

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nvestors in Metro Bank have been urged to block the re-election of chairman Vernon Hill at its annual meeting later this month, with advisory group Glass Lewis arguing that Mr Hill risked further damaging he bank’s reputation after a string of recent issues.

The proxy adviser also accused Metro of undermining basic pay principles by awarding its new chief financial officer tens of thousands of pounds in bonus payments for a period before he joined the bank.

Glass Lewis said “the introduction of an independent chair should be a priority”, thanks in part to Mr Hill’s pattern of paying large sums to a firm owned by his wife.

It also said he “clearly does not meet” recommendations under the UK Corporate Governance Code for independent chairs, given his role in

co-founding the bank and long tenure on the board.

The complaints, outlined in a note for shareholders published on Monday, are not the first time Glass Lewis has criticised Mr Hill’s leadership, having unsuccessfully raised similar concerns about the payments to related parties last year. However, it also stepped up its criticism of the bank’s broader approach to governance.

More than half of Metro’s nonexecutive directors at the end of 2018 had been on the board since shortly after it was founded, a policy that Glass Lewis warned “creates the risk of ‘group-think’” and potentially inhibits the non-executives from presenting an appropriate challenge to management.

It acknowledged that the bank had taken some steps to improve the situation in recent months, but suggested the decision to appoint a nonindependent director to the newly created position of deputy chair was

a missed opportunity.

Mr Hill has long been a controversial figure in the banking world, with UK regulators twice trying to block him from becoming chair. However, the board has come under particular scrutiny since the revelation of a reporting error in January prompted a massive drop in the bank’s stock and forced it into a new fundraising.

The pressure on Mr Hill in particular has been amplified by recent legal action in the US accusing him of unfairly dismissing a pair of exbusiness partners and having a history of making sexist remarks.

Metro Bank declined to comment on Monday, but in its annual report published last week the bank said: “As the founder of the Bank, Vernon has a unique role. The Board firmly believes Vernon to be the best qualified individual to take the Bank forward and implement the Bank’s unique business model as Chairman.”

Iliad chairman fined €600,000 for insider dealing

Maxime Lombardini punished for share sale before failed 2014 move for T-Mobile USA HARRIET AGNEW

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he chairman of French telecoms company Iliad has been fined €600,000 for insider dealing over his sale of shares in the telecoms company weeks before they dropped during the failed 2014 takeover approach for T-Mobile USA. The Financial Markets Regulator’s enforcement committee said on Monday it had fined Maxime Lombardini, then chief executive, for “breaching insider dealing regulations”. Iliad must pay €100,000 “for breach of its disclosure requirements”.

The breaches relate to Iliad’s attempt to acquire the much larger US mobile network in July 2014. When Iliad surprised the market with its initial approach, its share price slipped 7 per cent, the French group’s sharpest drop in almost eight years.

Weeks earlier, Mr Lombardini had sold Iliad shares for him-

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self and his partner, which the regulator said constituted insider dealing.

Iliad was fined for delaying by seven days its communication to the market of its interest in TMobile USA. The AMF statement said Iliad waited until “31 July 2014 to disclose that information, even though the company could not ignore that, on 24 July 2014 at the latest, it was no longer able to ensure its confidentiality, following which Iliad had failed in its obligation to communicate any inside information as soon as possible.”

The offer for T-Mobile USA, an attempt by Iliad’s largest shareholder Xavier Niel to establish an American foothold, was rebuffed by the US company’s majority shareholder Deutsche Telekom.

An improved bid was also rejected before Iliad withdrew its offer in October 2014.

The fines are lower than the regulator was seeking — it recommended last month that the @Businessdayng

enforcement committee fine Mr Lombardini €1m and Iliad €500,000.

Mr Lombardini and Iliad, who have previously said the regulator’s grievances were “unfounded”, declined to comment on Monday.

The fines come at a difficult time for the company and its management. Its shares have dropped by more than a fifth this year, reflecting investor concerns about the highly competitive commercial environment in France and over the company’s ability to generate cash.

Iliad acknowledged last month that it would take longer than expected to hit its cash flow targets and said it might try to raise cash by selling part of its mobile network.

A foray into Italy, where Iliad is building a mobile network from scratch, has put further pressure on cash at the same time it has to invest in faster fibre broadband in France.

46

Monday 29 April 2019

BUSINESS DAY

ANALYSIS

FT Attenborough, Gates and the battle between optimism and pessimism Climate change is worrying even the most determined optimists GIDEON RACHMAN

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re we in the best of times? Or the end of times? One of the oddities of the current era is that extreme pessimism about the world coexists with extreme optimism — and both have a plausible case to make.

The two views are epitomised by David Attenborough and Bill Gates, two charismatic figures whom I met on the same day, earlier this year.

(Reader, forgive me, it was at Davos.)

Sir David, now in his nineties, is using his position as one of the world’s most famous broadcasters to sound the alarm about looming environmental catastrophe. In a recent BBC programme, Climate Change: The Facts, he argued that without dramatic action, humanity “faces a devastating future”.

Sir David highlights not just climate change but a whole array of unfolding environmental disasters, such as the pollution of the oceans

disappearance of natural habitats for wildlife reflects the relentless expansion of humans, with the population of Africa alone set to double by 2050.

The response of environmentalists such as Sir David, however, is that we are now at the stage where human welfare is intimately connected with the preservation of the environment.

The melting of the polar ice caps is not just bad news for polar bears. It will also mean higher sea-levels that could flood coastal cities. And if you chop down more of the Amazon to make way for soyabeans or cattle, you will accelerate global warming, leading to desertification and mass population movements.

There are some professional optimists, such as Matt Ridley, author of The Rational Optimist, who have consistently challenged both the extent and the dangers of climate change. But Mr Gates does not belong to this camp.

He takes climate change seriously enough to have contributed generously to a $1bn fund for new scientific

Bill Gates (L) is a determined optimist whereas David Attenborough uses his role as broadcaster to sound the alarm about looming environmental catastrophe © Getty, EPA-EFE

and the extinction of species.

Mr Gates, by contrast, is a determined optimist. In a recent interview with the MIT Technology Review, he argued that “the big picture is that it’s better to be born today than ever, and it will be better to be born 20 years from now than today.” To back up his case, Mr Gates can point to an array of good news. In 1990, nearly 36 per cent of the world’s population lived in extreme poverty; but by 2015 that number had fallen to 10 per cent.

Child mortality rates have also plummeted over the same period.

So who is right? Mr Gates or Sir David? The optimists or the pessimists?

Part of the answer is that the two men are looking at different things.

Mr Gates is concentrating on human welfare, while Sir David’s priority is the wider natural world. It is a bleak fact that throughout history massive advances in human welfare have gone hand in hand with the eradication of other species — from the woolly mammoth to the sabretoothed tiger.

As Yuval Noah Harari puts it in his book, Sapiens: “The historical record makes Homo Sapiens look like an ecological serial killer.”

Humankind’s eradication of other species is now proceeding apace, with the numbers of lions, tigers, elephants and rhinos living in the wild plummeting in recent decades.

But, while many people will be horrified by the disappearance of these animals from the wild, their loss will not necessarily prevent human flourishing. On the contrary, the

research into alternative energy.

What is less clear is whether Mr Gates is genuinely optimistic that technological advances will come rapidly enough to head off disaster. A recent UN report argued that the world needs to reduce greenhouse gas emissions by more than 20 per cent by 2030, if it is to limit temperature change to under 2C more than pre-industrial levels — a level that is widely deemed to be unacceptably dangerous. But Mr Gates believes that things could get much worse than that, arguing recently that, “If we freeze ­technology today, we will live in a 4C warmer world in the future — guaranteed”.

The trouble is that the technological advances needed to avoid significant warming will have to come implausibly fast. The world’s greenhouse gas emissions have gone up every year, bar one, since 2010 and are currently 12 per cent higher than they were a decade ago. Stopping that rise and then reversing it in just a decade, as the UN demands, seems unlikely.

But does that necessarily spell disaster? Sir David fears the worst, warning of the possibility of the “collapse of our societies”, unless climate change is halted. Mr Gates is worried enough to have accepted the co-chairmanship of the Global Commission on Adaptation, (alongside Kristalina Georgieva, the chief executive of the World Bank), which aims to mitigate the effects of climate change on the world’s poorest people. But he avoids speculating about the worst scenarios in public, preferring to accentuate the positive — such as the “ingenious inventors who are tackling climate change”. www.businessday.ng

Can HBO retain its place on the throne under AT&T? Takeover by telecoms group triggers fierce cultural clash at the ‘Game of Thrones’ creator ANNA NICOLAOU AND JAMES FONTANELLA-KHAN

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elcome to the beginning of the end,” a voiceover echoed through Radio City Music Hall in New York, as a live organist performed the Game of Thrones theme song.

