BusinessDay 30 Dec 2019 by BusinessDay

businessday market monitor

Biggest Gainer Nestle N1300

Foreign Exchange

Biggest Loser

Guinness 10.00 pc N32.05 26,416.48

FMDQ Close

Everdon Bureau De Change

Bitcoin

NSE

-6.24pc

Foreign Reserve - $39.006bnbn Cross Rates GBP-$:1.29 YUANY - 51.69 Commodities Cocoa US$2,393.00

Gold $1,484.27

₦2,593,569.53 -0.77

N300

Sell

$-N 358.00 362.50 £-N 472.00 481.00 €-N 392.00 401.00

Crude Oil $66.03

news you can trust I ** monDAY 30 DECEMBER 2019 I vol. 19, no 466

Buy

www.

Market

Spot ($/N) 364.20 307.00

Currency Futures

NGUS FEB 26 2020 363.50

hat is the economic advantage of a huge population? Big market size, high economic growth, huge tax base and better domestic capital mobilisation. Nigeria has none of those but keeps growing at a rate that would see the country overtake the United States as the third most populous country globally before 2050. With a population of around 200 million currently growing annually at around 2.6 percent, Nigeria is Africa’s most populous country and is expected by UN’s population division to add a little more than 200 million in the next three decades. This would see Nigeria surpass US population which would be under 400 million then. For now, Nigeria doesn’t boast of a huge population alone. It is Africa’s biggest economy

Analysis (around $420bn in 2018 based on 306/$). But the country is poverty capital of the world and

could become home to a quarter of the world’s poorest by the end of the new decade, the World Bank recently warned. Ironic as it might seem, Nigeria’s conflicting titles are not

0.81 7.32

0.00

unrelated. Big for nothing Nigerians are poor, and a 200 million population is not a Continues on page 42

10.83

NGUS MAY 27 2020 364.51

In new decade, Nigeria must focus on economy, population control SEGUN ADAMS

3M -0.61 5.17

I&E FX Window CBN Official Rate ($/N)

fgn bonds

Treasury bills

10 Y 0.4

30 Y 0.01

11.50

12.84

NGUS DEC 30 2020 366.87

Winners, losers in 2019 and expectations for 2020 LOLADE AKINMURELE

rom store owners who suffered losses running into several millions of naira after being targeted by Nigerian mobs retaliating against xenophobic attacks in South Africa to the victims of a billion-naira fire outbreak in Balogun market, many Nigerians will remember the year 2019 for the despair it brought them. It’s been over a month since Kazeem Ijaduade’s fabric shop was burnt to the ground by a rampaging fire. He claims goods worth N5 million were lost to the fire. He and his family had barely Continues on page 42

Inside

L-R: Ayodele Ilelaboye, director, trade and investment, Nigerian-British Chamber of Commerce (NBCC); Abimbola Olashore, vice president; Bisi Adeyemi, deputy president; Kayode Falowo, president; Niyi Adebayo, minister of industry, trade and investment; Yusuf Ibrahim, acting director; Zulaika Abdullahi, assistant director; Rachel Mandi George, asst. director, ministry of industry, trade and investment, and Fisayo Shonibare of Greenwich Trust Limited, during the chamber’s visit to the ministry in Abuja.

Nigeria’s external debt may rise to $111bn in 2020, OBJ warns P. 41

Monday 30 December 2019

BUSINESS DAY

news Sanwo-Olu restates commitment to rid Lagos of gridlock JOSHUA BASSEY

agos State governor, Babajide Sanwo-Olu, has reassured Lagosians of his administration’s commitment to rid the state of traffic congestion. Sanwo-Olu gave the assurance Saturday evening while inspecting the removal of 2nd Lekki Roundabout as part of junction improvements for free flow of vehicular movements along the Lekki corridors. This is in line with the state government’s move to remove some roundabouts identified as the major causes of gridlock being experienced by motorists. Four roundabouts including Ikotun, 2nd roundabout on the Lekki-Epe Expressway, Allen Avenue roundabout and Maryland will be removed to pave the way for road expansion and free flow of traffic. The government, through the Ministry of Transportation, says the removal of some roundabouts and street furniture such as giant bill boards will give room for road expansion and strategically ease off traffic congestion in some parts of the metropolis. Governor Sanwo-Olu, while at the project site, encouraged the contractors handling the projects to keep up with the current pace of work so as to ensure its completion in record time. Last week, the state commissioner for transportation, Fredrick Oladeinde, who ac-

companied Governor SanwoOlu to inspect the project, described the decision to improve the junctions as a strategic repositioning of the roads to ease traffic congestion. According to him, the government started off through discovery of 60 gridlock junctions and areas across the state. “Sufficiently, the junction improvement work that is being conducted on the four roundabouts includes the following: Removal of roundabouts, separate streams of traffic through Traffic Signal Lights (TSL) synchronise all TSLs through intelligent traffic systems which will recognise the densities of traffic streams and give priorities accordingly,” he told journalists. It also includes introduction of “stacking lanes for both left and right turns at these junctions which will also contribute to increasing the capacities of our roads at the junctions thereby reducing travel time”, he said. In the same vein, Governor Sanwo-Olu visited the Lekki coastal roads to ascertain the level of work done by men of the state’s environmental task force, who had gone earlier to clean up the illegal structures built on the right of way. Satisfied Sanwo-Olu said that government would immediately move in and start work in the area to avoid further encroachment and illegal occupation of the large expanse of land.

FIRS moves to ease tax clearance certificate process

…offers taxpayers 30-day window JAMES KWEN, Abuja

he Federal Inland Revenue Ser vice (FIRS) has put in place machinery to ease issuance of 2020 tax clearance certificate (TCC) to all eligible taxpayers in the country. The Service is offering a 30day window – from January 2 to January 31, 2020 – to enable taxpayers obtain tax clearance certificate. The move is to assist taxpayers to meet obligations that may require tax clearance certificate, Muhammad Nami, executive chairman of FIRS, said. In a notice he personally signedwhichwasissuedinAbuja on Sunday, Nami noted that the offer to ease issuance of TCC is in accordance with the provisions of Section 101 (1) of CITA LFN 2004 and in conformity with SelfAssessment Regulation, 2011. “Following the numerous complaints received from our esteemed taxpayers with respect to difficulties encountered before obtaining Tax Clearance Certificate (TCC) and the fact that taxpayers need TCC to enable them to, inter alia, seek and obtain contracts and loans, renew permits, registrations, franchises, agreements and/ or licences that will invariably

generate revenue from which taxes will be paid, management has looked into the above complaints and has taken steps to ease the process of obtaining TCC,” Nami said. “Consequently, notice is hereby given that the Service has put in place machinery to issue 2020 TCC for all eligible taxpayers from 2nd January to 31st January, 2020,” he said. He warned that FIRS would not fail to invoke the provisions of the law, including enforcement and imposition of lien, should it be apparent that a taxpayer has misled the Service to issue a TCC. “The Service may not hesitate to use enforcement activities including imposition of lien on bank accounts of such defaulting companies to recover any outstanding debts when it discovers that the taxpayer has misled the Service in her duty to observe tax compliance,” Nami said. “The issuance of TCC to ease the burden of taxpayers is in line with the provisions of Section 101 (1) of CITA LFN 2004 and in conformitywithSelf-Assessment Regulation, 2011. Taxpayers are therefore encouraged to take advantage of this initiative and apply for their 2020 TCC, as soon as possible,” he said in the notice. www.businessday.ng

Babatunde Fashola (2nd r), minister of works & housing; Aliko Dangote (r), chairman, Dangote Group; Devakumar Edwin (m), group executive director, strategy, capital projects/portfolio development, Dangote Industries Limited, and Oluyemi Oguntominiyi (2nd l), director, highways, construction and rehabilitation, being briefed by Adedamola Kuti (l), federal controller of works, Lagos, at the inspection of the ongoing construction work on Apapa-Oworonshoki–Ojota Expressway: Section 1 Sub-Sections A,B,D and Sections 3 & 4 in Lagos.

What new $10bn NLNG train means for Nigerian economy OLUSOLA BELLO & DIPO OLADEHINDE

fter several years of delay, the Nigeria Liquefied Natural Gas (NLNG) Train 7 project reached final investment decision (FID) on Friday, December 27, 2019. The project had missed a previous deadline in the fourth quarter of 2018 and, more recently, on December 19. The decision by shareholders of NLNG Ltd to proceed with the construction of the country’s seventh liquefied natural gas production train is expected to have immense effect on Nigeria’s economy. With the construction period projected at approxi-

mately five years after FID with first LNG rundown expected in 2024, the project is expected to increase Nigeria’s LNG production by 35 percent to 30 million tonnes per annum (mtpa). NLNG is run in a unique way that is different from other public assets, as it is owned partly by the government and the private sector. It is, however, run exclusively by the latter, earning it plaudits along the way for its operational success. The Federal Government, represented by NNPC, owns 49 percent of NLNG while international oil company Shell owns 25.6 percent. French oil company, Total Gaz Electricite Holdings, owns 15 percent and Eni owns 10.4 percent.

The Train-7 project is located at the Bonny Island LNG facility in the Niger Delta. Once complete, it will include a new liquefaction unit, an 84,200m3 storage tank, a 36,000m3 condensate tank, and three gas turbine generators. “This is a gateway to more investment in Nigeria. We will take steps to get to Train 12. There is an opportunity to do this. NLNG is one of the most successful ventures in Nigeria,” Mele Kyari, group managing director (GMD) of Nigerian National Petroleum Corporation (NNPC), said. Impact on Nigeria’s economy The Train-7 project, when it finally takes off, is expected to greatly impact the national

economy as it would boost the Federal Government’s revenue by $9 billion and generate about 10,000 direct jobs and 40,000 indirect jobs to ease the youth unemployment challenge in the country. The project would deliver 100 percent engineering of all non-cryogenic areas incountry and also push up Nigeria’s profile as a major force to reckon with globally in terms of gas production. “Train 7 is the crux of a growth agenda which will ensure the company’s position as the 5th major supplier of global LNG is maintained, increasing value to its shareholders and other stakeholders, as well as further reducing

Continues on page 42

Apapa gridlock, corruption, overtime cargo major setbacks to port business in 2019 AMAKA ANAGOR-EWUZIE

xcruciating gridlock on the roads leading to Apapa and Tin-Can Island Ports in Lagos in 2019 made it almost impossible for cargo owners to take delivery of their goods. The unbearable traffic situation piled cost on shippers. Truckers striving to gain access into the ports were extorted by security operatives manning the access roads. All of these combined to impede the growth of port business in 2019. The efficiency of port operation was also hampered by the presence over 5,000 twenty-foot equivalent units (TEUs) of overtime and abandoned containers as well as over 1,179 used vehicles (including scraps and movable

vehicles) at the port terminals located in Apapa, Tin-Can Island and Onne Ports. Given the persistent traffic situation, the cost of moving cleared containers from the port increased in the period under review as truck owners doubled the transportation fare in order to recoup what was lost to several hours of gridlock to and fro Apapa. Manual cargo examination was another obstacle to efficient port operation in 2019, according to Vicky Haastrup, chairman, Seaport Terminal Operators Association of Nigeria (STOAN). “The scanners at the port are not working, while almost all the cargoes landed at our ports were subjected to 100 percent physical examination,” Haastrup said. “This certainly

https://www.facebook.com/businessdayng

slows down the cargo delivery process and increases the cost of doing business. We urge the Federal Government to, as a matter of urgency, work on automating Customs processes at our ports and install functional scanners to reduce manual clearing processes.” Haastrup said automation and scanning would reduce human contacts at the port and cut down on the use of discretionary powers by government officials, which will in turn reduce the cost of doing business at the port and increase government revenue. “Port operators and users are groaning under severe stress posed by severely dilapidated port access roads. While terminal operations at all the ports have attained varying degrees of efficiency, @Businessdayng

the dilapidated roads leading into and out of the ports, are fast eroding the gains of the port reforms,” she said. Hadiza Bala Usman, managing director, Nigeria Ports Authority (NPA), had at different forums said the ports have been heavily congested due to the presence of overtime cargoes. This, she said, impedes efficiency of operation and timely release of cargo. For Nigeria to optimise the benefit of closing the land borders by the Federal Government, Usman noted that there was need to decongest the seaports by removing the overtime cargoes that hamper the capacity and efficiency of the seaports.

•Continues online at www.businessday.ng

Monday 30 December 2019

BUSINESS DAY

www.businessday.ng

https://www.facebook.com/businessdayng

@Businessdayng

Monday 30 December 2019

BUSINESS DAY

www.businessday.ng

https://www.facebook.com/businessdayng

@Businessdayng

Monday 30 December 2019

BUSINESS DAY

www.businessday.ng

https://www.facebook.com/businessdayng

@Businessdayng

Monday 30 December 2019

BUSINESS DAY

www.businessday.ng

https://www.facebook.com/businessdayng

@Businessdayng

Monday 30 December 2019

BUSINESS DAY

www.businessday.ng

https://www.facebook.com/businessdayng

@Businessdayng

Monday 30 December 2019

BUSINESS DAY

news

Ndi-Igbo Germany denounces holders of Igbo traditional titles in foreign land

Lagos mulls transit homes for people in emergency situations

...says they are impostors, impersonators

CHUKA UROKO

he apex body of all Igbo unions in Germany, Ndi-Igbo Germany, has warned that all those who parade Igbo traditional titles in foreign land are impostors and impersonators and should be treated as such. The group reiterated its stand against all forms of falsification, commercialisation or impersonation of Igbo traditional titles in foreign land, especially in Germany. In statement signed by Oge Ozofor, its coordinator, and Tony Dominic, general secretary, sent to BusinessDay, Ndi-Igbo Germany said as custodians of Igbo culture in foreign land, it has from inception strived to maintain the purity and essence of that culture. “To this end, we have successfully banned all forms of falsification, commercialisation or impersonation of Igbo traditional titles of Ozo, Nze, Eze, Onowu or such similar titles here in Germany,” the group said. “Conferment of such titles is the prerogative of specific Igbo communities/kingdoms in Igbo land” and “a celebration and recognition of consistent contributions of positive influence and development made to the specific community or the larger society by the recipient”, it said. Ndi-Igbo Germany stated that as the only apex body of all Igbo unions in Germany, it does not confer and does not recognise such titles as they are nonexistent in Germany. “In clear text, we want to bring to the notice of the public, all the embassies of the Federal Republic of Nigeria, the state governments of all the South-East states, their Ministries of Culture and Chieftaincy Affairs, their State Council of Chiefs and Traditional Rulers, that any person, persons parading himself/herself as Ozo, Nze, Ogbuefi, Onowu (xy name) of Germany or such similar titles are nothing but imposters and impersonators and should be treated as such,” it said. Ndi-Igbo Germany, therefore, called on all Ndi-Igbo, both home and abroad, to join hands and complement the group’s effort to halt “this cultural aberration which erodes, cheapens and bastardizes our value system of hard work, honesty, benefits and reward system”. “We call on all Igbo diaspora groups in the world to join us and take similar stand,” it said.

s part of its New Year gift to the citizens, Lagos State government says it is planning to build transit homes as a response to the plight of people in emergency situations and also to reduce homelessness and destitution in the state. Housing is a major social problem in Lagos, arising from its large and growing population coupled with the expensive

www.businessday.ng

nature of the state’s housing market. Many cannot afford what is on offer in the market. This is why, beyond the transit homes, the state is also planning to turn around some of its dilapidated estates into liveable cities to achieve the SDG 11 of sustainable and liveable cities. “Apart from working hard to deliver our ongoing projects within the next 24 months, we are planning to initiate new schemes in all parts of the state. We are geared to-

wards making more Lagosians home owners,” said Moruf Akinderu-Fatai, the state’s commissioner for housing, in an interview. With an estimated 20 million people, Lagos has housing deficit that is approximately 3 million units. About 80 percent of the residents are renters who spend about 50 percent of their income on rents. The state is unable to provide adequate housing for the teeming population because,

https://www.facebook.com/businessdayng

according to the commissioner, there are challenges that work against their desire and ability to do that. Apart from paucity of unencumbered land, there is also the issue of high cost of materials and labour which, in the commissioner’s view, is reason for houses not being affordable and therefore not available to low-income earners. “We will sponsor researches into development of technology that will reduce cost of building. We will also build

@Businessdayng

human capacity with training programmes for artisans to reduce unemployment and bring down cost of labour,” the commissioner said. Funding is yet another constraint to delivering housing. Akinderu-Fatai noted that building homes was highly capital intensive and they were involved in private partnership and joint ventures on many of projects. “We are also actively looking for cheap funds to translate our visions into reality,” he said.

Monday 30 December 2019

BUSINESS DAY

www.businessday.ng

https://www.facebook.com/businessdayng

@Businessdayng

Monday 30 December 2019

BUSINESS DAY

comment

comment is free

Send 800word comments to comment@businessday.ng

The Metropolitan Club – If you think you are surrounded by idiots (1)

Bashorun J.K Randle

he Metropolitan Club on Victoria Island, Lagos can legitimately claim to be the most exclusive club in Nigeria (and perhaps West Africa). However, the story does not end there. Thirty years ago (on the 30th Anniversary of the Club), I was selected to write a brief history of what had already become a national (possibly International) treasure and institution. Shortly afterwards, Joe Brandler invited me to lunch at his private club in London – “The East India Club” at 16 St James’s Square in London, London. Consul Brandler (or “Joe” as he preferred to be called) was an excellent host. The food was excellent; and the superlative champagne plus fine wine were provided in generous quantities by the ever so attentive uniformed waiters. Among the other guests were several “old coasters” – an appellation reserved for those Britons who had served in Nigeria while it was a British colony and stayed after Nigeria gained Independence on 1st October 1960. A handful were in the civil service but the rest were in banking, insurance, accountancy, shipping, industry and commerce – mostly under the aegis of the British High Commission and British Council as well as the multinationals such as the United Africa Company Plc (now known as UAC of

Nigeria Plc); Lever Brothers (now known as Unilever); BEWAC Ltd; Paterson & Zochonis Limited (now known as PZ Industries Plc); Nigerian Tobacco Company Limited; Nigerian Breweries Plc; Guinness Nigeria Plc; British Petroleum (BP); Shell Petroleum etc. Anyway, when we retired to the members’ lounge for cigars and coffee as well as cognac the discussions became more animated. The major subject was The Metropolitan Club of which Joe as well as many of his guests was founding members or very early joiners. What was most fascinating were the antecedents or more correctly the preamble to the founding of Metropolitan Club on 13th October 1959 as: “A Club for gentlemen” Membership would be shared equally between Nigerians and expatriates. It was quite a revelation to learn that as far back as 1932, the Lagos Dining Club had been founded with the same ideal, ethos and dynamics in mind – monthly formal dinner rather than the weekly Tuesday lunch as is the case with the Metropolitan Club. However, as a kid I was aware that in the 1950s the crème de la crème of Lagos would assemble for lunch daily/ weekly at the residence of Santos (a Brazilian descendant) at 52 Odunlami Street, Lagos to savour his legendary culinary skills. At the top of the long dining table would be seated Adetokunbo Ademola (an old boy of King’s College) and he would, be flanked by the likes of Flavious Akerele (an old boy of King’s College); V.O. Munis (an old boy of St. Gregory’s College) who lived in Ikeja (but his law office was just across the road on the corner of Campos square and Bamgbose Street); Ebenezer O. Okunowo (businessman); Bamidele Oyediran, Principal of Methodist Boys High School (and an old boy of King’s

College); Ernest Ikoli, editor of The Daily Times (and an old boy of King’s College); Mobolaji Odunewu (journalist); M.A. Ogun (businessman); Oladipo Odunsi (a lawyer); Oladipo Moore, QC (lawyer); Ladipo Oluwole, Chief Medical Officer of Lagos (an old boy of King’s College);etc. My father, Chief J.K. Randle (an old boy of King’s College) was a staunch member of what was clearly an informal club for men only. However, I must add that late Moses Adekoyejo Majekodunmi (an old boy of St. Gregory’s College) was younger than the others that sat around the table. They all adored him immensely. He drove a Jaguar car and smoked a very elegantly carved pipe. He had swagger. According to Nigerian Hakeem Olajuwon the United States based basketball legend (Star player in “The Dream Team” at the American 1996 Atlanta Olympic Games) his mother had lost eight pregnancies before coming under the care of Majekodunmi at Massey Street Clinic, Lagos. It was the great doctor who safely delivered Hakeem, the miracle baby on 21 January 1963. Sadly, Santos lost his house to Majekodunmi from whom he had borrowed money in a private transaction and pledged his property as security. All the main characters departed long ago but the Santos house is firmly included in the Estate of M.A. Majekodunmi. The connecting thread between the Lago Dining Club and “Santos Luncheon Club” was that they shared similar aspirations. Besides, both had common membership who was the driving force, (Sir Adetokunbo Ademola in particular) in midwifing the Metropolitan Club. Anyway, back at the East India Club when it was time to depart (carriages!!), it was Professor Alex Maxwell-Dunt who got a double first from Cambridge in physics that delivered the following

‘

Fortunately, there was an alternative soft option – The Metropolitan Club where the merging elite in Nigeria – both expatriates and indigenes could as gentlemen set the moral tone for the nation

verdict: “I do not know much about the Metropolitan Club or Nigeria but going by the principles of quantum physics my summation is that while the Metropolitan Club has been bristling with massive intellectual capacity, it is surrounded by idiots – and that is why Nigeria is in big trouble. Hence, what the Metropolitan Club must do is bring Nigeria up to speed. The alternative is a short route to the ‘Black Hole’ which my colleague Professor Stephen Hawking of Trinity College has correctly defined in his book: “A Brief History of Time” Before we went off to hail taxis to our various destinations it was Colonel Kevin Windham (Baliol College, Oxford University) who served under MajorGeneral Sir Christopher Welby-Everard, the last British Commanding Officer of the Nigerian Army who disclosed that before Independence was granted to Nigeria, the British became somewhat apprehensive that considering the seething ethnic tensions and simmering rage a military takeover could not be ruled out. In order to forestall such a catastrophe, the British offered Nigeria a Defence Pact in addition to extending the tenure of the British head of the Nigerian Army. Nigeria refused both offers. Fortunately, there was an alternative soft option – The Metropolitan Club where the merging elite in Nigeria – both expatriates and indigenes could as gentlemen set the moral tone for the nation; enthrone transparency and uphold the tenets of civilisation as gentlemen – no histrionics or division along religious/ethnic lines. In the event of trouble, these gentlemen would be there to offer advice and counsel restraint. Randle is Chairman/Chief Executive JK Randle Professional Services Chartered Accountants

Another Christmas celebration in Nigeria

s Christmas not the most widely celebrated religious festival in the world? Even nonChristians like Buddhists, Hindu faithful, Moslems, African Traditional Religion Practitioners, and others participate in the celebration of Christmas, which is the birthday of Jesus Christ, our saviour. The celebration of Christmas is marked by a long holiday that starts from the Christmas Eve and stretches to the New Year day. The celebration of Christmas dates back to some centuries ago. We know that Christmas is around the corner when there is chill in the air; and, we do muffle ourselves in heavy clothes at night because of the biting cold. And our lips will become chapped during the period. During the yuletide season, the deciduous trees by the roadsides will shed their leaves while the nondeciduous ones will wear coats of dust. These are signs that Christmas is in the air. But what is Christmas? It means the remembrance of the birth of Jesus Christ, the only begotten son of God. Jesus Christ, according to the synoptic gospels, came into this world through the Immaculate Conception, having been born by Virgin Mary. Christians are taught to believe that Jesus Christ is the ransom for the sins of mankind. So, these who exercise faith in him and abide by his teachings will enter heaven when they die. However, some writers posit that Jesus Christ is not a historical figure; rather, he’s a product of myths and legends. But the book called “A Short History of The World” said this about Jesus: ‘He appeared in Judea in the reign of Tiberius Caesar. He was a prophet. He preached after the fashion of the preceding Jewish prophets. He was man of about thirty, and we are in the profoundest ignorance of his manner of life before his preaching began.”

There are compelling proofs, which show that Jesus Christ actually lived in the time past. But, was he born on December 25, the day Christians commemorate his birthday? The Jehovah witnesses, a Christian sect, argue that Jesus could not have been born on December 15 based on the Biblical nativity story which vividly described the climatic conditions which existed at the time of his birth. It’s said that the Greek festival of solstice, the worship of the Sun God, was Christianised into Christmas. Perhaps, the Christmas celebration has pagan origins and background. So, today, Jehovah witnesses, members of Cherubim and Seraphim, and some other Christian groups do not celebrate Christmas on the grounds that it has pagan origins. They say, also, that Jesus Christ did not instruct His disciples to mark His birthday. Today, the celebration of Christmas by Christians in the Christendom bears similarities to the throwing of worldly parties and feasts. In the name of celebrating Christmas, people indulge in illicit sexual concupiscence, get drunk, and binge on food rather than reverence God on that day. Consequently, our wild celebration of Christmas does bring woes to us. In the recent past, not a few people had died in car accidents on Christmas day because of drink-driving. And many teenage girls had got unintended pregnancies, which caused the truncation of their dreams of acquiring further education. They’ve become semi-literate teenage mothers, who are saddled with the responsibilities of raising kids. More so, in the period before the Christmas day, many people would engage in mad pursuit of money, which they would use to make purchases for the Christmas celebration. Because the Christmas period is the time of mass return of people to their country homes, people would like www.businessday.ng

to dress in very expensive clothes, drive in posh cars, and start living in magnificent houses they built. But their ostentatious display of wealth is not congruent with the teachings of Jesus Christ. Jesus Christ for whom we celebrate the Christmas symbolizes love. Were he on earth today, he would not approve of rich people’s ostentatious display of wealth in the midst of poor people, which shows their lack of charity and insensitivity to other people’s problem and impecuniousness. Jesus Christ for whom we mark the day admonished us to strive to possess the virtue of charity. The person who loves his brother has fulfilled the commandments. And in the Bible we are told that “Love covers a multitude of sins’’. But does love still exist among us? Do the feelings of empathy well up in our hearts when we see other people who are encountering existential problems? The fact is that we have stopped being our brother’s keepers. Now, Nigerians are very hard-hearted human beings. It is not love that propels Boko Haram insurgents to detonate bombs in crowded places to kill other people. The kidnappers who kidnap rich people for ransom are not actuated by the feelings of love. And, in today’s Nigeria, our politicians, who perceive their occupation of exalted political offices as opportunities to become rich, do dip hands into the public tills to steal our collective money. What propelled them to steal our collective wealth for their personal use is not their love for the less- privileged people in Nigeria. Consequently, Nigeria lacks basic infrastructures and millions of Nigerians have been reduced to sub humans by poverty. So, they live below the breadline, and in margins of society. It is another Christmas celebration in the world. It is the time for the remembrance of the

https://www.facebook.com/businessdayng

CHIEDU UCHE OKOYE birthday of Jesus Christ, who’s the saviour of mankind. So, as Jesus Christ symbolises love, it behoves the well-heeled people in our society to look the way of the poor and offer them succour so that they can celebrate the Christmas happily, too. They should visit the orphanage homes, hospitals, and correctional centres to give the inmates of these centres material gifts. And, in today’s Nigeria, our country has been sundered apart by the centrifugal forces of religion and ethnicity. But a man who has the virtue of love is not prejudiced against other people whose religions and ethnic origins are different from his .Our religious and ethnic prejudices predispose us to hate those who are different from us. In this yuletide period, we should imbibe Jesus Christ’s message of love. Our imbibing the virtue of love will disabuse our minds of religious biases and ethnic prejudices As it is the yuletide, let us ponder and reflect on the revolutionary teachings of Jesus Christ, the chief of which is his message of love. Christ’s crucifixion on the cross of Calvary which was preceded by his acceptance to become a ransom for our sins is a perfect exemplification and demonstration of love. Let us continue to emulate Christ’s sterling examples during this Christmas period and beyond. Okoye, a poet, wrote in from Uruowulu-Obosi, Anambra State08062220654

@Businessdayng

Monday 30 December 2019

BUSINESS DAY

comment

comment is free

Send 800word comments to comment@businessday.ng

European Business Schools rankings 2019 Adaptability, international cohorts and faculty, and lower costs help European business education programmes stand out

Jonathan Moules

urope is often portrayed as a sort of Goldilocks porridge of business education: not too hot, like the dynamic new Asian markets, but not too cold, like the US, where demand for most MBA courses is in decline. There is no guarantee, however, that the climate at European business schools will always be “just right”. The number of applications to fulltime MBA courses was up at 63 per cent of European business schools this year, according to the Graduate Management Admission Council (GMAC), the entrance exam administrator. Growth in demand was driven by a rise in international applications. Most of the institutions surveyed by GMAC reported year-on-year increases in interest from abroad, although for half of those courses international demand was up only slightly. One of the top reasons candidates pick European schools is the quality of the continent’s education system. They also see a degree from a European school as an asset in their pursuit of an international career. However, that does not mean European schools can rest on their laurels. Insead, the provider of Europe’s

highest-ranked full-time MBA course for the past three years, and global number one in 2016, announced in May it was entering the crowded market for masters in management courses. It hopes its new 10-month degree will help it attract a younger cohort to its Fontainebleau campus than currently come for its flagship MBA. The extra 100 students expected on the first MiM class will be particularly welcome. Demand for most of the world’s highly ranked full-time MBA programmes — which are largely in the US — fell this year. Rising costs have been blamed for the decline at these top schools, where tuition fees have risen the fastest and highest. There has been significant change in the positions of several institutions in the FT’s 2019 European business school ranking, though not at the top of the table. The leading six schools have shuffled places but are the same group as last year. London Business School loses the crown of top European school to HEC Paris but slips only one place. The fact that it, or other UK MBA providers, have not fallen further reflects a surprising aspect of the business education market in Europe: the way the UK has defied the negative predictions after its 2016 referendum vote to leave the EU. While Brexit has caused political paralysis and been blamed for economic malaise at home, UK business education has gone from strength to strength, with demand for business masters degrees rising, especially among non-EU applicants. When GMAC surveyed non-UK citizens who applied to British business schools about their attitudes to Brexit at the end of 2018, 54 per cent said it had made no difference to their decision to study in the UK. Of course this might

change in the coming 12 months if the UK’s divorce from the EU goes ahead, GMAC notes in its research. One of the biggest concerns in Europe, as in other parts of the world, is an increase in visa restrictions for overseas students, according to Sangeet Chowfla, GMAC chief executive and president. “If we are to maintain a healthy climate for aspiring candidates, we need to make it possible for people from different regions and backgrounds to study and work in the location they desire,” he says. The FT’s European ranking recognises schools that perform strongly across a range of masters degree programmes and short courses. ESMT Berlin is the joint highest climber in this year’s ranking, up from 24th place to ninth, a reflection of its strength across MBA and executive education classes and its high percentage of faculty from outside Germany. (Nyenrode in the Netherlands also rose 15 places, to joint 36th.) The most proactive schools are investing in new degree programmes and support services that strengthen their alumni base, according to Alfons Sauquet, director of quality services at the European Foundation for Management Development, a business school accreditation agency. Top-tier schools set themselves apart by being able to secure high-level jobs for their students following graduation and useful networking opportunities with alumni to build a career afterwards, Sauquet notes. The payback for schools is that if students progress to the highest levels in their careers, they are more likely to donate funds to their alma mater, enabling institutions to build facilities that attract yet more high-quality students. “It is not enough to get big numbers of students,” says Sauquet. “You need a high quality of applicant, rather than quantity.”