Holding court amid the media executives and socialites gathered this month to celebrate the final run of the most popular television show in history was Richard Plepler, the HBO chief who transformed the flagging cable channel into a powerhouse that ushered in a golden age of television.

Game of Thrones’ final season has invoked a global fixation rarely seen in an era where streaming has fragmented viewing choices. The frenzy validates the bet Mr Plepler made over a decade ago, when he approved the most expensive pilot in HBO’s history for an out-of-thebox idea: a show about dragons, an army of the dead and incestuous love affairs.

But beneath the glitz typical of an HBO premiere, the atmosphere evoked the end times. The evening marked Mr Plepler’s last appearance as the leader of the network. Just a month earlier he had abruptly quit after months of disagreements with HBO’s new owners, AT&T, in the first big shake-up since the latter’s blockbuster purchase of Time Warner.

Nearly three years after AT&T made an $80bn bet that its future was in Hollywood — a bid that faced countless regulatory battles and was only completed last June — the telecoms operator is finally pushing forward with its plans. The deal is part of a wave of consolidation as media groups look for ways to compete against Netflix, the streaming service which has transformed the way content is both created and viewed.

Also in the audience for the premiere was John Stankey, a 30-year AT&T veteran who is now running the rebranded WarnerMedia, and Bob Greenblatt, the outsider who AT&T had brought in to build a rival streaming service.

Interviews with a dozen current and former employees within WarnerMedia and AT&T revealed a turbulent and at times hostile changing of the guard. These executives, many of whom spoke on condition of anonymity because of exit agreements or fear of retaliation, described a culture clash between the Texas telecoms group and New York media company.

At the premiere the creators of Game of Thrones made no secret of their allegiance, making nostalgic speeches at their grand finale. “The core of our show rests in the hands of one man, and that man was Richard Plepler,” pronounced co-creator David Benioff, as the crowd roared. They did not mention AT&T.

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The tug of war over HBO’s identity has raised fundamental questions about the media business, and whether a niche company like HBO can thrive in an environment dominated by deep-pocketed streamers such as Netflix that are flooding the market with new shows.

Time Warner gave HBO autonomy as long as the company hit its profit numbers. But AT&T has taken a tighter grip, with Mr Stankey last summer warning HBO employees that the network needs to make more content. The demand ruffled feathers at HBO, which has clung to its identity as a producer of high-quality, cuttingedge programming.

“The idea that you can data test this stuff and predict that people will like shows with dragons? Ten years ago, people did not like shows with dragons,” says a senior HBO executive who worked closely with Mr Plepler.

“If you’re going to create the culture then you can’t rely on data, which is historic. You’re only going to end up making things that already exist.”

AT&T’s rocky start with Time Warner has also raised questions about the value of megamergers. One result of such a large deal is that AT&T is now focused on cutting its $164bn of debt. This month it has sold both the WarnerMedia headquarters for $2.2bn and its stake in streaming service Hulu for $1.4bn. The emphasis on debt reduction “may be coming at the expense of the long-term business”, says Jonathan Chaplin, an analyst at New Street Research.

Jamyn Edis, who was vice-president of innovation at HBO from 2007 to 2012, expects that AT&T “is going to process an organisation like HBO in the same way a body processes a kidney stone . . . It will be slow and painful and a bloody mess.”

Last month AT&T consolidated its media businesses, which had largely operated as independent fiefdoms — a move which some analysts cheered as necessary to centralise decisionmaking. But the overhaul led to the departure of Mr Plepler and other top executives. “You have to tread lightly, lest you create a talent exodus that destroys the asset you bought,” says Craig Moffett, a media analyst at Moffett-Nathanson.

Mr Plepler is the epitome of the way Hollywood used to operate — throwing legendary parties and hobnobbing with talent, trusting his instinct over data-crunching. Mr Stankey, who has ruffled feathers during the transition for his no-nonsense demeanour, has worked in telecoms his entire career, much of that time in Texas. Mr Plepler sits on the board of the Council on Foreign Relations think-tank and is a longtime Democrat; Mr Stankey last year donated to Republican senator Marsha Blackburn, a close ally of President Donald Trump who is a vocal opponent of abortion and same-sex marriage. “[AT&T] has a command and @Businessdayng

control culture,” says one senior HBO executive in New York. “You can’t question or contradict your superior in a meeting, which is completely antithetical to an HBO that thrived on collaborating and dissent.”

After almost three decades with HBO, Mr Plepler realised he would no longer have the same independence under his AT&T bosses, according to two people close to him. “He initially took a ‘wait-and-see’ approach to the deal, but over time his outlook deteriorated. He would go to these meetings and come back and say: ‘Well, you know, they’re not communicative,’” says one person familiar with the decision.

Another source of frustration for many AT&T and WarnerMedia employees is that senior executives seemed focused on the US, at the expense of international businesses.

According to five current and former executives at AT&T and WarnerMedia, the telecoms company had internally floated the idea of selling HBO Europe, which is a standalone streaming business in parts of eastern Europe, Scandinavia and Spain.

Such an idea, which Mr Stankey says is inaccurate, enraged many at HBO as well as the AT&T executives that work on the international business. “It’s probably not going to happen after the FT reported the story they were considering a sale [of HBO Europe] but the fact that this was even discussed internally as an option is illogical and stupid,” says a current HBO executive, who asked not to be named.

Some bankers also point to what they say is AT&T’s mixed record with dealmaking, particularly its acquisition of DirecTV. When AT&T acquired the satellite operator for $48.5bn in 2014, AT&T chief Randall Stephenson said the deal was “a unique opportunity that will redefine the video entertainment industry”. But DirecTV and its subsidiary U-Verse have shed millions of pay TV customers since the merger.

“The record of media M&A is highly uneven,” says Jonathan Knee, a professor at Columbia Business School. “It is difficult to separate what the source of failure is. Culture is a big part, but so is execution and strategy.”

“All of those — culture, execution and strategy — frequently interact with each other. So you can get the culture right and the execution right but the deal can still fall apart because you have the wrong strategy,” Mr Knee adds, while stressing that he was not talking specifically about AT&T’s deal.

However, others say that it is too easy to point fingers at AT&T for mismanaging DirecTV or damaging HBO. “HBO might have been incredibly successful with producing great content but its business model is flawed and let’s not forget that they completely messed up streaming,” says a media and telecom dealmaker, who is not advising AT&T but has followed the company closely.

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THE NIGERIAN INSURANCE INDUSTRY

Overview of the Nigerian Insurance Industry

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he Nigerian insurance industry is considered as one that is yearning for reckoning and relevance because its challenges, which are manageable, hold great opportunities for the sector.

Efforts by the Nigeria government to ensure the country has an insurance industry that will rank among the twenty largest markets in the world by the year 2020 (though Nigeria is currently ranked 60 in the world) is one that gives hope to the industry.

The Government has however taken certain steps and measures towards actualising this objective, particularly the strengthening of the Nigerian Insurance Commission (NAICOM) which derives

Unleashing vast potential its regulatory powers from the National Insurance Commission Act, 1997 and the Insurance Act of 2003.

Section 86 of the Insurance Act empowers NAICOM amongst other numerous powers to be responsible for the administration and enforcement of the provisions of the Act, as well as empowering it to register insurance companies and to increase the amount of minimum share capital requirement as circumstances may demand.

This is coupled with the growth potential of the industry and the collective effort of the 59 insurance firms underwriting non-life and life businesses in Nigeria.

A 2018 survey by the Chartered Insurance Institute of Nigeria (CIIN) revealed that out of the adult

population of about 100 million in Nigeria, about 86.6 million of them do not have any form of insurance cover. This is considered a market opportunity for the insurance companies The penetration ratio of the Nigerian insurance industry stands at 0.5 percent in 2018, one of the lowest in Africa compared with countries like South Africa (17%), Kenya (2.8%) and Ghana (1.1%).

According to industry sources, the low penetration ratio presents a huge opportunity for growth and as such the sector is tagged as one in a growth phase.

Although the challenges that drag the industry still remain, lack of tailored products to reach the low-income earners is one that

ranks the top of this list.

Lack of information technology and standardisation of insurance data (including lack of local expertise in the field of insurance IT solutions), meaning manual operations is still prevalent in the industry, is another issue traced by industry experts to be dragging insurance penetration in Nigeria.

Leveraging technology to reduce cost and provide seamless access to products for Nigerians is an opportunity that has not been fully utilised by the insurance companies.

Lack of trust on the insurance companies to pay claims and on time is one of the reasons some Nigerians are not encouraged to take up insurance policies.

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Linkage Assurance strong, and delivering efficient services to customers

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inkage Assurance Plc, a leading general insurance company with focus on service excellence has continued to deliver value to its numerous clients across various sectors in the Nigerian economy.

Its strong capacity to underwrite big ticket risks in oil and gas, energy, power sectors among others places the company in a strong position as one of the most capitalized firms in its area of specialization.

With penchant for prompt settlement of claims and service excellence, Linkage is broker friendly company, underscoring why its patronage has continued to gain momentum despite the harsh economic environment.

Daniel Braie, managing director/CEO of the company at a recent interactive session with insurance brokers in the country stressed its continued commitment to prompt claims obligation, assuring that the company is financially strong and able to deliver qualitative insurance services that meet the expectation of customers.

Braie said Linkage Assurance has strengthened its internal structures to deliver quality and efficient services.

“We have strengthened our internal structures to ensure that claims are handled with speed, because we realise that this is the main reason we are in business, and we will ensure it is sustained” According to Braie, the human capital of the company has also been beefed up with the recent appointment of the Executive Director, Technical (subject to the approval of NAICOM) among others who are already adding value to the operations and systems, for the benefit of its esteemed customers, he said.

The underwriter believes that with increased investment in technological infrastructure and as well as quality manpower,

Daniel Braie, MD/CEO, Linkage Assurance Plc.

which the company has been attracting the future is bright for the company.

“We have been able to attract quality staff, better infrastructures to enable us deliver quality service in the coming years, and we are hopeful that we will do better in our performance indices.

“We have also increased our capacity to do more volume businesses as evidenced by the increase in our reinsurance treaty across all classes of insurance”.

The company total assets stood at N23.31 billion at the end of 2017, moving up by 15 percent from N20.33 billion in the previous year.

To ensure also that the company meets the needs of its cuswww.businessday.ng

tomers, Linkage has developed array of retail products targeted at deepening penetration and

‘‘

We have strengthened our internal structures to ensure that claims are handled with speed, because we realise that this is the main reason we are in business, and we will ensure it is sustained

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increase revenue. These include the Linkage Third Party Plus, which is a budget friendly motor insurance product that provides not only the compulsory Third party protection but an additional Own damage protection to the tune of N250, 000, and is only available in the company”.

The premium for the policy is N10, 000.00 per annum, just an additional N5, 000.00 to the third party cover. It covers all the benefits under the compulsory third party insurance such as third party property damage, bodily injury and death liabilities, plus the additional benefit of own damage protection. Third Party Motor Cover is a compulsory insurance policy under the 2003 Insurance Act for all vehicles plying @Businessdayng

the Nigerian roads against third party damage or loss. Premium is N5, 000.00 for cars and N7, 500.00 for commercial vehicles. “This is an invaluable, budget friendly product for all Nigerians particularly in this period of when money is hard to come-by, the company said.

According to the management, the product has been developed with Nigerians in mind, having realized that many may not have the fund to take comprehensive insurance for their vehicles at this time.

Other products offered by the Company to increase retail penetration are the Linkage SME Comprehensive, Citadel Shield (which provides compensation as a result of injuries from accident for pupils and students in recognized academic establishments); Linkage Events Xclusive Insurance, Linkage Shop Insurance, Purple Motor Plan (comprehensive motor cover exclusively for women), and the Linkage Estate Insurance.

According to the company, Linkage Assurance Plc is repositioning itself to tap into the retail space by designing appropriate and competitive new insurance products that will meet the needs of its customers.

The company has also deployed ts online portal to make its products and services available to customers especially the digital savvy customers and enterprises.

“We have developed our IT infrastructure in to put the company in competitive position in line with our peers. To improve our operational efficiency, we have deployed the Virtual Private Network (VPN) to all our branches nationwide to ensure seamless operational link and/or fully integrated with Head office.”

Linkage Assurance Plc was incorporated on 26th March, 1991 and was licensed to cover and transact non-life insurance businesses on 7th October, 1993.

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Tuesday 30 April 2019

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THE NIGERIAN INSURANCE INDUSTRY Growth performance of the insurance industry

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he asset base of the Nigerian insurance industry stood at N1.3 trillion as at 31 December 2018, reflecting a compounded annual growth rate of 17 percent in the last three years.

In 2018, the century-old underwriting industry generated Gross Premium Income (GPI) of N448.6 billion, which reflects a 12 percent growth year-on- year, Agusto & Co’s data analysed by BusinessDay show.

However, total assets, GPI and profits are controlled by a few players in the industry. Top five players account for 45 percent of GPI, 42 percent of total assets and 61 percent of after-tax profits.

The credit rating agency, Agusto & Co, projects that in 2019, Nigerian insurance industry will record a 10 percent growth in its GPI to about N493.4billion.

The growth is expected to be driven by a slightly better operat-

ing environment from an improved operating climate as well as opportunities in oil & gas (particularly refinery) and engineering, considering the Dangote projects that are on-going - the refinery and fertilizer manufacturing plant.

In addition, there is the potential to deepen market share of the pockets of the already insured populace.

There are over 12 million registered vehicles in Nigeria for motor insurance; fire insurance for

households and manufacturing companies; annuities as more people retire and life insurance policies for individuals.

There are also opportunities in the agriculture value chain as the government continues to diversify its earnings away from oil.

Insurance companies in Nigeria are still largely under-capitalised and this limits their ability to take on ‘big ticket’ and highly profitable transactions in the Oil & Gas, Marine

and Aviation sectors of the economy.

If they shore up their capital base, they will be able to take on heavy risks which are currently being taken abroad.

Globally the insurance sector is going digital and technology-driven (InsurTech), thus, Nigerian insurers need to leverage more on digital platforms to increase insurance penetration, eliminate brokers and fasten claim verification processes and payment, industry sources say.

NAICOM: A key driver for growth in the insurance sector

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igerian insurance industry has passed through several phases of reforms in the past without significant achievements in terms of insurance awareness and penetration.

To ensure the success of its major priorities for 2017 to 2020, the Nigerian government through NAICOM, the apex regulator of the industry which is responsible for ensuring the effective administration, supervision and control of insurance business in Nigeria amongst other things, initiated a growth strategy for the industry.

The first phase of the growth strategy saw the industry consoli-

dation which is aimed at growing the companies’ financial capabilities, solvency margin to ensure that these companies are able to play a significant role within its internal capacity, pay claims promptly and pick high-ticket risks to grow their bottom and top lines.

If implemented successfully, this could solve the issues of late payment of claims by the insurance companies, through which confidence and trust in the industry can be further restored, industry sources have said.

The second phase focuses on developmental initiatives such as Market Development and Restructuring Initiatives (MDRI) launched

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in 2009, Risk-Based Supervision, International Finance Reporting Standard (IFRS), Insurance Industry Rebranding and lately, the Seven Point Harmonised Goals 2017-2027, all aimed at developing the insurance market space.

Part of NAICOM’s mandate among others include establishing standards for the conduct of insurance business in Nigeria, to approve rates of insurance premiums to be paid in respect of all classes of insurance business, ensure adequate protection of strategic Government assets and other properties.

As part of its oversights, NAICOM has over the years drafted

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capital requirement for insurance operators in the country. In 2005, NAICOM introduced new capital requirements for insurance companies; life insurance companies were directed to recapitalise from N150 million to N2 billion while the composite insurance firms were required to jack up their minimum capital base from N350 million to N5 billion.

Also, non-life-underwriting companies were given a minimum capital base of N3 billion, up from N200 million. Reinsurance companies were to raise N10 billion as the new capital base as against N350 million Last year, it introduced the tier-

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based solvency capital policy for insurance companies in Nigeria.

This was later withdrawn by NAICOM following complaints from stakeholders in the industry.

However, some of the reforms that have been successfully implemented include: The issuance of Nigeria’s first Micro-insurance guidelines, which established a distinctive framework for the distribution of insurance products tailored for low income population, low-valued policies and small scale enterprises; The issuance of Nigeria’s first Bancassurance guidelines which specifically establish and regulate collaborations between bankers and insurance firms on the marketing of insurance products; The issuance of Nigeria’s first comprehensive sector-specific code of corporate governance for the insurance sector; The issuance of Takaful/sharia-complaint insurance guidelines, which established regulatesTakaful insurance models and specifies governance, management and capital requirements for Takaful insurance operators; The implementation of the Market Development and Restructuring Initiative (MDRI) (now in its second phase) which focuses on addressing issues around the enforcement of compulsory insurance products, insurance agency system and fake insurance institutions; Employers’ Liability Policy (Group Life), Employers’ Liability Policy (Workmen’s Compensation Act 1987 – Now repealed), Healthcare Professional Indemnity Policy (The NHIS Act 1999) and Motor Third Party Liability Policy (The Insurance Act 2003).

The aforementioned reforms have been a catalyst to the recorded improvement in the sector, although industry experts say there is more to be done to achieve the target of being one of the twenty largest markets by 2020.