‘

London Business School loses the crown of top European school to HEC Paris but slips only one place. The fact that it, or other UK MBA providers, have not fallen further reflects a surprising aspect of the business education market in Europe

2019 – A year in drift

he year 2019 was a rather predictable year for the Nigerian economy. If you could describe it with one word it would be “drift”. A state of inaction. In 2019 we saw GDP grow at a steady pace of around two percent. Better than the previous year and some way better than the recession economy of 2016 and 2017, but still slower than population growth. Which means that on average Nigerians got poorer in 2019. How much poorer? We do not know because we have not officially measured poverty in years. The growth was also some way off the seven percent growth target from the economic recovery and growth plan (ERGP). Not also great. Other macroeconomic variables also drifted. Inflation? Hovered around 11 percent for most of the year. Not as bad as the 15 to 16 percent of the recession years but still some way off the single digit target set by the central bank. Unemployment? That one we don’t know, we haven’t measured it since the third quarter of 2018. My guess would be that the rapid increase we saw during the recession years would have slowed but I doubt

ECONOMIST

it has started to come down. The stock exchange? Drift. Infrastructure challenge? Drift. Not getting better but not really getting worse either. Now, if we were a rich economy with high average income and a high quality of life then drifting would not be so bad. Unfortunately we are anything but that. We are an economy that badly needs growth. Not just fast growth but inclusive growth. So, whereas we have lost the sense of crisis we felt when everything was falling through the roof from about 2014 to 2017, we are still in crisis. Just without the sense of urgency. If you are an economist and a casual observer of the Nigerian economy then all this drift would have been very predictable. It is almost common knowledge that when an economy is faced with terms of trade shocks there are roughly two possible paths. The first is to allow rapid macro adjustment, absorb the shocks, take the pain and then look to move on. Kind of like what Egypt went through. The second is to try to resist and do things to prevent that macro adjustment until you cannot resist any longer. Afterwards you still end up adjusting by force. If www.businessday.ng

Top school: HEC Paris The French business school tops the composite European ranking, compounding its second place in the 2019 global masters in management table and number one position on the executive MBA list. High alumni salaries and pay increases for masters in management and EMBA graduates contributed significantly to its overall success. But it does not score highly in every category — it has one of the lowest proportions of female faculty at 18 per cent, joint thirdlowest on the table. Top for MBA: Insead Insead is among the top 20 business schools in four out of five FT rankings used to compile the European table. Third in the Global MBA ranking this year, the French school is top among European MBA providers for the third year running. Almost all MBA students are international (97 per cent). Insead was second in Europe for executive education open-enrolment programmes and eighth for custom courses. It participated in the EMBA ranking with two programmes: its own and a dual degree programme with Tsinghua University in China. Top for MiM: St Gallen Heading the global MiM table for the ninth year and its strong showing in other rankings contributed to St Gallen University’s fourth place overall in Europe for the third consecutive year. MiM alumni surveyed by the FT rated the careers service top, and it was joint first for graduates achieving their professional aims. One credited the service with helping find their “dream job”. “They taught us how to react to tricky motivational questions at job interviews . . . after the first few tries I improved my interview skills.”

you are smart then you unwind some of the things you did to try to prevent the adjustment. If you are not so wise you stick with them. Either way the outcome is a sluggish economy for some time. How long? Well that depends on how quickly those “destructive” policies are unwound. Which ones did we do in 2014 to 2016? The second of course. We tried to deal with a terms of trade shock by restricting imports. Restricting access to foreign exchange. Jacking up rates to attract short term portfolio funds. And so on. In the end we still had to take the painful adjustment. The economy stopped collapsing as expected but we have not unwound all those things we did. If you thought the 2019 election would serve as a good point to unwind some of that then you would have been mistaken. Instead we seem to doubling down. The 41 items banned from forex list has been expanded to include things like milk with other additions maybe coming soon. Doubling down. The policy of trying to attract US dollars from short term portfolio funds at huge cost? We have scattered our debt markets trying to achieve

https://www.facebook.com/businessdayng

NONSO OBIKILI

that goal. Doubling down. The policy of trying to force lending at single digit rates to “preferred” sectors? We have added a minimum loan to deposit ratio policy and financial repression on top of it. Doubling down. The philosophy of trying to grow the economy by restricting imports? Shut the border. Doubling down. So, what does all that mean for the economy in 2020? Well if we are lucky we will continue drifting. But the risks are building up and if we get unlucky then we may find ourselves in a spot of bother. Still, I guess we should be thankful for having survived 2019. Dr. Obikili is the chief economist at Business Day

@Businessdayng

BUSINESS DAY

Monday 30 December 2019

EDITORIAL Publisher/CEO

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

Bashir Ibrahim Hassan

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

The opportunity cost of N37bn NASS renovation

he decision by the authorities of the Nigerian National Assembly (NASS) to renovate the legislative complex with N37 billion has continued to receive knocks from Nigerians, especially those who, like us, are looking at what the economist calls opportunity cost of that insensitive and ill-advised decision. Looking at this humongous amount, we immediately see the many other more strategically useful and beneficial things it can do for the Nigerian economy that have been forgone in order to renovate a building where legislative business, centres largely on the selfish interest of the assembly members. Among alternatives foregone, roads infrastructure, housing and healthcare stand out undeniable economic benefits. With about 198,000 kilometres network of roads, Nigeria has the largest road network in West Africa and second largest in Sub-Saharan Africa (SSA). However, only 2,627 kilometres are dualised and, worse still, only about 35 percent of the network is motorable. It is estimated that when 37 billion is deployed to the pro-

vision of roads in the country, 45 kilometres of standard roads would be delivered at the cost of N800 million per kilometre. The impact of this on the economy cannot be easily quantified – lives would be saved, cities would be connected while trade and commerce would be encouraged and facilitated. It is no longer news that Nigeria is a “homeless” nation and this is painful in a country that can house a significant number of its citizens if the right things are done or allowed to be done. Given its crowded housing market where the demand-supply gap is estimated at 22 million units, housing situation in Nigeria is dire. With a population of nearly 200 million people, the country requires a minimum of two million housing units per annum for 10 years to close the gap. Believing that a few housing units at a time would take the country near the promised land in housing delivery, we see N37 billion making a bold and ambitious start in low income or affordable housing. At N7.5 million per unit, the estimate is that 5,000 twobedroom bungalows could be provided for low income home seekers in the country if the N37 billion is committed to that purpose, bearing in mind that

the legendary housing deficit in the country is about low cost or affordable housing. What this means, in our view, is that the money has capacity to take 5,000 families off the housing market. Considering an average of four persons per family, comprising father, mother and two children, we see the cost of renovating that complex providing homes for 20,000 Nigerians who will be out of the crowded housing market for good. As a social problem, solving the housing needs of Nigerians have the multiple advantage of ending destitution, providing security for citizens, increasing productivity at work places and ultimately growing the country’s economy. Also, at both primary and tertiary level, the Nigerian health story is pathetic and it is disagreeable that consideration is given to what is, arguably, a frivolous ego trip intent on squandering our common wealth. Like the rest of humanity, we are frightened by the World Health Organisation’s (WHO) statistics on cancer which it describes as the second leading cause of death globally being responsible for an estimated 9.6 million deaths in 2018. Globally, about 1 in 6 deaths is due to cancer.

The organisation notes that, approximately, 70 percent of deaths from cancer occur in lowand middle-income countries and our dear country belongs to this group. Available record shows that the economic impact of cancer is significant and is increasing. Besides being able to provide 350 primary health centres, N37 billion can also make significant impact in fighting the cancer scourge by way of establishing a well-equipped and staffed cancer centre that can go beyond diagnosis to treatment and cure. But sadly, this is part of the foregone alternatives. We are gladdened by what the new private sector-driven NSIA-LUTH Cancer Care Centre is doing at the University of Lagos Teaching Hospital (LUTH) for cancer patients. That simply underscores what is possible in Nigeria’s health sector with private capital or adequate public sector funding. Deploying N37 billion to building more of such facility and not just renovating a structure that nobody says is dysfunctional is one such funding and we support that for the good of more Nigerians, not just that a few self-serving individuals masquerading as representatives of the people.

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

Enquiries NEWS ROOM 08169609331 08116759816 08033160837

} Lagos Abuja

ADVERTISING 01-2799110 08033225506 SUBSCRIPTIONS 01-2799101 07032496069 07054563299 DIGITAL SERVICES 08026011296 www.businessday.ng The Brook, 6 Point Road, GRA, Apapa, Lagos, Nigeria. 01-2799100 Legal Advisers The Law Union

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

OUR Core Values

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

www.businessday.ng

https://www.facebook.com/businessdayng

@Businessdayng

BUSINESS DAY

Monday 30 December 2019

comment

comment is free

Send 800word comments to comment@businessday.ng

Nigeria in 2019: Reflections on a year full of low points global Perspectives

OLU FASAN

ast December, I wrote in a column entitled “Goodbye 2018: The next will be rockier for the world” (BusinessDay, 31 December 2018): “The outgoing year, 2018, has been challenging, but it’s presaging a rockier one for Nigeria and the world”. So, looking back, as 2019 ends this week, how has it gone for Nigeria? Well, let’s start with politics. After all, the main event this year was the general election, of which the two main parties were All Progressives Congress, APC, and People’s Democratic Party, PDP, with President Muhammadu Buhari and former Vice President Atiku Abubakar as their respective presidential candidates. As I predicted, the election was shaped by perceptions of personal integrity rather than competence. Buhari was perceived by most ordinary Nigerians to be incorruptible, while Atiku, despite having the best policies and being a far more competent candidate, struggled under a burden of negative perceptions! It was a contest between a pious, anti-free market demagogue and a brash, pro-market liberal. The former won! That said, there were significant irregularities, which though did not materially affect the outcome of the election, but nevertheless undermined its credibility. The turnout in the presidential election was, at 35%, about the lowest of recent presidential elections in Nigeria, with only 27m people voting, even though 82m actually collected the permanent voter cards, PVCs. The unpopularity of both leading candidates was a key factor. For instance, while the North voted massively, and for Buhari, the turnout in the South, where Buhari was less popular and Atiku was viewed with suspicion, fell below 25%.

But the presidential election and the subsequent governorship polls were also marred by militarisation, violence, voter-intimidation and massive votebuying. President Buhari’s removal of the Chief Justice of Nigeria in the middle of the presidential election campaign sent a negative signal of abuse of incumbency. As the European Union Election Observer Mission (EOM) said in its final report, “Instances of the misuse of state resources and vote-buying were evident and remained generally unaddressed.” Truth is, the conduct of this year’s election, which fell far short of that of 2015, was a really low point of 2019. Well, another low point was the reckless neglect and deliberate harming of the economy. Since President Buhari’s re-election this year, he has done nothing to boost economic efficiency. He started his second term with a bloated cabinet of 43 ministers, made up wholly of loyal associates, campaign hacks and party apologists, none with a reputation for economic technocracy. He tried to make up for that by constituting, on September 16, a high-profile Presidential Economic Advisory Council. But, as I have written twice in this column, there is no evidence that the economic technocrats have been giving Buhari the right policy advice or, if they have, that he has heeded their advice. Think of the economic and social self-harm of closing Nigeria’s land borders. “All goods, for now, are banned from being exported or imported through our land borders”, the government said in October! It is very interesting that the Buhari government is doing everything to dampen economic activities and yet complaining about low tax revenues. In August, the presidency ordered the chairman of the federal inland revenue service (FIRS), Tunde Fowler, to explain “the significant variances between budgeted tax collection and actual tax collection”. Fowler sensibly explained that “tax revenue collection is a function of economic activities”. But Buhari was not satisfied and on December 9 removed Fowler from office, citing low revenue earnings! Yet, the main problem was not FIRS’ failure to collect taxes, but the government’s inability to generate sufficient economic activities and growth to increase revenue earnings.

But President Buhari’s economic policies were not only hampering revenue generation, it was also increasing extreme poverty in Nigeria. For a start, policies such as food-import ban and border closure would only increase the prices of consumer goods in the country, which would increase the cost of living. In a country where nearly half of the population live in extreme poverty and where there is no general income support and social safety net, such policies would certainly increase extreme poverty. What’s more, in December, the World Bank warned that the number of Nigerians living in extreme poverty would increase by 30 million by 2030, with Nigeria then accounting for 25% of the world’s extreme poor population, if it did not urgently undertake far-reaching economic reforms. Indeed, with Nigeria’s population projected to reach 397 million by 2050, according to the UN, the country faces a poverty ticking time bomb without radical reforms and rapid growth! Surely, one key impetus for embarking on such structural reforms is the African Continental Free Trade Area, AfCFTA, which, if positively embraced, could lead to the transformation of Nigeria’s productive and export capacities and attract significant foreign investment into the country. Sadly, Nigeria sees AfCFTA as a threat rather than an opportunity! Since reluctantly signing the AfCFTA agreement in July this year, President Buhari has done nothing to start the process of its ratification in the National Assembly. Rather, he recently inaugurated the National Action Committee to ensure that AfCFTA “reflects Nigeria’s national trade objectives and development plans”, which are protectionist as both the “objectives” and “plans” are based on import-substitution, and not export-orientation. Thus, its approach to AfCFTA has been to set up one committee after another without actually taking concrete steps towards implementation. But that shows a lack of readiness to embark on the kind of radical structural economic reforms that the country badly needs. So, the reckless management of the economy is a key low point of 2019; a recklessness that manifested in the shoddy handling of the Process and

‘

The reckless management of the economy is a key low point of 2019; a recklessness that manifested in the shoddy handling of the Process and Industrial Development (P&ID) case, which resulted in a judgement debt of $9.6bn being upheld against Nigeria by an English commercial court in August this year

Industrial Development (P&ID) case, which resulted in a judgement debt of $9.6bn being upheld against Nigeria by an English commercial court in August this year. Although Nigeria has appealed the judgement, the country is at the mercy of the English court, with interests accumulating on the debt! From politics and the economy, let’s move on to social cohesion and the rule of law. Well, there have been low points too! The rampant killings of innocent farmers by Fulani herdsmen, and President Buhari’s insensitive attempt to appease the herdsmen by establishing cattle colonies or so-called rural grazing areas, RUGA, in the South and the Middle Belt were terrible events that could have inflamed ethnic tensions in 2019. Equally provocative was the obnoxious attempt by some federal legislators to introduce the so-called hate speech and social medial laws under which any Nigerian found guilty of making hate speech could be sentenced to death by hanging! Equally obnoxious was the attempt by some APC legislators in the National Assembly to amend the Constitution to allow President Buhari run for a third term. Another Third Term agenda? It’s beyond belief! Ah, what about President Buhari’s utter disregard for the rule of law? The arrest and trial of the activist Omoyele Sowore for treason simply for shouting “Revolution Now”, the disobedience of court orders to release him from detention and, shockingly, the invasion of a court by security operatives to forcefully re-arrest him were terrible blows to human rights and the rule of law. It was a very low point that Buhari had to be forced by local agitation and US superpower pressure before releasing Sowore and Sambo Dasuki on December 24. So, 2019 is full of low points for Nigeria. But I can’t end this piece without adding another low point: the death on September 22 of Ambassador Chiedu Osakwe, Nigeria’s and AfCFTA’s chief trade negotiator. It was a terrible loss! Happy New Year everyone. May 2020 bring lots of high points! Dr. Fasan, a London-based lawyer and political economist, is a Visiting Fellow at the London School of Economics. e-mail: o.fasan@lse.ac.uk, twitter account: @olu_fasan

“A director shall not fetter his discretion to vote in a particular way” – section 279(6) of CAMA

ccording to Section 279 of the Companies and Allied Matters Act (CAMA), as fiduciaries, Directors are expected to act in good faith at all times – a duty primarily owed to all stakeholders in the Company; exercise power only for proper purpose - if not, they may be liable to the Company for losses incurred; exercise care and skill – what a prudent Director would do in comparable circumstances; protect corporate property, opportunity or information; not to allow personal interests to conflict with their duties and responsibilities as Directors and not to fetter their discretion. These are statutory duties and are enforceable against the Director by the Company. Indeed to underscore the sacrosanct nature of these responsibilities, subsection 8 of Section 279 provides that “No provision, whether contained in the articles or resolutions of a company, or in any contract shall relieve any director from the duty to act in accordance with this section or relieve him from any liability incurred as a result of any breach of the duties conferred upon him under this section”. A Director’s fiduciary duty is owed to the Company and not to the shareholders. As such, to the extent that the best interests of the Company may diverge from what is in the best interests of the shareholders, the Director

must act in the best interests of the Company. A Director may not fetter his/her discretion by contracting with other Directors or with third parties to act in a certain way in the future. The duty not to fetter his/her discretion applies regardless of whether the Director is nominated or appointed by a particular shareholder, and whether the Company is private or public. The interests of shareholders are often aligned with the interests of the Company, however, where such interests are in conflict, the Director’s duty is to the Company which has other stakeholders, including employees, creditors, regulators, etc, all of whose interests should be considered. An example of a divergence of interests is where the Board is faced with a decision to either pay dividend after five consecutive years of losses or embark on a significant upward review of employee remuneration that has been kept constant during the “trying period”. The shareholders would typically vote in favour of a dividend pay-out, whereas it could be in the best interest of the Company at the time to approve an upward review of compensation to employees who have made it possible for the Company to come out of the woods. After all, according to Richard Branson “if you can, put staff first, your customers second and shareholders third, effectively, in the end, the shareholders do well, www.businessday.ng

the customers do better, and yourself are happy”. The obligation not to fetter their discretion precludes Directors from agreeing to predetermine, the manner in which they exercise their discretion. In other words, a Director’s obligation to act in accordance with his fiduciary duties would usually take precedence over any course of conduct he/she may have previously agreed with co-directors or third parties. The ability to make independent judgement is core to the performance of the Director’s fiduciary duties. If he/she has agreed ahead of a Board meeting to vote in a particular way, it goes without saying that the Director will not be willing to consider superior argument, a contrary position or indeed fresh facts that should make the position he/she had taken ahead of the meeting not in the best interest of the Company. Shareholders on the other hand are free pursuant to a Shareholders Agreement to fetter their discretion and agree to vote in a particular way. Such a position can however only be given effect to at a shareholders’ meeting and not in the Boardroom. A nominee Director representing a Private Equity firm for example on the Board of a portfolio company cannot fetter his/her discretion to vote in a particular way as this will not be in the best interest of the Company – even though it may serve the narrow interest of the PE

https://www.facebook.com/businessdayng

Bisi Adeyemi firm. The Directors of a Company incorporated under the Companies and Allied Matters Act are subject to statutory and common law fiduciary duties that transcend the duties owed by the Director to a nominator. The mere appointment as a nominee does not imply a duty to act in favour of the nominator. Note: The rest of this article continues in the online edition of Business Day @https:// businessdayonline.com/ Bisi Adeyemi is the Managing Director, DCSL Corporate Services Limited. Kindly forward comment(s) and reaction(s) to badeyemi@dcsl.com.ng. DCSL provides Governance Advisory, Corporate Restructuring & Board Evaluation, Board & Senior Management Training, Retreats & Strategy Sessions, Executive Talent Recruitment, HR Outsourcing, Company Secretarial services

@Businessdayng

Monday 30 December 2019

BUSINESS DAY

www.businessday.ng

https://www.facebook.com/businessdayng

@Businessdayng

Monday 30 December 2019

BUSINESS DAY

www.businessday.ng

https://www.facebook.com/businessdayng

@Businessdayng

Monday 30 December 2019

BUSINESS DAY

www.businessday.ng

https://www.facebook.com/businessdayng

@Businessdayng

Monday 30 December 2019

BUSINESS DAY

www.businessday.ng

https://www.facebook.com/businessdayng

@Businessdayng

Monday 30 December 2019

BUSINESS DAY

In Association With

The Economist’s country of the year

A Balkan Making upbetrayal is hard to do

Which nation improved the most in 2019?

The Gulf states reconsider their feud with Qatar

The winner is a place that abolished slavery

UR ANNUAL “countr y of the year” award celebrates improvement. Each December, therefore, we give a hostage to fortune. The places that climb furthest are often those that started near the bottom: poor, ill-governed and unstable. Freshly won democracy and peace do not always last, as Aung San Suu Kyi, the leader of Myanmar (The Economist’s country of the year in 2015) ended up reminding the world when she appeared recently at the International Court of Justice in The Hague and glossed over the ethnic cleansing of the Rohingyas, a Muslim minority, by her country’s soldiers. In 2019 the most striking political trend was a negative one: belligerent nationalism. India has been stripping Muslims of citizenship, China has been locking up Muslims in camps, America has taken a wrecking ball to global institutions. So strong was the global tide that it was a relief to see some countries paddling the other way. New Zealand deserves an honourable mention for its response to a massacre in mosques by a white nationalist. Jacinda Ardern, the prime minister, put on a headscarf and declared that an attack on Muslims was an attack on all New Zealanders. Her government banned semi-automatic weapons and bought thousands of them from the public. Even more impressive was No r t h Ma c e d o n i a, w h i c h changed its name to promote peace with its neighbour. Greece had objected that its former moniker, Macedonia, implied a claim to the Greek region of the same name. Greek intransigence prevented the Macedonians from joining NATO or starting

The threat of Iran is leading to some newfound realism

ALKING ONTO a football pitch hardly seems an act of high diplomacy. But two and a half years into the embargo of Qatar by three Gulf neighbours—Bahrain, Saudi Arabia and the United Arab Emirates (UAE)—it may count as progress. The three had planned to boycott the annual Gulf Cup because it was being held in Doha, the capital of Qatar. In November, though, they changed their minds, and on December 2nd the Emiratis took the field against the Qataris. The Emiratis lost 4-2. Adding insult to injury, the defeat came on their national day, which marks the unification of several emirates into the UAE. Still, the match

negotiations to join the European Union. So lawmakers in Skopje swallowed their pride and voted to rename their country; the change took effect in February. Relations with Greece are now much warmer. A source of discord has been removed from a tetchy region. North Macedonia is on track to join NATO. Alas, Emmanuel Macron, the president of France (country of the year 2017) is blocking its candidacy for the EU, fearing that welcoming another Balkan state into the club would irk French voters. Two countries became notably less despotic in 2019. In Sudan mass protests led to the ejection of Omar al-Bashir, one of the world’s vilest tyrants. His Islamist regime had murdered and enslaved so many black Africans that a third of the country broke away to form South Sudan in 2011. Mr Bashir was convicted of corruption in a Sudanese court on December 14th (see article) but seems unlikely to be extradited to stand trial for overseeing genocide in Darfur. A new

power-sharing government vows to hold elections in three years, is negotiating peace in Darfur and has eased the dress code for women. However, the risk that thugs from the old regime may scupper democratic reforms is still worryingly high. So the winner is a country Herman Cain, an American presidential candidate, once dismissed as “Ubeki-bekibeki-stan-stan”. Three years ago Uzbekistan was an oldfashioned post-Soviet dictatorship, a closed society run with exceptional brutality and incompetence. Its regime allegedly boiled dissidents alive, and certainly forced legions of men, women and children to toil in the cotton fields at harvest time. When Islam Karimov, the despot for 27 years, died in 2016, he was succeeded by his prime minister, Shavkat Mirziyoyev. At first, little changed. But after dumping the head of the security services in 2018, Mr Mirziyoyev began reforms that have accelerated over the past

year. His government has largely ended forced labour. Its most notorious prison camp has been closed. Foreign journalists are let in. Bureaucrats are banned from calling on small businesses, which they previously did constantly, to bully them for bribes. More border crossings have opened, helping unite families divided by Central Asia’s crazy quilt of frontiers. Foreign technocrats have been invited to help overhaul the statestifled economy. Uzbekistan is to hold parliamentary elections before the new year (see article). Although it is far from a democracy—all of the parties support Mr Mirziyoyev and some critics remain behind bars—some of the candidates have offered mild criticisms of the government, which would previously have been unthinkable. Ordinary Uzbeks, too, feel free to lampoon the campaign and grumble about the political class, without fear of being dragged off in the middle of the night. Uzbekistan still has a long way to go, but no other country travelled as far in 2019.

ended amicably enough, a far cry from an Asian Cup tilt in January, when the victorious Qatari squad was pelted with shoes and bottles by the crowd in Abu Dhabi, the capital of the UAE. The embargo, imposed in June 2017, has divided families, diverted planes and caused a deep rift in the six-member Gulf Cooperation Council (GCC). Qatar refuses to comply with a list of demands from the Saudi-led camp, such as cutting ties with Islamist groups and closing Al Jazeera, a satellite news channel. But there are growing signs that some of the blockading states want to end the feud anyway. Apart from the football diplomacy, Saudi Arabia and Qatar have held quiet talks about a resolution. On December 10th Qatar’s prime minister flew to Saudi Arabia for a GCC summit, the emirate’s highest-level Continues on page 19

Monday 30 December 2019

BUSINESS DAY

In Association With

Seize the memes

Teenagers are rewriting the rules of the news That will affect both the industry and society

HE PRESIDENT of El Salvador gets it. Addressing the UN General Assembly in September, Nayib Bukele paused to take a self-portrait at the rostrum. “Believe me, many more people will see that selfie once I share it than will listen to this speech,” he said, adding, “I hope I took a good one.” Marianne Williamson, a NewAgey type running for the Democratic presidential nomination in America, gets it. Asked after a debate in July whether it went well, she replied that she would only know for sure “later, when I see the memes”. So does Andrew Yang, another Democratic no-hoper. His first big interview was with Joe Rogan, an internet-famous comedian with 6.96m subscribers on YouTube. After it was viewed 1m times over the course of two days, Mr Yang wrote that his campaign could be divided into “BR (Before Rogan) and AR (After Rogan)”. These minor politicians provide a pithy summary of how teenagers and those in their early 20s consume news today. It is almost entirely on social media. It is almost entirely visual. And the content of the news—“President Makes Speech at UN”—is less important than how it is packaged. It is often filtered through humour or comment. Or, just as often, it is mediated by personalities who command huge followings among young people but are little known to the general population. These principles hold true around the world, even if the specifics and platforms differ. Between 2009 and 2018 the share of teenagers who read newspapers declined from around 60% to close to 20%, according to the Programme for International Student Assessment (PISA), an educational league table of 15and 16-year-olds in the OECD, a group of mostly rich countries. Young Indians are half as likely to visit timesofindia.com, India’s biggest English-language news site, as older ones; they are also far more interested in videos and Bollywood news. In Britain, younger teens are far less familiar with the BBC’s brand than they are with those of YouTube or Netflix. The public broadcaster “will face a threat to its future sustainability if it cannot engage young people sufficiently” according to Ofcom, the country’s media regulator. Some 80% of Arabs aged 1824 years old now get their news from social media, up from 25% in 2015. They favour Facebook, though the Gulf states, particularly Saudi Arabia, are captivated by Snapchat. Two-thirds of South Korean teenagers go online to find out what is happening in the world, and of them, 97% turn to Naver, a portal and search engine. According to Pew Research Centre, 95% of American teens have access to a smartphone and 45% are online “almost constantly”. A study of American and British teens commissioned by the

Reuters Institute for the Study of Journalism in Oxford argues that when it comes to news, young people are most concerned with “what it can do for them as individuals—rather than society as a whole”. It can be tempting to dismiss teenagers’ news-consumption habits. Most cannot vote, have limited spending power and are probably incapable of finding El Salvador on a map. Such sneers are misplaced. A third of the planet is under 20. More than half the world is now connected to the internet. The young are a proxy for the future. That is especially the case in media businesses, where their habits drive billion-dollar decisions, such as Facebook’s acquisition of Instagram in 2012 and its failed attempt to buy Snapchat the following year. Teenagers understand that technology gives them outsized power. Greta Thunberg, a teenage activist in Sweden, started the global “school strike for climate” which has now spread to 150 countries. Protests led by students, some still in high school, have erupted across the world, from Hong Kong to Chile. Politicians, policymakers and media executives should pay attention: how news is made, spread and consumed by teenagers today will determine what happens to their countries and businesses tomorrow. As one 13-year-old told Alexandria Ocasio-Cortez, an American lawmaker, “I’m not old enough to vote yet, but I can follow you on Instagram!” To best understand this future, look to America. It has the world’s most vibrant media ecosystem and is home to most of the platforms used by youth around the world, including Instagram, WhatsApp, Facebook, YouTube and Snapchat. (TikTok, wildly popular with younger teens, is Chinese and strictly moderated for political content.) American media wield influence around the world and are widely aped: the New York Times boasts readers everywhere; websites such as BuzzFeed have inspired similar clickbait sites in dozens of countries. And America’s political and cultural vocabulary is pervasive. A meme that starts there has a good chance of spreading throughout the world. The arena for those memes

has changed. Since the 2016 presidential election in America Facebook has come under intense scrutiny for its role as a platform for news distribution. But to many Western teenagers the social network is deeply uncool. It is for old people. Nor do many of them hang out on Twitter, which plays an outsized role in journalism and politics only because it is full of journalists and politicians (and Donald Trump). They have little time for youth-focused websites such as BuzzFeed either. “It’s clearly adults trying to relate to young people,” says Victoria, a 16-year-old in Kentucky. Teenagers deride outlets that just a few years ago were hailed as the next big thing: Griffin, a 16-year-old from the Chinese city of Wuxi, dismisses Jinri Toutiao (“Today’s Headlines”), China’s most popular news app with 120m daily users, as clickbait for adults. The action has shifted to Instagram (owned by Facebook), WhatsApp (ditto) and YouTube (owned by Google), each of which has well over a billion users. (Snapchat is popular in America but less so elsewhere.) Pew reports that 85% of American teenagers use YouTube; more than 70% use Instagram. Common Sense, an American non-profit group, found in a recent study that 69% of American teens watch online videos every day, mostly on YouTube. They spend nearly seven and a half hours a day looking at screens of all kinds. Instagram is an odd destination for those seeking the news. Users post pictures to their “grid”, mostly pretty ones. The app allows only one link per account— in the bio. And it has no formal reposting mechanism. But the introduction of “Stories” in 2016, which allowed its users to post short-lived images with annotations, added text to a largely visual platform, made sharing and reposting easier and supercharged its growth. Stories also allow those with more than 10,000 followers to share links to other material. Where users went, so did those who hope to influence them: advertisers, marketers, politicians, propagandists and miscellaneous mischief-makers have all piled into Instagram. Consider the Amazon. By late August, anyone with an Instagram account anywhere in the

world would have known that “the Amazon rain forest—the lungs which produces 20% of our planet’s oxygen—is on fire,” as Emmanuel Macron, France’s president, put it in a post on August 22nd that was liked by nearly 200,000 people. On the same day National Geographic’s account, the 11th-most followed on Instagram (126m followers), posted about fires in the Amazon, as did Leonardo DiCaprio (an American actor, 38m); Prilly Latuconsina (an Indonesian actress, 32m); and Malaika Arora (an Indian model, 10m). Two days later NASA (51m) fanned the Instagram flames with a fresh satellite image. This is fine Posts about Amazonian fires were soon inescapable—as were allegations that big news outlets were ignoring it. “It’s the only thing I saw for weeks,” says Dylan, a 17-year-old pupil in Lexington, Kentucky. “Whatever I saw about the Amazon I would share it,” says Stacy, a 15-year-old Bostonian. Unscrupulous accounts tried to take advantage of the disaster, asking for donations or promising to plant a tree for every “like”. The world’s press subsequently ran articles, many of which debunked falsehoods on Instagram, such as Mr Macron’s assertion that the Amazon produces 20% of the world’s oxygen. In interviews conducted by The Economist with two dozen teens in Lexington, Kentucky and Boston, every one of them mentioned the fires unprompted. “The fires in the Amazon were not getting very much coverage,” says Olivia Seltzer, a 15-year-old Californian who two years ago started The Cramm, a newsletter for teenagers that goes out on Instagram and via email and text message. There is “a lot of frustration that these kinds of stories aren’t heard about. A lot of young people are taking it on to themselves to inform their peers.” News outlets native to Instagram are also springing up. Not everything they cover is serious. @nowthisnews (2m followers) combines text overlaid on brief video clips about everything from political protests in Hong Kong to a dog with a tail on its head. (It also publishes on other platforms such as Facebook, Twitter and YouTube.) @houseofhighlights (15m) is dedicated to clips of American sports. In 2015 it was acquired by Bleacher Report, a large sports news website. Both accounts are in the top ten on Instagram for engagement, as measured by the number of likes and comments accrued, according to Axios, another news website. “We’ve had the distinct advantage that we’ve never tried to take something that worked in a legacy medium and force fit it into the digital age,” says Howard Mittman, Bleacher’s CEO. Other outlets, he says, are like the “divorced uncle who bought the right convertible in the wrong colour, who has cool clothes, but they just don’t look good on him”.

The Gulf states... Continued from page 18

representation in two years. No one expected it to produce a deal, but Qatar’s foreign minister said it broke a long “stalemate”. To understand why, look across the Gulf to another intractable conflict, the one between Iran and its Arab neighbours. Their long cold war has escalated into overt hostilities. President Donald Trump’s economic sanctions, meant to bludgeon Iran into softening its regional policies, have instead made it more belligerent. The feud with Qatar seems more and more a needless distraction, one that has forced the Qataris to deepen their political and economic ties with Iran. There is no newfound love between Qatar and its Gulf neighbours, but there is a newfound realism. A turning-point came on September 14th, when missiles rained down on two oil facilities in Saudi Arabia’s eastern desert. Half of the country’s oil output—5% of the world’s total—was briefly knocked offline. America and Saudi Arabia saw Iran’s hand behind the attack (though a United Nations panel said in December that it found no definitive link). Yet it passed without an overt American response. In public, Saudi officials insist they still trust their longtime friend. “We don’t see this concept of America as receding. Quite the contrary,” says Adel al-Jubeir, the minister of state for foreign affairs. America did deploy an additional 3,000 troops to Saudi Arabia after the attack. Whether Mr Trump would use them to defend the kingdom is another matter. Privately, Saudi officials fret that the American security umbrella seems full of holes. Worried that further attacks might spoil the initial public offering of Saudi Aramco, the state oil giant, they began talking to Iran through intermediaries this autumn. They are also trying to wind down a war in Yemen against Iranian-backed Houthi rebels that has cost the kingdom dearly and left Yemen even less stable than before.

Monday 30 December 2019

BUSINESS DAY

In Association With

For the money, not the few

Wealth managers are promising business-class service for the masses Banks, brokers and tech buffs vie to look after common people’s $72trn stash of cash

INDA, A 54-YEAR-OLD event consultant in Los Angeles, is neither disorganised nor innumerate. Ask about her finances, however, and you lose her for two hours. She opens her current (checking) account on a mobile app, then cites a rainy-day fund at another bank. She has 14 credit cards, five mortgages, six insurance policies and several pensions with ex-employers. Ranks of pinstriped advisers have long helped the very rich to invest, minimise tax and pass money down the generations. Everyone else has had to work it out on their own. “People’s relationship with money is broken,” says Martin Gronemann of ReD Associates, which uses anthropology to advise businesses. It reckons that personal finances are a bigger source of stress than worries about crime or health. Now, however, financial firms are competing to democratise wealth management. On December 8th Goldman Sachs, which used to shun clients with less than $25m, said its robo-adviser could soon serve clients with as little as $5,000 to invest. And on December 14th Vanguard, an

asset manager with nearly $6trn under management, teamed up with Alipay, a Chinese tech giant, to counsel customers with at least 800 yuan ($114). The wealth-management sector is fragmented and ripe for disruption. UBS, the global leader, has a 3% market share and is the only firm in the top four in each of Europe, Asia and America. The industry remains technophobic, says Charlotte Ransom, a Goldman Sachs veteran now at Netwealth, a challenger. Advisers spend half their time on tasks that could be automated. According to EY, a consultancy, only 56% of

clients fully understand the fees they pay. The industry stratifies customers in a manner rather similar to airlines. “Affluent” clients, with between $300,000 and $1m in assets, get premium-economy treatment. They may talk to advisers by phone, but banks will do all they can to keep them out of branches. Investment options are limited to ready-made funds. “High-net-worth” clients, with up to $15m, fly business class, picking stocks and chatting in person with named advisers. Flying private are the “ultra-highnet-worth” individuals, who have

access to venture capital and currency hedges, with exclusive dinners, golf outings and so on as cherries on top. Whereas high-net-worth individuals typically pay no more than 1% of assets in fees each year, the mass affluent often pay over 2%—the average yield of S&P 500 stocks—for inferior service. Cattle class gets no service at all. Saving for retirement is the second-biggest financial commitment most adults ever make (after buying a home), says James McManus of Nutmeg, a British fintech. Yet most do it with no help. That leaves a lot of money on the table. According to Oliver Wyman, a banking consultancy, the affluent, with $21trn in assets, and those below them, with $51trn, have as much to invest between them as high-net-worth individuals. The problem is that advisers, branches and time are costly. Most private banks deem portfolios below $2m barely profitable. Yet three factors are conspiring to bring that figure down. The first is technology. In 2001 Credit Suisse tried to go budget with a pan-European online network. But the cost quintupled to €500m ($447m), in part because

it relied on huge servers. Today data are in the cloud, and firms can bolt on apps instead of coding everything. Second, the top of the pyramid is getting crowded. Banks love wealth management, with its high returns and low need for capital. As they have all tried to expand their high-net-worth offerings, competition has squeezed margins. The market value of a panel of 100-odd wealth managers has dropped by 15% in the last year, using Bloomberg data. Third, negative interest rates are eroding the money held by the masses, about half of which is in cash deposits. So clients are crying for help. That has sparked a race between banks, fintechs and investment firms. Wealth managers need several strengths to succeed, says Matthias Memminger of Bain, a consultancy: technology, trusted brands, marketing dollars and a human touch. Private banks have the last three, but score poorly on IT. They also fear cannibalising their highnet-worth business. UBS shut its robo-adviser in 2018, a year after launch. Investec, a bank, folded its own in May.