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THE NIGERIAN INSURANCE INDUSTRY Swot analysis of the Nigerian insurance sector Strength • Largest population in Africa • The second-largest economy in Africa • Under-developed insurance market with a very low insurance penetration indicates vast potential for growth if proper structures are put in place Weakness • Lack of a robust portfolio of insurance products • Lack of Capital and Capacity in the Insurance sector means large risks particularly in the Oil & Gas sector need to be re-insured outside the country • Widespread poverty means there is very little capacity for spending on Insurance products

Opportunities • Fragmented market indicates

opportunity for foreign insurers to gain market share via local acquisitions • Group life insurance is now compulsory for employers • Innovative distribution channels like mobile payments could improve awareness and access to insurance products & services • Micro-insurance products catering for low-income households offer enormous growth potential • Health insurance has the potential of being an important longterm growth area Threat • Low level of transparency across the Insurance sector

Types of insurance companies in Nigeria Composite Insurance A Composite Insurance company provides both Life and Non-Life insurance policies.

Life Insurance These insurance companies sell life insurance policies, annuities, and pension products. It mainly deals with long and short-term

monetary investments, college plans and plans that mature and benefit surviving family at the time of death.

Non-Life/General Insurance These are insurance companies which sell non-life types of in-

surance. These companies are mainly concerned with protecting/indemnifying policyholders against loss of or damage to property or asset from many kinds of risks and natural acts like fire, lightning, typhoon, flood, and earthquakes in exchange for a fee called Premium.

Re-insurance Re-insurance companies sell insurance policies to other insurance companies in order to help reduce their risks and protect them from incurring huge losses in the event of an insurance claim.

Continental Re-Insurance Plc Continental Re-insurance stands out as the major local player in the Re-insurance space accounting for about 97% of the market share. It has established itself in Nigeria’s oil and gas re-insurance market were the bulk of premiums are realised.

There are a total of 59 companies operating in the Nigerian insurance industry • Life – 14 companies • Non-life – 28 companies • Composite – 13 companies • Re-insurers- 2 companies • Takaful – 2 companies

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CHI delivering quality service and enhanced consumer experience

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onsolidated Hallmark Insurance (CHI Plc), as leader in the nation’s insurance industry has continued to redefine its place in the market with quality service delivery and enhanced customer service. This is clearly evident in the volume of claims it is paying to its numerous customers, which has not only endeared them to the brand but has also made a large number the institution’s brand ambassador.

The company, a leading general insurance company in Nigeria with over 10 years underwriting experience is built on integrity and driven by a passion to serve its customers and deliver efficient service.

A recent experience of a CHI customer, who had an accident with his insured car and got his claims paid in less than two days, was unbelievable, indicating a major transformation that has taken place in the Nigerian insurance industry, which should not go unmentioned.

The customer had taken out a comprehensive motor cover with CHI for his Toyota Camry, and has paid premium for the year before his car had the accident.

Uchenna, the customer tells his story. “I had an insurance policy with CHI and I had paid my premium for the year. I was driving my car two weeks ago on a Saturday evening after visiting a friend at his office at about 7pm. There was some traffic at Ilepo Round About, along Iyana-Ejigbo Ikotun Road, and my lane was directed to move by people controlling traffic there.

To my surprise, a jeep came from behind and hit my car damaging the boot, back rear light and the bumper, while I also hit a Sienna Car right in my front. Before we knew what happened, the jeep escaped and we were left to our faith.”

“I took photograph of my car, showing the damages, and on Monday at about 11am I contacted CHI, my insurance company and reported the incident. I thought they were going to feel bad because I have brought problems to them, but surprisingly, they were very sympathetic, and more concerned about my safety, asking “hope you did not sustain injuries.”

“They asked me to send the photograph of the accident car, and also contact my mechanic to send a quotation, while they also sent me a claims form to fill and submit immediately. As soon as my mechanic sent me a quotation and I forwarded to them, they called him on the telephone number in the invoice he sent,

Eddie Efekoha, MD/CEO, Consolidated Hallmark Insurance Plc.

agreed with him the cost of repairs and purchase of damaged parts.

Before 4 pm on that same Monday, they sent me discharge voucher and their offer, and I completed the form and returned same”.

“The most exciting thing about this interaction was the promptness, and the eagerness to ensure I was settled very quickly, so the chain of

‘‘

The new website has been designed to present an utmost user-friendly experience alongside hassle-free navigation and improved functionalities. It enables users, with a click, access to information on various products of the company

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email communication was unbelievable, far from the impression so many people have about insurance.”

According to Uchenna, before the close of work on Tuesday, his claim was paid into his account, and before then, he was receiving regular mails that his cheque was being processed; that his payment will be made soon and this came to pass, the insurance customer said.

Insurance companies in Nigeria have proven in recent times that they are liquid and have the required capacity to meet claims obligation when losses crystallise.

This is evident in quantum of claims paid in major losses that have hit the industry in the past few years.

Consolidated Hallmark Insurance (CHI Plc), in a move to ensure that its service offerings are within the reach of its rapidly growing clientele and potential customers has unveiled a new website -www. chiplc.com.

The new website has been designed to present an utmost user-friendly experience alongside hassle-free navigation and improved functionalities. It enables users, with a click, access to information on various classes of general insurance business to take decisions based on available options and forms of protection desired.

With a very easy and friendly on boarding process, the website enhances the purchase of insurance products online through the aid of premium calculators. It also facilitates payments with Bank Debit Cards and online payments via specified bank accounts with several tier one and two banks.

Also, through a Unique Customer Dashboard available for new and existing customers of the foremost insurance firm, they can view onlinereal-time the status of their policies, and transactions.

The functionality of the new website is further evident in the provision for clients to report and lodge in their claims, send supporting claims documents by uploading pictures and relevant forms as well as track the status of their claims.

Built for the digital age, the website is easy to navigate and very suitable for the multi-device social networking customer.

Managing Director of CHI Plc, who is also the sitting president of the Chartered Insurance Institute of Nigeria, Eddie Efekoha attributed the painstaking efforts of several weeks deployed in building the website to the determination of the company in ensuring insurance services are made available with ease to the end users.

According to him, the closer insurance services are to the end users, particularly via desktops and mobile devices, the better for higher insurance penetration with the attendant positive effects on revenue growth.

Deployment of latest technology is an integral part of the strategic plan of CHI Plc in its quest to remain a major player in the Nigerian insurance industry.

In the 2018 financial year ended 31st December, CHI Plc reported a ...percent leap in profit.

In its results, which were submitted within the regulatory timelines and recently approved by all regulators, including the Capital Market, the company posted a profit after tax of N406.21 million when compared with the N194.99 million of the 2016 financial year.

Also, profit before tax grew by 74 percent from N368.13 million 2016 to N641.05 million in 2017.

Further details of the results made available to shareholders of the company show appreciable progress in investment activities as well. Income from this arena grew from N472.3 million to N796.2 million in 2017. Meanwhile the total assets of the company have risen by 27 percent from the N7.44 billion of 2016 to N9.49 billion.

Revenue reported for the period

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through gross premium written was N5.68 billion, while a net underwriting income of N4.05 billion was recorded. The company continues to fulfil its obligations through prompt claims settlement as gross amount paid out in this regard during the year under review was N3.35 billion.

The positive result is an affirmation of the recent assurance by the Managing Director of the company, Eddie Efekoha to shareholders that they should expect more returns in the nearest future from Consolidated Hallmark Insurance even as recent capacity expansion and growth initiatives will help to grow revenue.

Plans are already afoot to hold the Annual General Meeting, where in line with its policy of rewarding shareholders for their steadfastness, dividend payment will be proposed to shareholders for approval. CHI Plc has paid dividends seven times in the last ten years.

While also ensuring that its customers who take insurance go home to sleep and do their business without fear, CHI has put in place simple and seamless claims structure.

In the last five years, the Company paid claims totalling over N8 billion. An analysis of the claims payment from the company’s published financials show a movement from N1.08 billion paid in 2013 financial year to N3.35 billion at the end of December 2017, indicating an 800 percent increase.

A further analysis of claims expenses trend of the company from the five year financial summary shows that claims payment increased to N1.23 billion in 2014; increased to N1.34 billion in 2015; and in 2016 it rose to N1.73 billion.

Following a merger in 2007, Consolidated Hallmark Insurance Plc is one of the top ten General Business and Special Risk Insurance underwriters in Nigeria.

“In the last ten years, we have carved a niche for ourselves through big-ticket transactions in the Aviation, Oil and Gas, Marine Cargo and Hull Business as well as our motor insurance business.”

“We have built a reputation on professionalism, integrity and excellent service delivery, leveraging on the capabilities and unique skills of the entire group, we provide premium risk management solutions to our clients.”

Our commitment to serving you better has seen us make key investments in our people, technology and processes, having become the second insurance company in Nigeria to obtain the prestigious ISO 9001:2015 (Quality management systems), the company said.