Borderline disorder

Donald Trump’s wall will irrevocably change America’s south-western border Is it worth the cost?

N A CRISP clear morning in November Fidel Baca, a Customs and Border Patrol (CBP) agent in El Paso, was driving west on Cesar Chavez Highway, which runs alongside the Rio Grande. Mexico was just yards away, behind a few mesh fences and the reddish-brown trickle of river. An alert came on the radio telling him that a surveillance had camera had caught four people emerging from the river’s concrete channel on the American side. Stopping by the side of the road, he pointed first to a couple of fresh footprints, and then, just behind them, to fresh wet sand atop the highway barrier: someone had just jumped it. The chain-link border fence behind the barrier showed a fresh cut. Less than a mile away from where Mr Baca patrolled, a new wall is rising, and it will not be so easily sliced through. America’s new border wall is made of 30-foot-tall (18 in some places) steel bollards filled with concrete, sunk six feet deep into a concrete foundation and topped with fivefoot slabs of solid steel designed to impede climbing. Though American taxpayers rather than

Mexico are paying the bill, and it is far from “beautiful”, Donald Trump is honouring his promise to build a wall along America’s border with Mexico. Some Democrats argue that Mr Trump is merely replacing walls that already exist. That is not true. When a 30-foot wall, impenetrable to wildlife and surrounded by a network of roads and lights, replaces a low fence, it really is a new structure, in much the same way that replacing a garden shed with a ten-storey office block would be. A journey from El Paso to San Diego makes clear just how deeply the wall will change the character

of America’s south-western border. Emma Lazarus’s poem on the Statue of Liberty welcomes to America the world’s “huddled masses yearning to breathe free”. Mr Trump’s wall sends the opposite message. On a map, El Paso appears to sit directly across from Ciudad Juárez. But in many ways the two cities are really one, separated by the border. Parents in Juárez send their children to America each day to private schools in El Paso, while professionals who work in Juárez often prefer to live in El Paso. Each day an average of around 80,000 people cross into

America from Juárez by bus, car and on foot. As of early December 2019, 27.5 miles of new wall have been built in El Paso, with contracts for another 24 miles expected to be signed soon. The CBP argues that the wall is particularly important in urban areas such as El Paso because it buys them time. When someone crosses a border in a remote area, Mr Baca explains, CBP has hours, perhaps even days, to catch him before he reaches a place where he can blend in. He recalls that when he was seconded to a mountainous region in rural West Texas, “by the time you apprehend someone, they’ve been walking for three days, maybe five. If we were tracking someone, you could smell them before you saw them.” In cities, says Mr Baca, “we have seconds to minutes...People can just blend in once they reach the city.” Of course, no barrier is completely impenetrable. Smugglers have reportedly sawn through Mr Trump’s wall. But slicing through a chain-link fence is quick and easy; cutting through concrete-filled steel bollards takes energy, probably multiple mo-

torised saw blades and most importantly for the border patrol, a long time. Gloria Chavez, the acting chief of CBP’s El Paso Sector, which includes all of New Mexico’s largely rural frontier, argues that “There’s a misconception that the wall was built to stop the flow. It was built to manage the flow. It’s a tool.”

Monday 30 December 2019

BUSINESS DAY

COMPANIES & MARKETS

COMPANY NEWS ANALYSIS INSIGHT

Markets

Could NSE’s biggest daily gain in over a month signal late Santa rally? SEGUN ADAMS

he equities marke t o n F r i d ay gained the most in over a month amid expectations of a “Santa rally” in the market that could end December with its worst monthly performance in a decade. Stocks rose 1.25 percent, the highest in a day since a 1.84 percent increase in mid-November. The performance improved month’s return to negative 2.17 percent and year’s return to negative 15.95 percent raising hopes that the remaining two trading days help to lift month’s return to the usual positive region. “Over the last decade, the month of December has consistently recorded gains save for 2009, a phenomenon which has

been referred to as “Santa Claus” rally,” said Lagosbased CSL Stockbrokers in a note to clients over a week ago. Decembers since a negative 0.87 percent decline

in 2009 have gained for the month. The average return has been 3.31 percent according to BusinessDay computation, which puts negative 2.17 percent month-to-date on Friday at

a record decline. However, expectations are for a mild rally in the remaining trading days, expected to be driven by year-end portfolio rebalancing activities as well as

early positioning by early birds in high-yield dividend stocks with attractive entry points ahead of their full-year 2019 earnings announcement. This rally has seemed elusive but Friday’s surge has rekindled hopes of consistent strong gains in the remainder of the year for stocks. On Friday, NEM Insurance gained 10 percent to lead the advancers while Nestle (+10%), and UACN- Property Development Company (+9.52%), University Press (+9.4%) and Wapic (+9.09%) according to Bloomberg data. On the other hand, May & Baker (-9.81%), WemaBank (-7.25%), Guinness (-6.24%), Sterling Bank (-5.37%) and Japaul Oil and Maritime Services (-4.55%) were the biggest losers for the day. Consumer goods index

advanced the most by some 5 percent while Insurance trailed with almost 2 percent. On the other hand industrial goods index remained flat while oil and gas suffered a decline. BusinessDay estimates that a 2 percent gain in the last remaining three trading days of the year would suffice in helping the market maintain a positive December rally trend. However the market will still end the year at a double digit loss which would extend the bearish sentiment which started in 2018 to a second year. This would see the Nigerian Stock Exchange (NSE) end 2019 as one of the worstperforming globally. Outlook for 2020 is for a slight improvement in market condition although it is not certain that the market might see a significant rally in the coming year.

OIL & GAS

NNPC records 52.84% increase in Crude Oil & Gas Export Sale OLUSOLA BELLO

he Nigerian National Petroleum Corporation (NNPC) has announced crude oil and gas export sale of $355.93million in September 2019, indicating a significant increase of 52.84 per cent, compared to the August, 2019 figure of $232.87million, a release by the corporation’s Acting Group General Manager, Group Public Affairs Division, Samson Makoji, has said. A breakdown of the figures indicated that crude oil export sales contributed $267.97million (75.29 per cent) of the

dollar transactions, compared with $150.73million contribution in the previous month; while the export gas sales amounted to $87.96million in the month. The September 2018 to September 2019 Crude Oil and Gas transactions indicated that crude oil & gas worth $5.63billion was exported. The streak of positive results which has largely characterized the operations of the corporation was sustained with the posting of a trading surplus of ₦8.59billion recorded in the month under review. The report indi-

cated a significant increase of 65 per cent compared to the ₦5.20billion surplus posted in August 2019. In turn, the August figure of ₦5.20billion surpassed the ₦4.26billion surplus posted in the previous month of July 2019, reflecting an increase of 22 per cent, according to the September edition of the report. The improved surplus posted in the Upstream and Downstream Sector transactions of NNPC’s subsidiary companies, Integrated Data Services Limited (IDSL), Nigerian Gas Company (NGC), Nigerian Gas Marketing

L-R: Iheanyi Anyahara, deputy director, research and strategy, Financial Reporting Council (FRC); AlMuniru Wambai, board member; Daniel Asapokhai, executive secretary/CEO, FRC; Zainab Shamsuna Ahmed, minister of finance; Ahmad Rabiu, board member, FRC, and Adewale Owolo, board member, at a courtesy visit to minister by the board of FRC in Abuja.

Company (NGMC), Petroleum Products Marketing Company (PPMC), Nigerian Pipeline and Storage Company (NPSC), and Duke Oil Incorporated, explained the significant increase of 65 per cent in the September trading of corporation, the report said. The MFOR noted that the percentage increase in the performances of these NNPC subsidiaries cushioned the September sharp decline in the results posted by the Nigerian Petroleum Development Company (NPDC) as compared with the company’s posting in August, 2019. The report said that in the Gas Sector, 235.12billion Cubic Feet (BCF) of natural gas was produced in the month of September 2019, translating to an average daily production of 7,837.42Million Standard Cubic Feet per Day (mmscfd). For the period September 2018 to September 2019, a total of 3,106.80 BCF of gas was produced representing an average daily production of 7,941.69mmscfd during the period. Period-to-date Production from Joint Ventures (JVs), Production Sharing Contracts (PSCs) and

NPDC contributed about 69.43 per cent, 21.14 per cent and 9.43 per cent respectively to the total national gas production, according to the report. In terms of natural gas off take, Commercialization & Utilization, out of the 235.12BCF of gas supplied in September 2019, 135.63BCF of gas was commercialized, consisting of 32.25BCF and 103.38BCF for the domestic and export market respectively. This translates to a total supply of 1,074.86mmscfd of gas to the domestic market and 3,446.02mmscfd of gas supplied to the export market for the month under review, implying that 57.68 per cent of the average daily gas produced was commercialized while the balance of 42.32 per cent was re-injected, used

as upstream fuel gas or flared. In the Downstream Sector, the report said a total of 186 pipeline points were vandalized, representing an increase of 18 per cent from the 158 points breached in August 2019. Out of the vandalized points, 30 failed to be welded while none was ruptured. Aba-Enugu axis accounted for 77 per cent of the breaks, while PHCAba, ATC-Mosimi and other routes accounted for 8 per cent each. To eliminate the menace, the report informed that NNPC in collaboration with the local communities and other stakeholders continuously strive to reduce and eventually eliminate the scourge through collaboration and sustained dialogue.

Monday 30 December 2019

BUSINESS DAY

www.businessday.ng

https://www.facebook.com/businessdayng

@Businessdayng

Monday 30 December 2019

BUSINESS DAY

www.businessday.ng

https://www.facebook.com/businessdayng

@Businessdayng

Monday 30 December 2019

BUSINESS DAY

COMPANIES&MARKETS COMPANY RELEASE

The Coca-Cola Company (TCCC) celebrates 100 years of going public

oca-Cola, arguably the world’s most popular beverage company has celebrated 100th anniversary of its initial public offering over a century ago. An investment of $40 at that time would be worth more than $18 million today! James Quincey, who led senior executives and board members of TCCC to the New York Stock Exchange, on Monday 9th December, rang the opening bell, in commemoration of the centenary celebration. Speaking on the landmark achievement, the global CEO, James Quincey, said, “Not many brands make it this far and not many have been able to grow at the speed that we have. It is a testament to the work that goes on behind the scenes and also thanks to our loyal consumers and investors across the world. It’s a big day for us and it’s a good time to look optimistically into the future.” With strong presence in over 200 countries, The Coca-Cola Company and its beverage brands continue to drive economic growth across markets, making it one of the most recognized brands globally. However, the incredible story of Coca-Cola goes

beyond profits and revenue. Over the years, The CocaCola Company has taken the lead in good business, committing huge resources in laudable sustainability initiatives across its markets. In 2009, Coca-Cola launched Replenish Africa Initiative (RAIN) to improve access to safe drinking water for African communities. A total of over 4 million people have been impacted under this initiative. With profits comes responsibility, and The Coca-Cola Company has continued to invest; in Women through its 5by20 global program that has committed to the empowerment of 5 million women by 2020, right up to its World Without Waste campaign which has committed to retrieve and recycle equivalent of every product package by 2030. Nigeria is not left out of the beverage giants’ good efforts. With the launch of the Safe Birth Initiative, Coca-Cola Nigeria Limited, in partnership with the Federal Ministry of Health, the Office of the Senior Special Assistant to the President on Sustainable Development Goals and an NGO, Medshare International Inc., has provided equipment and supplies, capability development of biomedical engineers as well as resusci-

tation and repairs of abandoned medical equipment in 15 government hospitals across the country worth a total conservative value of about $10.8 million, i.e. over N3.8 billion. The Safe Birth Initiative is a critical intervention that aims to tackle the high rate of maternal and newborn deaths in Nigeria. Another critical intervention in the healthcare space is the Project Last Mile – a public private partnership working to make life-saving medicines available to people who need them most, to improve access to vaccinations by strengthening public sector refrigeration, or “cold chain” capacity using our vast experience in distribution and cold chain equipment management. This partnership is working together to create a positive cycle that builds human capital, reduces future healthcare costs, and contributes to national development. And so, celebrations are in order even in Nigeria. As the company continues to grow despite shifting economic scenarios, its prosperity has become a beacon of hope as it stretches its wings of sustainable and humanitarian action in Nigeria and beyond.

Business Event

L-R: Cecilia Ibru, co- founder/ chancellor of Michael And Cecilia Ibru university; Son Oboden Ibru, Monica Polo; Matilda Ibru, and Oluwatobi Odunaiya, wife of former governor of Delta State, (Late Felix Ibru), at the 2019 Ibru’s Christmas Get-together in Lagos

L-R: Qasim Akinreti, chairman of Nigerian Union of Journalists, Lagos Chapter; Emeka Oparah, director, corporate communications & CSR, Airtel Nigeria, and Adeola Taibat Ekine, chairperson of the Lagos State Chapter of the Nigeria Association of Women Journalists, at the presentation of the NUJ award on Oparah at the Airtel HQ, Banana Island, Ikoyi, Lagos.

OIL AND GAS

Nigeria LNG signs final investment decision for 7th train SEGUN ADAMS

igeria LNG Limited (NLNG), a liquefied natural gasproducing company and a liquefied natural gas plant on Bonny Island, on Friday signed a final investment decision (FID) that would boost will expand boost its liquefied natural gas capacity by 35 percent. The deal paves the way for the construction of Train 7 of the Nigeria Liquefied Natural Gas (NLNG) project and will help push Nigeria’s output to 30 million tonnes per year. NNLG is jointly owned by the government through NNPC’s 49 percent stake shares and private oil majors, the likes of Royal

Dutch Shell which holds 25.6 percent; Total SA 15 percent stake; and Eni International with 10.4 percent stake. “We are going to put in place a project that will ultimately deliver at least $20 billion in net revenues to the country, create 10,000 direct jobs and 40,000 indirect jobs,” said Mele Kyari, group managing director of the NNPC. The long-awaited deal comes after Nigeria lost its place as fourth-largest LNG producer in 2018 to the US. For over a decade, Nigeria has struggled to build another plant after its 6th LNG train. The Train 7 will help Nigeria maintain its place as the 5th major supplier

of global said Tony Attah, Managing Director/CEO of NLNG. Qatar and Australia produce three times as much as the West African nation. Russia also threatens to overtake Nigeria in global production according to Bloomberg. It also reported that the new train, which will take five years to complete, will cost about $10 billion and will boost LNG output to 30 million tons a year from 22 million tons. “This is a gateway to more investment in Nigeria. We will take steps to get to Train 12. There is an opportunity to do this. NLNG is one of the most successful ventures in Nigeria,” Kyari said.

L-R: Odunayo Sanya, acting executive secretary, MTN Foundation; Emotan, Elvina Ibru, Nollywood actress and a lead actor; Tobechukwu Okigbo, chief corporate relations officer, MTN Nigeria, and Emotan Aisha Sanni-Shittu, lead actor, at the Command Performance of Emotan, sponsored by MTN Foundation, in Lagos

L-R: Olusegun McMedal, chairman, Nigerian Institute of Public Relations (NIPR), Lagos Chapter; Yomi Badejo-Okusanya, group CEO, CMC Connect Limited/president, African Public Relations Association (APRA), and Odion Aleobua, CEO, Modion Communications, winner, Rising Practitioner of the Year 2019 during the Lagos PR Industry Gala & Awards (LaPRIGA) in Lagos.

Monday 30 December 2019

Harvard Business Review

BUSINESS DAY

MONDAYMORNING

In association with

Build a culture to match your brand DENISE LEE YOHN

f you are simply aiming for a “good” culture at your organization, you’re setting the bar too low. If you want to produce the kinds of specific outcomes that will allow you to differentiate your company, you need to define a unique culture that cultivates the necessary kinds of employee attitudes and behaviors. Having worked on a broad range of brands for more than 25 years — enterprises and small businesses, local and international, B2C and B2B, startups and companies with long histories — I’ve concluded that there are only nine general brand types. All should offer good service. Once you know the type of brand you have or want to build, the next step to aligning external brand and internal culture is to identify the kind of culture required to deliver on it. In my research I was able to isolate the core values that correspond to each brand type: — DISRUPTIVE brand: Competition, standing out and risk taking. — CONSCIOUS brand: Purposefulness, high commitment

and transparency. — SERVICE brand: Caring, humility and empathy. — INNOVATIVE brand: Inventiveness, experimentation and continuous improvement. — VALUE brand: Accessibility, fairness and pragmatism. — PERFORMANCE brand:

Achievement, excellence and consistency. — LUXURY brand: Sophistication, distinction and status. — STYLE brand: Design, discernment and creativity. — EXPERIENCE brand: Entertainment, enjoyment and originality.

Use these as starting points for drafting your own core values. Your company culture needs to be as distinct as your brand. You can achieve this whether your culture is friendly or competitive, nurturing or analytical. And remember, there is no single right type of culture, just

as there isn’t one best type of brand.

(Denise Lee Yohn is a leading authority on positioning great brands and building exceptional organizations.)

What will it take to solve the student loan crisis? DANIEL M. JOHNSON

very day, there are news stories about the college tuition crisis. But what is the crisis we are seeking to solve? Is it the staggering amount of student debt? The rapidly rising cost of higher education? The interest being collected on student loans? The high default rate on student loans? Or all the above? The central problem for many is the accumulated student loan debt. The larger problem — and the root source of the student loan crisis — is the high cost of attending college and obtaining a degree. The roots of rising college and university costs are not difficult to identify. For the nation’s 1,600-plus public institutions, the chief culprit has been major reductions in state support; public investment in higher education has been in retreat in the states

since about 1980, according to the American Council on Education. Other culprits that add to students’ costs in private and public universities are the rapidly increasing number of million-dollar-plus salaries for

presidents and many senior administrators . Growth in the size of administration has also added substantially to the high costs for students. We are long overdue for genuine, transformative reform. One source for leading

a reform movement that we have not seriously considered is the students themselves. In sufficient numbers, students could bring real pressure on the higher education establishment to cut costs, even by simply delaying enrollment for

a year or two — a time when these students could work, save, travel and volunteer. The nation’s companies could also play a major supporting role in bringing about needed reforms by looking for “competency” in their new employees rather than requiring a college degree. That competency, or the capacity to develop that competency fairly rapidly, could come from a variety of sources, including on-the-job training, military service, apprenticeship programs, continuing education programs and the internet. Are there solutions to the student loan crisis? Maybe. But again, the solutions aren’t going to come from the higher education establishment itself.

(Daniel M. Johnson is president emeritus and a distinguished university professor at the University of Toledo.)

Monday 30 December 2019

BUSINESS DAY

insurance today

In association with

E-mail: insurancetoday@businessdayonline.com

Need for insurance as building collapse takes tall on families, government Modestus Anaesoronye

uilding collapse in our environment today has become so rampant that it has become costly not taking any form of insurance protection or the other. The outgoing year 2019 was remarkable in terms of incidences of building collapse with consequent losses of life and properties, and the unnecessary involvement and distraction of government when such incidents happen. Across the country particularly Lagos, the story is the same both in occupier buildings and building under construction. In certain cases, more floors were being added to the existing floors (possibly without appropriate approvals) and without consideration for the structural strength or quality of the initial foundation, say’s Funmi Babington-Ashaye, managing director/CEO, Risk Analysts Insurance Brokers Ltd in one of her recent article on ‘Spate of building collapse and what insurance can do’. She stated that the regularity, huge loss of human lives and property as well as the adverse impact of these incidents call for serious introspection and greater care by landlords, property developers, professionals and regulatory agencies in the building industry. She said it is time for more regulatory activism in this sector. “The weight of the law should be brought

to bear on culprits of noncompliance to laws, regulations and standards. It is time for greater premium to be attached to the lives of Nigerians.”

Babington-Ashaye stated that despite these precautionary measures, risks are still there, underscoring the need for adequate insurance for public build-

ings as well as contractor all risks for building under construction. Unfortunately, the insurance industry is sitting on billions of naira that

is yet to be exploited. The ‘sleeping fortune’ is on taking advantage of building insurance made effective in the Insurance Act 2003, as a compulsory policy to take care of occupiers liability in the event of accident. Its impact analysts have said, is capable of generating several billion naira premiums annually if implemented. Section 64 of the Insurance Act 2003 provides that “No person shall cause to be constructed any building of more than two floors without insuring with a registered insurer his liability in respect of construction risks caused by his negligence or the negligence of his servants, agents or consultants which may result in bodily injury or loss of life to or damage to property of any workman on the

R-L: Okonlawon Adelagun, ED, Technical; Daniel Braie MD/CEO, both of Linkage Assurance Plc making a presentation to Shehu Zaki, deputy Corps Marshall, Federal Road Safety Corps (FRSC), standing in for Corps Marshall Boboye Oyeyemi, when the Company donated reflective vests to FRSC as part of it’s Corporate Social Responsibility activities towards the ember months traffic peak period. Watching are Assistant Corps Marshall, John Meheux; deputy Corps Commander, Martha and Corps Commander, Pauline Olaye at the ceremony.

www.businessday.ng

https://www.facebook.com/businessdayng

@Businessdayng

site or of any member of the public. A person who contravenes the provision of this law commits an offence and on conviction shall be liable to a fine of N250, 000 or imprisonment for three years or both. While section 65 of the Insurance Act stipulates that “Every public building shall be insured with a registered insurer against the hazards of collapse, fire, earthquake, storm and flood. The penalty for noncompliance with this occupier’s liability insurance is N100, 000 or one year imprisonment or both. National Insurance Commission (NAICOM) through its Market Development and Restructuring Initiative (MDRI) to enforcing these compulsory insurances in Nigeria, which occupier’s liability insurance of public buildings and building under construction above two floors fall into. However, like many other areas of insurance which remained crawling as a result of reasons including low awareness, apathy and most importantly, operators’ inability to take proactive steps on implementation, this goldmine has largely remained a dream. While, the operators themselves have unanimously agreed that the regulator is conceivably doing what it is suppose to do in terms of creating awareness having launched in the six geopolitical zones of the country, it is left for the operators to step up action and sell the product.

Monday 30 December 2019

BUSINESS DAY

insurance today

In association with

E-mail: insurancetoday@businessdayonline.com

Why you need to get your motor insurance from the right place Modestus Anaesoronye

ccidents happen, so it is reassuring to know that you are covered financially if you are involved in one. Having car insurance is a legal requirement and mandatory for all motorist or intending motorist as enshrined in the Third Party Act of 1945. “All motorists must be insured against their liability to other people or road users, as stipulated in the Motor Vehicle (Third Party Insurance) Act, 1945”. The Act mandates at least a Third Party cover which basically covers your liability as a motorist to third parties and/or property. Car Insurance cover comes in various options depending on your requirement and affordability. The cover ranges from the basic Third Party which is mandatory to Comprehensive. Car Insurance provides financial protection in the event of your vehicle being damaged, stolen, vandalised or destroyed by fire. It also protects your liability for injuries to other drivers, passengers or pedestrians, and their property depending on the cover option selected. What if I am not insured? Driving without car insurance is illegal. If you do not have it, you could be fined. The maximum fine is unlimited, the law enforcement agent also have the power to seize vehicle being driven without cover. Types of car insurance There are three levels of cover you can choose from - third party; third party, fire and theft; and comprehensive. Third party - This is the bare minimum required by law but is not always the cheapest. It covers injuries to other people and damage to others property.

Third Party, Fire and Theft - This is the same as third party but also covers the cost of repairs or a replacement vehicle if your car is stolen or damaged by fire. Comprehensive - This is the highest level of cover you can get. It protects against damage to your own car as well as accidents involving other people. It can also include a courtesy car, tracking, flood, Riot Strike and Civil Commo-

tion; however, this may be at an additional cost. Where do you buy your motor insurance cover? Also important is the source from where you buy your insurance. If you do not buy from any of the 42 general business insurance companies registered and licensed by the National Insurance Commission (NAICOM), it is possible that you buy a fake document in the name of insurance. So, vehicle licensing

offices are not insurance companies’ office and touts are there with fake documents to sell to you and this denies you the right to make claims when there is liability. Motor Third Party Insurance for private vehicles is N5, 000.000 and so that one they have been selling to you at N1, 000.00 or anything less than N5, 000 is fake…so, don’t buy. The benefit of having a third party insurance

policy is huge because it protects you against third party damage. This means that in the event of an accident occurring, the policy holder has a third party property damage limit up to N1 million and no limit to life the in case of death or permanent disability. Think of this, Joshua, a businessman had gone to an Auto Registration Office in his locality to obtain a third party motor insurance at the cost of N1000.00 and each day he gets to police check point; he gets clearance from the police and passes. While he was going to work one morning he mistakenly lost control and unfortunately hit another vehicle, but confident that he had an insurance policy he assured the owner of the damaged vehicle that his insurance will pick the bill. There at the moment, the police drove in and asked that he gets across to his insurance company and when he called; he discovered that the insurance company whose name is on the document is not aware of the cover. There and then, the police took him up for holding a fake document and the owner of the damaged vehicle also held him until he had

L-R: Chidiebere Nwokeocha, executive director, Institutional Business; Ganiyu Musa, group managing director/CEO; Adewale Foster-Aileru, head, Strategy, Investor Relations & ERM, all of Cornerstone Insurance Plc at a Media Parley in Lagos www.businessday.ng

https://www.facebook.com/businessdayng

@Businessdayng

to borrow from family and colleagues to pay. This is the experience of most people who have got insurance from licensing offices and motor parks. Why not advice yourself today by going to any of the registered Insurance Companies office and obtain a genuine insurance cover. Verifying your motor insurance cover Except you want to be deceived or you want some people to feed fat on your ignorance, you have got no reason to pay for fake documents in the name of motor third party insurance. So, now if your policy document is not captured in the Nigerian Insurance Industry Data base (NIID), then that policy document you have as motor third party insurance certificate is fake and worth nothing. You can actually verify it yourself, right from any where you are. This has not only brought a check to fake documents, it has now empowered you to make claims on all third party liabilities. How do you verify the document? Simply apply this code into your GSM handset, and in seconds the status of your insurance is displayed on your screen. (SMS: policy number*plate number to 33125).This is compliant with all networks. If the resultant message says, “not available on NIID date base, then know that what you are parading as insurance is fake. But if it’s there, it tells you immediately the name in which your vehicle is registered; the make and model of the vehicle; the colour of the vehicle; name of the insurance company and date of expiration of the policy. “Verifying the authenticity of your vehicle insurance policy on the NIID gives you peace of mind and assurance that your claim will be paid”, says the Nigerian Insurers Association.

Monday 30 December 2019

BUSINESS DAY

cityfile

Court remands man over armed robbery

n Ado-Ekiti Chief Magistrate Court has remanded a 22-year man, Temitope Olaboni, in prison over alleged armed robbery. The defendant, who is of no fixed address, is standing trial on a charge of armed robbery. The prosecutor, Oriyomi Akinwale, told the court that the defendant committed the offence on November 15, in Ido-Ekiti. He said that the defendant went to the house of one Alausa Muheedeen, with a locally-made gun and robbed him of the sum of N350,000, adding that he also searched the complainant’s car and took away N50,000 belonging to him. The prosecutor said the offence contravened section 402(2) of the Criminal Code, Laws of Ekiti State, 2012. He urged the court to remand the defendant in prison pending legal advice from the office of the Director of Public Prosecution (DPP). The plea of the defendant was, however, not taken. The chief magistrate, Adesoji Adegboye, ordered the remand of the defendant and adjourned the case till January 17, 2020 for mention.

Yuletide: Caution your driver, FRSC tells travellers

he zone RS2 command of the Federal Road Safety Corps (FRSC), comprising Ogun and Lagos States, has charged travellers this festive season to caution erring drivers. The zonal commanding officer, Samuel Obayemi, gave the advice while speaking with journalists. He said must be at alert so as to be able to be able to quickly caution drivers who want to put their lives at risk. According to him, travellers during the season must join hands with the FRSC officials to bring down road traffic crashes and fatalities. The FRSC commander said: “Passengers should not be allowed to be driven to death. Most passengers are passive while on board. As somebody, who has paid commercial drivers to move from one place to another, there is the need for to be involved in the way the driver is driving’’. The FRSC commander said that commuters must be cautioning their drivers anytime they noticed dangerous overtaking, overloading and speeding on the highways. He urged passengers to use the free toll lines to report erring and recalcitrant drivers, especially to marshals and officers on the highways. Obayemi said that the public should take note of the FRSC emergency tollfree line 122 or 0700CALL as well as the CUGs of Commanding Officers on the FRSC’s official websites in case of emergencies. The commander, who urged motorists to be patient and adhere to speed limit on the road, said that long distance journey drivers must rest at regular intervals to guide against stress and fatigue capable of causing accidents.

Olumide Adeosun (m), managing director, Ardova plc, with children from Obalende Primary School who received certificates from the just concluded ‘My Story of Energy’ project delivered in partnership with Five Cowries Initiative, in Lagos.

Harassment of motorists unacceptable, Sanwo-Olu tells, VIO, LASTMA … opens new VIS head office JOSHUA BASSEY

overnor of Lagos State Babajide Sanwo-Olu has warned officials of the Lagos State Traffic Management Authority (LASTMA) and Vehicle Inspection Officers (VIOs) to desist from chasing after recalcitrant motorists, saying such does not befit the status of Lagos as emerging smart city. The governor said approvals, therefore, have been given for acquisition of necessary electronic gadgets and devices that would enable the traffic managers and vehicle inspectors be on top of their game using modern technology to bring those who flout state traffic laws to discipline. Sanwo-Olu spoke at the unveiling of a two-storey headquarters building of Vehicle Inspection Service (VIS) at Ojodu on Tuesday. He said there was the need for the officers to play by the rules, and justify the investment the government was making on them. “You must be civil in dealing with the members of the public at all times. We are more refined, we are better human beings, we are better officers and we are working in an environment that we can compare and compete

with anybody in any part of the world. “So, let us keep this environment working, let us be courteous when people come in for service. Let them have an experience that they will go and tell others. “People must see that we have a human face in all of our deliverables,” he said. He assured of his administration’s commitment to bringing the VIS in line with global best practices. He believed that the state has recorded substantial improvement in traffic law enforcement, but that more needed to be done. The improvement, he said, has come through the introduction of Automatic Number Plate Recognition (ANPR) the Lagos Computerised VIS (LACVIS) the forensic laboratory, and Etesting for driver’s licence among others, all of which are in consistence with the government’s Smart-City project and the goal of making Lagos truly a preferred 21st-century economy. “Now, with the commissioning, we are consolidating on the progress so far made, the VIS plays a critical support and role especially at ensuring that all vehicles that ply our roads are roadworthy and do not constitute dangers to commuters. “We know that vehicle breakdowns are

major contributors to traffic gridlock in Lagos, which results in avoidable losses of productive lives and time. “We must therefore seek to minimise these destructive breakdowns through strict enforcement of relevant laws aided by application of modern technology. The major goal of this new system is to ensure that traffic flow is not negatively impacted in the process of enforcing the law,” Sanwo-Olu said. The governor disclosed that the state would implement the VIS modern offices in all the 57 local government and local council development areas, saying 16 councils have been covered already. Frederic Oladeinde, the commissioner for transport said the newly inaugurated VIS has been built to accommodate all arms of the Directorate of VIS. The office also has back-end-office for the Automatic Number Plate Recognition Enforcement System (ANPR), training hall, conference room and others. The office is also accommodating other sister agencies, including Motor Vehicle Administration Agency (MVAA) and the Federal Road Safety Corps (FRSC) to serve as a onestop centre for prompt and quality services.

Soldiers kill, repel ISWAP terrorists in Borno

igerian Army troops of Operation Lafiya Dole partnering with the Air Task Force say they have dislodged Islamic States of West Africa Province (ISWAP) terrorists who attempt to infiltrate Damaturu, the Yobe State capital. The operations media coordinator, Aminu Iliyasu, disclosed this in a statement in Abuja. Iliyasu said that the troops engaged the terrorists along Gashua Road in the outskirts of Damaturu in a fire fight with the support of Air Task Force leading to heavy casualty on the side of the terrorists in both men and equipment. According to him, a top ISWAP commander, Abu Muqhtar, believed to have coordinated several attacks along the fringes of Lake Chad was neutralised along with over 30 other insurgents in the attack. “Regrettably, 2 gallant soldiers were wounded

www.businessday.ng

in action during the encounter. The wounded personnel are currently receiving treatment and responding positively at a military medical facility. “In the aftermath of the encounter, troops captured one gun truck and destroyed two others. Troops equally captured 561 rounds of 12.7mm ammunition, 1420 rounds of 7.62mm special ammunition, 1850 rounds of 7.62mmX51 ammunition and 2 rocket propelled gun bombs. “Other items captured by the gallant troops include, one Hand Held Communication Radio, 27 sachets of meal ready to eat wraps and 350 liters of petrol,” he said. Iliyasu further disclosed that the troops of 331 Artillery Regiment carried out artillery bombardment on Boko Haram insurgents with heavy casualty on Dec. 23 around Mandara Girau in Biu local government area.

https://www.facebook.com/businessdayng

He added that troops of 121 Task Force Battalion deployed at Pulka in Gwoza local government area of Borno also thwarted another Boko Haram attack in their location with devastating consequence on the marauding criminals. According to him, after the encounter, four Boko Haram criminals including one suicide bomber were neutralised while others are believed to have escaped with varying degrees of gunshot wounds. “In a related development, troops of Sector one deployed at Gwoza conducted a robust clearance operation deep into Sambisa Forest on December 23. “The rugged troops cleared Banari, Keluri, Usmanti and Jowlori villages all of Gwoza LGA and captured two of the criminal Boko Haram insurgents alive, rescued nine women and nine children.”

@Businessdayng

Monday 30 December 2019

BUSINESS DAY

This is MONEY

• Savings • Travel • Debt & Borrowing

A guide to your Personal Finance

• Utilities • Managing your Tax

Financial goals for 2020 rowing behaviour matters and your credit score will matter more and more in future so put that in place early and begin to monitor it. Take your credit seriously; visit a credit agency or check online for how to go about this. Uncover your Talent Is your talent buried? What is that thing that everyone says you are so good at and that you do effortlessly? This is your year to uncover your gift; that extraordinary God-given talent, and put it to work. Perhaps you’ve written some outstanding short stories; is it time to publish? You take the best photographs at family events or you are highly sought-after to sing at functions. You make the most beautiful clothes. Maybe you are a tech genius and are keeping it to yourself? Is your side-hustle just to bring in some extra money or is it something that can grow to eventually even replace your fulltime job? We all need multiple streams of income. This may be the time to monetise that talent to help you achieve your goals. Wills don’t Kill No one wants to think about death at the start of a new year. In our society, preparing a will is sometimes seen as a death sentence. See it, rather, as a courtesy to your family; you owe it to them to put

www.businessday.ng

‘

Are you expecting to move up in your current job, change careers, start a side-hustle, go back to school, start your own business something in place should something untoward happen to you. We love our families; indeed much of what we do, the struggle and the stress, is for them. So, surely, we should want to protect what we have to ensure that our loved ones are taken care of. A will is the easiest form of estate planning and doesn’t take long to do. Make an appointment with an estate-planning attorney who will put you through the relatively simple process. You probably won’t need it for a long time to come, but having one in place provides some peace of mind for you and your family. If you already have a will, review and update it to make sure you have included any new assets or beneficiaries. Estate planning isn’t just about death though; there are other ways to tidy up your affairs and

https://www.facebook.com/businessdayng

‘

ave you ever a c c o m plished anything big with your money or are you waiting until you have enough? The hard truth is that there is rarely enough to accomplish a big goal right from the start; it takes time, consistency, discipline and focus. Don’t have too many goals or you may never achieve them. So, what is that big goal that you’ve been putting off? Are you saving for a down payment for your first home? Building an emergency fund, an education fund, a retirement fund? Do you plan to start your own business? Whatever your goals are, short, medium or long term, make sure that they are “SMART”; you need to be specific about the amount you need and with clear time lines. Start Small If your goal is shortterm, for just 12 months, to save a certain sum by the end of 2020, simply divide that sum by 12 and get started. Set up a dedicated account that you hardly use for this purpose, so that you aren’t tempted to dip into it. Automating your savings will make the task much easier to achieve. The barrier to entry is low, so you don’t need a large lump sum to get started. Even if you only have a tiny sum to spare right now, deposit it into that account. A deliberate action will be a boost to help you build the confidence that you can do it. If you spend N30,000 a month on takeaway meals, you definitely have got money to invest. It all comes down to your priorities and choices. For the bigger goals such as educating children

or your retirement, there are numerous financial planning calculators online to help you estimate your monthly savings target to achieve long-term goals. Investing is a nonnegotiable part of the long-term wealth creation equation; don’t neglect it. Reduce your Debt It will be very difficult to achieve financial goals if you are drowning in high-interest debt. Bad debt such as out-ofcontrol credit card debts and personal loans with exorbitant interest charges are the opposite of good investments. They decrease your net-worth at a compounding rate, rather than grow it. Make paying off or at least significantly reducing your expensive debt a priority. What’s your credit score? Are you one of those people that swear never to borrow? Are you one of those that borrow and don’t pay back? It’s time to build some credit. The credit system is a reliable source of information for future lenders and creditors about potential borrowers. Armed with this information, lenders can make informed decisions about whether or not to lend to lend money to you. We should all make it a point of building our credit so that when we do wish to borrow, we will have access to credit. Your bor-

to acquire new assets in a more structured way, such as a trust. A new year is a good time to sit down with a professional to plan for your assets. Estate planning need not be expensive; yet the peace of mind and protection it can provide for your family is priceless. Invest in Yourself You are your greatest asset, so do all you can to invest in and protect yourself. What do you visualise for yourself? Are you expecting to move up in your current job, change careers, start a side-hustle, go back to school, start your own business? It is hard to achieve success without the drive and the physical and emotional strength to make things happen. Choose to be healthy. Health is wealth; it’s not just a cliché. Choosing a healthy lifestyle means that you must be deliber-

@Businessdayng

ate about the choices you make for both your physical health and your mental health that we often ignore. Find a physical activity that you enjoy that gives you enough exercise and build it into your routine. Watch what you eat and choose a diet that makes you feel your best self. Don’t neglect your health insurance; it gives you access to decent medical care. People matter; surround yourself with people that encourage and build you up and do the same for them. Practice a hobby that helps you relieve stress and makes you feel happy and fulfilled. No one owes you happiness or fulfilment; it’s a choice that comes from you and your faith in God. To make 2020 truly count, be deliberate in making an impact both in your personal and professional life. The fulfilment that comes from touching lives, changing lives, and even saving lives is more fulfilling than all the money in the world. Happy New Year!

Instagram and Twitter: @ mmwithnimi, Facebook and Google+: ‘Money Matters with Nimi’. www. moneymatterswithnimi. com, or send us an email info@ moneymatterswithnimi. com Nimi Akinkugbe has extensive experience in private wealth management. She seeks to empower people regarding their finances and offers frank, practical insights to create a greater awareness and understanding of personal finance. For more personal finance tips, contact Nimi: Email: info@ moneymatterswithnimi Website: www. moneymatterswithnimi. com Twitter: @MMWITHNIMI Instagram: @ MMWITHNIMI Facebook: MoneyMatterswithNimi

Monday 30 December 2019

BUSINESS DAY

www.businessday.ng

https://www.facebook.com/businessdayng

@Businessdayng

Monday 30 December 2019

BUSINESS DAY

real sector watch

Nigeria’s ports of agony The state of Apapa and Tin Can ports, Nigeria’s two largest seaports, is hurting lives and businesses in the premier port city. Government agencies rake in billions from the dilapidated ports to the detriment of manufacturers, exporters, SMEs and residents, writes ODINAKA ANUDU

an Umoh was rushed to a hospital in Lagos on October 7, 2019. For 16 days, he was in a coma. His family members invited five pastors from different churches who came with their prayer teams, yet there was no sign of coming around. He had left his home at Surulere for Apapa at 6.55am hoping to return in the evening. On getting to Ojuelegba, a crowded suburb in Surulere, he was told by bus drivers plying Apapa route that the road was blocked. He then decided to use a motorbike to be able to access Apapa port complex. He was a cashew exporter and wanted to visit Apapa to find out why his container of goods had been on the bridge for eight days. His customers in the Netherlands were worried and his cashews would turn bad if the container continued to stay longer. As he got to Ceddi Towers sitting on Wharf Road, a container swerved and fell on him and the motorcyclist. The motorcyclist, Adamu, died on the spot. Umoh went into coma. Eighteen days after the accident, Umoh came around but not without suffering brain damage. He could neither recognise his wife nor his children. Agony, tears and blood Umoh and Adamu are not the only victims of Apapa and Tin Can ports, two of Nigeria’s largest seaports. There are 1001 ways to die in Apapa and Tin Can if anyone is willing to commit suicide. On 12th May, 2019, a truck driver hit Folashade Arogundade, a official who worked in the Lagos State Traffic Management Authority (LATSMA). She was helping to evacuate containers and articulated vehicles from Apapa when a truck driver hit and killed her. She was rushed to the General Hospital, Apapa, but the medical staff on duty confirmed that she had been brought in dead. In June

robbers owing to the poor state of the roads.

Marine Beach, a link bridge to Apapa port

2019, a heavy-duty container fell on three vehicles at Tin Can Port, inflicting harm on passengers. In August 2019, a container crushed an operator of O’Ride, a motorbike hailing service, to death along Oshodi-Apapa axis. There are many unreported cases of broken legs in Apapa, including hit and run drivers who inflict deaths and injuries on passers-by and residents. In 2018, a private vehicle ran over the legs of this writer while waiting to

board a commercial bus in Apapa. The problem Apapa and Tin Can are two major seaports in the country. Importers bring in their products through the seaports, and exporters rely on the ports to ship out their goods to other countries. In a consistent show of shame, Nigeria exports crude oil through the ports to be refined in other countries. It then brings in the refined petroleum products through

the same ports after spending scarce foreign exchange in other climes. This is because refineries are barely working despite empty promises of resuscitation. “I will resign if Nigeria keeps importing fuel in 2019,” Ibe Kachikwu, former minister of state for petroleum, had pledged in 2017. Yet in January and February 2019, Nigeria, Africa’s largest economy, imported 1.3 billion litres of fuel. The minister did not resign until President Muhammadu Bu-

Container fell on private vehicles in June www.businessday.ng

https://www.facebook.com/businessdayng

hari dissolved his cabinet on May 28, 2019. The inability to fix the refineries has continued to pile pressure on Apapa and Tin Can ports as Nigeria continues on the archaic path of lifting fuel from the ports to filling stations. According to a 2018 maritime report carried out by the Lagos Chamber of Commerce and Industry (LCCI), about 5,000 trucks sought access to Apapa and Tin Can ports in Lagos every day. The report said the two ports were originally meant to accommodate only 1,500 trucks. Where are the other ports? It is easier for visitors to believe that Apapa and Tin Can ports are the only seaports in the country. Far from that, the country is blessed with other seaports such as Okrika Jetty in Rivers State, Indorama Jetty in Rivers State, Onne Port in Rivers State, Calabar Port in Cross River State, and Warri Port in Delta State. However, the ports are not dredged and the access roads to them are dilapidated, according to the LCCI. Businesses complain that access roads to those ports are often blocked by armed @Businessdayng

Ineffective presidential task force Twice, Yemi Osinbajo, Nigeria’s vice president, came to Apapa in 2019 to ascertain the true state of the premier port city. Consequently, he set up a presidential task force in the second quarter of 2019 to make Apapa habitable for residents and businesses. This comprised the army, the navy, the police, LATSMA and other state government officials. It was successful initially as trucks and containers were given call-ups that would enable them to access the ports. But today, the presidential task force seems to have collapsed as it can no longer control the truck drivers. “The traffic situation we have now is the worst ever. In the past, we used to wriggle through with one lane intermittently open. Now, as from 6pm, from Ijora to the port turns into parking lot with little or no movement. Cars have been trapped for four to six hours, some till day break,” Ayo Vaughn, chairman, Apapa GRA Residents Association, told BusinessDay. “The team, out of frustration, expressed lack of cooperation from the Nigerian Ports Authority (NPA) because of closure of Lilipond ( a container terminal). Interestingly the team was established by the presidency. The vice president is the chairman while Kayode Opeifa is the vice and operational head with heads of government maritime organs as members,” Vaughn noted. Life has become difficult for residents of Apapa as the NPA continues to close the Lillipond which is supposed to be a transit trailer park. Because containers do not have anywhere to park, they stay on bridges and streets and cause traffic crisis for over 20 million residents of Lagos, which already contends with five Continues on page 32

Monday 30 December 2019

BUSINESS DAY

real sector watch Nigeria’s ports of agony Continued from page 31

million vehicles. Ports without functional scanners The Nigeria Customs does not have functional scanners, thereby causing container delays at Apapa and Tin Can ports, worsening the state of access roads to the two seaports. Recently, the European Union handed over a multimillion dollar scanner to the Customs but the government agency prefers to do its checks manually or use the old scanner that functions intermittently. “One scanner was provided by the Economic Community of West African States (ECOWAS) to us, but we have not started using it. We are making use of the old scanner that we have. Though, just recently, the old scanner had a downtime, but we are currently working on it,” Bello Jibo, head, Revenue for Seme Customs, said in November at an engagement session in Lagos. Hassan Bello, executive secretary of the Nigerian Shippers’ Council (NSC), said there were expectations that the nation’s seaports would witness rise in business activities following the closure of land borders to international trade, import and export. “We are having longer waiting days in the anchorage, and we need to put other ports into use,” he said. “Customs needs to ensure that equipment like scanners are put into use as well to fast-track cargo clearance,” he advised. Manufacturers, exporters suffer Today, a lot of manufacturers cannot move their raw materials to their factories. One manufacturer confirmed that he spent N300,000 on a container in 2016 but spends N900,000 today to move goods to the factory. “Of particular concern and importance to us (MAN) are the challenges we face in moving our raw materials and goods to and from the ports,” Seleem Adegunwa, chairman, Manufacturers Association of Nigeria (MAN), Ogun State chapter, said in 2018 at the CEO Business Luncheon at Agbara, an industrial cluster in Ogun State.

Apapa access road

He said the resultant effect was that the production cost of manufacturers had increased tremendously. Adegunwa said if the trend was not checked by relevant government agencies, it could result in collapse of more factories and businesses, noting that some factories and businesses had already shutdown their operations and relocated to neighbouring countries. At a recent CEO survey carried out by MAN, 89 percent of them agreed that poor access to national ports and the associated gridlock negatively affect productivity in the manufacturing sector. “The poor scenario accounts for delay in clearance of manufacturing inputs and machinery as well as high demurrage which increases cost of production in the sector and often times put manufacturing concerns in

stock-out situations. It is, therefore, important that government urgently addresses the difficulty in accessing the national ports, particularly Lagos ports,” MAN said. Exporters complain that the turnaround time for goods is getting longer as many of them have their products go bad while waiting for call-ups. “An exporter shipping out 1,700 tons of commodities per day under normal circumstances when Apapa road was in good condition now manages to only ship between 100 and 250 tons, Tola Faseru, president of the National Cashew Association of Nigeria, told BusinessDay in 2018.

Maryann Uwan, said her customers had all left Apapa for other convenient locations. “Many of them must have discovered other fashion designers, as they no longer call. Even when I call them, they will not take my calls,” she said. John Abisoye, who sells shoes at Liverpool, one of the most affected places in Apapa, said he had decided to park out of Apapa as he was no longer making sales that would sustain him. “I used to sell at least two pairs of shoes each day, but sometimes these days, I sell nothing,” he said. “Who will come into Apapa to buy anything, when those around are exiting the area?” he asked.

SMEs suffer Small and medium scale businesses are also feeling the pinch. A fashion designer,

It is all about competition for revenue Each month or quarter, the NPA and the Customs de-

Folashade Arogundade, a LATSMA official killed in Apapa on 12th May www.businessday.ng

https://www.facebook.com/businessdayng

clare billions in revenue to the excitement of their masters. Yet these two agencies contribute to the problems of Apapa and Tin Can ports. And they are reluctant to find workable solutions. In January to March 2019, the NPA declared revenue of N67.19 billion ($220.295 million). In May, the NPA said it was targeting N276.75 billion from its 2019 operations ($907.377 million). Similarly, Tin Can Island Command of the Nigeria Customs Ser vice made N179.2 billion ($587.540 million) in the first half of 2019, processing 150,930 metric tons of export with Free on Board (FOB) value of N68.88 billion, according to Baba Abdullah Musa, Tin Can Command’s comptroller. Also, Apapa Customs recorded $46.6 million as FOB Value for exported goods and generated N203.2 billion ($666.229 million) as revenue in the first half of 2019, according to Muhammad Abba-Kura, area comptroller of Apapa Command. High vacancy rate Apapa Shopping Mall came as a response to the yearning of residents for a modern, world class shopping experience. The mall hosts Kobis restaurant, Card shop, Daviva, Essenza, Healthplus, Casa Bella, Etisalat, Airtel, Cash N Carry, Shoprite and Busen, among others. But most of the places are becoming increasingly empty. Many residents of Apapa have packed out for more secure and peaceful locations in Lagos. Consequently, rents have gone more than 40 percent lower in the last five years, say residents. It is bike economy Commercial motorbikes are having a field day, charging an arm and a leg to move people in and out of the premier port city. From Ojuelegba or Mile 2 to Apapa, motorbikes charge between N500 and N800, and many who work in Apapa spend twice that each day. But they also have their disadvantages. “I broke my leg because the motorbike rider fell into a ditch while overspeeding,’ Ifeanyi Onwema, a trader in Apapa, said. Where do we g o from here? Many believe that the prob@Businessdayng

lem of Apapa and Tin Can ports can be solved once the federal and Lagos State governments have the will to do so. “The concessioning of Onitsha seaport should be finalised, while government should improve the security situation along and within the Warri port in order to ward off militants and touts,” Babatunde Ruwase, former president of the LCCI, suggested. “Stakeholders request that government should approve and publicise a bouquet of incentives to importers and exports that patronise ports outside Lagos,” he said. Bashir Jamoh, president of the Chartered Institute of Transport Administration of Nigeria (CIoTA) , said a rail line should be built and linked to Apapa port city. “Government can develop policies that would introduce public-private partnership in the development of transport infrastructure like rail system,” he said. Many say there is the corruption side of the story. Ada Amah, an entrepreneur in Apapa, said corruption should be eliminated in the call-up system. “For instance, we have heard that money exchanges hands before a call-up. This discourages truck drivers when they know that those coming behind them will go into Apapa before them,” she said. In several occasions, the task force has denied collecting or accepting bribes from truck drivers, but many drivers say otherwise. Speaking at a maiden quarter business roundtable organised by MMS Plus Newspapers recently in Lagos, Kunle Folarin, chairman of Port Consultative Council (PCC), said the port corridor must be reserved and restricted as an exclusive economic zone. “Until we install a multimodal system of transport and build other infrastructure at the ports, we would continue to have a recurring decimal of congestion at the ports,” he said. “The port environment, up to 4km, should be only warehouses for cargoes, roads for movement of port cargoes by trucks or railway. There should also be a ring road exclusively reserved for the port,” he further said.

Monday 30 December 2019

BUSINESS DAY

Advertise Here

2019: How did we fare?

Manufacturers’ reading of the economy, their advice to government 35

Thoughts on international relations, globalization

Snippets of 2019 non-oil business SIAKA MOMOH brings you bits and pieces of reports on non-oil business in the year 2019. For those who missed the stories, we give you a second chance. Those who have read them will find them a good reminder and knowledge rejuvenating.

Leveraging on China’s rapid growth n April, we reported that Manufacturers Association of Nigeria (MAN) President, Engr Mansur Ahmed wanted Nigeria to leverage on China’s rapid economic growth as he set the tone of discussion at the Nigeria-China economic relations event which held in Kano at the instance of MAN. Ahmed drew attention to the increasing Chinese influence on the global economy and specifically on developing countries “such as ours, and the opportunity this opens up for our economy”. For him, “It’s now common knowledge that China has become the 2nd largest economy in the world (GDP over $10 Trillion) and is rapidly becoming a major factor in the changing global economic order. “In 2015, the Chinese Government launched the “Belt and Road Initiative” (BRI) as a global economic development strategy aimed to change the architecture of the world economy. BRIinvolves a $900 Billion infrastructure and investment programme designed to connect over 67 countries in Europe, Asia, Middle East and Africa, to China

with the goal of changing the direction of trade and investment flows.” He added that in September 2018, Nigeria joined the Belt and Road Initiative. The focus of the Nigeria-China MOU, according to him, was mainly on infrastructure development especially in the power and transportation sectors. Exporting leather products In our report on leather in April we reported Bello Abba Yakasai, a leather research expert saying “The Nigerian leather industry, which currently generates between USD600 million and USD800 million through export of raw leather annually, will experience a dramatic upward swing if it opts for export of leather products.” According to Yakasai, who reeled out these figures in a paper titled ‘Leveraging on China-Nigeria Economic Relations to Industrialize the Economy’, he presented at the instance of the Manufacturers Association of Nigeria (MAN)in Kano. Good as these figures may be, Nigeria can do better if it exports leather products as against largely raw leather that it currently exports. Yakasai explained, “About 20 bil-

lion ft2 leather is produced worldwide, valued about $40 billion. In 2016, world leather exports and imports totalled around US$2 billion each. But with value addition, value of all products is about $272bn -55% footwear valued at $150bn; shoes alone over accounted for 11bn pairs (1.4 pairs/person).Other products are furniture upholstery, clothing, leather goods, vehicle upholstery, and gloves. “So if global export is based on raw leather the value is $40 billion, but if it is leather products export, the value is $272 billion giving us a difference of $232 billion!” For Bello Yakasai, instead of exporting leather from Nigeria, China/Nigeria should invest into further processing of the products. This he said would result in more growth, and employment; training Nigerian artisanal processors of leather and leather products; en-

hance the growth of MSMEs; encourage export of finished leather products and will earn Nigeria bigger foreign exchange from the industry. Emefiele on non-oil sector June came with Emefiele’s vision for Nigeria’ apex bank for the next five years which placed high emphasis on non-oil sector of the economy. He recalled that with concerted efforts by the monetary and fiscal authorities, “we implemented a series of measures which led to the recovery of our economy from the recession by the 1st Quarter of 2017.” Several of the measures favoured the real sector of the economy. He explained that part of the measures the bank deployed to support the recovery include tightening of the monetary policy rate in order to rein in inflation; and that it also created an Investors and Exporters

Advertise here

Window which allowed exporters and investors to inflow and sell their foreign exchange at the prevailing market rate. “In order to reduce our reliance on the importation of items which could be produced in Nigeria, we restricted access to foreign exchange on 43 items, while deploying our intervention funds to support growth and productivity in the agricultural and manufacturing sectors. These measures helped to support the attainment of our monetary policy objectives such as a reduction in the inflation rate, stability in our exchange rate and improved accretion to our external reserves,” he said. A plus for the real sector. Impact of US-China imbroglio In June, we had a chat with Busty Okundaye on what the US-China

Continues on page 36

Monday 30 December 2019

BUSINESS DAY

Economy

2019: How did we fare? SIAKA MOMOH

OIPolls Limited summarized it this way: Nigerians Decry Challenges in Health Sector, Electricity Supply, Job Creation and Economy. NOIPolls is a credible country-specific polling service in the West African sub-region. The report: ‘As 2019 comes to an end, people look forward to celebrating in various ways so as to relax and kick start 2020. In the course of this season, various items are being purchased, travel tickets are booked, parties are organized whilst family and friends gather to celebrate and wish themselves a more prosperous 2020 ahead. It is also a time of reflection especially on goals achieved and lessons learnt for individuals and the nation as a whole. For instance, it is pertinent to evaluate the performance of the government as it relates to key socio-economic areas, such as security, agriculture, education and electricity, to discuss the challenges of the government in these areas and also deliberate on areas of improvement for all stakeholders. Against this background, NOIPolls conducted this poll to gauge the perceptions of Nigerians on how well the country have fared in 2019 particularly on some key socio-economic areas. Poor showing The poll result revealed that Nigerians believe that the country has not fared well in the following areas; the Health sector (79 percent), Electricity supply (66 percent), Job creation (65 percent) and the Economy (64 percent). With regards to healthcare, access to quality and affordable health care remains an issue to Nigerians due to challenges like; inadequate capital spending, poor pay, outdated technologies, poor infrastructure, sharp disparities in the availability of medical facilities across the country, high mortality rates, a weakened primary health care system, incessant strikes by doctors and health workers. Stakeholders in the health sector have repeatedly decried declining budgetary allocation to the health sector for instance, a capital expenditure of N46 billion has been allocated to the Ministry of Health in the 2020 budget which is lower than the 51.1 billion allocated in the 2019 budget. According to the 2018 World Health Organization Health Access Quality (HAQ) Index, Nigeria is rated 187th out of 195 countries,1 therefore it is urgent that adequate capital funding is allocated to the sector to boost healthcare delivery in the country. Electricity On electricity supply, 66 percent stated that the sector has not fared well in 2019 and power failure has a very debilitating effect on the economic growth given that electricity supply is fundamental to productivity. Also, adequate and efficient utilization of energy sources to meet the existing demand is essential for high levels of economic growth in Nigeria. Job creation

Similarly, 65 percent of adult Nigerians reported that Nigeria has not fared well with regards to Job creation. According to the National Bureau of Statistics (NBS) report unemployment rate in Nigeria increased to 23.10 percent in the third quarter of 2018 from 22.70 percent in the second quarter of 2018. Unemployment.2 An increasing unemployment rate in Nigeria could have adverse effects on both the economy and the society. For instance, reduction in the national output of goods and services, increased rural-urban migration, high level of poverty, increase in the number of dependent people and high rate of crimes in Nigeria. Economy On the economy, the National Bureau of Statistics (NBS) reported that the nation’s Gross Domestic Product (GDP) grew from 2.12 percent in the second quarter of 2019 to 2.29 percent in the third quarter of 2019 indicating an increase of 0.17 percent.3 Despite this increase in the nation’s GDP, the average Nigerian is yet to feel the impact of this increase in the GDP. According to the Director-General, Budget Office of the Federation, Mr Ben Akabueze, for Nigerians to effectively feel the impact of economic growth, the rate of Gross Domestic Product growth must be higher than the population growth. Survey Findings Respondent’s opinions were assessed on how Nigeria has fared in 2018 on seven specific areas. The poll revealed that 79 percent of Nigerians disclosed that healthcare delivery has not fared well in 2019, while 66 percent lamented over epileptic power supply in 2019. Also, 65 percent of Nigerians complained about lack of job in the country and this could be as a result of the high rate of unemployment and underemployment in the country as well as the thousands of Nigerians who join the labour market on a monthly basis. On the economy, 64 percent of the respondents stated that they nation has not fared well in this area in 2019 despite the marginal increase recorded in the county’s GDP in quarter 3, 2019 as reported by the National Bureau of Statistics. Agriculture doing fine On the contrary, 68 percent of Nigerians reported that the country has fared well in the area of Agriculture while 58% reported that the country has fared well in the Education sector. In conclusion,

the poll has revealed that a larger proportion of Nigerians consider healthcare, electricity supply, job creation and the economy as the critical areas that have not fared well in 2019 and consider Agriculture, Education and Security as areas where the government has fared well. Synergy between government and concerned stakeholders will go a long way in ensuring that these critical challenges are addressed in 2020. For instance, fixing these sectors pointed out by Nigerians will attract more foreign direct investments, create millions of jobs, help to create new markets, foster competition, spur innovation, lower prices, raise productivity and in turn leads to increase in living standards. Survey Methods The opinion poll was conducted in the week of December 16th 2019. It involved telephone interviews of a random nationwide sample. 1,000 randomly selected phone-owning Nigerians aged 18 years and above, representing the six geopolitical zones in the country, were interviewed. With a sample of this size, we can say with 95% confidence that the results obtained are statistically precise - within a range of plus or minus 4.65%. NOIPolls Limited is the No1 for country specific polling services in West Africa. We conduct periodic opinion polls and studies on various socio-economic and political issues in Nigeria. More information is available at www. noi-polls.com.’ Moderate performance For Shuaibu Idris, a financial and former managing director Dangote Flour Mills Plc, “The real sector of the Nigerian economy performed moderately well. Over the last twelve months, the economy has witnessed moderate growth but the real sector did not contribute much to the marginal growth in the GDP. One major index of measurement which is the monthly statistics on PMI, that is, the purchasing managers index, fluctuated within a band of 55 to 60 in quite a number of months Increasing, while in few months it decreased. Absence of investment and shortage of infrastructure “The ability of the sector to offer employment to teaming youths looking for jobs has not been encouraging. The growth of the sector has been

inhibited largely by absence of investment and shortage of infrastructure as well as insecurity. Bank lending became an issue which necessitated the intervention of the industry regulator to force banks to lend to the real sector.Government policy particularly the CBN policy on exchange rate has impacted negatively to the sector. Rationing foreign exchange or selective pricing of foreign exchange distorts the market and inhibits growth and expansion. “In an election year, some of the developments that happened in the economy are usual, normal and expected in a developing country like Nigeria. Foreign Direct Investment eluded the country while hot money or Portfolio Investors took flight to safety leading to loss of value in most stocks in the Stock Market.” Outlook for 2020 On outlook for 2020, he said, “The new year of 2020 appear to start on a good note with the budget of the Federal Government already signed in to law. Spending by the government particularly capital spending which could spur growth and energise the real sector may happen earlier in the new year. However there are new taxes to be introduced which will affect purchasing power of the citizens. Without demand for goods and services the real sector would surely be negatively affected. The level of debts burden of the government and the need to service same would affect the expected spending. “However government’s plan to take more loans could help the situation albeit temporarily. There is certainly a need to take a critical look at certain aspects of the government such as expenditure, tax incentives and subsidies so as to improve the financial position of the government. The real sector will only enjoy growth in a secure environment hence the need to improve on the nation’s internal security situation of the country.” Shuaibu Idris advised government may need to quickly review the performance of Vision 2020 and set up a committee for the formulation of the next face of another vision document. “ There is also an urgent need for the government to review the performance of the economic growth agenda as this is directly linked to the real sector and its performance.” he said. Short comings And for Dr Kayode Oyeleye, veteri-

narian, journalist and former special adviser on media to two Federal Ministers of Agriculture and Rural Development, “Agriculture didn’t do well in 2019. There were a lot of short comings. First, weather played a part. Climate change affected agriculture negatively. Government policy implementation didn’t match policies on ground. There was policy gap. Election promises were not substantiated by evidence on ground. Rice production figures were spiced up by political statements. Staples farmers were on their own. There were no robust changes on ground. All we see is primary production – food processes didn’t fare well. Border closure “Many companies operated below capacity. They made no profit, importation and smuggling continued up to August. Border closure brought about increase in price of rice. 50kg local rice sold for between N16, 500 and N22, 000. Many factors affected supply and demand. Insecurity at the country side, crises of farmers/ herdsmen were scaring. There was no intervention by the Federal Ministry of Agriculture.” Regarding outlook for 2020, he said Lagos and Rivers are not strictly agriculture states. “What are they doing? There is a big disconnect. Agreed agric is on the concurrent list, but they are not taking it seriously. How many farmers do they have? How many grass root telecommunication facilities are available? This problem remains unresolved. Strategy “What strategy do we have for 2020? 2020 may remains in 2019 state. Nothing is being done about climate change. The same sets of people are in power. I cannot see what they will do differently. Take the CBN for instance, the institution is supposed to strictly handle monetary issue but it is handling agric issues. What expertise does it have for this? CBN should be moving the commercial banks. It should give directives to them and sanction them when they err. The apex bank can supervise commercial banks lending to farmers and if they default, CBN can use the big stick and make them sit up.” Generally speaking, Oyeleye said, “There is a lot of gap between policy making and policy implementation. Nigeria has the largest number of research institutes in Africa, how much are they being used, how much support are they getting? Very little.”

Monday 30 December 2019

BUSINESS DAY

Manufacturers’ reading of the economy, their advice to government Content of Manufacturer CEOs Confidence Index (MCCI for Quarter 3, 2019

h e ma nu f a c t u re r CEOs Confidence Index (MCCI) is an index created by the Manufacturers Association of Nigeria (MAN) to gauge the pulse of the economy on quarterly basis. MCCI deploys a set of Diffusion Factors which include, Current Business Condition, Business Condition for the next three months, Current Employment Condition, Rate of Employment, Employment Condition for the next three months and Production Level for the next three months to measure a quarterly perception and confidence of manufacturers in the economy. In addition to the set of Diffusion factors for which information is generated on, the general macroeconomic ambience in terms Foreign Exchange, Lending Rate,Credit to the manufacturing sector and Capital Expenditure of the Government behaviours including business operating environment issues such as Over-regulation, Multiple taxes/levies, Access to sea ports, Local raw-material sourcing, and Government patronage of Nigerian manufactured goods and Inventory are also measured. A questionnaire structured with the diffusion factors, macroeconomic and business environment variables was administered on the Chief Executive Officers (CEOs) of MAN member-companies across the six geo-political zones of the country and the ten Sectoral Groups of the Association.The responses provided by the CEOs were used to compute the Index

while keeping the names of the companies in strict confidentiality. Also, in keeping with the evidence-based advocacy of the Association, MCCI has strongly become a reliable source of empirical evidence for galvanizing the advocacy machinery of the Association.

a major reason the sector has not competed favorubaly in the community market, particularly as it is awashed with cheap and sub-standard foreign substitutes. Lending Rate: Majority of respondents, 82 percent, disagree that the rate at which commercial banks lend to manufacturing sector encourages productivity in the sector.This is evident in the double-digit cost of borrowing from the commercial banks even amidst measures by the monetary authority to reduce cost of borrowing in the country. This to large extent discourages investment particularly in the manufacturing sector.It is therefore imperative that the Association sustain the advocacy for policy measures that will lower the cost of borrowingto increase productivity and competitiveness of the sector while partnering the Federal Government to interrogate the

performance of the various single digit interest rate funding windows available for the real sector of the economy. Size of Loan to the Sector: 80 percent of CEOs of manufacturing companies disagree that the volume of Commercial Banks loan to the manufacturing sector encourages productivity in the sector. This obviously underscore the need for the current Central Bank of Nigeria to improve and sustain the current policy aimed at increasing loan to the productive sector of the economy to stimulate national output. There is the need for CBN to review the guidelines of the various development fund to ensure that the terms and conditions are liberal enough to attract borrowing from the industrial sector.

Read the rest of the story in www.realsectornow.com

Editor’s Note Presentation of data As earlier reported, the target respondents for MCCI questionnaire are the CEOs of manufacturing companies and questionnaires were administered during the fieldwork of the Third Quarter 2019 MCCI.Data collected on the performance of themacroeconomy and the business operating environment from the CEOs were analyzed and presented with high

level of simplicity for easy understanding of the content and appreciation of its significance. However, data generated on the Diffusion Factors were deployed for the computation of the Diffusion Index. The Diffusion Indexes is the weighted sum of percentage response (1=Posi-

tive, 0.5=Neutral and 0=Negative) of the Diffusion Factors. MCCI has a baseline index of 50 points which suggests a stationary-state in the economy; any index point above 50 points indicatesManufacturers confidence in the economy and improvement in manufacturing performance, while any index point below 50 points indicates otherwise.By the design of the Diffusion Index, the more index point tends to 100 points thehigher thelevel of confidence inthe economyand improvement in manufacturing activity. Macroeconomic Performance Forex: Of all the MAN CEOs interviewed, 70 percent disagreed that the rate at which the sector sources foreign exchange (forex) has improved. While 15 percent agreed that the sector’s foreign exchange (forex) sourcing has improved, the other 15 percent are not sure that forex has improved. The response thus further confirmed that much has not changed in the supply of forex to the industry for purchase of machines, rawmaterials and other manufacturing input that are currently not available in the country. At the moment most manufacturers sourceforex only at the parallel market at unfavorable exchange rate, making manufacturing import bills for raw-materials and machinery that not locally available unnecessarily high. This has been

t is the end of another year. As it is customary with us, we bring you bits and pieces of our reports in the course of the year. We recall, for instance, we reported that the Non-oil sector “is suffering neglect”. We illustrated with the following: ‘In 2009 for instance, the sector was hit by setback as the total income generated from its export from January to September stood at US$900 million (N140.3 billion) while total amount that accrued to the country in 2008 was US$1.9 billion (N296.1 billion) amounting to a drop of 138 per cent in non-export earnings… Read the excerpts of this story and many others in our package for this month. How did we fare with non-oil business in 2019? NOI Polls gave an apt summary. Its poll result revealed that Nigerians believe that the country has not fared well in the following areas: the Health sector (79 percent), Electricity supply (66 percent), Job creation (65 percent) and the Economy (64 percent). And the content of Manufacturer CEOs Confidence Index (MCCI) for Quarter 3, 2019, gives us a picture of how we fared with the real sector, that is, non-oil business in 2019. The index shows that 80 percent of CEOs of manufacturing companies disagree that the volume of Commercial Banks loan to the manufacturing sec-

Siaka Momoh tor encourages productivity in the sector. This obviously underscores the need for the current Central Bank of Nigeria to improve and sustain the current policy aimed at increasing loan to the productive sector of the economy to stimulate national output. There is the need for CBN to review the guidelines of the various development funds to ensure that the terms and conditions are liberal enough to attract borrowing from the industrial sector. We have all above and more for you in this last month of the year’s sweet package. You are welcome on board. Merry Christmas and have a wonderful New Year celebration. For advert placements, call Siaka: 08061396410, 08023033988 or email siakamomoh@yahoo.com.