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List of Composite Insurance Companies in Nigeria as of 23 January 2019, according to NAICOM: AIICO Insurance Plc Allianz Nigeria Insurance Plc AXA Mansard Insurance Plc Cornerstone Insurance Plc Goldlink Insurance Plc Great Nigeria Insurance Plc Industrial and General Insurance Company Plc Lasaco Assurance Plc Leadway Assurance Company Plc NICON Insurance Plc Niger Insurance Plc NSIA Insurance Plc Standard Alliance Insurance Plc

NAICOM-recognised general insurers as at 23 January 2019 include: Alliance and General Insurance Company limited Anchor Insurance Company limited Consolidated Hallmark insurance Plc Custodian and Allied Insurance limited FBN General Insurance limited Fin Insurance company limited Guinea Insurance Plc International Energy Insurance Plc Investments and Allied Assurance Plc KBL Insurance Limited Law Union and Rock Insurance Plc Linkage Assurance Plc Mutual Benefits Assurance Plc NEM Insurance Plc Nigeria Agricultural Insurance Cor-

Companies that offer Takaful insurance as at 23 January 2019 according to NAICOM are: Jaiz Takaful Insurance Plc Noor Takaful Plc

Companies that offer Reinsurance as at 23 January 2019 according to NAICOM are: Continental Reinsurance Plc Nigeria Reinsurance Corporation

or fake insurance certificates.

Insurance products under Non-life Insurance Companies Motor Insurance The motor insurance dominates the non-life business in terms of gross premium written. This growth has been largely driven by NAICOM’s compulsory third-party insurance policy which makes it compulsory for all vehicles to be insured against damages caused by third-parties in case of accidents. We are of the opinion that the motor vehicle segment is still largely untapped as many motor vehicles either have no insurance

poration Old Mutual Nigeria General Insurance Company limited Prestige Assurance limited Regency Alliance Insurance Plc Royal Exchange General Insurance Company limited Saham Unitrust Insurance Nigeria limited Sovereign Trust Insurance Plc STACO Insurance Plc Sterling Assurance Nigeria limited SUNU Assurance Plc Universal Insurance Plc Veritas Kapital Assurance Plc Wapic insurance Plc Zenith General Insurance Company limited

Companies that offer life in-

Femi Oyetunji, MD/CEO, Continental Reinsurance Plc

surance as at 23 January 2019 according to NAICOM are: Alliance & General Insurance Life Assurance A.R.M Life PLC African Alliance Insurance Company Ltd Capital Express Assurance Limited Custodian Life Assurance Limited FBN Insurance Limited Metropolitan Nigeria Life Insurance

Limited Mutual Benefits Life Assurance Ltd Old Mutual Nigeria Life Assurance Company Limited Prudential Zenith Life Insurance Company Limited Royal Exchange Prudential Life Plc Spring Life Assurance Plc UNIC Insurance Plc Wapic Life Assurance Ltd

Oil & Gas Insurance The Oil & Gas sector is the third largest contributor to Gross Premium Written in the Non-life segment of the Insurance industry.

The NAICOM guideline makes it compulsory that Oil & Gas companies seeking to insure their Oil & Gas assets must exhaust local capacity before insuring abroad.

The NAICOM guideline has helped in growing this segment of the Insurance industry.

Fire & General Insurance Even though it is compulsory for public buildings in Nigeria to be insured against fire, the enforcement has been very lax hence the weak growth of this segment.

Meanwhile there is no regulation covering General accident insurance.

Marine Insurance This segment is grossly hindered by insufficient under-writing capacity of local insurers along with incidents of forged marine insurance certificates. www.businessday.ng

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Leadway Assurance competitively strong and giving value to customers

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eadway Assurance Company Limited (‘LEADWAY’) is one of Nigeria’s foremost insurance companies, with a reputation for service efficiency and customers’ reliability.

Leadway was established in 1970 and commenced business in 1971 and started out as a direct Motor Insurer with a passion for customer service. The business expanded into other areas of general business until it became a composite company underwriting both life and general insurance business. From a modest capital base, the company’s financial capacity grew over time and now, it can boast of an ability to underwrite risks of very high magnitude as regards heavy industries, such as Oil and Gas and big manufacturing concerns. It also offers subsidiary financial services like Bond, Secured Credit, Miscellaneous financial losses and Fund/Portfolio management.

Presently, it is an active player in providing good local security under the local content arrangement of the Oil and Gas Industry.

For almost 5 decades, LEADWAY has honored its underwriting commitments and has earned its reputation of excellence in claims handling. The reputation enjoyed today by LEADWAY has been attained by the continuing pursuit of improvements, as regards its financial, underwriting and service profiles.

The evolution of LEADWAY since 1970 has mirrored the dramatic expansion of indigenous insurance service providers, with LEADWAY remaining in the forefront as an insurer of repute. Our core values are iSCORE meaning; integrity, service, costumer-

Oye Hassan-Odukale, MD/CEO, Leadway Assurance Company Ltd.

‘‘

The Company’s decision to invest heavily on computerization is part of its corporate strategy to take advantage of the benefits offered by technology as a service enhancement tool and the Company’s preparedness to follow the trails of e-commerce www.businessday.ng

focus, Openness, respect-forthe-individual and excellence.

The reputation enjoyed by LEADWAY has been attained by the continuing pursuit of improvements to maintain competitive advantage.

Presently, LEADWAY has a Shareholders Fund of N45.27 billion. To reposition and take advantage of opportunities in the changing environment, LEADWAY has a policy of increasing its paid-up capital steadily. Over the years, the company has recorded steady growth in its business op-

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erations. As at 31st December 2018 the company had a total asset base of over N312.77 billion and a premium income of about N 87.74 billion. It has no loan stock and internally generates funds for capital projects. The Company holds a sizeable number of blue chip stocks spread across banking, insurance, manufacturing, finance etc. Within the money market, it has an average of N30billion deposit placement and leases in reputable banks and discount houses.

Leadway also has a remark@Businessdayng

able claims paid record of over N109billion naira claims paid in 5 years, with N33billion paid in 2018 alone, the highest figure of claims paid in the industry.

Leadway is aware of its customers’ financial security.

It ensures that its insurance risks are carefully backed up with world-class reinsurance arrangements. For over two decades, the company has maintained a good business relationship with Swiss Reinsurance Company and Munich Reinsurance Company. These two widely known international reinsurance companies lead on the company’s major Treaties.

Other participating companies are Africa Reinsurance Corporation, Continental Reinsurance Company Limited, GIC Reinsurance and Scor Reinsurance Company Limited The Company has a highly computerized work environment with major offices online. This enables a timely dissemination of information to clients on any risk assumed.

The Company’s decision to invest heavily on computerization is part of its corporate strategy to take advantage of the benefits offered by technology as a service enhancement tool and the Company’s preparedness to follow the trails of e-commerce into the next century.

Leadway’s Registered and Corporate Offices are located in Kaduna and Lagos respectively with 23 Branches spread all over the country. Gen. Martin Luther Agwai is the Chairman of the current Board of Directors while Oye HassanOdukale, MFR is the Managing Director of the company.

If you would like to have more information about our products and services, please call +234 1 2700700, email insure@leadway.com or visit www.leadway.com.

Tuesday 30 April 2019

BUSINESS DAY

SPECIALREPORT on

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THE NIGERIAN INSURANCE INDUSTRY

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Tuesday 30 April 2019

BUSINESS DAY

SPECIALREPORT on

THE NIGERIAN INSURANCE INDUSTRY Reasons why Nigerians don’t buy insurance products • Lack of Trust • Lack of Awareness • Affordability of Insurance products & services • Lack of easy access to Insurance products.

Negative perceptions of Nigerians about the Insurance sector • Dishonesty amongst Insurance practitioners • Late payment of claims • Refusal to settle genuine claims • Ambiguous description of product details Key Initiatives towards driving growth in the Nigerian Insurance Sector Product development • Development of new and unique insurance products • More emphasis on building customer trust and product awareness • Micro-insurance penetration to drive growth in the sector Regulation • NAICOM should continue initiatives on strengthening the Insurance market whilst increasing regulatory over-sight • Insurance companies should be encouraged to meet international best practices/standards

• Higher capital requirement is needed in order to boost Insurers’ capacity to take on bigger transactions Competition • There should be drive to eliminate weak players via a number of policies like forced mergers & acquisition or increasing the minimum capital requirement of Insurance companies • The Insurance market should be driven by innovation especially via technology Human Resources • Conscious effort towards building Human Capital and retaining those talents within the industry • Greater use of mobile/digital platforms • There is a need to attract new customers via alternative channels Reasons for the under-performance of the Nigerian Insurance Sector Public Perception • Cultural and religious beliefs hinder individuals from taking Life insurance • Low level of innovation in product development • Lack of trust as regards Claim settlement

Distribution • Heavy dependency on Insurance brokers and agents for product distribution • Limited take-off of Micro-insurance, Bancassurance and Takaful insurance • Weak distribution channels

Financial Capacity • Current Capital requirements mean that Nigerian Insurers will have to partner with foreign re-insurance firms on big ticket transactions especially in the upstream Oil & Gas sector Technical & Operational Inefficiencies • There is a partial and ineffective deployment of technology platforms

(online, mobile and digital platforms ) and software applications in running day-to-day operations of insurance companies Lack of transparency & Accountability • High incidence of Insurance fraud • Low level of disclosure • Prevalent unethical practices • Inadequate industry data base

Steps that can be taken by Stakeholders to make Insurance more widely acceptable • Greater enforcement of Compulsory Insurance • Improving our mortgage culture would revolutionise the Insurance sector via property insurance as financiers of housing projects will need to insure the underlying asset for the period of the mortgage • Blocking premium leakages and proliferation of fake insurance documents mainly in motor and marine insurance is still a hindrance to growth of insurance • Improve public trust and perception • Customer protection • Drive awareness of Insurance policies and products • Training & Capacity building • Easier access to Insurance (Mobile, Bancassurance & Agency)

the banking platform. The insurer is positioned to grow revenue through referrals which may not be captured through its existing sales channels.