Monday 30 December 2019

BUSINESS DAY

Snippets of 2019... Continued from page 33

imbroglio meant for Nigeria. Busty Okundaye, Group CEO of UGC Technologies as well as the President of UGC Automotive Company Limited, a Global Technology and Management Expert on National Industrialization with a critical focus on Strategic Management, Technology /Transfer and Products Domestication or Localization, is highly qualified to speak on the trending US-China trade war story since he is one person who shares Nigeria, US and China personalities. How? He is a Nigerian trained in the prestigious American Ivory Tower – MIT; married to a Chinese, and does business in America and China. For Busty Okundaye, the impact of the prevailing trade or economic war between the USA and Peoples Republic of China (PRC) may have on Nigeria is mainly economic. He categorized this into four period levels as follows: Real time, Short term, Mid term and Long term…. In summary, he said, for the longterm, the impact on Nigeria economically, would not be much greater than

those of the short- and mid- terms. “This,” he said, “is because considerable bulk of Nigeria trade is with the two countries that are now at economic war, the USA and China”. Busty Okundaye argued that on all of the above four levels or periods of the trade war impact on Nigeria, the country would survive. He said it is just that the major impact may be delay or even scrap of some developmental mega projects in the country, especially those controlled or managed by China. This, he said, would particularly be so in the areas of infrastructure development / construction, energy, etc. For August, we have: • Investment valued N50 billion at current value, and installed capacity of 200 million litres of assorted paints annually, is, with the signing of the African Continental Free Trade Agreement (AFCTA), threatened, Abimbolu Sunday Babatunde, Chairman of Paints Manufacturers Association of Nigeria (PMA), said at a press interactive session in Lagos.The paint makers fear that AFCTA will make Nigeria a dumping ground for paints and other products from other countries as Nigeria’s market size is an attraction for competitors in these countries.Babatunde argued that it was the Manufacturing Association of Nigeria that delayed the signing of AFCTA, that the Federal Government did not carry MAN along at the beginning. For him, the implication of dumping will be low volume production, low profitability, loss of jobs, etc. • We are not ready for CBN policy on milk, like the Lagos Chamber of Commerce and Industry said in a press statement sent to Non-Oil Digest; and like the Manufacturers Association of Nigeria (MAN) said too. But when will we be ready? We may never be ready

Thoughts on international relations, globalization for a long time to come if we go by past debates on the issue. Those who are familiar with the story will agree with this writer that we have gone through this path before and we ended up not stopping importation of milk… • For Shuaibu Idris, introduction of the payment of Export Expansion Grant (EEG) to exporters of Nigerian products by the Federal Government is a fine and appropriate move. The thought process, according to him, was that Nigeria should be able to expand its export commodities base and that

Nigerian commodities should be able to compete favourably with products from others countries… September has the following: • Rice consumption in Nigeria has been rising steadily — about 5.6 million metric tons in 2011 and 6.9 million tons presently — but market, production and policy limitations mean domestic production often fails to meet demand, and the increase is largely made up for costly imports. Between 2012 and 2015, Nigeria imported $4 billion worth of rice in order to meet expanding consumption. Yet Nigeria actually has the capacity to be a net exporter of rice. A space for stakeholders to engage with each other about the commodity value chain was needed and did not exist… • Ranching involves the demarcation of an area of land, including various structures, given primarily to the practice of raising grazing livestock such as cattle or sheep for meat, milk or wool. The practice exposes cattle to paddock grazing with improved varieties of forages and fodders all year round and modern livestock management practices such as feedlot fattening, artificial insemination and others. This practice is an improvement over the traditional livestock management system and it is not new to us in Southwest Nigeria. The incidence of cattle ranching in South West Nigeria could be dated back to the colonial era when farms and a couple of ranches were established by the colonial masters across different locations in Nigeria. As part of measures to further promote the practice of sustainable agriculture in Western Nigeria, in the 1960’s the leadership of the then western leader (Chief Obafemi Awolowo) invested in agriculture. Prominent among this

development was Fashola stock farm in Oyo state which was equipped with cattle breeding and multiplication facilities while the progenies were further distributed to other ranches (Imeko, Akunnu, Odeda cattle ranch etc.) within the western region for commercial cattle production. The era of military administration following the first coup suffocated and frustrated all efforts to make the enterprise functional thus it became a failed project. However, amidst recent concerns by the populace of southwest

ne thing stands out clear in Transformations in International Relations Since 1945 – it is a rich resource document, what with its array of authors who are experts in their own right. You will find the book, edited by Abolade Adeniji, PhD, covering all relevant aspects of international relations – close or remote. ‘Distilling the Presence of the Past: Continuity and Change in International Relations’ by Abolade Adeniji, identifies, defines and dissects International Relations then and now. He thus succeeds in not only introducing the subject to the uninformed but gives a convincing executive summary of the subject. You will get to know that the modern period in International Relations commenced in 1648 with the signing of the Treaty of Westphalia, which enthroned the principle of sovereignty, which brought with it, the principle of balance of power. You will discover that the principle of balance of power helped to disallow Nigeria, DAWN commission proposes continental domination by any one the revisit of the abandoned ranching State. You will find out too that the project. breakdown of balance of power was responsible for the outbreak of the We reported the following sto- First and Second World Wars. ries in October: Rufus Olu Olaoluwa anchors • The Non-oil sector is suffering neglect. the ‘Role of International Law in In 2009 for instance, the sector was hit International Relations’. He treats by setback as the total income generated the concepts, and sources of Internafrom its export from January to Septem- tional Law, principles of the law, as ber stood at US$900 million (N140.3 well as the relationship between Inbillion) while total amount that accrued ternational Law and Municipal laws, to the country in 2008 was US$1.9 billion (N296.1 billion) amounting to a drop etc. It is interesting and in order that of 138 per cent in non-export earnings. Olaoluwa is able to expose the ugly In the same vein, according to Central face of International Law, inspite of Bank of Nigeria’s Q2 Economic Report, its outward qualities. Olaoluwa’s point of view can the total non-oil export earnings by Nigerian exporters in the second quarter be corroborated with an Australia/ of 2010 fell by 56.4 percent to US$297.2 East Timor example, which has to million (N46.3 billion) from the level in do with a dispute over territorial waters. January 2006 witnessed an the preceding quarter. According to Peter Onwualu, direc- outpouring of criticisms against the tor-general/chief executive officer, Raw Australian Government as the GovMaterial Research and Development ernments of Australia and East Timor Council (RMRDC), Nigeria enjoys signed another interim resources comparative advantage to produce and sharing agreement for contested supply a myriad of non-oil products petroleum resources in the Timor to other African countries, including Sea, by an Australian lobby group. ECOWAS countries, USA and other de- The group attacked the Australian veloped countries. Apparently explain- Government’s failure to address the ing why Nigeria is not doing well with larger and more important issue of non-oil exports, he said “Nigeria is yet to exploit this comparative advantage to a permanent maritime boundaries. Timor Sea Justice Campaign comeaningful non-oil economic growth”. • Former Governor of Central Bank coordinator, Tom Clarke, claimed of Nigeria, Prof. Charles Soludo, has the deal to share ‘government roywarned that the Nigerian economy may alties’ from the Greater Sunrise gas crash if it continues to depend on oil. He field 50/50, despite the field being said the rich in the country will also suf- twice as close to East Timor than fer if high poverty and unemployment Australia, simply postpones the real issues of sovereignty for half a rates are not tackled. Soludo gave this warning on Octo- century. This is something similar to ber 1, 2019, in Lagos, while delivering a Nigeria’s 60/40 per cent oil explorapresentation on economic restructuring tion relationship with Sao Tome and at a programme, tagged ‘The Platform’, Principe. organised by Covenant Christian CenMichael Ogbeidi’s 15-page histre. He argued that the country had not torical analysis of the ‘Middle East in been able to diversify away from oil Contemporary Times’ is a brief that and gas over the years despite efforts gives one the picture of war-monby successive governments.

gering Middle East that we know. We get to know the origin of the MiddleEast debacle – an unending military confrontation that is predicated on the Palestinian question. What is the question? The Jews facing persecution and decimation in Europe wanted a safe haven elsewhere. On this question of safe haven, the Jews race was divided between the orthodox Jews who wanted to return to Palestine and the liberals of the secularists who wanted statehood and locality. The orthodox Jews had their way for the Jews migrated to their acclaimed homeland, a move that was hotly rebuffed by Palestinian Arabs. The Palestinian question has its roots in the 20th C, when most Arab nations became independent from either Britain or France, the UN voted in 1947 to divide Palestine between the Jews and the Arabs, but all Arab states rejected the plan. In 1948, when British troops left Palestine, the Jews declared the independent state of Israel. The Arab states attacked Israel, unsuccessfully, and most of Palestine’s Arab inhabitants fled. Arab-Israeli relations remained hostile, although in 1979, Egypt and Israel signed the Camp David accord, a separate peace treaty brokered by U.S. President Jimmy Carter. The dingdong relationship remains till this day. Olaoluwa appropriately gives a summary of the militarism that the region had been entwined in over the years – from the 1935 and 1939 Arab terrorists and Iraq’s murder of 630 Jews in Mandatory Palestine, through the various attacks of Arab armies on the Jews in 1948, 1967, 1973, and 1991.He notes appropriately too, that the solution to the Palestinian question is the recognition of the existence of the state of Israel by all Arab nations. The genesis of the crisis tells it all. One other chapter that makes interesting reading is Chapter 13, the chapter tagged ‘Globalization and its Contradictions’ authored by Sylvester Odion-Akhaine. If you have been part of the group that has been celebrating the phenomenon called globalisation you are most likely to have a change of mind after reading this chapter. Odion-Akhaine profiles current global inequality. To him, the North South divide is like a ravine, which deepens with everyday downpour. He asks the question: For who is globalisation? And he proffers an answer: It is simply for capitalists, and a tool for their maximization of profits, and for the rest of us, it is poverty and social inequality. Quoting Ihonvbere, he says, “Globalization has not reduced genocide, civil wars, interstate wars and violence”. All said, the book is an indispensable, robust, quality resource material.

Monday 30 December 2019

BUSINESS DAY

Start-Up Digest

In association with

Chigozie Okwara: Connecting freelancers to business opportunities Josephine Okojie

higozie Okwara is the founder and chief executive officer of Softwork. xyz, a freelancing platform that connects freelance professionals across Africa to businesses that require their services. Chigozie is a serial entrepreneur as he manages two other businesses in the agricultural and real estate sectors. He was inspired to set up Softwork.xyz after he could not find a freelancing job when he needed one. As a result, Chigozie thought of having a platform to address this challenge and help others facing a similar problem. He saw it as an opportunity to make a change rather than a perennial problem without a solution and, in 2018, he established Softwork.xyz. “It was hard sourcing for freelance jobs when I needed one because I also had school work to handle,” the

Chigozie Okwara

young entrepreneur says. “So, I went online and signed up for some international freelancing platforms to enable me to get to know the freelance jobs available online,” he further says. Chigozie says that the process of getting a freelance job online saves time

and stress, revealing that he was easily connected to jobs when he went online. “I kept on getting freelancing jobs on international platforms for about six years until last year-2017when I decided to establish a freelancing platform where Nigerians and Afri-

cans can handle freelance jobs done and shared by us,” he explains. The young entrepreneur started the business small and was able to build his own website. “I build websites, so I didn’t have to hire anyone to build the platform for me,

I only requested assistance from fellow tech friends when I needed help,” he says. “Most of the money spent on the business was used for branding, marketing, logistics and in acquiring an office space,” he explains. Since starting in 2018, his business has grown tremendously and has connected over 5,000 freelancers across various skill-sets with clients. He currently makes his money by charging 15 percent commission on all jobs got by the freelancers through his platform. He explains that the business works by connecting freelancers that have signed up on its platform and share their portfolios with clients in need of their services. He says the business plans to sign up over 100,000 freelancers across the continent by the end of 2021. He adds that the business plans to have a strong presence across cities in Africa in the long term. Highlighting some of the major challenges faced by the business, he says poor

power supply has impacted negatively on his business. Also, inadequate access to cheap funds has also limited his business. He urges the government to pay more attention to tech entrepreneurs and create more access to funds. Similarly, he calls for investment in critical infrastructures to aid industrialisation and growth of the Nigerian economy. Chigozie says that the Nigerian tech industry is evolving and has contributed largely to the growth of the economy. “The tech industry is very broad and there’s enough space for everyone to fit in,” he says. “The biggest thing I and my team have done is to be unique in our approach to solving the problem at hand and, automatically, that stands us out,” he adds. On his advice to other entrepreneurs, he says, “Start from whatever level you are with whatever resource you have and just keep being consistent. Other Levels will surely be unlocked as we grow.”

Our business is growing in spite of challenges in Nigerian business environment — Sunkanmi Ola Sunkanmi Ola is the founder and chief operating officer of Syracuse Africa, a digital creative ad agency in Nigeria. Syracuse Africa is one of BusinessDay’s 100 fastest-growing SMEs in 2019. Sunkanmi featured as one of Forbes’ 30 Under 30 in 2018. In this interview, he assesses the Nigerian business environment and speaks on challenges in his industry. Can you give us a brief introduction of your business? e handle m a r k e ting strategy, management and execution for brands across digital, PR, product development and branding. Syracuse Africa was established in 2012 and has evolved gradually into an innovation powerhouse in this field, establishing some of the biggest & leading brands in Nigeria and across the African market, forging the path of entry for global brands into the West African market and driving the brand growth of local innovative businesses.

How is the Nigerian business environment impacting your business? The same challenges have

always been with us. Infrastructure is poor or lacking in many cases. There is insufficient access to SME finance, and weak or faulty policies to support and protect small and medium sized businesses. The list goes on. These choke the lifeblood of young businesses, but on the other hand, it presents a challenge that drives the need to innovate in order to survive. As a company, we have had to thrive and grow in spite of these challenges, but this hasn’t come without its sacrifices. What are the most critical problems your industry faces? Infrastructure, or the lack of it, stands out sorely. This affects some industries more than others, but it does cut across all sectors, includwww.businessday.ng

finance are just as bad too, because these things are critical to sustaining a healthy and encouraging business environment.

Sunkanmi Ola

ing the service industry which Syracuse Africa plays in. Epileptic power supply and high cost of good internet service, among

others, drive up the cost of conducting business and SMEs suffer the most from it. Other problems such as lack of access to growth

https://www.facebook.com/businessdayng

Can there be any end to the challenge of financing for SMEs? So far, there have been positive steps to addressing this problem in particular, both from the sides of government policies pushing commercial banks to increase and meet their quotas for SME financing, and the private companies moving into the credit space to bridge the gap. These markers show that a future with sufficient SME financing is possible. There is, however, a long way to go. Do you think the existing policies and regulations are enough to ensure @Businessdayng

the proper functioning of SMEs in Nigeria? At the moment, no. Not even close. Not just in the service industry but across the SME sector overall. A lot more initiative is needed in this regard, especially from the part of policy makers and enforcers. What policies and regulations do you propose should be implemented/ introduced? Government should intensify intervention programmes that w ill aid growth of MSMEs by making affordable financing options available. Additionally, more attention and support should be given to knowledge acquisition through access to requisite trainings and apprenticeship systems based on global standards.

Monday 30 December 2019

BUSINESS DAY

Start-Up Digest

Government must streamline, simplify taxes for MSMEs — LCCI president Toki Mabogunje is the newly elected president of the Lagos Chamber of Commerce and Industry (LCCI). A lawyer by training, she is a business consultant with a special interest in the growth of micro, small and medium enterprises (MSMEs). In the last 36 years, she has been involved in commercial and business enterprises from both public and private sector perspectives. In this interview with ODINAKA ANUDU, our Start-Up Digest editor, she explains her vision for the LCCI and what should be done to spur the growth of MSMEs in the country. Tell me about your agenda as the new president of the Lagos Chamber of Commerce and Industry (LCCI). y belief is that when you are given the awesome responsibility of leading an institution that is 131 years old, you must be very mindful of the reasons why that the institution was established in the first place. So, really, the LCCI has taken its responsibility as the voice of business very seriously. One of my major jobs is to continue in the area of advocacy. The LCCI is here to ensure that the business environment keeps on improving for the success of Nigerian businesses, and we will continue to do that. So, anything that happens in the political or policy space that affects the ability of businesses to thrive becomes our business. The other reason that we exist is to promote our members’ businesses. We will continue with those strategies that promote their businesses like the Lagos International Trade Fair that is over 30 years. We have the ICTEL, which is about four to five years now. We are beginning to look at other specialisations or other parts of the economy are growing at rapid rates, needing our foothold to be thrown forward. Also, in the space of promoting businesses in Lagos, we have the African Continental Free Trade Area (AfCFTA) agreement and we need to be looking at that. We need to look at areas where leveraging can be done by businesses here. We need to be looking at how prepared we are for it. We need to be looking at what we need to do, both on the government and the private sector sides, in order to ready us for this massive opportunity for a country like ours that already dominates the space. Also, the chamber exists to protect its members. So, many of those legislations that may be coming up or policies that may inadvertently be harmful are things we will look at and take up in our usual way of dialogue.

And then, finally, we stand for business ethics and for development of business. So, there is a whole arm of the chamber that involves business development—consulting and training. In fact, training has become very popular here. We will have a lot more of that because we need to have companies that will grow into the Dangotes of this world across sectors. The chamber is actively promoting the non-oil growth. My own personal touch on that is that I believe so much in inclusiveness. How do we include the youths and more women in it? How do we leverage digital technology to improve what we are doing? Eight or nine years ago, I started a mentoring programme when I was chairman of BEST unit. That programme continues to grow. Today, the alumni have elected an executive. It is to try and carry it to the next level. As a business consultant, what would be your answer if young people ask you to advise them on what they can do to earn a living? Strangely enough, when it comes to young people, I am also concerned about their own personal development and their visions for themselves beyond the problems of today. So, when it is young people, I start with personal development. I will ask, what is your interest? Some young people set up businesses because their friends are succeeding in them. Throughout my life as a consultant, I have seen that it does not work. But if a young person has a very strong interest or passion in a subject matter, they are more likely to overcome the challenges that are sure to come their way. For some of them, I have what I call ‘the Visioning Session’. My firm helps them to look 10 years ahead into the future. Then, we throw options in front of them, including the sectors that are showing the most opportunities for young people like them. Why I am focusing on their personal development is really to build their muscle, their capacity to survive, whatwww.businessday.ng

completely different kinds of technology, which minimises the cost across board, these are things that should be reviewed.

Toki Mabogunje

ever the business climate might be. What are your thoughts on multiplicity of taxes in Lagos? There are two sides to the tax issue. There is the issue of the tax payer and the government that has to raise the internally generated revenue to be able to govern well. Underlining all of these is the activities of touts. Some of them are not even touts but legitimate workers in the local government who are exploiting the situation of these micro enterprises. As a consultant, I got involved in Enugu State several years ago when they were looking at the issue of multiplicity of taxes as it affected micro businesses. One of the things that was done, through the associations that the micro enterprises belonged to, was some education around tax. The director of tax at the state level was asked to draw up legitimate levies and taxes that these people were expected to pay at the state and the local government levels, so that if anybody came to ask of any tax that was not on that list, the people would report. What they were encouraged to do was to report it at a particular office. Once it was reported, the state government would

take some internal action. The government engaged with those associations and assured them that some levies would not increase within a particular period. That is education on the side of the person paying. On the side of government, our view is that below a certain income bracket, they should simplify it to one payment. As far as you are small or micro enterprise and you are earning below a certain amount, this is the one payment you make as your own contribution to tax. Many countries in Asia, particularly South-East Asia, have tried it and it worked. We keep hearing of streamlining of taxes, but especially in Lagos where we suffer from enthusiasm of public officers who want to raise internal revenue, businesses are now on the receiving end. As a chamber, we encourage our members to report these things to us, because when we do our advocacy, it is always evidence-based. Do we still need to have radio and television taxes today? Those taxes are what I call ‘relics of the colonial times.’ I really do not think so. I think technology has changed the equation. Now that a lot of broadcasts are done with

https://www.facebook.com/businessdayng

A lot of Nigerians believe that funding of MSMEs has improved because of the intervention of the Central Bank of Nigeria (CBN), which has raised loan-todeposit ratio from 60 to 65 percent. As someone who interfaces with these business owners, have you seen the impact of that policy on them? I started MSME consulting when there was nothing— around year 2000. So, I am looking at over a span of 20 years. In 20 years, the situation has greatly improved. There is a lot of funding, but still a lot of reluctance on the side of the banks because they consider MSMEs to be high-risk. This is what has led the CBN to use carrot and the sticks with the banks. Banking is still not where it should be. I believe that every bank account holder should be able to borrow from the bank to whatever degree that the business turnover justifies— which is not happening now. On the side of the banks, we do not have enough banks that understand MSME lending. You cannot be lending to Emmanuel & Sons the same way you are lending to Globacom. We do not have enough of them with technical competence behind MSME lending. Because of that, they are even more averse with risks that come with being an MSME. It is not as if the risks are extraordinary in Nigeria compared with any other developing country. Some of the things that the banks require in order to make good lending decision are not yet strengthened. The policy behind BVN is an absolutely brilliant idea that it helps to determine those who are bad borrowers and good borrowers, but we need to leverage it. On the side of the MSMEs, there is a whole education to be done in terms of MSMEs not understanding the banks’ requirements. So, they keep complaining that the banks’ requirements @Businessdayng

are steep. Yes, in some cases, they are, but in other cases, they are looking for basic information. Are you keeping your financial records? Do you have processes in place that convince the banks that over time you will pay back? There are challenges on both sides which need to be worked upon. How do we de-risk the MSMEs to enable them have access to funds and become efficient enterprises? The MSME community has a huge ecosystem around it. Some people are setting up co-working systems to create environment where MSMEs can share resources and get infrastructure support so that it won’t be a burden on one person. Some are setting up innovation hubs, helping them to generate ideas. You have a lot of institutions that are doing a lot of things. The University of Lagos has set up the Enterprise Development Centre. We have the Enterprise Development Centre (EDC) of the PanAtlantic University. There are FATE Foundation and a lot of others. We have business associations which have the capacity to do a lot of things. You have LCCI, the Manufacturers Association of Nigeria (MAN), the Nigeria Employers’ Consultative Association (NECA) and all others. All of them engage in the development of MSMEs. I think where there is hope for more impact is through organisations like Small and Medium Enterprises Development Agency of Nigeria (SMEDAN). What we would require from SMEDAN is more consistent performance. Sometimes they function, at other times they are quiet. They have the capacity to affect a lot more MSMEs. We commend the effort of the government in setting up the Development Bank of Nigeria, but they are still new. They are still depending on the framework of commercial banks to lend money. We have new players in the market such as venture capitalists, angel investors and impact investors. The thing is to see a groundswell of growth.

Monday 30 December 2019

BUSINESS DAY

MARKETS INTELLIGENCE Supported by Asset Management Corporation of Nigeria (AMCON)

Stocks

Currencies

Commodities

Rates + Bonds

Economics

Funds

Week Ahead

Watchlist

P.E

Access Bank, Lafarge, GTBank, MTN, and Nestle are analysts’ top pick BALA AUGIE

he regulatory and macroeconomic environment has been unpalatably macabre, as 2019 will be a year investors and industry players will want to forget in hurry. Of course, they are counting their loses as the Christmas period was soured by spiraling prices of basic food products, while high inflationary environment squeezed their wallets. Every sector weren’t spared the pang of a scorching environment. From a border closure that compounded the woes of consumer goods firms struggling with low consumer purchasing power and a low yield environment that undermined banks’ revenue, it wasn’t surprising that earnings result of the biggest corporate fell below analysts’ expectation. To stoke further sell-off of shares by investors is a slew of regulations by the central bank, new rules that sent a predawn chill down the spine of bank directors and shareholders. Despite these challenges, some companies have been able to surmount the tempest, making them the toast of analysts and investors. These stocks will offer a lot of opportunities for investors in 2020. The companies are: Access Bank Nigeria Plc, Lafarge Africa Plc, Guaranty Trust Bank, MTN Nigeria Communications Palc, and Nestle Nigeria Plc. Access Bank Nigeria Plc The lender’s earnings has been growing at a blistering pace after acquiring Diamond Bank (a mid-sized bank) to emerge as the largest lender by deposit and total assets. It is the third largest by profit after Guaranty Trust Bank and Zenith Bank as it continues to intensify on its risk management strategies. And if it continues to record a double digit growth in earnings amid a low interest rate environment, it could climb it way to becoming the largest by profit. Despite acquiring a company

(Diamond Bank) with a notoriously deteriorating assets quality, Access Bank is able to keep its Non Performing Loans (NPLs) at a manageable level of 6 percent, just shy away from the 5 percent regulatory bench mark. It has generated more investment profit since the beginning of the calendar year (2019) than any of its peer rivals, as it is the only bellwether to outperform the broader market. Recent analysis of seven banks show that only Access Bank has a positive 1 year-to Date return (YTD) and 5 year-to date return (YTD), thanks to consistent earnings growth. Access Bank has the best bank stock yield on a YTD basis with a return of +45.59 percent, that compares with United Bank for Africa (UBA), (-9.09 percent); Zenith Bank, (-18.66 percent); FirstBank Holdings, (-21.38 percent); Stanbic IBTC Holdings, (-24.31 percent); Guaranty trust Bank or GTBank (-14.37 percent), and Ecobank Transnational Bank, (-50.0 percent). For the first nine months through September 2019, it is the only lender to record strong earnings growth. Its net income increased by 44.23 percent as at September 2019, that compares with Zenith Bank’s (+4.53); GTBank’s (-3.35); Stanbic IBTC Holdings (-7.03 percent); FBNH (15.32

percent); UBA (32.32 percent), and ETI (-12.35 percent). Guanraty Trust Bank Plc Just as the lion is the king of the jungle, so is Guaranty Trust (GTBank) Bank the strongest lender in Africa’s largest economy. Everything about the lender is superlative. Its N853.50 billion market capitalization makes it the most capitalized among peer rivals. Investors crave for a firm that keeps cost at the barest minimum whilst generating delivering a higher return on investment. It has a cost to income ratio of 36.90 percent as at September 2019, this compares with 71.50 percent for First Bank Holdings Plc; Access Bank, (63.10 percent); Zenith Bank, (50.10 percent); and United Bank for Africa,(60.80 percent). The lender has been deploying latest technology (superb automation activities) to control costs, as evidenced by fewer branches across the country that are satisfying customers need in an efficient and expeditious manner. GTBank has utilized the resources of shareholders in generating higher profit as its return on average equity of 32.30 (ROAE), the highest in the industry. The lender’s shares closed at N29 as of 2:00 pm Friday in Lagos while it has a price to earnings ratio of 4.38

times. Lafarge Africa Plc Investors brought into Lafarge Africa’s growth story after the disposal of a subsidiary helped lower debt, spurring it to the path of profitability. The cement maker is the only company in the building material industry to make money for investors as evidenced in a positive year to date of +12.45 percent. That compares with Dangote Cement’s (-26.20) and Cement Company of Northern Nigeria (CCNN) (-6.70 percent) The rally in Lafarge Africa’s stock is simply because of its impressive financial performance as at the nine months ended September 2019. For instance, debt to equity ratio, a leverage ratio that measures the proportion of debt in the capital structure of a firm reduced to 18.67 percent in September 2019, which is far lower than the 60 percent and 70 percent company expectation. This means investors own N0.813 of every Naira of company assets while creditor own N0.186 on the dollar. The debt to equity ratio is a financial, liquidity ratio that compares a company’s total debt to total equity. It shows the percentage of company financing that comes from creditors and investors. A higher debt to equity ratio indicates that more creditor financing (bank loans) is used than investor financing (shareholders). The company’s decision to to diversify its energy sources has bear fruit as its total cost of production has fallen, which will further added strength to future margins. The future is bright for company as government proposed copious infrastructure spend is expected to spur demand for cement. MTN Nigeria Communications Plc Since it listed on the bourse in May 2019, the telecommunications giant has been taking advantage of Nigeria’s burgeoning population and

the proliferation of smart-phones to magnify subscriber base and earnings. The largest mobile operator in Africa’s largest economy is using its brand name to make an inroad across the continent. With a net income of N148.15 billion as at September 2019, MTN is second most profitable company in Nigeria after Dangote Cement. MTN Nigeria accounted for the largest share (42%) of total subscriptions while it recorded 488,000 new internet subscriptions in October compared with 73,000 additional subscriptions recorded in September. Following the Nigeria Communications Commissions (NCC)’s approval of the 800 MHz spectrum band in Q2 2019, MTNN was able to increase its 4G coverage to >35 percent. The company’s shares closed at N105 on the bourse as of 2;00 pm in Lagos, valuing it at N2.13 trillion. Nestle Nigeria Arguably the most successful consumer goods firm in the country. Nestle Nigeria has been using its brand name, diversified product portfolio, and strong distribution network to surmount the headwinds. It has the strongest margin and profit expansion among peers. In short, it is the most profitable consumer goods firm in the country The consumer goods giant’s revenue growth can be ascribed to consistent investment in the company’s brand, marketing and route-to-market initiatives which are delivering stable demand for its products The growing sales volumes of flagship product:Maggi, Milo and Nescafé are the key drivers of revenue growth with average prices largely unchanged year-to-date. Nestle robust cash-flow and steady dividend payment has earned it BUY Ratings from investment houses across. The company’s shares closed at N1,430 as of 2:00pm Friday in Lagos, valuing it at N1.02 trillion. Its stocks yield 4.40 percent in dividend.

Santa ignores NSE market as stocks on track for worst December since 2009 ...stocks on track for only 8th December decline in 34 years IFEANYI JOHN

ecember hasn’t always been the best of seasons for Nigerian investors who anticipate an annual Santa rally in the month of December to pare back losses or extend gains in the stock market. Still, investors have grown accustomed to earning strong stock

returns in December which is popularly referred to as the Santa rally, however this year may prove quite different from other years at least in the last 10 years As the month of December draws close to an end, hopes are being dashed away as the Nigerian All Share Index appears to have returned -2.2 percent so far for investors. This means that the stock market may see its first negative performance in December since

2009 if the market doesn’t post a significant gain on its final trading day on Monday. Although, investors last experienced a true santa rally in 2016 when the stock market returned about 6.08 percent in the month of December, investors remained hopeful for a strong December rally after the stock market managed to produce positive results for investors in 2017 when it returned 0.79 percent and in 2018 when stocks rose by 1.8 percent de-

spite the slow pace of the economic recovery. 2009 was the last time stocks declined in December in the local bourse. The ASI fell by -0.87% in December 2009 as the world entered the second year of the global financial recession. Since then, Santa Claus has never failed to make investors smile to the bank in December until this year. Investors have become too accustomed to seeing a green result

in December as stocks have only declined 7 times in the last 34 years during the month of December. The average stock return in December since 1985 is 2.47 percent. While it is still very possible for the stock market to return to positive territory this month, it will take more than just wishes but an actual upward stock price movement on the last trading day on monday to save Christmas this month at the Nigerian stock market.

BusinessDay MARKETS INTELLIGENCE (Team lead: BALA AUGIE - Analyst: Dipo Oladehinde, ENDURANCE OKAFOR, BUNMI BAILEY Graphics: FIFEN FAMOUS)

BMI provides in-depth analysis and data on industries, companies, stocks, currencies, fixed income/credit, economics, regulation and factors that influence investor’s decision-making Continues on page 37 Email the BMI team patrick.atuanya@businessdayonline.com www.businessday.ng

https://www.facebook.com/businessdayng

@Businessdayng

Monday 30 December 2019

BUSINESS DAY

Access Bank Rateswatch

Market Analysis and Outlook: December 27 – January 3, 2020

KEY MACROECONOMIC INDICATORS GDP Growth (%)

2.28

Q3 2019 — higher by 0.17% compared to 2.12% in Q2 2019

Broad Money Supply (N’ trillion)

35.26

Increased by 0.66% in Oct’ 2019 from N35.03 trillion in Sept’ 2019

Credit to Private Sector (N’ trillion) Currency in Circulation (N’ trillion)

25.80 2.06

Increased by 1.30% in Oct’ 2019 from N25.47 trillion in Sept’ 2019 Increased by 2.51% in Oct’ 2019 from N2.01 trillion in Sept’ 2019

Inflation rate (%) (y-o-y)

11.85

Increased to 11.85% in November 2019 from 11.61% in October 2019

Monetary Policy Rate (%) Interest Rate (Asymmetrical Corridor)

13.5 Adjusted to 13.5% in March 2019 from 14% 13.5 (+2/-5) Lending rate changed to 15.5% & Deposit rate 8.5%

External Reserves (US$ million) Oil Price (US$/Barrel) Oil Production mbpd (OPEC)

38.78 67.64 1.80

December 24, 2019 figure — a decrease of 2.33% from December start December 24, 2019 figure— a decrease of 0.27% from the previous wk November 2019, figure — a decrease of 0.33% from October 2019 figure

COMMODITIES MARKET

STOCK MARKET Indicators

Friday

NSE ASI Market Cap(N’tr)

Friday

Change(%)

27/12/19

20/12/19

26,416.48 12.75

26,526.35 12.80

Volume (bn)

0.22

0.34

Value (N’bn)

3.04

2.34

MONEY MARKET NIBOR Tenor

Global Economy In the Japan, unemployment rate contracted to 2.2% in November 2019 from 2.4% the previous month, matching a three-month low. The jobs-to-applications ratio remained unchanged at 1.57 according to the Ministry of Internal Affairs & Communications. The number of unemployed decreased by 150,000 from the previous month to 1.51 million in November, while employment increased by 110,000 to 67.69 million. The labor force went down by 50,000 to 69.19 million and those detached from the labor force went up by 80,000 to 41.63 million. Elsewhere in Brazil, it reported the lowest jobless rate since 2016 according to the Brazilian Institute of Geography and Statistics. Unemployment rate dropped to 11.2% in the three months to November of 2019 from 11.6% in the three months to October and 11.6% a year earlier. In a separate development, India recorded the highest inflation rate since July 2016 according to Ministry of Statistics and Programme Implementation. Inflation rate increased to 5.54% year-on-year in November 2019 from 4.62% in the prior month, which is above the Reserve Bank of India's medium-term target of 4%, boosted by food prices.

Friday Rate

(%)

27/12/19

Indicators

27/12/19

1-week Change

YTD Change

(%) Energy Crude Oil $/bbl) 67.64 Natural Gas ($/MMBtu) 2.20 (34.87) Agriculture Cocoa ($/MT) 2405.00 127.30 30.02 Coffee ($/lb.) Cotton ($/lb.) 69.24 Sugar ($/lb.) 13.56 Wheat ($/bu.) 554.00 Metals 1510.16 Change Gold ($/t oz.) Silver ($/t oz.) 17.84 (Basis Point) Copper ($/lb.) 283.80 (0.41) (0.40)

(%)

(0.27) (5.17)

4.93 (28.01)

(0.99) (0.16) 2.34 (0.07) 1.28

24.23 (2.23) (10.66) (11.55) 27.80

2.20 4.69 0.91

14.62 3.78 (13.42)

20/12/19

4.57

2.14

243.0

NIGERIAN INTERBANK TREASURY BILLS TRUE YIELDS

O/N CALL 30 Days

3.93 4.06 10.68

2.93 2.95 9.64

100 111.3 104

Tenor

27/12/19

20/12/19

90 Days

11.34

10.33

100.7

1 Mnth 3 Mnths

5.71 5.02

4.62 4.75

109 26

6 Mnths 9 Mnths 12 Mnths

5.30 5.70 6.03

5.23 5.52 5.77

7 18 26

OBB

FOREIGN EXCHANGE MARKET Market

Friday

1 Month

(N/$)

Rate (N/$)

20/12/19

27/11/19

Official (N) Inter-Bank (N)

27/12/19 307.00 363.84

306.95 363.52

307.00 362.45

BDC (N) Parallel (N)

0.00 362.00

0.00 363.00

0.00 360.00

Indicators

AVERAGE YIELDS Friday

Friday

Change

(%)

(Basis Point)

27/12/19 3-Year 5-Year 7-Year 10-Year 20-Year 30-Year

0.00 9.08 10.91 11.13 11.74 12.88

20/12/19 0.00 10.01 10.84 11.27 11.86 12.88

0.0 (92.8) 7.7 (14.0) (12.2) (0)

Disclaimer This report is based on information obtained from various sources believed to be reliable and no representation is made that it is accurate or complete. Reasonable care has been taken in preparing this document. Access Bank Plc shall not take responsibility or liability for errors or fact or for any opinion expressed herein .This document is for information purposes and private circulation only and may not be reproduced, distributed or published by any recipient for any purpose without prior express consent of Access Bank Plc.

Friday

Change

(%)

(Basis Point)

ACCESS BANK NIGERIAN GOV’T BOND INDEX

BOND MARKET Tenor

Friday

Change

(%)

(Basis Point)

27/12/19

20/12/19

Index Mkt Cap Gross (N'tr)

3361.13 10.50

3347.32 10.46

0.41 0.41

Mkt Cap Net (N'tr) YTD return (%)

6.97 36.83

6.94 36.27

0.37 0.56

YTD return (%)(US $)

-19.01

-19.55

0.54

TREASURY BILLS (MATURITIES) Tenor

Amount (N' million)

Rate(%)

Date

91 Day

2,000.00

18-Dec-2019

182 Day

2,000.00

18-Dec-2019

364 Day

3,000.00

Sources: CBN, Financial Market Dealers Association of Nigeria, NSE and Access Bank Economic Intelligence Group computation.

5.495

18-Dec-2019

Domestic Economy Nigeria's total non-oil receipt increased by 16.7% to N369.84 billion in November, up from the N316.79 billion realized the previous month. This formed part of the Central Bank of Nigeria's (CBN) monthly economic report obtained recently. However, the amount of non-oil earnings, which was 43.1% of total revenue in the month under review, was below the monthly budget of N447.24 billion by 17.3%. The drop in collection, relative to the monthly budget, was attributed to the decline in revenue from Value Added Tax (VAT), education tax and the federal government independent revenue. Also, total non-oil export earnings, at $455.37million, indicated an increase of 15.4% and 48.9%, relative to the levels in October 2019 and the corresponding period of 2018, respectively. The report attributed the rise in earnings from non- oil exports in November largely to a 3,797.7% increase in receipts from mineral sector to $78.88million. In a separate development, the CBN in a recent circular slashed bank charges in order to protect customers. It reduced the withdrawal fee charged for the use of other banks' Automated Teller Machines (ATM) from N65 to N35. The N35 ATM fee according to the CBN should be imposed on customers after the third withdrawal within one month. It also removed card maintenance fee on all cards linked to current accounts, and also asked banks to charge a maximum of N1 per mille for customer induced debit transactions to third parties and transfers or lodgments to the customers' account in other bank on current accounts only. It also pegged the Advance Payment Guarantee (APG) to a maximum of one per cent of the APG value in the first year and 0.5% for subsequent years on contingent liabilities. The CBN warned banks to ensure full compliance to the new guidelines adding that any bank that violates the provisions of the guidelines would be sanctioned. Stock Market The Nigeria Stock Exchange ended the year 2019 on a bearish note for the 3 working day week following the Christmas and Boxing Day holidays. Market closed lower on the back of continued selloffs. Consequently, the All Share Index (ASI) fell by 0.41% to end at 26,416.48 points from 26,526.34 points the preceding week. Similarly, market capitalization tapered by 0.40% to N12.75 trillion from N12.80 trillion the prior week. We expect that investors to take advantage of low prices as capital flow and

repositioning in value stocks continue for the new week and coming year. Money Market There was a marginal rise in money market rates as the Central Bank of Nigeria (CBN) debited banks that failed to meet up with the required loan to deposit ratio (LDR) of 65%. Banks were debited the sum of about N608 billion, which was put back in the cash reserve account held by the CBN. Short-dated placements such as Open Buy Back (OBB) and Over Night (O/N) rates closed higher at 4.57% and 3.93% from 2.14% and 2.93%. The slightly longer dated instruments such as the 30-day and 90-day Nigeria Interbank Offered Rate (NIBOR) settled at 10.68% and 11.34% from 9.64% and 10.33% the prior week. This week, short tenored rates are expected to decline due to OMO maturity of N592 billion. Foreign Exchange Market Last week, the naira depreciated against the green back across most markets except at the parallel window where it appreciated. The official rate saw a marginal decline as it ended N307/$, a 5 kobo loss from the previous week, while at the Nigerian Autonomous Foreign Exchange (NAFEX) segment, the local currency depreciated by 40 kobo to close at N363.84/US$ from N363.53/US$ the previous week. The parallel market closed at N362/US$ from N363/US$ the prior week. This week, we envisage the stability in the market would continue due to consistent FX liquidity injections by the CBN. Bond Market The bond market returned to bullish territory as yields went down for the week ended Dec 27th, 2019 due to market players continuous request for some select maturities. Consequently, demands for most maturities across the curve. Yields on the five-, tentwenty- and thirty-year debt papers finished at 9.08%, 11.13%, 11.74% and 12.88% from 10.01%, 11.27%, 11.86% and 12.88% respectively, the previous week. The Access Bank Bond index increased marginally by 13.81 points to close at 3,361.13 points from 3,347.32 points the prior week. We anticipate a continuation in the buying sentiment owing to relatively liquid market. Commodities

Oil prices declined slightly due to unexpected crude oil inventory of 4.7 million barrels according to the American Petroleum Institute (API). Bonny light, Nigeria's benchmark crude dipped 0.27% or 18 cents to close the week at $67.64 per barrel. The bulls reigned at the precious metal market as prices closed higher compared to two weeks ago. Prices are up as notions of better consumer demand for bullions in the coming new year are driving prices north. Consequently, gold gained 2.2% to $1,4710.16 per ounce and silver rose by 4.69% to $17.84 per ounce. This week oil prices are expected to rise due to easing trade tension between U. S. and China coupled with expectation of a decline in the U.S. crude inventory levels. Precious metal prices are expected to remain firm and any downside correction will be the opportunity to buy again. MONTHLY MACRO ECONOMIC FORECASTS Variables

Jan’20

Feb’20

363

362

Inflation Rate (%)

11.90

11.98

12.1

Crude Oil Price (US$/Barrel)

For enquiries, contact: Rotimi Peters (Team Lead, Economic Intelligence) (01) 2712123 rotimi.peters@accessbankplc.com

www.businessday.ng

https://www.facebook.com/businessdayng

Mar’20

Exchange Rate (NAFEX) (N/$)

@Businessdayng

Monday 30 November 2019

BUSINESS DAY

news

JAMB insists on NIN as registration commences January 14 Godsgift Onyedinefu Abuja

oint Admissions and Matriculations Board (JAMB) has insisted that only prospective candidates with the National Identity Number (NIN) will register and sit for the 2020 Unified Tertiary Matriculation Examination (UTME). The JAMB spokesperson, Fabian Benjamin, who spoke with BusinessDay on Friday, maintained that the board was not going back on its decision and warned that as registration commences January, candidates without the NIN cannot register for the exams. The board had fixed March 14 to April 4, 2020, for the examination while the registration for UTME

candidates and Direct Entry will begin January 13 and end on February 17, 2020. The JAMB registrar, Ishaq Oloyede, had noted that the essence of the NIN for registration was to curb cases of multiple registration and other forms of malpractices perpetrated in the UTME process. However, the House of Representatives had called on the board to delay implementation of the policy until 2021, in order to allow more time and better awareness for prospective candidates, saying the planned use of the NIN was too sudden, and might lead to denial of several Nigerians the opportunity to seek admissions into tertiary institutions.

Babajide Sanwo-Olu, Lagos State governor, flanked by Frederic Oladeinde (r), commissioner for transportation, and Planet projects engineer (l), at the governor’s inspection of the removal of the 2nd Lekki Roundabout on Saturday.

FBRA plans more recycling hubs to tackle plastic waste challenge in 2020

BDCs fault alleged CBN’s dual FX allocation Hope Moses-Ashike

ureau De Change (BDC) operators have faulted ongoing petition against the CBN governor, Godwin Emefiele and its management team over the deployment of dual exchange rate regime in forex allocation. Senate Committee on Finance had invited Emefiele to appear before it on February 7, 2020, following a petition by Human Rights lawyer, J.U Ayogu, accusing the CBN governor and his management team of compromise in the allocation of foreign exchange. Aminu Gwadabe, president, Association of Bureaux De Change Operators of Nigeria (ABCON), faulted the N305/$ rate to BDC as proposed by the petitioner, saying it was not transactional rate but used for settling government obligations. In a statement by the association, ABCON defended the CBN policy on foreign exchange allocation to BDCs, which it believes has stabilised the naira against the dollar. “There is a case against the CBN governor and his management team written by J.U Ayogu. A petition before the Senate on the December 12, 2019, where J. U Ayogu, on behalf of the Bureaux De Change Operators of Nigeria wrote against the CBN over its dual exchange rate forex policy that enriches few Nigerians and its top management staff to the detriment of many lawful Nigerians and frustrating the policy of the present administration of eradicating poverty and unemployment from all the nooks and crannies of Nigeria,” member, Senate Committee on Finance, Ayo Akinyelure (PDP, Ondo Central) said. The petitioner had pleaded with the Senate to compel Emefiele to review the policy of dual exchange rate without delay to keep BDC operators in business. But ABCON management said the CBN forex policy had brought stability to the BDC

industry and helped operators embrace automation, which is the standard best practice globally. “This is hand work of unknown faces not ABCON. It is confrontational and lack credible evidence. The N305/$ is not a transactional rate but for settling government obligations. ABCON submission to the National Assembly is on Value Added Tax (VAT) exemption and review of licence fee renewal downward submitted to the CBN. The petitioner was never at any time appointed to speak on behalf of BDCs,” Gwadabe said. He disclosed that no BDC or service provider got forex at N305 to dollar and that the petitioner’s claim was completely false. The ABCON has appointed Mike Akinfolarin & Associates as ABCON Consultant/Tax Attorneys on VAT, which is a bigger problem confronting operators as a large part of their income go into paying taxes, Gwadabe said, adding that in other economies, foreign exchange rate control by government is VAT exempt. “That the law firm Of Mike Akinfolarin &Associates ( Tax Attorneys) made a representation on behalf of ABCON before the National Assembly public hearing, House Committee on Finance Bill on November 25, 2019 in Abuja. And that remains the position of ABCON,” he said. Beyond the rates differentials, Nigeria needs multiple streams of forex earnings and the enlisting of more channels to attract Diaspora remittances and other foreign capital that will not only deepen the market, keep the naira stable and boost operations of BDCs, Gwadabe explained. For instance, Diaspora remittances to Nigeria, which stood at $25 billion annually in 2018, remain a reliable source of forex to the domestic economy and should form part of the revenue stream for over 4,500 CBN -Licenced BDCs.

CHUKA UROKO

he Food and Beverage Recycling Alliance (FBRA) Nigeria says it is looking forward to establishing proper recycling hubs across Nigeria come 2020, in order to tackle head-on the menace and environmental hazard associated with plastic waste. This was disclosed by the alliance at a recent sensitisation campaign tagged ‘Picka-Plastic’ held in partnership with Green Janitors Sustainability Initiative, aimed at ridding Badagry and its environs of plastic waste. The exercise is expected to last for three months. Pick-a-Plastic initiative is part of a three-month

campaign aimed at educating Lagos communities on waste separation from source and rewards for collection of post-consumer packaging waste, especially plastics for recycling. “The aim of the alliance is to expand; there are initiatives that are coming up in 2020 that will scale-up and expand beyond Lagos. That definitely is in the plans and part of the initiative is to have proper recycling hubs where all of these things can be aggregated professionally and made available to end-users,” said Patrick Olowokere, corporate communication manager, Nigerian Breweries, a part of the alliance. He said the alliance was working with a recycling firm to establish a proper

aggregation hub. An aggregation hub, according to him, takes all the plastics from the streets and turns them into end-products that will either go into an export market or can be used in certain industries in Nigeria. According to Olowokere, the FBRA is working with all stakeholders to ensure plastic wastes were properly managed. This is aimed at building constant messages on the need to recycle plastics. “Today we are working with Green Janitors; in other instances we have worked with people like Recycle Point and several others,” he said, adding, “we are also partnering with LAWMA; there are other initiatives that the FBRA is doing in partnership with other recycling agencies to

recover plastics that are ongoing right now; those plastics are being recovered and are being put to other use.” Speaking further on the collaboration with other rec ycling organisations, Olowokere said FBRA was providing both financial incentives and products to encourage recycling of plastics from the street, pointing out that they were providing their products to encourage residents to bring in their plastics. Sade Morgan, the chairman of FBRA, said the alliance was in Badagry to kick-start Pick-the-Plastic, being one of the community initiatives of the FBRA to encourage community based recycling in Nigeria.

Nigeria’s external debt may rise to $111bn in 2020, OBJ warns

www.businessday.ng

Modestus Anaesoronye

wo time former president of Nigeria, Olusegun Obasanjo (OBJ) has warned African leaders to desist from taking foreign loans that would turn to debt burden for their countries. He said leaving a debt burden behind for successive leaders amounted to mortgaging the future of that country and that of the generations unborn. Obasanjo gave the warning while delivering an address he entitled “The Challenges of Debt and Sustenance of Democracy” at this year’s ‘Why I am Alive Campaign’ party, organised by a media personality and CEO of Eureka Production, Caroline Moor, at the weekend in Lagos. A situation where a country is borrowing to service its debts become worrisome, he said, and calledonallNigerianstoriseupand shout in one voice and call on National Assembly to rise up to its core dutyandresponsibilityandsaveour children and our grand and great children from being mired in debt. The former president said although he was able to secure a $20 billion debt relief for Nigeria during his administration, such

opportunity might not be possible even as he said, “Algeria and President Boureflika have tried everything they could to secure debt relief which I secured for Nigeria, and they never get it.” He said as at 2015, Nigeria’s external debt was about $10.32 billion, adding that in four short years by March 2019, our external debt grew to N24.947 trillion or $81.274 billion, amounting to about $111 billion in 2020. He explained that to service this current level of indebtedness, the country must commit at least half of its foreign earnings, stating, “Such a situation talks about an impending bankruptcy. No entity can survive while devoting 50% of its revenue to debt servicing.” Continuing, he said, “It has recently been pointed out that in 2018, total debt service cost took over 60% of government revenue. What is more we are not doing enough to address the fundamental, deep-seated and structural challenges that inhibit the expansion of our economy. As if this is not bad enough, we are currently seeking to add another $29.6 billion loan to our already overburdened debt portfolio.” Expressing his worries on the Nigeria’s debt profile, Obasanjo

https://www.facebook.com/businessdayng

said, “My biggest worry is that with the scale of debt we are walking into with our eyes wide open, there are already fiscal challenges to meet our obligations. The current situation where we are already spending significant percentage of our budget on debt servicing and another chunk on recurrent expenditure, leaving very little or nothing for capital investments is not a durable and sustainable approach to development and progress. “This will even get worse when oil with gas that we rely on will no longer command premium demand as in the past. “I fear for the future we are bequeathing to our children and to their children and their children’s children. I believe that it will be foolhardy, irresponsible and wicked for us to tie a millstone of debt around the neck of the successor generations of Nigerians. We need to take hard and important decisions that will facilitate a balanced allocation of resources to both capital and recurrent expenditures.” As a solution, he advised the leaders to look for other options to debt such as global investment andcapitalmarket,amongothers. Earlier in his speech, the guest @Businessdayng

speaker, the world’s first and only Heart and Kidney Surgeon, Olurotimi Badero, described Nigeria as a great country. He called on Nigerians to come together if they must make the difference as a nation, adding, ‘Our strength lies on our diversities.’ “As a people, we must come together. We can make the difference. There is strength in our diversities.” He urged Nigerian youths to always believe in themselves and focus on their intentions, adding that “intentions without attention will put you in detention. “Always be the best. Be yourself and don’t imitate others. Being a Nigerian teaches you to be strong and be resilient. As youths, we should try as much as possible to be the best wherever we are. We should stop fraud and those things that will give us bad name.” The aim of “Why I am Alive Campaign” party, according to the convener, Caroline Moore, is designed to empower young Nigerians for the future by tapping into key lessons from success stories of eminent personalities that have contributed to the social, economic and political growth of Nigeria.

Monday 30 December 2019

BUSINESS DAY

news Winners, losers in 2019 and expectations... Continued from page 1

trudged along through a bleak year marked by low

sales, hopeful that the festive bounce would bring some relief. That hope is dead now and the year is ending on a worse note than it started. He had no insurance cover and so recovering from such a loss would be slow and painful. “Since the incident, the family has survived on my wife’s petty trading,” he said. He has four children and his wifesellsfruitsatanearbymarket. James Hutu (not real name) is also yet to recover from the attack by an angry mob who broke into his store and carried away with luxury items worth billions of naira. The angry mob included middle-aged Nigerians who took part in a wave of brainless attacks where Nigerian stores were attacked in retaliation to the killings of Nigerians in South Africa. In Novare Mall in Ajah, Nigerian stores which shared a building with South African retailer, Shoprite, were victims of violent attacks that left damaged property and stolen items in its wake. “The scars (from that incident) will remain with me forever,” Hutu, whose store at the Novare Mall remains shut, said. The year 2019 was also a bad one for some investors. For stock investors, billions of naira was lost judging by the movement in market capitalisation. This group of investors can only speak of an underwhelming year that was made worse by a lack of economy-stimulating reforms and capped off by investor apathy. A year ago, Nigerian equities returned as much as 42 percent on their way to becoming one of the best performers globally; that bounce completely faded in 2019. The conclusion is simple. It was a bad year for investors who staked money in stocks hoping for a post-election rally widely anticipated to more than double stock valuations on the stock exchange. The stock rout also meant many listed companies, set to end the year at a decade-low, also had a year to forget in 2019. Consumer goods companies have suffered shrinking profits as consumer demand remains weak while the border closure has created a big headache for traders. Perhaps only foreign bond investors can call 2019 a kind year thanks to heterodox monetary policies by the Central Bank of Nigeria that

triggered a rally in bond prices and a decline in yields. Some small business owners and individuals who were beneficiaries of bank credit, on the back of the CBN’s increase of the loan to deposit ratio of commercial banks to stimulate lending, may have positive takeaways from 2019 but the infrastructure deficit, from power shortages to bad road networks, would have muted their excitement of better access to credit. The CBN’s heterodox policies have also spurred a financial repression that is hurting local investorsfromthepensionfunds to the deposit money banks. With 2019 tagged an underwhelming year, 2020 may be no different. Business leaders interviewed by BusinessDay fear next year could be even worse than this year. The fragility of economic growth in 2019 which saw only 24 percent of the economy grow above 3 percent was a big factor in evaluating the year and predicting next year. Not only are there worries for economic growth in 2020, there is a growing concern over exchange rate stability given the steady fall in fx reserve level of about $7-8 billion this year. Though the exchange rate has been stable for nearly two years, cracks are beginning to appear as the government seems to be reverting to its demand management strategy by adding new items – milk and dairy products – to a list of 41 items banned from accessing dollars from the official window. Concerns over economic growth, which probably printed at 2.1 percent in 2019, are gradually becoming the norm and the calamitous collapse on foreign direct investment in 2019 paints a bleak outlook for robust growth and job creation. There are also some external factors with negative implications for the economy in 2020. Global economic growth is expected to slow down and oil futures contracts hint at an oil price of $57 per barrel next year from $61 in 2019. These developments, along with a likely increase in production cuts by OPEC, have negative implications for Nigeria in the form of lower oil revenues. With higher taxes, from the hike in VAT to a possible introduction of a 9 percent communication levy, the Nigerian tax man must brace up for a tougher year that will be marked by a more aggressive tax drive by the government.

What new $10bn NLNG train means for... Continued from page 2

the gas that would otherwise have been flared, in fulfilment of its vision of being a global company, helping to build a better Nigeria,” Tony Attah, managing director of NLNG, said in a statement immediately after the signing. “Over 12,000 jobs will be created during the peak of

construction, trade and commercial activities with the Niger Delta region equally receiving a boost as a result. The project will also support the development of local engineering and fabrication capacity in the country. Other opportunities for local content include procurement, logistics, equipment leasing, www.businessday.ng

L-R: Babajide Ibironke, chief financial officer, Viathan Engineering Limited; Brian Marcus, head, capital management, Seplat Petroleum Development Company plc; John Maguire, chief financial officer, Interswitch Limited, and Ikechukwu Omeruah, head, debt capital markets, Rand Merchant Bank Nigeria Limited, during the Bonds, Loans and Sukuk Conference Nigeria 2019 sponsored by RMB, in Lagos.

In new decade, Nigeria must focus on...

a 2019 survey by Lagos-based SBM Intel. “Nigeria’s true market size is really the number of people who are able to spend discretionarily once they get past spending on the essential commodities,” said SBM Intel in the 2019 report where 63 percent of respondents revealed that after taking care of food, they had nothing left to spend. Another report by Coronation Merchant Bank established that Nigerians are pricesensitive and prefer cheaper, less-known brands to the more popular ones (quoted on the stock exchange). This is because Nigerians simply don’t have money. Nigeria has 94 million people living below $1.9 per day, according to World Poverty Clock, and unemployment at an all-time high of 23 percent. Nigeria’s per capita income last year was $2,028.182 which was an improvement from 2017. However, Nigeria still had one of the lowest per capita incomes in Africa underperforming the likes of Egypt, South Africa, Angola, Algeria, among others, and many global peers. The low income per head is due to the slow pace of growth compared to the increase in population size. Bismarck Rewane-led Financial Derivatives Company (FDC) expects the economy to expand 2.2 percent this

year compared to 1.9 percent last year. This would be an improvement but leaves Nigerians worse off because income per head (which does not even measure wealth dispersion) will continue to decline. This means with an average fertility rate of 5.457 compared to a 2.432 global average doesn’t play well in Nigeria’s favour. An increase in household size leads to a less proportionate increase in household demand since income is not increasing. Families must, therefore, resort to sharing meals. This has an adverse effect on capital formation which leads to a poverty cycle or trap. Domestic liquidity is low. Broad Money (M2) as a percentage of GDP last year was 23.5 percent, lower than Ghana (27.4 percent), Angola (30.3 percent), Kenya (37.5 percent), South Africa (73.1 percent), Algeria (79.1 percent), Egypt (81.8 percent), and Morocco (118.7 percent), according to data compiled by Lagos-based Economic Associates. This shows the financial depth is low in Nigeria as banks can only fund around a fifth of the economy which is not good for the MSMEs. Gross domestic savings in Nigeria is around 17.82 percent and underperform sub-Saharan Africa average of 18.1 percent, according to the World Bank. Academic research shows that labour productivity is low in economies where there is a population surge if capital and technology do not match up. Unfortunately, required

capital investment in Nigeria is still very low. A poor population also has implications for the government which plans on increasing tax revenues. Aside from issues of tax evasion, a poor population cannot yield much tax revenue to the government. Nigeria’s tax-to-GDP ratio is under 10 percent and one of the lowest in the world. All current projections show the possibility of increasing in population up to at least 700 million by 2100. Economic growth remains a potential and the grim statistics may get worse in the coming years if the population is not checked. Economy or population? There is an on-going debate whether Nigeria’s focus should be on population control or boosting the economy. Some arguments have been that population size has not stopped India, US and China, among others, from realising the potential of their economy. Interestingly, these countries with bigger economies, faster growth rate, per capita income and prevailing technologies have lower population growth than Nigeria. India’s Prime Minister Narendra Modi in August 2019 mulled introducing population control policies in the country. There’s little need discussing US and China’s efforts on population control. Notwithstanding, there cannot be any proper economic planning without discussing population. Zainab Ahmed, Nigeria’s finance minister, at the 24th Nigerian Economic Summit in Abuja in 2018 admitted that Nigeria’s population was a con-

straint to the Economic Recovery and Growth Plan (ERGP). In the absence of a longoverdue population census, the last one having been conducted in 2006, Nigeria’s exact population is not known and this affects national planning. The National Population Commission (NPC) earlier this year disagreed with the United Nation’s estimation of Nigeria’s population. Notwithstanding, the population size is in fact so huge that the government reportedly said a policy to limit the number of children a mother can have in Nigeria was in the offing. China’s struggle with an ageing workforce is a clear warning against coercive population control. But left for “positive” checks, Nigeriamaybefacedwithaworse level of insecurity and insurgency than it has seen in the last few years. However, the country can rely on education and sensitisation programmes as preventive checks to tame population surge, while policymakers try to get the economy back on track. While awareness programmes alone are not incentivising enough to discourage population growth, experts have argued that investing in education especially of the girl-child can help increase planned parenting, reduce early marriages and even delay child-bearing. At the end of the new decade, Nigeria could see the number of extremely poor increase by more than 30 million. The government must double efforts on its population control programmes as well as embark on necessary reforms to unlock growth.

insurance, hotels, office supplies, aviation, haulage, and many more,” he said. Simbi Wabote, executive secretary, Nigeria Content Development and Monitoring Board (NCDMB), said the benefits of the Train-7 project would extend to site civil works on roads, piling, and jetties, 100 percent local procurement of all low and high voltage cables, non-cryogenic

valves, protective paints, and coatings, sacrificial anodes and many others from local manufacturing plants. The target, according to the NCDMB boss, is to assemble over 70 percent of all noncryogenic pumps and control valves in-country. Wabote urged the SCD consortium to fully implement the agreed Nigerian content levels as contained in

the approved Nigerian Content Plan for Train-7 project, covering engineering, fabrication, civil works, local procurement, project services, logistics, equipment leasing, insurance, hotels, office supplies, aviation, haulage, human capacity development and jobs. History of NLNG trains Trains 1-3 were a brainchild of the Shell-run Ni-

geria LNG, established to tap into Nigeria’s abundant gas resource and monetise it through LNG exports. The FID for the first two trains was received in November 1995. Production commenced in September 1999 for Train 2, while Train 1 started in February 2000. Train 3 commenced production in November 2002.

Continued from page 1

big deal if they have a low purchasing power. Nigeria’s market size is just under 37 percent of the population, according to

https://www.facebook.com/businessdayng

@Businessdayng

Monday 30 November 2019

BUSINESS DAY

news

NSE market capitalisation inches N156bn after Christmas holidays

rading resumed on the Nigerian Stock Exchange (NSE) on Friday after the Christmas holidays on a positive note with the market capitalisation increasing by N156 billion, amid Nestle gain. Specifically, the market capitalisation of listed equities rose by N156 billion to close at N12.752 trillion from N12.596 trillion achieved on Tuesday. Also, the All-Share index, which opened trading at 26,090.88, inched 325.60 points or 1.25 percent to close higher at 26,416.48. Nestle led the gainers’ table, increasing by N130 to close at N1,430 per share. Stanbic IBTC followed with a gain of N2.60 to close at N39, while UACN gained 45k to close at N8.55 per share. NASCON improved by 40k to close at N12.90, while UPDC REITS added 35k to close at N4.30 per share. Conversely, Guinness recorded the highest loss to lead the losers’ table, dropping by N2 to close at N30.05 per share. May & Baker trailed with a loss of 21k to close at N1.93, while Unilever dropped 15k to close

at N22 per share. Sterling Bank was down by 11k to close at N1.94, while Oando dropped 7k to close at N3.63 per share. In spite of the increase in market indices, the volume of shares traded declined by 31.41 percent. Consequently, investors traded 222.51 million shares valued at N3.04 billion in 2,540 deals. This was against a turnover of 324.40 million shares worth N1.66 billion exchange in 1,993 deals on Tuesday. The financial service sector maintained leadership as the most active with Access Bank emerging the most sought, trading 42.03 million shares valued at N418.41 million. United Bank for Africa came second with an account of 28.37 million shares worth N196.33 million, while Guaranty Trust Bank sold 22.78 million shares valued at N660.52 million. Jaiz Bank traded 22.49 million shares worth N14.02 million, while Sterling Bank accounted for 15.57 million shares valued at N29.47 million. NAN

Newcross celebrates chairman’s birthday at five orphanages

anagement and staff of Newcross Petroleum Limited and Newcross Exploration and Production Limited have celebrated the birthday of their chairman, Festus Fadeyi, with children at five different orphanage homes in Lagos and Ogun states. The celebration was put together not just to serve as an opportunity to give gifts to the orphans, but also to draw attention to their needs in society. Fadeyi’s entourage was received by the children and their guardians who collaboratively sang birthday songs amid cheers and exchange of pleasantries. At Yemisi Alogi Orphanage and Children’s Home, Ajegunle in Abeokuta, the community chairman, Prince Bello expressed gratitude to Festus Fadeyi for his support to the orphanage home and the community. “Times are hard in Nigeria today for most families, as many are looking forward to

a very bleak Christmas and New Year celebration but it appears that will not to be the case with the lucky children in Yemisi Alogi Orphanage and Children’s Home, Ajegunle,” he said. He further stated that the community would ever remain grateful for this show of magnanimity in the course of social responsibility from the celebrant, Fadeyi. Some of the orphanages that benefitted include Lagos State run Modupe Cole Child Care and Treatment Home school - one of the oldest in the state, founded in October of 1960 specifically for children with physical or health challenges whose parents are unable to care for, and the Gideon Orphanage in Abeokuta targeted at getting children off the streets through rehabilitation, reformation and reintegration. At Gideon Home, the visiting team from Newcross Petroleum and Newcross E&P were welcomed by the orphanage’s first December baby.