Key drivers of future growth in the Insurance Industry Micro insurance is insurance with low premium that provides cover for low income earners.

In other words, this type of insurance is designed to indemnify lowincome earners from risks they want to insure against whilst taking into consideration their financial status to protect them from unnecessary financial burden.

This type of insurance involves pooling resources from people within the same income bracket, for example, villagers, community or a cooperative society, and sharing the risk among the beneficiaries. Micro insurance is an element of social

protection.

Micro insurance penetration has the capability to drive growth in the insurance industry because it will serve as a mechanism to help cover the informal sector of the economy.

It is a key determinant in increasing market penetration. NAICOM has already introduced guidelines for and issued Micro insurance licences to stand-alone companies as well as micro insurance window licences to existing mainstream insurance companies.

Bancassurance is a partnership between an insurance company and a banking institution that allows the bank to refer its clients to the insurance company for a fee. In such a way that both the banking and insurance institution mutually benefit.

According to the Bancassurance approved guideline 2017 by NAICOM, it is “the collaboration between a bank and an insurance company to market insurance products to the customers of the bank” The underlying basis is to enable penetration of insurance through

Takaful Insurance Takaful insurance is a type of Islamic insurance, where members contribute money into a pool system in order to guarantee each other against loss or damage.

Takaful-branded insurance is based on Sharia, Islamic religious law, which prohibits interest (riba), forbids gambling (al-maisir) and provides guidelines for dealing with uncertainty (al-gharar) Takaful insurance incorporates certain elements of mutuality and ethical finance in its operations. This type of insurance makes it possible for certain segments of the Nigerian population to comfortably participate in the insurance sector hence driving financial inclusion.

The fund is managed by a Takaful operator who is allowed to charge an agreed upon fee and compensate any policyholder for any loss insured against.

The fund is managed for a specified period after which any remainder after accounting for future claims and reserve may be returned to the policyholders as cash dividend or in form or reduction in future contributions.

InsurTech - The future of Insurance Insurance technology (InsurTech), a sub-sector of financial technology

(Fintech), is aimed at simplifying and further improving Insurance processes via technology. InsurTech has the potential of disrupting all processes in the Insurance Valuechain, from policy creation to claims management and product distribution. Insurance companies can now leverage on high mobile phone/ internet penetration in Nigeria and run their operations using a combination of mobile technology and agents. As a result, customers can purchase and pay for insurance products and services without walking into a physical office. There is an urgent need for Insurance companies in Nigeria to review existing models and align with fast changing technological solutions.

Insurers need to innovate via technological solutions in order to leverage on key business opportunities in trying to meet and anticipate customer needs while improving core insurance functions.

• Applying new approaches to under-writing risk and predicting loss • Leveraging on existing data and analytics in generating risk insight • Meet ever-changing customer needs with need product offerings • Enhance client inter-action and build trusted relationships • Enhance the business with sophisticated operational and technical capabilities

BusinessDay SPECIAL REPORT Editor (OLUDOLAPO ASHIRU) - Others MODESTUS ANAESORONYE, OLUFIKAYO OWOEYE, ENDURANCE OKAFOR , SEGUN ADAMS... Graphics: OGAR DAIVD OJIE www.businessday.ng

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Tuesday 30 April 2019

BUSINESS DAY

59

news VeriPark commits to accelerating financial inclusion

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potlight on the potential of digital financial services delivery to widen financial inclusion was the focus of senior executives and technology managers of financial institutions as they gathered at the Future Banking Technology West Africa Summit.

The Summit theme was ‘Merging financial inclusion and innovative banking technology to boost West Africa’s banking sector growth.’

The well-attended event, which held at the Lagos Continental Hotel, Victoria Island from April 23-24, had over 30 speakers and 200 delegates.

It provided an opportunity to showcase the contributions of fintech companies in deepening financial inclusion, and by extension, engendering sustainable economic development.

Speaking at the sidelines of the Summit, Ronke Atkinson, managing director of VeriPark Nigeria, a global tech solutions provider to financial institutions, expressed her excitement

about the theme because it fitted right in with the company’s mission to ‘break down the barriers between banks and the underbanked population through end-to-end seamless customer experience solutions.’

In her view, technology has a critical role to play if the ambitious goal of financial inclusion is to be achieved in the subregion. This is where she sees Veripark’s suite of solutions playing a part.

“Our solutions empower financial institutions to accelerate financial inclusion through an end-to-end seamless customer experience. Veripark enables these institutions to serve society, and by doing so, achieve a broader, deeper financial system that is more robust and resilient.

“By unifying customer relationship management and Omni-Channel servicing capabilities in one interface, we help banks to establish a new kind of relationship with their customers and improve the financial wellbeing of millions,” she said.

Job creation drive: Edo subsidises tech training for undergraduates, graduates to groom more techpreneurs

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ommitted to creating more opportunities for Edo youths to tap from Nigeria’s booming tech ecosystem for self-reliance, Edo State governor, Godwin Obaseki, is subsidising the training of youths in in-demand tech fields, such as Artificial Intelligence, Data Science and Machine Learning.

The six-week training programmes are being run by Curators University and held at the Edo Innovation Hub, Institute of Continuing Education (ICE), Wire Road, Benin City. At the last count, over 250 youths have been trained, which is also partly funded by Microsoft.

Young people who want to take the same courses in Lagos and Akure, Ondo State pay as much as N160,000 ($140), in cases where they don’t get sponsors or subsidised by Curators University. This makes Edo one of the most IT-friendly state in the country.

The programme, open for undergraduates and graduates, is being subsidised through EdoJobs, Edo State’s skills development and job creation platform.

Senior special assistant to Edo State Governor on Jobs Creation and Skills Development, Ukinebo Dare, said the gesture was part of the governor’s promise to create

at least 200,000 jobs in Edo State before 2020, noting that up to 90,000 jobs have been created so far.

According to Dare, “Students in the programme get to learn Python and R programming languages and are encouraged to continue with advanced level work at the end of the 6-week training. By the fourth week, they are able to tackle real-life problems in data science and machine learning and are ready for the workplace.”

A beneficiary, Princess Oviawe, a 300-level undergraduate at the University of Benin (UNIBEN), said though she could code in HTML and CSS languages before the programme, she was able to learn Python and R, and was now confident of working as a freelancer even before graduation.

Joy Ativie, a graduate of Literature and English, said she did not know any code before joining the programme, noting, “My only exposure to code were these lines of number and letters I always saw online that looked like Greek. They have always fascinated me. My quest to make a career change into technology and related areas drove me to the programme. I’m writing code now. I can also use data to do several things. It’s amazing.”

L-R: Urs Bolt, wealth tech and reg tech advisor, Bolt.Now; Shehu Aliyu, group executive, retail banking, North, FirstBank; Nnaemeka Ejeh, group executive, retail banking, South; Gbenga Shobo, deputy managing director, FirstBank; Tunde Owolabi, group executive, retail banking (Lagos and West), and Gordian Gaeta, international resource director, The Asian Banker, following the presentation of the Best Retail Bank in Nigeria award to FirstBank at the Asian Banker Award held at Eko Hotel & Suites, Lagos.

Fire at Chevron’s facility may take weeks to be put off Olusola Bello

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he fire raging in Chevron’s abandoned oil well, Ojumole Well 1, which has been on since last week, may not be extinguished soon because of the terrain the well is located.

It may take weeks to put off the fire, according to some experts, who were not specific about how many weeks it might be.

According to oil and gas industry sources, those who have fair knowledge of the Well say it is located in a swampy terrain and the kind of equipment required to put the fire out cannot go through the terrain as it may get stocked in the mud.

They say in some cases the movement of the equipment

may depend on ocean tide, if the tide is low the equipment would not be able to get in there and if this is the situation the contractor might have to wait till when tide is high for a safe sail to the site of the well.