FG urged to fund Mayo Belwa – Toungo road project in Adamawa

ederal G overnment has been urged to adequately fund and ensure timely completion of the 112kms Mayo Belwa – Toungo highway in Adamawa State. The contractor handling the project, Triacta Nigeria Limited, and the Federal Controller of Works in the state, Salihu Abubakar, made the appeal in separate interviews with the News Agency of Nigeria in Yola on Friday. They identified lack of adequate funding as the major constraint obstructing the speedy reconstruction of

the Mayo Belwa-Jada-Ganye-Toungo Federal Highway connecting neighbouring the Republic of Cameroon. The road rehabilitation job was flagged off on August 28, 2018. The contract was awarded to Triacta Nigeria Limited at a cost of N22.69 billion. The construction was to cover 112 kilometres with a completion deadline of 36 months. But a check conducted indicated that since the flag-off of the project 16 months ago, the work had covered only 28 kilometres. www.businessday.ng

L-R: Rowland Ogundu, general manager, operations, Waltersmith Petroman Oil Limited; Simbi Wabote, executive secretary, Nigerian Content Development Monitoring Board; Timipre Sylva, minister of State for Petroleum Resources; AbdulRazaq Isa, chairman, Waltersmith Petroman Oil Limited; Danjuma Saleh, vice chairman, Waltersmith Petroman Oil Limited; Chikezie Nwosu, MD/CEO, Waltersmith Petroman Oil Limited, and Osten Olorunsola, non-executive director, Waltersmith Petroman Oil Limited, during the inspection of the Waltersmith Modular Refinery in Ohaji/Egbema Local Government

Agric reforms: CBN’s N69bn investment in Edo oil palm sector excites farmers

ith the commitment of about N69 billion by the Central Bank of Nigeria (CBN) to the Edo State O i l Pa l m P ro g ra m m e (ESOPP), smallholder farmers in the state have applauded the Governor Godwin Obaseki-led administration for creating the right environment to attract the investment. A cross section of the farmers, who spoke with journalists in Benin City, the Edo State capital, said the investment would revolutionalise the oil palm sector in the state,

which will have a spiral effect on other aspects of the economy. Esosa Igbinoba, a farmer in Okada axis of the state, said the investment would allow a number of the plantation owners expand their hectarage and processing capacity, which will have positive effect on smallholder farmers in the axis. According to Igbinoba, “We were excited when we heard that the CBN will be committing billions of naira for the development of the oil palm sector in Edo State. We already have two heavyweights in

We’re committed to seaport project in Badagry – Sanwo-Olu

overnor of Lagos State, Babajide Sanwo-Olu, says his administration is highly committed to the issue of seaport project in Badagry. Sanwo-Olu made this known on Sunday at the Badagry Integrity Awards 2019 organised by Badagry Parrot Prints and Publication in Badagry. The governor was represented by his special adviser on Tourism, Arts and Culture, Solomon Bonu. According to Sanwo-Olu, on the issue of seaport, Badagry has been identified for this project for the past four years. “We are still talking to the Federal Government to perfect the deal because as at today, the heart of Lagos is congested and we need to decongest it. Badagry has the land and we are still praying to Federal Government to listen to us so that the project will start on time. “We are willing to do everything humanly possible to let the project start,” he said. In his keynote address, Maumo Jinadu, bursar, Lagos State Polytechnic and chairman of the event, urged the Federal Government to resuscitate the Badagry Seaport project’s plan and make it a reality. Jinadu said that the project

would help the development plan of Badagry and Lagos. According to him, the construction of the seaport in Badagry is key to the development of the town. He said the award was in recognition of his 27 years of work experience in Lagos Polytechnic, saying the organiser did not request for any money. According to him, it is a merit award and no monetary value is attached to it; it is not an award bought with money. Solomon Zosu, Publisher, Parrot Prints and Publication, the organiser of BIA 2019 Award, said the criterion used in selecting the awardees was performance. “We do not reward people who won election but we went into the field and looked at the performance evaluation of people before giving them awards,” he said. Zosu expressed his gratitude to the people who had been behind the success of the publications over 10 years ago. The News Agency of Nigeria reports that among the awardees were, Solomon Bonu, the special adviser on Tourism, Arts and Culture to Lagos State Governor, and Mobolaji Ogunlende, the Founder of Real Acts of Kindness (RAK), an NGO in Badagry.

https://www.facebook.com/businessdayng

Nigeria’s oil palm sector, namely Okomu plc and Presco plc, in the state. The investment further opens up the field for more players. “Particularly, we want to thank Governor Godwin Obaseki for making the land available for the plantation owners and smallholder farmers to access the fund. We are very confident that the investment will transform the state for the better.” Emmanuel Usen said the state governor had shown uncommon resolve in unlocking land assets to attract invest-

ment, noting, “We have experienced a new wave of agricultural revolution in Edo State with the governor’s determined effort to create wealth and job opportunities for youths with the ESOPP. It is going to change a lot of things. “We know that the investment will last for years, with each stage involving the employment of a number of people in the plantations. About 600,000 people are expected to benefit from the activities. We can’t ask for more than this, as long as our people are gainfully engaged.”

In the spirit of Christmas, Mbonu gives back to widows, others

hristmas is a time to love, and Uzoc h u kw u M b a o n u , popularly known as Zuma Rock, demonstrated the virtue by extending his hands to numerous widows, children neighbours a nd fr i ends dur i ng t he season. The Zuma Fun Fair celebration which held at Catholic Mission Street, in Tedi Town a suburb of Ojo Local Government Area of Lagos State on Wednesday saw the less privileged in society leave with smiles after Mbaonu catered to their needs. “Christmas period is a s e a s o n o f re f l e c t i o n , blessings and gift, it is only appropriate for us to count our blessings,” said Mb o nu . “ At t h i s t i m e, we must reflect on those things that have happened to us in the year and how we can improve them and be better citizens.” D u r i n g t h e f u n f a i r, Mbonu donated bags of rice and other food items t o w i d o w s t o m a rk h i s appreciation to God for sparing his life and others @Businessdayng

around him. “It is good to give than to receive, God has blessed us this year and it is good for us to give back to G o d by remembering those less privileged and widows that have nothing much to eat,” Mbonu said. He also said giving should characterize the life of everyone and the more fortunate in society must endeavour to give back at all times. Children from all works of life were present at the funfair and they returned home with lots of gifts. The Igbo group in Catholic Mission Street were also present to celebrate with Mbaonu and his family. Speaking on the occasion, Boniface Obiako one of the elders of the group expressed his appreciation towards the unity of the group and the members of the entire Catholic Mission Street. Obiako, praised Mbonu with his initiative of reaching out to the less privileged and widows within and outside his vicinity.

Monday 30 December 2019

BUSINESS DAY

news FIRS 2019 revenue falls N3.7trn below target Cynthia Egboboh, Abuja

otal revenue of the Federal Inland Revenue Service (FIRS) for the 2019 fiscal year fell below target as a total of N5 trillion was generated as against its N8.8 trillion target for the year. Muhammad Nami, executive chairman, FIRS, in an internal memo expressed concern over the dwindling revenue performance, despite increase in the service workforce over the period as the shortfall of about N3.7 trillion represented over 40 percent of the total revenue projected. FIRS with a total revenue projection of N45.7 trillion between 2011 and 2019 generated about N40.5 trillion, recording a deficit of over N5.2 trillion within the period, despite an increase in staff numerical strength from 6,445 in 2011 to 9,448 in 2019. Nami encouraged staff to redouble effort towards achieving the FIRS target in 2020, noting that the service in 2012 surpassed its revenue target of N3.6 trillion when it generated N4.6 trillion without the active participation of consultants and with moderate inflation and exchange rate. “I want to be positive that

this impressive performance is achievable again, it should be pondered upon during the holiday so that you would resume refreshed and better prepared to serve,” Nami said. “It is observed that despite the rise in service workforce, the engagement of consultants, the rise in inflation and the exchange rates, the tax revenue collection continues to dwindle,” he said. The chairman urged the staff to take advantage of the current staff-friendly environment to redouble their effort to reverse the downward trend in revenue generation as well as ensure that the current target of N8.5 trillion was not only achieved but also doubled before the end of 2020. He, however, warned staff to desist from negotiating with taxpayers and siphoning tax revenues meant for the Federal Government. “No doubt the task is daunting but with dogged spirit, integrity, probity and accountability as well as resolve not to negotiate with taxpayers and pocket the revenue due to the Federal Government, the current challenges can be surmounted and our ambitious target achieved or surpassed,” he said. www.businessday.ng

Delta wades into SPDC, Ojobo community crisis Francis Sadhere, Warri

ormalcy has returned to Shell Petroleum Development Company’s (SPDC) Beniseide Flow station as Delta State Governor Ifeanyi Okowa has waded into the crisis betweenthecompanyandOjobo community in Burutu Local Government Area of the state. The governor met representatives of Shell and the community at Government House Annex, Warri, on Friday, and appealed to them to embrace peace in the interest of development. He commended both parties for agreeing to resolve the impasse that temporarily halted the company’s operations in the area. Represented by the commissioner for oil and gas, Emmanuel Angbaduba, assured that another meeting would hold among the stakeholders in January, 2020, for a Global Memorandum of Understanding (GMoU) on the issue. He also directed that while the process for the community inter-dependence electrification project was on, a generating plant to cater for the electricity needs of the community should be made available in the interim. The governor said, “My ad-

ministration is committed to providing enabling environment for companies to operate. We are, however, not comfortable with the rising cases of disagreement between oil firms and their host communities. “As a result, I am appealing that whenever there is a problem, stakeholders should come together, put the issues on the table and find a proper solution to them. “This administration is strongly concerned about the interest of all Deltans, so is the production of oil and gas that generates revenue for the government to deliver on our manifesto to Deltans.” He announced that SPDC had agreed to grant the demands of the community that ranged from building a workshop for training the youths in skills, electrification of Ojobo (Gas Turbine), sense of belonging, to release of GMoU funds, rejuvenation of abandoned projects and issues of social inclusion. According to him, work is expected to resume on Friday at the Beniseide flow station operated by SPDC, which was shut down eight days ago following the host community’s disagreement on a number of issues with their tenant.

https://www.facebook.com/businessdayng

Six dismissed staff were given fair hearing - NIMC James Kwen, Abuja

he National Identity Management Commission (NIMC) Sunday said it gave fair hearing to the six staff dismissed over extortion and other corrupt practices in the ongoing National Identity Number (NIN) enrolment exercise. Jamila Ahmad, NIMC head of media who made this clarification to BusinessDay, confirmed that the workers were sacked after they were found guilty of various charges of corruption by a Senior Staff Disciplinary Committee after long investigations. “There was disciplinary Committee and that is the outcome of the disciplinary Committee on the board recommendations after long investigations. There was fair hearing, they were given fair hearing. “They were invited to come and defend themselves. We were fair to them and that is what exactly happened,” Ahmad explained. The dismissed NIMC staff were among others, indicted for illegal and unauthorised printing of the NIN for individuals and several organisations. According to the NIMC Senior Staff Disciplinary Committee, the sacked staff who were @Businessdayng

serving in the Federal Capital Territory (FCT) and other states of the federation breached the security and integrity of the NIMC by their actions. In an internal memo dated December 12, 2019, addressed to all regional and state coordinators, cluster heads and Enrolment/Registration Centre supervisors, two officers in Lagos State, and an assistant manager in Kogi State, were also dismissed. The memo directed the supervisors and heads of units to “improve their supervisory roles” and constantly remind the members of staff under their stewardship” of the gravity of the punishment to be meted to any of the staff members involved in any form or shape of extortion.” The memo signed by Umar Abdulhamid, general manager, operations, the Commission lamented that the issue of extortion in the NIMC had put it in bad light and that its recurrence nationwide had become very disheartening, embarrassing and worrisome to the management. NIMC, however, warned that supervisors would be held responsible for the actions of their subordinates, especially when it concerns extortion or bribery.

Monday 30 November 2019

BUSINESS DAY

news Tourist arrival to Ghana surges near 10,000 weekly

mmigration officials at the sprawling Accra airport are running out of stamp to take in the surge of tourists as a wave of arrivals signals Ghana is doing many things right, once again. Hotel bookings in Accra are at unprecedented levels with rejection from overbooking now the norm. Among the latest arrivals is a man from Boston who is staring at the ocean and thinking: Maybe I’ll never go back. He’d come to Ghana for an adventure, he told friends, but his motivation ran deeper. Pierre Delva, 32, craved a fresh start without the question that had bothered him since childhood. “Is it because I’m black?” the used-car salesman said, reclining at a seaside bar in the nation’s capital, Accra. “You don’t have to wonder here.” What started as an anniversary promotion called the Year of Return – a governmentfunded call for the African diaspora to explore Ghana four centuries after the first slave ship reached Virginian soil – has enticed some Americans to stay for good. Delva moved to Accra in August to explore business

opportunities. Officials in this West African nation of roughly 29 million people say interest has overwhelmed the tourism office as the annual flood of visitors has more than doubled and A-list celebrities spark frenzies around the capital. By December, border agents were running out of visa stickers. Applications to enter Ghana shot up from about 1,000 per week to a staggering 10,000, said Akwasi Agyeman, chief executive of the Ghana Tourism Authority. Most visitors are American, he said. More surprising, he said, was the number of people who have decided to stay: 126 were granted citizenship this fall, including 46 Americans, in the country’s biggest naturalisation ceremony since 2016. “We could not have imagined this,” Agyeman said. The rush to Ghana, where millions of Africans were forced into servitude before the slave trade ended in 1870, intensified after tweets from President Trump. In July, Trump told four congresswomen – including Rep. Ilhan Omar (D-Minn.), a Somali refugee – to “go back” to

“the totally broken and crime infested places from which they came”, sparking outrage around the world. (All four are US citizens.) Omar responded Aug. 1 from the Cape Coast Castle in Ghana, where she posted photos with House Speaker Nancy Pelosi (D-Calif.) on an official visit this summer. “So grateful for the honour to return to Mother Africa,” Omar tweeted. The high-profile sparring amplified attention on Ghana, Agyeman said. Calls and emails surged. Hotel costs climbed. People spoke of booking a trip, he said, as a way to strike back at Trump’s words. Ghana’s quest to attract tourists began as a strategy to bolster the economy. It’s a mission countries across the continent share as leaders aim to harness historical sites, national parks and glittering shorelines. Consumer spending on tourism, hospitality and leisure in Africa is projected to hit $262 billion in the next decade, up from $124 billion in 2015, according to the Brookings Institution in Washington.

Lagos presents N250m seed cheque for tech start-ups JOSHUA BASSEY

s part of plans to make Lagos State a hub for innovation and technology, the state government weekend presented a seed fund of N250 million to Lagos State Science Research and Innovation Council (LASRIC). LASRICisaLagosStateinstitution in charge of research with the responsibility to boost innovation andtechnologyinthestate.Itpresently has a 16-man team headed by vice chancellor of University of Lagos, Toyin Ogundipe. Presenting the cheque at the State House, Governor Babajide Sanwo-Olu charged the committee to ensure that the criteria to accessthefundwereflexibleenough for Lagosians to benefit from. He said: “For us, it is to put action in what we believe in. When

you make pronouncements as a government, you must put them to action. I don’t want very stringent conditions that will not make people benefit from this fund. In the next six months, let us begin to see a litmus test that people have beensupportedthroughthisfund. “We can’t do it alone, ours is just a SEED fund. Some of you have access to international donors and partners that will want to see the level of our seriousness and commitment; I want us to put in serious effort so that others will be willing to support us. “We need innovative solutions. We can think global but we have to act local. Let us think about solutions that are peculiar to us as Lagosians and Nigerians and you will be amazed that we have great skills that lack people to bring them out.” Chairman of the team, Toyin

E-payment providers urged to embrace partnership, data analytics Hope Moses-Ashike

lectronic payment providers must embrace increased partnerships and utilisation of data analytics to sustain the triple digit growth recorded under the Payment System Vision 2020 (PSV). Payment experts made this submission while speaking at the 2019 retreat of the Committee of E-Business Industry Heads (CeBIH) held recently in Abeokuta, Ogun State. In a statement made available to BusinessDay, the experts who spoke at the retreat, themed, ‘Payment 2020 plus: The Next Frontiers of Payments,’ include Dele Adeyinka, chief digital officer, Polaris Bank; Niyi Ajao, deputy managing director, Nigeria Interbank Settlement System; Nkech Nwoka, CEO, Migo Technology Services; Kevin Chen, director, International Business, Eastcompeace China; Bola Asiru, principal, Mastercard Advisory Sub Sahara Africa; Wole Oyeniran, technology and transformation leader, Deloitte West Africa, and Olayinka Oni, chief digital officer, Sterling Bank. Special guests at the retreat include Kevin Chen, director, International Business, Eastcompeace China; Tokunbo Talabi, secretary to the Ogun State government, and Lekan Olude, SA to Ogun State governor on Youth Empowerment. Tokunbo Talabi, in his good-

will message, commended the huge progress recorded in the Nigerian payment landscape, but however noted the concomitant rising risk of cyber fraud, and hence called for collaboration to tackle cyber fraud, stressing that this was critical to ensuring that the gains recorded in the payment space was not eroded. Talabi also called for collaboration with government on key policies and initiatives to ensure payments were adopted in the lifestyles of the average Nigerian. In a presentation titled: “Review of the Evolution of the Payments in Nigeria between 2000 and 2019, Dele Adeyinka noted that the industry achieved a Compound Annual Growth Rate (CAGR) of 120 percent in value of e-payment transactions during the 19 years period, driven majorly by collaboration between the regulators and stakeholders in the payment. He however called the attention of the gathering to the rising prominence of data in driving payments. “Data plays a major role today, and moving forward, as we deliberate on the next frontiers of payment, we will know that data will play a major role. Also speaking on the rising prominence of data, Bola Asiru, principal, Mastercard Advisory, Sub Saharan Africa, said: “Anything that we see that is facilitating payment in the digital space, behind it there is

Ogundipe, noted that the institution would partner several nongovernmental organisations for the benefit of Lagos State. “Any country that is doing well, there is research backing it up. What we are doing today is to refocus concerning Lagos State. What we have done is around the T.H.E.M.E.S agenda that the governor has for Lagos State for the pronouncement to be very clear. We are going to make sure that we promote STEM in primary and secondary school level for a start. “We want to get the database of all researchers in Lagos, not only in higher institutions but in companies and other organisations in Lagos. We are going to have a multi-disciplinary research collaboration between the institution and the companies and it will attend to the needs of Lagos State,” Ogundipe said.

Air Peace clears air on publication indicting FG on multiple designations granted foreign carriers Ifeoma Okeke

ir Peace on Sunday said its attention had been drawn to some publications within the past couple of days, stating that Oluwatoyin Olajide, its chief operating officer (COO), said the government should stop granting multiple designations to foreign carriers. These publications also stated its COO berated the government for continuously imposing multiple taxes and charges on the aviation operators. The airline in a statement stated categorically that the interview was not a recent one. According to the airline, Olajide granted this interview about multiple designations almost two years ago. “Hadi Sirika, the minister of aviation, on assumption of of-

fice as the substantive Minister of Aviation, swung into action geared towards addressing all these complaints to the satisfaction of all the airlines in the overall interest of the nation. He called several meetings with the airlines’ Chief Executives in order to find a lasting solution to the issues. “Air Peace has since then praised the Federal Government’s efforts in addressing these issues. How could Air Peace be complaining about issues the airline has since commended the Federal Government for handling to the satisfaction of the industry? “We have, as an airline, in recent times, come under deliberate attacks from quarters that could no longer disguise their ugly intentions for an entity that is catering for over three thouwww.businessday.ng

sand workers, an entity that is moving the Nigerian economy positively. “We see the publications as an attempt by some mischiefmakers to put Air Peace at loggerheads with the government. “The news platforms releasing these publications are giving the impression that Air Peace as an airline does not appreciate the efforts of government,” the airline stated. The airline further explained that recently, Air Peace received a notice from the Civil Aviation Authority of one of the West Coast countries it fly into, stopping them from operating into and out of points beyond their country. It stated that their reason was simply, the Federal Government of Nigeria had refused to grant a similar request to their Airline. https://www.facebook.com/businessdayng

@Businessdayng

some level of data.” Asiru, who spoke on, “Using Data and Analytics to unlock sustainable growth in payments,” advised banks and other stakeholders to follow the rising trend of partnerships between banks and Fintechs in the global payment space, and collaborate with the upcoming Payments Services Banks (PSB). While highlighting the global trend in collaboration between banks and Fintechs, Asiru said: “Another reason why global financial institutions do this kind of deals is because they don’t have the data about a particular geography.” This, he stressed, also applies between banks and telcos in Nigeria, saying, “There is plenty of space for everyone, because the legislation today does not permit them (PSB) to give credit. But what the telcos know a bit more that the banks, is that they know the customers more than the banks do. “Banks should work with the PSBs. Let them share their data. Let the banks take on some of the risks. Lend and share some of the interest that comes out of the loan.” On his part, Ekechi Nwokah, CEO of Migo Technology Services, cited the Migo platform as an example of the collaboration needed to enhance further growth in the payment space. “We are interested in partnering with everyone to drive the business of credit and lending,” he said.

Monday 30 December 2019

BUSINESS DAY

www.businessday.ng

https://www.facebook.com/businessdayng

@Businessdayng

Monday 30 December 2019

BUSINESS DAY

www.businessday.ng

https://www.facebook.com/businessdayng

@Businessdayng

Monday 30 December 2019

BUSINESS DAY

www.businessday.ng

https://www.facebook.com/businessdayng

@Businessdayng

BD Money

Monday 30 December 2019

BUSINESS DAY

COVER

PERSONAL FINANCE

Here’s what you need to know about cold room business

4 Things to buy-or avoid-in January

The art of “cheapism” is one to master in the New Year if you plan to save Cold room business is fast becoming a popular side hustle in Nigeria. There is as much as possible by buying things when they are cheapest. hardly any household today in the country that does not feed on frozen foods such as yoghurt, ice cream, ice block, soya milk, frozen fish or poultry products.

Page 50 www.businessday.ng

https://www.facebook.com/businessdayng

Page 51 @Businessdayng

Monday 30 December 2019

BUSINESS DAY

Monday 30 December 2019

BUSINESS DAY

Cover Story

Personal Finance

Here’s what you need to know about cold room business 4 Things to buy-or avoid-in January OLUFIKAYO OWOEYE

old room business is fast becoming a popular side hustle in Nigeria. There is hardly any household today in the country that does not feed on frozen foods such as yoghurt, ice cream, ice block, soya milk, frozen fish or poultry products. Many business-minded individuals are now taking advantage of this huge demand to start cold room businesses in order to make quick money. Esther Obiajulu owns a fairly large cold room business in Surulere and has been in the business for about 5 years now. According to her, cold room facility is a booming business provided one gets the space and facilities. How to start a cold room business Decide your scale: The first step is deciding whether to start on a small scale or on a large scale and this largely depends on the capital available to kick-start the business. The small-scale cold room business would only entail selling to immediate customers. For people who want to engage in small-scale cold room business, all you need is a good shop, refrigerators or a mini-cold room, constant power supply and of course, access to a cheap supply of products. Location: The success of your business depends largely on the location of the cold room. According to Obiajulu, cold room must be located in a busy environment— most preferably close to a market. “Once the cold room is strategically located, definitely people will patronize you, the place must be spacious and well ventilated in order to guarantee the adequate preservation of your products,” she said. Registration: An important step for any serious operator (large scale) of a cold room is to register with the regulatory agency, the National Agency for Food Drugs Administration and Control (NAFDAC). Officials from NAFDAC will visit the premises and give a pass mark on the hygiene of the environment since you will be storing consumable goods. It is therefore advisable to get the necessary

government license and get your premises registered. Access to products: If you plan to deal in chicken, turkey, meat, and fish, you can set up a farm where you can raise livestock birds or get supplies from owners of big poultry farms, then process and package the goods by yourself before selling. You can make more profit with these arrangements. Equipment needed to operate a cold room

A cooling van for transportation of perishable goods Generating set There are cold rooms of different capacities (3tons to 500tons) available in the market. They are either imported or

locally built in Nigeria. The imported cold rooms are very expensive, but the locally fabricated cold rooms are affordable and cheap to maintain; this will reduce the capital needed. Because of the peculiarity of this business, an operator must ensure constant power supply to prevent the products from damage. And to ensure steady power supply, you need a standby generator as an alternative to the public power supply; this is to ensure the continuous functioning of your cold room. Also, to get new customers, retain old ones and possibly gain an advantage over existing competitors, you will need to purchase one or two cooling vans to aid fast delivery of frozen foods to various destinations without them getting worse. Other tools include · Cutting knives · Packaging supplies · Measuring scales, tables. · Polythene bags or cartons. · Bowls and safety equipment. Also, hire some hands to manage the cold room business to ensure a high profit. You will need services of a manager, sales boys, loaders, driver, and security men. Likely Challenges The biggest challenge faced in the business is the shortage of electricity. This is why getting a standard generator that can carry the cold room is mandatory and this will always gulp very high voltage. Another one is transportation because the goods can be on the way for days, even weeks and there might be an accident or break down of the vehicle along the way.

@Businessdayng

models of some brands are released and the advantage of purchasing at that period and older models of those brands sell at significantly lower price. At this point the question on your mind would be if you have to wait a year to buy electronic gadgets. That answer depends on you. Christmas decorations

If you are big on Christmas and love buying decorations then January is the perfect time to buy such items. This is because retailers would be looking to restock in January and the Christmas items that were not sold during the holidays would need to be removed to make room for other items in vogue. You can be sure to get a good bargain if

you approached a retailer for their remaining Christmas decorations after December 25. You should also expect to be greeted by puzzled faces. Clothes After an end-of-the year frenzy, January tends to be a slower month for selling clothes. Retailers might want to sell-off holidays wears to stock newer ones ahead of the valentines celebration and this presents a good time to buy some nice wears at significant discounts. Cars Buying cars at the beginning of the year can be a good deal because it is not the usual time to buy a car. At the beginning of the year most people are broke or trying to recover from a December spending-spree. Moreso, the biggest expenses are usually incurred in Januaryrent and school fees for example. It is not unusual to find people trying to raise extra cash by selling their automobiles in January while cars sellers also make room for new makes around mid-year. Typically, this presents an opportunity to buy at attractive rate from anyone selling a car especially fairly used.

January has 40 days. Here’s how you can stretch your salary till PayDay SEGUN ADAMS

· One or two deep freezers: · A stabilizer. · A generating set For those that want to start on a large scale: Buying or constructing a cold room— Currently, prices of cold rooms vary with the number of features such as cold room dimension, the thickness of polystyrene body panels, roof panels, floor panels and door type sliding or hinged door. https://www.facebook.com/businessdayng

he art of “cheapism” is one to master in the New Year if you plan to save as much as possible by buying things when they are cheapest. This is however easier said than done for two reasons; the first is that it might require making purchases way ahead of need, and this might affect current budget and become counterproductive if not well managed. The second is that if you are very much concerned about staying in vogue or keeping up with the latest, it might be difficult because you might have to make some purchases during off-seasons. Whichever way if you like cheap, here are some items you should and shouldn’t buy in January-unless necessary. Electronic gadgets: The best time to buy your next smartphone, Television or Laptops is when there are massive discounts on them and this usually occurs around November and December during Black Friday sales. Asides the traditional end-of-year sale, this coincides with the period new phone

joke about spending cautiously in December to avoid tagging one’s friends as “fake” when one unsuccessfully attempts borrowing from them in January trended on the socialsharing app, Twitter, some days ago. The reality is some people would like and share the post but would not heed that advice. January is one of the months people accumulate most of the debt they struggle to pay throughout the year. The reason is not far-fetched: after the December celebrations come the January bills (school fees, rents etc.). Considering the fact many companies pay the December salary ahead of the Christmas holiday, around 23rd typically, the employees (especially those without the 13th-month salary) have to work out a way to make their paycheck last nine days of December and 31 days of January. Create a budget: Making a checklist of

For a small-scale cold room business, the main pieces of equipment are:

www.businessday.ng

SEGUN ADAMS

things you want to buy during the festive period and expenditure in January is a useful way of controlling spending. Your budget should follow the 50:30:20 rules which advise you to spend half your income on necessities or needs, 30 percent on wants and invest the 20 percent. Itemize all the major expenditures in January like rent and school fees-both of which prudence requires you should have

www.businessday.ng

saved the major chunk up to January. It is advisable to set aside a part of your wants for any emergency to avoid asking friends for a loan in January. If you had transitionary income in December, keep them in the emergency fund. Leverage December Gifts: In Nigeria, it is not unusual to receive gifts like food items and cash whether it is from your employee, family or friend. While it is tempting to

https://www.facebook.com/businessdayng

throw “parte-after-parte”, wisdom requires many the most of such gifts so that you can allocate your funds to other things. Give smartly: The festive season is a time to share and giving of gifts shows love and care towards family, spouse, girlfriends and boyfriend, less privileged etc. Since resources to meeting needs and wants are limited, you may need to prioritise the beneficiaries of your gifts. Yes. You do not have to buy gifts for everyone on your street and in many cases all your loved ones want is just a token to show you care, not show expensive item. If you can afford to and if necessary buy whatever you want for your loved ones otherwise you can take the opportunity to unleash your inner creative self, wrapping gifts yourself or creating hand-made cards. Consider selling unused items and gifts: You can also make money selling off any unused item in December instead of keeping them especially if they are items you won’t need. An example might be a pair of shoes that don’t fit or an item you already have that was given as a gift.

@Businessdayng

Monday 30 December 2019

BUSINESS DAY

Market Wrap-up

quities market sustained its lacklustre performance this week, amidst continued risk-off sentiments and the absence of posi-

tive market catalysts. With losses recorded in two of the three trading sessions in the shortened week due to festive season, the All-share index shed

-0.41% to settle the MtD and YtD losses at -2.17% and 15.95%, respectively. On Sectoral performances, the Banking (-0.26%) and Indus-

trial Goods (-0.31%) recorded declines, following selloffs of GUARANTY (-2.0%) and CCNN (-3.0%) stocks. Conversely, Consumer Goods

(+1.3%), Insurance (+1.0%), and Oil & Gas (- 0.7%) edged higher, driven by gains in NESTLE (+10.0%), NEM (+2.2%) and OANDO (+6.76%)

Chart of the week

Week Ahead

Equities market Week Ahead (Monday, 8th April – Friday, 12th April, 2019)

Does NSE’s biggest daily gain in six weeks suggest late Santa-rally at hand?

Analyst see the level of activity in the equities market and volatility being sustained over the final days of the year, with some pockets of gains expected, as fund and portfolio managers realign portfolios prior to the start of 2020. Money market In the coming week, maturities worth a combined NGN405.89 billion – OMO (NGN331.05billion) and PMA maturities (NGN74.83 billion) are expected during the week. Given that, we expect the OVN rate to settle lower. Treasury Bills Activities seem to be winding down for the year in the fixed income market, as the market continues to trade on a quiet note with reduced volumes. Yields at the Treasury bills secondary market pared by 22bps to settle the week at 5.59percent. Elsewhere, activities in the OMO market were bearish as the average yield rose by 19bps to settle at 13.3percent We expect trading volumes to start to taper in the NTB market, as the average yield trends sit in the single-digit terrain. However, the average OMO yield is expected to remain around the same level, with a slight increase in the coming week. Bond market Bonds were actively traded, as local investors still on the hunt for double-digit yield. Consequently, yields trended lowered by 20bps to 10.pts. The average yield declined across all trading instruments in the week, with the largest decline recorded on the 15-JUL2021instrument (-96bps to 8.2%). The continued restrictions on trading in the Treasury bills will continue to drive volumes in the Treasury bonds market. Consequently, we expect the average yield in the market to settle in the single-digit territory by 2019YE.

www.businessday.ng

The stock market closed the week on a positive note as the main equity gauge rose 1.25 percent, the highest in a day since a 1.84 percent increase in mid-November. NEM Insurance gained 10 percent to lead the advancers while Nestle (+10%), and UACNProperty Development Company (+9.52%). On the other hand, May & Baker (-9.81%), Wema Bank (-7.25%) and Guinness (-6.24%) were the biggest losers for the day.

https://www.facebook.com/businessdayng

@Businessdayng

Monday 30 December 2019

BUSINESS DAY

FINANCIAL TIMES

World Business Newspaper LAURA HUGHES

he UK government should carry out an “urgent” internal inquiry after accidentally publishing the addresses of more than a thousand New Year honours recipients, Britain’s first national security adviser has said. Peter Ricketts, a former UK national security adviser, called for the leak to be treated “seriously” and warned it should not be “about scapegoating an individual”. Personal addresses were made available online to the public from 11pm on Friday, before the information was removed from a government website about an hour later. The 1,097-strong list of those honoured includes counterterror police, as well as senior diplomatic and military figures. “It needs to be treated seriously with a proper internal investigation and some very clear assurance now that whatever the problem was has been fixed and won’t happen again”, Sir Peter told the Financial Times. “I think that’s now urgent. “For me it’s not about scapegoating an individual necessarily and for heads to roll. It’s not a blame game, it’s understanding why the system went wrong on something as big and sensitive as this.” The Cabinet Office apologised and said the department had referred itself to the Information Commissioner’s Office, which has the power to investigate and fine individual organisations. “A version of the New Year honours 2020 list was published in error which contained recipients’ addresses,” it said.

Calls for government inquiry grow after leak of UK honours list Embarrassing data breach includes addresses of military and security personnel

Elton John (left), Sharon White (centre) and Iain Duncan Smith were among the list of 1,097 New Year honours recipients whose addresses were published online © FT Montage/Rosie Hallam./Getty

“The information was removed as soon as possible. We apologise to all those affected and are looking into how this happened. We have reported the matter to the ICO and are contacting all those affected directly.” The ICO confirmed that it would be making inquiries in response to reports of a data breach involving the Cabinet Office and the New Year honours list. Bob Kerslake, former head of the civil service, told the BBC: “At the

Would-be banks fail to get off ground in 2019 Only two new lenders gained licences and neither have taken deposits NICHOLAS MEGAW

hen CivilisedBank announced it had gained a licence in 2017, the small business lender appeared to be the latest in a wave of start-ups attempting to disrupt the UK banking market. More than two years later, however, it has turned out to be part of a less positive trend — a spike in delays for authorising new lenders and a steep drop in the number of bank launches. Only two new banks gained licences in 2019, and neither of them have started taking customer deposits. CivilisedBank — now renamed Allica — was one of them, having had to hand back its original licence last year because its IT systems were not ready in time to meet Bank of England requirements. Several other would-be banks had been expecting to open their doors this year but all ran into delays, including Zopa, an early peer-to-peer lender, Distribution Finance Capital, Recognise Financial Services, and LQID. Some of the delays were caused by idiosyncratic issues — DF Capital’s application process was extended last month when its chief executive left after an “investigation into his personal conduct”. But the company was already months behind its original target. Recent applicants and others familiar with the application process said the trend was partly owing to increasing scrutiny and stretched resources, as regulators juggle com-

peting priorities such as Brexit and supervision of bigger companies. While people close to the Bank of England stressed it had not changed any of its standards for new lenders, three applicants said they felt increased pressure to demonstrate the safety of their businesses in light of recent warnings about challenger banks’ risk modelling and questions over the sustainability of their business models. “We have the same set of requirements, but we do think the regulators are putting slightly more emphasis around making sure these new entrants are resilient than a few years ago when there were no challenger banks and there was a lack of competition,” said one person briefed on the process. Regulators were keen to encourage new lenders in the aftermath of the financial crisis to increase competition in the UK’s retail and business banking markets, which are dominated by a few large lenders. However, the BoE’s Prudential Regulation Authority, which supervises large banks and insurers, warned this year that many challenger banks were cutting corners in their pursuit of growth. Rich Wagner, chief executive of Cashplus, a 14 year-old fintech that is aiming to secure a banking licence next year, said: “Of course we would like to get our licence as quickly as possible because we’re excited about the opportunities it opens up, but we appreciate how important it is for the PRA and the FCA to protect customers and ensure the safety of the financial system.” www.businessday.ng

point when people are most happy about having received the honour and most proud, to have the information released like this is really bad news. “So I can see why they [those honoured] might be very concerned. “But even if individuals don’t take it forward the information commissioner has to investigate it and we know that in other instances where there’s been significant data breaches the potential fines are very large indeed.”