One of the sources told BusinessDay that a proper channel was being dredged to allow the equipment easy passage to the site, saying the fire might be killed through either top-to-bottom approach or bottom-to-top, whichever way it best way possible would applied for the safety of the generality of the people Chevron had last week Thursday confirmed fire at Ojumole Well 1, but reiterates commitment to protecting lives, environment.

Esimaje Brikinn, general www.businessday.ng

manager, Policy Government & Public Affairs (PGPA), who confirmed the incident on in a statement, reiterated the company’s commitment to the protection of lives and the environment in its operations, said that “at about 10:00 p.m. on Thursday, April 18, 2019, a fire was observed at the Ojumole Well No. 1, an idle and plugged well with no flowline connected to it.”

Chevron blames Ojumole Well fire on third party interference.

He disclosed, “Ojumole field is in NNPC/CNL JV’s Western Niger Delta area of operations,” adding, “CNL conducted an overflight to evaluate the fire and also mobilised emergency responders to assess the site, contain the

fire and boom the area.”

According to Brikinn, CNL has notified the community’s stakeholders about the incident and also reported it to the Department of Petroleum Resources (DPR), National Oil Spill Detection and Response Agency (NOSDRA) and other regulatory and security authorities.

He said from investigations carried out, a third party was responsible for the fire incident at the site.

“A Joint Investigation Visit (JIV) to the site of the incident on Saturday, April 20, 2019, by a team made up of regulatory agencies, community stakeholders and CNL, determined that the fire incident was caused by third-party interference.

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FMDQ CEO, DMO DG, Absa Group for FMDA Lagos seminar ENDURANCE OKAFOR

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anaging director/CEO, FMDQ OTC Securities Exchange, Bola Onadele; Patience Oniha, director-general, Debt Management Office, and Victor Mofokeng, head of Counterparty Risk Trading - Absa Group Limited, South Africa, have all confirmed their attendance at the Bonds Workgroup’s financial markets seminar holding in Lagos.

The event scheduled to hold at the Federal Palace Hotels, Lagos, May 23, 2019, will focus on the theme: The Nigerian Futures Market - A Tool for Risk Management.

The seminar among others is to provide a forum for financial markets participants and other stakeholders to deliberate on perspectives for harnessing the enormous opportunities that can be derived from the futures market and the various ways of

mitigating against the associated risks. The event is expected to commence at 8.30am and ends by 2pm.

The opening remarks will be delivered by the chairman, Bonds Workgroup and vice president, Adetoun Dosunmu.

In a statement, Mary Gbegbaje, acting executive secretary, Financial Markets Dealers Association of Nigeria (FMDA), said Onadele as the keynote speaker, would be speaking on Futures as a Liquidity Management Tool, while Oniha would speak on the Bond Futures as a Hedging Tool in Nigeria and Mofokeng would be delivering a paper on Bond Futures and Risk Management.

The FMDA is an Association of licensed Deposit Money Banks (DMBs) operating within the Nigerian Financial Market, with emphasis on regulatory policy engagement/advocacy and professional ethics in the financial markets.

UBA partners Mastercard, rewards customers with all-expense paid trip to UEFA Champions League finals

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nited Bank for Africa (UBA), in partnership with Mastercard, says it is giving away all-expenses paid trips to the semifinals and finals of the 2019 UEFA Champions League to 12 lucky UBA Mastercard holders and their plus ones.

Open to all existing and new UBA Platinum Mastercard holders, this amazing giveaway is an opportunity to pamper customers and give them a unique, unforgettable and priceless experience including flights, visas, 5-star accommodation, tickets to watch either the semi-finals or final matches of the UEFA Champions League and so much more with their MasterCard Platinum Access.

A total of 12 UBA Platinum Mastercard holders from Nigeria and 11 other African countries will share the enthralling experience of watching the finals live with a loved one as well as enjoy the great ambience of host city of the Semi-Finals or Finals (Madrid). The participating countries are Benin, Cameroon, Chad, Congo Brazzaville, Gabon, Ghana, Liberia, Sierra Leone, Tanzania, Uganda, Zambia.

“As we celebrate our 70 years of Banking and excellence, this is our way of rewarding customers for their continued patronage to the UBA brand. There will be many more

this year as we want to continue to appreciate all our customers ... for now. Customers who qualify should get a UBA Platinum Mastercard and spend a minimum of $10,000 or its equivalent in his or her local currency to stand a chance to win the all-expense paid package.

“To get your UBA Platinum Mastercard at any UBA Branch, a customer simply needs to contact his or her relationship manager at any UBA branch office,” the group head, marketing, UBA, Dupe Olusola, said.

She said, “The UEFA Champions League is the most sought-after trophy in club football competition, and one of the most followed sporting spectacles in the world.

To this end, we decided to partner Mastercard and UEFA in bringing the most iconic and cherished moments in the history of football to our esteemed and loyal customers who are the reason why we are so successful.

“We realise that, a lot of our customers love football and we feel giving them this treasured experience while they are pampered in far-away Spain is the way to go. These are the moments that make football such a passionate sport and we want to share these moments and experiences with our loyal customers across Nigeria and Africa.”

Obaseki, newly elected governors meet at NGF parley, seek stronger partnership

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do State Governor Godwin Obaseki has sought for areas of partnership with some of the newly elected state governors during the induction of new and returning governors into the Nigeria Governors’ Forum (NGF), holding in the Federal Capital Territory, Abuja.

Governor Obaseki said Edo State had pioneered a number of reforms that would be beneficial to other state governors, noting that @Businessdayng

the state would be willing to compare notes and share its success stories with others.

Rwandan President Paul Kagame is expected at the event.

Governor Obaseki in the company of his wife, Betsy, joined his colleagues at a dinner on Sunday ahead of an elaborate induction programme organised by the secretariat of the NGF for newly elected and returning governors holding from Monday to Tuesday.

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BUSINESS DAY

NEWS

Showdown between FG, NLC deepens over NSITF Board … as NLC demands inauguration of Kokori-led board before May Day Innocent Odoh, Abuja

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he Federal Government and the Nigerian Labour Congress (NLC) appear to have intensified their faceoff over the constitution of the Board of the Nigerian Social Insurance Trust Fund (NSITF), even as NLC on Sunday demanded that the Minister of Labour and Employment, Chris Ngige, inaugurate the Board of the NSITF under the chairmanship of Frank Ovie Kokori before the 2019 May Day. The Ministry of Labour and Employment had through a statement announced the replacement of Comrade Kokori with Austine Enajemo-Isere and his transfer to the Board of Michael Imodu National Institute of Labour Studies (MINLS) Ilorin, a diploma-awarding institution in Labour Relations as Chairman, which it added followed due process and has the necessary presidential approval.

“The approval for this exercise was given by the appropriate approving authority which is the President and duly communicated to the Ministry of Labour and Employment.

This is also in line with the Act establishing the NSITF which confers such powers on the President on the recommenda-

tion of the Hon. Minister,” the ministry had said.

NLC however, disagreed with the Ministry’s position and mobilised its men to oppose it. NLC President Ayuba Wabba had alleged that President Muhammadu Buhari had appointed Kokori as the Chairman of Board of the NSITF but that the Minister Ngige changed the appointment.

The NLC President in a statement on Sunday demanded that Minister inaugurate the Board of the NSITF under the chairmanship of Chief Kokori before the 2019 May Day. “If Kokori has been declared by renowned world leaders as prisoner of conscious and has been appointed by Mr President, the minister had no right to manipulate the process by changing it,” the union leader said.

“Kokori has not been informed that there is a new chairman of the board. The minister had earlier informed him that Mr President has appointed him as the chairman of board and he has undergone all necessary security screening.

“So, close to three years now, they have refused to inaugurate the board due to one reason or the other and we can see today that they do not want somebody

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that is transparent to manage workers money just for no reasons just to delay the process,” he said.

Wabba also accused the minister of running the NSITF board as the sole administrator adding the NLC and its allies would oppose any move to inaugurate the board secretly.

Wabba said the labour movement had shown enough patience and understanding with regard to the long delay in the inauguration of NSITF board by the ministry. He said “as a responsible working-class organisation that values the tenets of social dialogue and tripartism, we had pursued this issue tenaciously for the last three years with relevant authorities without externalising it, despite all our frustrations.”

Wabba added: “Going forward, the dropping of the name of Mr President notwithstanding, we expect Minister Ngige to inaugurate the Board of NSITF under the chairmanship of Chief Frank Ovie Kokori before the 2019 May Day.” NLC also refuted the allegation by the ministry that it imported violent thugs to disrupt the inauguration of the board of NSITF on April 18, which led to the indefinite postponement of the inauguration.

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INSIGHT/INNOVATION

The lamentations of a middle class Nigerian

OGHO OKITI

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bout a week ago, I stumbled on a Facebook post on the pages of Agunze Azuka Onwuka. David Hundeyin, CEO of TupstartNG and a columnist with this publication wrote the piece.

According to the piece, he had attended the alumni meeting of Atlantic Hall, a private coeducational secondary school in Lagos, and their discussion was dominated by how they all wanted to leave Nigeria for greener pastures through migration to Canada, the United States of America, United Kingdom, and Australia down under.

He made three important points that I believe we need to interrogate.

This is important, as many Nigerians that have commented on the piece did not see the connection between these points and the scale of Nigeria’s present crisis.

The first point he made was about the composition of the group discussion. As alumni of Atlantic Hall,

they were all middle class, arguably considered the elite of this country.

They all had cars, and some of them own houses or inherited the ones that their parents built. They were not only middle classes by virtue of the jobs and assets they keep, but inherited middle class statuses from their parents. This is so because their parents were able to afford to send them to such prestigious school. Currently, they all have jobs and businesses and they enjoy reasonable standard of living. Despite all these, they wanted to leave Nigeria.

The second point is as important.

He said that most of them actually returned to Nigeria after studying and starting their careers abroad. Majority of them had studied abroad; some have 2 – 3 degrees and started their careers in these countries. Many came back to Nigeria between 2000 and 2013. They came to Nigeria to build and share in the above population growth rate averaging over 5% during that period.

The third point he made is that this group of Nigerians – middle class, reasonable standard of living, with jobs and businesses – are now leaving in droves. This group of Nigerians are stampeding themselves out of Nigeria with familiar destinations such as the United Kingdom, United States of America, Canada and Australia down under being the common ones.

He argued that they are migrating, some selling properties in the process, because Nigeria is strangulating

them and because they are becoming poorer.

Now, there is no educated and above poverty level Nigerian that is not familiar with this story. It is the descriptiveness, apt, and literary simplicity that made the post very unique.

Hundeyin described the hopelessness and desperation of Nigerians in under 500 words. Indeed, the piece followed a similar, but expansive piece I wrote for this publication June 2018.

In the piece, titled “Nigeria’s broken middle class”, I argued that given the trend in the first decade of this century, many had thought that it was only a matter of time before Nigeria’s middle class will act as the foundation for continuous significant foreign investment inflows, sustainable growth and jobs. But since the dramatic decline in oil prices in 2014, and the economic recession of 2016, the middle class has shrunk and continues to shrink, along with the expectations for the role it was to play in expanding Nigeria’s potential future growth and prosperity.

As data has continued to show, and never mind what the government is telling you, the greatest danger of Nigeria’s current poor economic growth is that the poor that had aspirations to enter into the middle class are falling farther behind, while those in middle class are becoming the poor.

Yes, in the growth of the middle class in the first 15 years of this century, a number of mistakes were made. First, the middle class had expanded on

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Nigerians are not leaving in droves purely for economic reasons, but also because of the fear and hopelessness about Nigeria’s future

the back of industries that were most vulnerable to decline in oil prices.

These industries, including financial services, telecommunications, real estate, and government sectors rely on oil prices themselves. Second, the economic reforms of the 2000s, though sound, did not go far enough. Consequently, the reforms did not deepen Nigeria’s productive base.

Third, the expansion of the middle class had been on the basis of expansion of income, and not wealth. The income expansion, within a decade, did not create sufficient wealth to withstand the significant shock that arise following fall in oil prices in 2014.

Finally, the rise in Nigeria’s middle class belies the unsustainable level of inequality in the country. Consequently, as a rising economic class, Nigeria’s middle class was still very vulnerable to significant fall in oil prices.

However, and in conclusion, despite these policy errors and the decline in the income that followed the decline in oil prices, there is something missing in many of the migration analysis of the last four years under President Muhammadu Buhari. The missing point is a new level of fear and hopelessness.

So Nigerians are not leaving in droves purely for economic reasons, but also because of the fear and hopelessness about Nigeria’s future.

I thank you.

Dr. Okiti is the president, Time Economics Ltd @ Dr_Okiti 081.7153.0058

Banks illegal stamp duty collections and related dances PROPHYLAXIS

AYULI JEMIDE

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f you are a customer of any bank in Nigeria, you are a victim of the current illegal deduction of 50 Naira stamp duty being collected by all the banks in respect of electronic transfer and teller deposits. This macabre dance started in 2014, when a company called Kasmal International Limited purportedly owned by Senator Buruji Kashamu, ostensibly acting as agent for NIPOST filed an action against the banks urging the Federal High court to compel the banks to deduct the stamp duty and remit to NIPOST. Kasmal obtained judgment and the Central Bank took the dance floor and gyrated in its usual manner with a directive issued on 15th January 2016 advising banks to commence the 50 Naira stamp duty deduction in obedience to the court order. The Central Bank in its directive stated that the court order formed part of its basis for the directive. The banks led

by Standard Chartered Bank changed the tempo of the dance by going to the Court of Appeal on this matter and the court of appeal in a very appealing tune set aside the judgement of the Federal High Court on 21st April 2016 – the justices ruled that the stamp duty charge

is illegal and there is no statutory basis for this deduction from customers’ accounts. Since this ruling by the court of appeal, the Central Bank has become shy to come to the dance floor. The Central Bank is wall hugging despite many letters from Nigerian Employers Consultative Forum (NECA) and yet another court judgement obtained

by Shoprite against Citibank wherein Shoprite challenged the deduction. Our supposedly independent Central Bank is not captivated by the ruling of the court of appeal. Meanwhile, the banks in their quintessential buck passing have said they are waiting for a directive from the Central bank before they obey the order of the court of appeal. Why has the Central Bank not reversed its January 2016 directive since the court of appeal has set aside the judgment obtained by Kasmal which formed the basis for their directive? I have many guesses, but I hate guess work so I will leave it at that. My personal view is that the Central Bank should be at the forefront of institutions that obey court orders. I am also of the view that if a court gives a judgment, the banks do not need the Central Bank to affirm that judgement before it is obeyed by the bank. This sounds utopian?

While we are at it several other participants are also on the dance floor at different times and doing varying types of jigs, twirls, twists and even belly flops.

The Attorney General of the Federation and Minister of Justice, Abubakar Malami (SAN), on March 23rd 2016 gave the Economic and Financial Crimes Commission (EFCC) a marching order to launch an investigation of the involvement of Kasmal Interna-

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My personal view is that the Central Bank should be at the forefront of institutions that obey court orders

tional Services Limited on collection of stamp duties. See how the fox-trot goes: Kasmal wins the case, Central Bank rides on it to issue a directive, then the Attorney General steps in to investigate Kasmal whilst the banks are deducting the 50 naira from the customers. The volume of the music gets louder as the Revenue Mobilisation Allocation and Fiscal Commission steps in and secures the approval of the National Economic Council to probe banks (yes probe banks) over the collection of stamp duties. The Revenue Commission says they suspect that banks have pulled the wool over their eyes. The gist is that since the beginning of the collection of electronic stamp duties in January 2016, unconfirmed reports say that a total of N30bn had been realised through the collection of stamp duties by the banks as of December 31, 2018 but this is grossly lower than the expectation of both the government and the postal authorities because NIPOST consultant had estimated that NIPOST should earn about N475bn per annum from the duty. Is this why the banks are not obeying the court order? Is this why they are waiting for a directive from Central Bank that they probably know may never come? This unholy dance between the Central Bank and the bankers seems to be at play again?

Whilst that is going on, at another end of the dance floor the Postmaster General of the Federation, Bisi Adegbuyi, is displaying some afro beat steps - he writes to the Governor of the Central Bank of Nigeria, Godwin Emefiele regarding the bank remittances into the CBN. Post Masters get things posted but

they do not like to be posted. Mr Post Master wants a forensic investigation of the funds that have so far accrued to the Federal Government through the electronic collection of stamp duties by banks. Soon Inspector Jacques Clouseau ([3akklu.zo]) the fictional character the Pink Panther series will be invited to do the forensics.

This dance gets even more interesting as soon as our distinguished Senators (who have some very famous dancers in their midst) come unto the dance floor. The Senators have taken the hint from the court of appeal that the current stamp duties Act does not support this N50 naira charge and their wisdom tells them that a new law is required to win the musical chairs. Senate at its plenary session of Tuesday, 8 May 2018, passed the Stamp Duties Act, 2004, (Amendment) Bill, 2018. Mr. President however needs to sign this into law, so we wait to see his footwork when he comes unto the dance floor. I must add that his footwork can be deft on a good day. So, stay tuned! We must note that the Senators by passing this law have admitted that the current collection is illegal but have strangely not exercised oversight functions to call the banks to order. Why? “Confusion is a word we have invented for an order which is not yet understood” - Henry Valentine Miller (December 26, 1891 – June 7, 1980) American writer.

Ayuli Jemide is Founder and Lead Partner of Detail Commercial Solicitors. An entrepreneur, public speaker and writer.

Email: AJ@ayulijemide.org Twitter: @JemideAyuli

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