Jon Trickett, the shadow Cabinet Office minister, described the data leak and “level of incompetence” demonstrated by the government as “unacceptable”. He said: “If the government can’t get sensitive details right then how can it possibly expect us to believe that it can sort out the big issues facing the country.” Sharon White, the former chief executive of media regulator Ofcom,

Graham Wylie, co-founder of software company Sage, and Ross McEwan, the former head of the Royal Bank of Scotland, are among several business leaders included on the list. Ms White, also a former senior Treasury official who is due to take over as chair of retailer John Lewis early next year, is made a dame, while Mr Wylie, who now runs his own charitable foundation for young people in the northeast of England, becomes a knight for services to business and charity. Most prominent among politicians being honoured is Iain Duncan Smith, former Conservative party leader and leading Eurosceptic, who becomes a knight. Mr Duncan Smith told the Sunday Times newspaper the leak was a “complete disaster” and that while his own personal details were already public knowledge, “it’s much more concerning for private citizens, like those who have been involved in policing or counter-terrorism or other such sensitive cases, to have their addresses published”. He said: “Ministers need to be asking some very serious questions of those involved about how this was allowed to happen and why no final checks were carried out before the document was published.”

Goldman and JPMorgan tweak repo operations to limit Basel impact

Banks crucial to short-term lending market find fresh ways to trade it JOE RENNISON AND LAURA NOONAN

oldman Sachs and JPMorgan have found ways to keep trading in the $1.2tn US repo market while limiting regulatory burdens, potentially easing a cash crunch at the turn of the year. Both banks are key players in the repo market, exchanging cash for high-quality collateral like US government debt — a vital financing tool that hit trouble amid a squeeze on funding a couple of months ago, which sent borrowing rates sharply higher. Some analysts are braced for further turmoil in coming days, as lenders have tended to rein in repo activities around year-ends. That is when global regulators take snapshots of banks’ balance sheets to assess whether they have enough capital to keep trading through a big hit to the financial system. However, in recent months Goldman has begun to mimic repo trading using derivatives known as total return swaps that carry lower capital requirements than regular repo trades, according to people familiar with the bank’s shift. JPMorgan, meanwhile, has been encouraging its clients to use so-called “sponsored repo” deals, where a clearing house sits in between trades and allows dealers to net transactions off against each other, according to

https://www.facebook.com/businessdayng

people with direct knowledge of the bank’s strategy. Analysts said that the efforts of both banks, while designed to minimise their own capital requirements, should have the effect of alleviating cash pressures in the market. Both banks have “taken steps to be ahead of the game at year-end,” said Jeff Drobny, chief executive officer of Garda Capital Partners, a hedge fund manager. “It’s sensible.” The New York Federal Reserve has been injecting money into the repo market for about three months, in an attempt to prevent interest rates moving outside the central bank’s target range. This month the Fed announced plans to inject almost half a trillion dollars into the market over the end of the year to keep markets ticking over. Goldman and JPMorgan declined to comment. Each bank trades almost $200bn in the repo market each day, according to data from the Federal Reserve. Both banks were on course to cross into a higher bracket, giving them a higher capital surcharge, when scores were last published at the end of the third quarter. The banks — which are both “globally systemically important banks” or GSIBs, in the eyes of the Basel Committee on Banking Supervision — have until the end of the year to reduce capital-intensive trading activity if they are to avoid such a penalty. @Businessdayng

Goldman’s new strategy centres on reducing secured financing like repo for non-US clients, such as hedge funds domiciled abroad, said the people. Such operations attract heavy capital charges under Basel’s capital rules. Total return swaps offer a way for hedge funds to replicate highly leveraged Treasury investments away from the repo market. The returns tied to a Treasury are created synthetically without owning the security, allowing funds to increase potential profits without borrowing more cash via repos. JPMorgan’s shift achieves a similar goal. Typically, the bank would source cash through the repo market from investors such as money market funds, and then lend this out to other clients such as hedge funds. Through sponsored repo, the bank’s capital costs are reduced because the bank faces the Fixed Income Clearing Corporation on both sides. Another benefit is that the FICC is classed as a domestic counterparty under the GSIB rules, so trades with non-US investors can receive more favourable capital treatment. “We believe sponsored repo cannibalises less efficient forms of repo, ultimately freeing up capital and creating more capacity for banks to provide liquidity to the fixed-income markets,” JPMorgan analysts wrote in a research report earlier this year.

Monday 30 December 2019

BUSINESS DAY

NATIONAL NEWS

Car bomb kills dozens in Somali capital Turkey sends medical staff after attack targets busy checkpoint in Mogadishu TOM WILSON

car bomb explosion in Somalia’s capital, Mogadishu, has left dozens of people dead in the latest terror attack to rock the war-torn east Africa country. The blast at a checkpoint in the city ripped through lines of people and vehicles on a busy Saturday morning. Images shared by Aamin Ambulance, an independent emergency organisation based in the capital, showed black smoke billowing from the site and debris scattered on the ground. The government has not confirmed an official death toll but Aamin Ambulance’s founder, Abdulkadir Adan, said that as many as 76 people had been killed and a further 70 injured. That would make the attack the deadliest incident in the country since twin truck bombings killed almost 600 people in Mogadishu in 2017. In the hours following the attack Turkey dispatched a plane carrying medical staff to Somalia, and many of those injured are being treated at a Turkish-built hospital in Mogadishu. Turkey, a big donor to Somalia since 2011, has become a key partner for the struggling government in Mogadishu. Turkey is funding several infrastructure projects in the country and opened a military base in the capital in 2017 to train Somali soldiers. Turkey’s foreign ministry confirmed that two Turkish nationals had been killed. Mohamed Abdullahi Mohamed, Somalia’s president, called the attack a “heinous act of terror.” “This dark day has robbed

our nation of dozens of innocent lives,” he said in a televised statement. Mr Adan, whose team from Aamin Ambulance were on the ground immediately after the attack, said the explosion occurred at a checkpoint on the way into the capital where dozens of vehicles and crowds of people had gathered. “Today was a very, very tragic day, and a very sad day for us,” he said. Mr Adan added that Mogadishu’s hospitals and emergency services were not equipped to deal with the scale of the attack and said the number of dead was likely to rise given the severity of some of the injuries. Abdirizak Mohamed, a member of parliament, said the death toll might be even higher, with more than 90 dead, including 17 Somali police officers, 73 civilians and four foreign nationals. These figures have not yet been independently verified. Police officials could not be reached for comment. No group has claimed responsibility for Saturday’s bombing. Previous attacks — such as the 2017 bombings — have been blamed on the al-Qaeda-linked Islamist group al Shabab. Al Shabab has staged similar bombings across the country for the past decade as part of an insurgency to topple the internationally backed government in Mogadishu. The militant group once controlled vast swaths of the country, including parts of the capital. In recent years, al Shabab has been pushed back by Somali government forces-backed African Union troops, but has never been fully defeated.

US bank lending plateaus as businesses hold back With trade concerns crimping investment, commercial loan growth stalled in second half ROBERT ARMSTRONG

S banks’ portfolios of business loans all but stopped growing in the second half of 2019, as an industrial slowdown crimped loan demand and larger businesses took advantage of cheap financing available in the capital markets. While commercial and industrial loans held by US banks had grown 1.6 per cent by mid-December, to $2.4tn, all of that growth occurred in the first half of the year, and most of that at midsized and small banks, according to Federal Reserve data. The pattern is still more pronounced in commercial real estate lending, with some growth persisting on smaller bank balance sheets, while the amount of CRE loans held at the largest banks has begun to decline. In many cases, CRE loans are regarded as business loans by another name, as businesses borrow against their real estate to finance investments or operations. Analysts say this year’s decline in growth reflects the slowdown in the US industrial economy. In November, the Institute for Supply Management’s survey showed contracting US manufacturing activity for the fourth straight month. For much of the latter half of the year the trade dispute between the US and China has weighed on business sentiment. Jennifer Piepszak, JPMorgan Chase’s chief financial officer, said confidence among chief executives had improved since the summer but uncertainty remained. “Trade would, of course, top the list there, but the elections in the US will contribute to

an uncertain environment in 2020,” she said at a conference this month. A graphic with no description There have also been low overall levels of capital investment. In the fourth quarter, capital expenditure by S&P 500 companies is set to rise by just over 1 per cent, according to Refinitiv. That compares to growth of over 12 per cent a year before, when tax incentives helped boost spending. Capex is the key driver of big bank lending, and “we’re just not seeing that big capex coming through”, said Brian Klock, bank analyst at Keefe, Bruyette & Woods. There has been minimal growth at the 25 largest US banks by assets yearto-date. Brian Foran of Autonomous Research attributed the growth differential between large and small banks to the effect of the trade tensions, saying that “tariffs weigh much more heavily on big companies”, which bank with larger institutions. Banks may also be losing some lending opportunities with larger companies to the junk bond market, where borrowing costs have fallen. US junk bond issuance is up almost 60 per cent in 2019 versus 2018, to $263bn, according to Dealogic. But even smaller banks, whose clients are less likely to turn to the bond markets, are seeing a slowdown in loan demand. Speaking at an industry conference this month, executives from Comerica, a midsized bank specialising in business lending, said it was seeing a slowdown in middle-market lending in the fourth quarter, offset by better results in commercial real estate and mortgages.

Graft and mismanagement claims taint Nigeria oil clean-up Drinking water and land remain polluted as Shell-backed initiative stalls NEIL MUNSHI

t the public well in Ogale, locals say the water still stinks of benzene eight years after the UN recommended emergency measures to remove the carcinogen after decades of oil production in the Niger Delta. But they still gather each day to collect it for washing, cooking and drinking. “Are we satisfied? No, we are not,” says HRH Godwin Bebe Okpabi, the king of Ogale, a community in the heart of the delta. “We are the victims and we will be satisfied only when we get clean drinking water and our community is remediated.” The decades-overdue clean-up of Ogoniland, after years of oil spills from the pipelines that criss-cross the region, is finally under way. But the billion-dollar project — funded by Nigeria’s national oil company and Royal Dutch Shell — is mired in allegations of corruption and mismanagement. “We are not pleased with what is going on,” said Mike Karikpo, an attorney with Friends of the Earth International and a member of the Ogoniland team that negotiated the creation of the Hydrocarbon Pollution Remediation Project (Hyprep), the government body running the clean-up. Activists across the Niger Delta had hoped Ogoniland could be used as a model for even more polluted areas. But so far, it reads more like a cautionary tale. Nigeria is Africa’s biggest oil producer, pumping out about 1.8m barrels per day. It provides roughly 90 per cent of the country’s foreign exchange and more than half of government revenues. The clean-up began only this summer, about a year after the first of an expected five tranches of $180m in funding was released to Hyprep. Mr Karikpo complains of a lack of transparency, alleging that planning, budgeting and awarding of contracts took place behind closed doors. Work started at the height of the rainy season, washing away much of the progress as contaminated soil collected for treatment was swept back into the

environment. Now the government has floated the idea of resuming oil production in Ogoniland for the first time in decades even as crude continues to leak from the pipelines. “There’s no transparency — communities don’t feel they can understand or trust the process,” Mr Karikpo said. “People think it’s a scam.” Local people’s lack of faith is rooted in decades of mistrust in the authorities. In the 1990s, writer and activist Ken Saro-Wiwa’s Movement for the Survival of the Ogoni People (Mosop) led nonviolent protests seeking justice for the Ogoni over the severe environmental degradation in their homeland caused by oil extraction. The government responded with a brutal crackdown and in 1994 executed Mr Saro-Wiwa and eight others. Little has changed since. Ogoniland, like the broader Niger Delta, has become more polluted and development has stalled, with little to show for the billions of dollars in crude that has been extracted. Critics have now accused Hyprep of being, like much of Nigeria’s oil sector, a vehicle for political patronage and graft. This year 16 companies were awarded contracts for the first phase of the clean-up, which — to the consternation of critics — focuses on the least contaminated parts of Ogoniland. An investigation by the news site Premium Times found that almost all the companies were set up for other purposes, including poultry farming, car sales and construction, and had no experience of tackling oil pollution. A graphic with no description Meanwhile, insiders have questioned Hyprep’s capacity to handle such a massive project. Wale Edun, chairman of Hyprep’s board of trustees and a former investment banker, said the organisation was moving so slowly that the board had only been able to disburse less than a quarter of the $180m available for the first year. “It’s very disappointing,” he said. “The hope is that from a slow start momentum will build up . . . because

if there’s no hope of that, then the poor Ogoni people will have no hope of their land being cleaned, of their water . . . and their livelihoods being restored.” Shell and Hyprep have rejected the criticism. The clean-up is being funded by the Shell Petroleum Development Company JV, a joint venture operated by Shell in which the Nigerian National Petroleum Corporation, whose pipeline has been blamed for the Ogale water contamination, has a 55 per cent stake, with Shell owning 30 per cent and Total and Agip the remainder. In a statement, Shell said the clean-up process was “being led by the federal government” through Hyprep, on whose board of trustees and governing council the company sits. “The contracting processes through which these awards were made are robust and all the contractors went through a diligent technical and commercial scrutiny before award was given,” Shell said. The company, which closed its Ogoniland operations in 1993, said it accepted responsibility “for spills arising from its operations”, but that some of the blame for the pollution must go to thieves who illegally tapped into pipelines and makeshift refining operations in the Delta’s creeks. Sampson Ebimaro, Hyprep’s head of monitoring and evaluation, acknowledged that things had moved slowly since the clean-up effort was relaunched in late 2016. “I wouldn’t say the performance has been robust,” he said. “Earlier we had challenges of insecurity and rain, but as soon as dry weather comes in we hope to move very fast.” Ledum Mitee, a friend of Mr Saro-Wiwa who took over Mosop after his death and whose hometown of K-Dere is one of the most polluted in the region, said he had concerns going back to the original UN report in 2011, which he said was not sufficiently critical of Shell or its legal liability. “I didn’t see a will to do a thorough job then and I don’t see it now,” he said. “So much of it is politics and hype, [rather] than changing people’s lives on the ground.”

Monday 30 December 2019

BUSINESS DAY

FINANCIAL TIMES

COMPANIES & MARKETS

@ FINANCIAL TIMES LIMITED

Warren Buffett on why companies cannot be moral arbiters Sage of Omaha says it is wrong for business to impose views on society

ROBERT ARMSTRONG

erkshire Hathaway has poured about $30bn into wind turbines and infrastructure in Iowa through one of the many businesses it owns. The goal is to turn the state into “the wind capital of the world, the Saudi Arabia of wind”. Another kind of capitalist would go on to say that moving from fossil fuel to renewable energy reflected the responsibility of his companies to society, a matter of “doing well by doing good”. Such is the current corporate consensus, expressed — sincerely or not — in annual reports and advertisements by companies across the globe. But Berkshire’s Warren Buffett is having none of it. He was investing in wind only because the government paid him to do so: “We wouldn’t do [it] without the production tax credit we get.” The so-called Sage of Omaha went further. It was wrong, he said during an interview with the Financial Times earlier this year, for companies to impose their views of “doing good” on society. What made them think they knew better? “It’s very hard to do. If you give me the 20 largest companies, I don’t know which of the 20 behaves the best, really. I’ve been a director of 20 publicly owned [companies] and I think it’s very hard to evaluate what they’re doing . . . it’s very, very

hard. I like to eat candy. Is candy good for me or not? I don’t know.” And even if Berkshire’s management did know what was right for the world, it would be wrong to invest on that basis because they were just the agents for the company’s shareholders. “This is the shareholders’ money,” he said. At Berkshire, charitable contributions are ruled out on principle. “Many corporate managers deplore governmental allocation of the taxpayer’s dollar, but embrace enthusiastically their own allocation of the shareholder’s dollar,” he noted wryly. Line chart of Berkshire Hathaway’s cash and cash equivalent ($bn) showing Warren Buffett’s cash pile It is a remarkable comment on the current moment that Mr Buffett’s expressed view of the company makes him exceptional. The University of Chicago economist Milton Friedman wrote 50 years ago that “the social responsibility of business is to increase its profits”. Until recently, that view was gospel, from business schools to boardrooms. After his success in creating immense wealth for Berkshire Hathaway, Mr Buffett’s greatest achievement may be the creation of an unassailable public image as capitalism’s kindly grandpa. This gives him room to say what others dare only think. But Mr Buffett is not entirely alone.

Monzo looks to raise up to £100m in new funding Deal could precede another major investment round next year TABBY KINDER

K digital bank Monzo is weeks away from raising fresh funds of between £50m and £100m in a deal that could precede another major investment round next year. Monzo has been in talks with existing and new investors since it received £113m in equity capital in June, according to a person close to the company. They said the upcoming deal, which is expected to complete early next year, was an “extension” of the fundraising round six months ago. Monzo could hold its “Series G” fundraising round in 2020, the person said. The upcoming deal was first reported by the Mail on Sunday. The app-based bank, which launched in 2015, doubled its valuation to just over £2bn this year. The June investment was led by Y Combinator Continuity, part of the eponymous Silicon Valley start-up accelerator that helped to launch Dropbox and Airbnb, and Monzo’s existing backers including Accel, Orange and Stripe. Monzo has expanded rapidly since it was founded by British entrepreneur Tom Blomfield, attracting more than 3m customers and 55,000 sign-ups a week. The company said in September that almost £50,000 was spent via

its platform every minute and £18bn had so far been spent by Monzo users. The company made a pre-tax loss of £50.7m in the 12 months to February 2019, according to its annual report, larger than the £33m loss it recorded in 2018. Mr Blomfield, who is chief executive, told the Financial Times in June that losses would continue to mount at Monzo during the year as it embarked on an advertising campaign to sustain growth in customer numbers. But he added that he had “enormous confidence” about the digital lender’s prospects, pointing to its rapid customer growth and rising revenues. Digital banks such as Monzo and rivals like Starling and Revolut have been effective at attracting users by offering perks such as cheap foreign exchange transactions, but have had a harder time convincing customers to make the leap to using them for their main bank account. Monzo’s latest annual report said the proportion of customers depositing salaries reached 30 per cent by the end of February, up from 12 per cent a year earlier. Revolut, which has almost 8m customers, announced global expansion plans in October. It has hired bankers to raise £1.2bn that could value it at $10bn. www.businessday.ng

Mark Payton: ‘Retail investors are not looked after and we try to do that, so we feel very bad’ © www.markwilliamsonphotography.com

Mercia contrite over small investors left out of £30m fundraising

Group needed money to buy two VCTs and allow Invesco and Woodford fund to cash out ANDY BOUNDS

ntil recently, having stockpicker Neil Woodford and fund manager Invesco as your biggest shareholders was a dream for any company. But that is no longer the case for investors in Mercia Asset Management. Mark Payton, chief executive of Mercia, which invests in small, growing companies, mostly outside London, has apologised to small shareholders after excluding them from a £30m fundraising this month. Mercia needed the money to buy two venture capital trusts and allow Invesco, and Woodford’s Equity Income Fund, which is now being managed by BlackRock after the fund manager’s dramatic downfall this year, to cash out. It increased the number of shares by more than a third, diluting existing investors. On December 3 Mercia’s shares, which listed in 2014 at 50p, were at 30p. Joint brokers N+1 Singer and Canaccord Genuity were worried that retail shareholders could

drive the price down by selling out during the fundraising. So they restricted it to institutions. But it soon became clear they would not pay more than 25p. Early on December 3 the brokers opened the 25p share sale to everyone: by mid-afternoon it was fully allocated, before many small investors had heard the news. “It was a mistake and I am sorry,” Mr Payton told Small Talk. “We received 30-40 emails from shareholders complaining. Myself and [chief financial officer] Martin Glanfield phoned each person. Retail investors are not looked after and we try to do that, so we feel very bad.” Mr Payton said the only consolation was that retail investors could have still bought shares after the fundraising at 25p, where they were stuck until December 19. They closed at 26.7p on Friday. More than 50 per cent of the shares are now freely traded. Mr Woodford’s former fund has cut its holding from 11 per cent to 7 per cent and Invesco from 19.5

per cent to 14.3 per cent. Mr Woodford favoured young businesses with bags of potential but not a lot of revenue, which could soar in value over a few years — or fall. Mercia looks for the same kind of investments. Mr Payton believes his company is better at it, backed by the board and management holding a 23 per cent stake in the business. It has three divisions: venture capital funds totalling £210m, private equity funds of £60m, and a £91m debt fund. The money comes from third parties but Mercia can also deploy its own cash. Particularly promising businesses are brought on to its balance sheet with direct investment and there are 22 at present. They include nDreams, a video games developer, and Oxgene, a gene therapy specialist. It has 19 formal university partnerships. Mercia expects to hold VC companies for up to 10 years, private equity ones — which are profitable — for 2-5 years and lend for about two years.

Earth’s pollution problem extends out into space

Urgent action is needed to tackle the junk accumulating in orbit

ometime in 2025, a European spacecraft will extend four robotic arms around a 100kg piece of metal junk in orbit at an altitude of 800km. Then, embraced in a hug of death, the craft and its target — a redundant rocket stage — will hurtle back towards Earth, burning up harmlessly in the upper atmosphere. The €100m ClearSpace mission will be the first large-scale demonstration by a space agency of technology to tackle the menace of orbital debris. It is an overdue move against a growing threat to the satellites on which modern life depends — communications and broadcasting, navigational signals, weather and environmental monitoring. According to the European Space Agency, Earth is surrounded by more than 3,000 abandoned satellites, 34,000 other objects larger than 10cm and millions of small fragments travelling fast enough to damage spacecraft. At least one ac-

https://www.facebook.com/businessdayng

tive telecoms satellite has already been destroyed in a collision and experts fear a series of catastrophic failures as thousands more satellites are launched in the 2020s. This accumulation of rubbish extends into orbit the “tragedy of the commons” that has led to so much pollution on Earth. Anyone can benefit from exploiting space but no one has an incentive to keep it clean. Solutions will depend on developing international rules to force satellite operators to remove redundant spacecraft from dangerous zombie orbits, while coming up with new technology to remove the junk already up there. The 1967 Outer Space Treaty, the foundation of international space law, was drawn up when few anticipated how many satellites would be launched in decades to come. It is vague about responsibility for junk almost to the point of uselessness. There is little chance of amending the treaty in the near future but various @Businessdayng

voluntary codes have been drawn up for satellite operators, such as the 2007 UN Space Debris Mitigation guidelines, which need strengthening and enforcing through national governments and industry bodies. Top priority is for every satellite to include a built-in de-orbiting mechanism that propels it to burn up safely at the end of its life. Otherwise the operator must contract with someone else to bring down its satellite. A few private companies are developing their own technologies to serve the junk removal market that they expect to emerge later in the 2020s. Although robotic grabbing like ESA’s ClearSpace seems the most popular clearance technology, others including harpooning the junk and catching it with a net are in contention too. However it is done, large-scale investment in space junk removal and prevention by both private and public sectors will be essential if we are to prevent catastrophic collisions in space in the decades to come.

Monday 30 December 2019

BUSINESS DAY

ANALYSIS

Ukraine-Russia prisoner swap marks step towards peace deal

Scores change hands in exchange between Kyiv and breakaway separatists ROMAN OLEARCHYK AND HENRY FOY

krainian forces and Russianbacked separatists in the country’s east have undertaken an exchange of prisoners in a step that observers hope will help push the two sides towards a peace deal to end their conflict, which has lasted for more than five years. The prisoner swap, billed as an “all-for-all” exchange between Kyiv and the two Kremlin-supported breakaway eastern regions, was brokered during talks this month between the leaders of Ukraine, Russia, France and Germany, amid renewed efforts to reach a ceasefire. The first of scores of prisoners to change hands crossed through a checkpoint on the front line of the conflict on Sunday afternoon, watched over by armed troops from both sides. Live footage streamed over the internet by Ukraine’s presidential office showed buses with prisoners parked at a crossing point. The office of Ukraine’s president Volodymyr Zelensky tweeted at around 4pm Kyiv time saying: “The mutual release of detained persons is completed . . . 76 of ours are safe in Ukraine-controlled territory . . . de-

exchange by both sides, citing unnamed sources. Ukrainian television reports estimated that Ukraine would hand over about 120 prisoners, including Russian-backed separatist fighters, collaborators and Russians detained on Ukrainian soil for alleged subversive activities. Liudmyla Denisova, Ukraine’s human rights ombudsman, said that one group of those freed consisted of four soldiers who had been detained in eastern Ukraine when the war erupted after Moscow’s 2014 annexation of Ukraine’s Crimean peninsula. The prisoner exchange followed a swap of detainees between Kyiv and Moscow earlier this year, and was seen by observers as progress in efforts to bring an end to a conflict that has claimed 14,000 lives, making it the bloodiest war in Europe since the 1990s Balkans conflict. Hopes of a settlement rose after the April election of Ukrainian president Volodymyr Zelensky, a former comedian who won a landslide 73 per cent of the vote on a promise to end the war. But many analysts say a full

Iranian sailors saluting a Russian navy frigate during joint naval drills in the Gulf of Oman © Iranian Army office/AFP via Gett

tails later.” They are to arrive by flight to Kyiv this evening, the president’s spokesperson Iuliia Mendel said. Russian state-run television channels whose correspondents were at the border crossing confirmed the swap had taken place. In a joint statement French president Emmanuel Macron and German chancellor Angela Merkel said they welcomed the prisoner exchange and thanked those involved in the negotiations. “They bear in mind that further work will still be necessary to allow the exchange of all prisoners linked to the conflict, and in this context recall the essential nature of full and unconditional access for international organisations, in particular the International Committee for the Red Cross, to all those detained, and the search for missing persons,” their statement said. In a statement published on Twitter, the US embassy in Kyiv welcomed the “return of liberated captives from Russian-controlled Donbas, as agreed at the December 9 Normandy summit”. “Recognising that Russia’s ongoing aggression confronts Ukraine’s leadership with difficult choices, we stand in solidarity with our Ukrainian partners and the many Ukrainians who remain in captivity in Russia and Crimea,” the statement said. Russian news agencies said 200 people had been identified for the

peace deal will be extremely hard to reach, given how entrenched both sides have become. Like his predecessor Petro Poroshenko, Mr Zelensky has brushed aside Russian demands that Kyiv should grant deep and permanent autonomy to the far eastern regions, offering instead to grant them the same decentralised form of government that is being implemented in other parts of Ukraine. “Today’s prisoner exchange in Donbass will bring relief to the persons involved and their families, but it will not bring the settlement any closer,” wrote Dmitri Trenin, director of the Moscow Carnegie Center, on Twitter. “The conflict is much more likely to become frozen than resolved.” In a sign of the difficulty Mr Zelensky faces, a Kyiv court’s decision to release five former riot police as part of the prisoner exchange sparked public anger in the Ukrainian capital. They had been held over their involvement in shooting protesters during the 2014 Maidan revolution, which ousted a pro-Russian Ukrainian president. Ukrainian film-maker Oleg Sentsov, who was detained in Crimea in 2014 and later jailed in Russia before being released this year, criticised the decision to hand over the former riot police and Mr Zelensky’s failure to secure the return of all Ukrainians held in Russia. www.businessday.ng

Ten charts that tell the story of 2019 The FT’s pick of the year’s best visual journalism, from extreme weather patterns to signs of a growing surveillance society ALAN SMITH

he p ow er of a g o o d chart or map lies in its ability to inform the debates and decisions that lie ahead. Here are 10 graphics published by the Financial Times in 2019 where the real story is often about what happens next — in the years, decades and centuries to follow. Map showing the estimated annual per capita income loss under a hard Brexit scenario (€) Europe to share the pain of departure but UK and Ireland will be most affected Boris Johnson’s victory in the UK’s December general election, driven by his promise to “get Brexit done”, means that the premise of this graphic from earlier in the year — a “hard Brexit” — remains a strong possibility as we enter 2020. The estimated per capita income losses shown on the map illustrate cartographer Waldo Tobler’s first law of geography: “Everything is related to everything else, but near things are more related than distant things.” Most economists predict a hard Brexit will hit the UK hardest, with neighbour Ireland a close second — but the ripple is predicted to extend across Europe. Chart showing the Measles immunisation coverage (%) for the first dose (MCV1) among 1 year olds, between 2008 and 2018. Estimates, as of Jul 15 2019. The measles ‘first dose’ immunisationoffers an individual 90% protection from the disease. Twenty-three countries have yet to introduce the second dose, which would increase this cover to 99%. Not all countries have made progress in their efforts to reach vaccination targets. Countries affected by war or civil unrest, such as Syria and South Sudan, have seen a big decline in measles vaccination rates in the past decade. In the US, where there is a prominent “anti-vax” movement, levels remain stubbornly below the 95 per cent threshold needed to prevent wider outbreaks. Meanwhile, new research suggests that the disease has a much more serious effect on children’s immune systems than previously thought. Workers are set to experience major changes to their jobs and careers as a result of automation. And according to the OECD, their governments are not preparing them for the disruption. Separate analysis by McKinsey suggests that

https://www.facebook.com/businessdayng

those in low-skilled and low-paying jobs are exposed to the greatest risk of automation. But virtually every worker faces the threat of elements of their job being automated. Map showing locations where once-a-century extreme sea level events are projected to occur at least annually by 2050, even if the world drastically cuts emissions. One metreSea level rise by 2100 if global warming exceeds 3C. 20%–90% projected loss of coastal wetlands by 2100. 90% projected loss of warm water coral reefs, even if global warming is limited to 1.5C. Sea levels are rising quicker than previously thought — and pose a significant risk to coastal cities and low-lying islands, according to a September report from the UN’s Intergovernmental Panel on Climate Change. The UN’s researchers warned that extreme floods — typically experienced once a century — are likely to happen at least once a year by 2050 in many regions, even if global warming is limited to 1.5C above pre-industrial levels. Two maps showing Top 10 counties according to total vineyard hectares, 2015 and Top 10 counties based on area of viticulturally suitable land. Areas such as Essex and Suffolk have highly suitable land and climate as well as greater seasonal stability than areas currently populated with vineyards. Climate change presents an unusual economic opportunity to English winegrowers according to academics at the University of East Anglia. A combined terrestrial and climatic model identifies over 33,000 hectares of prime viticulture land — an area larger than France’s Champagne region. The research suggests that Essex and Suffolk are particularly ripe for cultivation, while many current English vineyards are “sub-optimally” located. Useful intelligence, if you think you could run a vineyard. Chart showing a visual history of lunar missions. Almost all missions have been unmanned; some completing a lunar orbit, others using the moon for a ‘gravity assist’ as part of a longer journey, some sending a probe to impact the lunar surface, and others landing rovers on the moon. Most early lunar missions failed to escape Earth’s orbit. The first two manned lunar missions were orbital only, and never landed. In July 1969, the crew of Apollo 11 becamethe first people to set foot on the moon. The crew of Apollo 13 never made it to the lunar surface. Every lunar mission @Businessdayng

since 1972 has been unmanned. After the frenetic activity of the space race, lunar missions were seen as too expensive. More recently, a wider set of countries has launched lunar missions. 2019 saw the 50th anniversary of the first manned Apollo landing — and renewed questions asking why it has been so long since the last crewed mission to the moon in 1972. With Nasa’s publicly declared goal of returning humans to Earth’s closest neighbour by 2024 and billionaire entrepreneurs joining aspiring space nations in launching ambitious missions of their own, one thing seems certain: space is set to become extremely busy. Chart showing the number of patents published worldwide that mention facial recognition or surveillance cameras in the title or abstract, by country of patent author(s). China dominates both facial recognition and surveillance cameras patents China is leading a global boom in surveillance technology that is fuelling increasingly polarised views on privacy and security. San Francisco police may have banned its police from using facial recognition software but, according to the FT’s Henry Mance, there are a growing number of companies justifying their technological advances on the premise that “anonymity was just a phase in human existence”. Animated world map showing whether US or China is the larger supplier of goods in a country from 2000 to 2019. In 2000, Cuba, a rare Chinese stronghold in the Americas. Few countries in China’s orbit prior to WTO entry. In 2005, US top supplier to the Americas and key western allies. China major exporter to most of Europe, Asia and much of Africa. In 2010, China dominant in Europe and Africa, and has a foothold in Latin America. In 2018, China mops up holdouts in Africa and the Gulf. Red tide rises in South America. In 2019, Venezuela switches to China’s camp. France, Austria, Greenland, CAR and Zimbabwe rejoin US sphere of dominance. The simmering trade war between the US and China threatened to spiral out of retaliatory control before signs of de-escalation finally appeared at the end of the year. This animated map paints a stark picture of the inroads into global trade China has made since joining the World Trade Organization in 2000. One analyst described 2019 as “peak China”.

Monday 30 December 2019

BUSINESS DAY

www.businessday.ng

https://www.facebook.com/businessdayng

@Businessdayng

Monday 30 December 2019

BUSINESS DAY

www.businessday.ng

https://www.facebook.com/businessdayng

@Businessdayng

Monday 30 December 2019

BUSINESS DAY

abujacitybusiness Comprehensive coverage of Nation’s capital

Dangote Cement: Makoju out, Puchercos in as GMD/CEO James Kwen, Abuja

he Group Managing Director and Chief Executive Officer (GMD/ CEO) of Dangote Cement Plc, Joseph Makoju will retire effective January 31, 2020 from a position he has held since 2018; according to a report from the Nigerian Stock Exchange. While Makoju, popularly called Mr Cement is bowing out after 45 years of transformational leadership in the cement industry, the Board of

Permanent Secretary, FCTA, Chinyeaka Ohaa (r), presenting food items to Bala Tsoho Musa, principal, Vocational Rehabilitation Center Bwari.

IPPIS will accommodate all universities perculiarities-AGF Cynthia Egboboh, Abuja

he Federal Gove r n m e nt ha s declared that the Integrated Payroll and Personnel Information System (IPPIS) is robust enough to accommodate and efficiently address all genuine concerns and peculiarities of the Nigerian universities. The Accountant General of the Federation (AGF), Ahmed Idris said this while receiving the Committee of Vice Chancellors of Federal Universities in Abuja stressing that all rules and peculiarities in the universities that are

recognized by the government will be accommodated and implemented through IPPIS. The Accountant General of the Federation, who was responding to concerns raised by the Vice Chancellors based on the recent enrolment of university staff into the Integrated Payroll and Personnel Informat said all rules and peculiarities in the universities that are recognized by the government will be accommodated and implemented through IPPIS’. “All the peculiarities should be stated, all the r u l e s o f e n ga g e m e n t should equally be stated;

we are ready to go by the rules of engagement. All the rules that are recognized by the government in the universities, we will go by these rules, none will be set aside”, he said. Idris stated that the objection by the academic staff of the universities to the IPPIS is unfounded assuring that the IPPIS was not to take away the autonomy of the universities, but to make the management of personnel more efficient. “The practice where universities recruited staff not minding whether their budget would accommodate such employment was responsible for the

issue of shortfall in personnel revenue. He explained that the Integrated Payroll and Personnel Information System (IPPIS) would help the universities solve the problem of shortfall in personnel revenue as the recruitment and remuneration of staff would be more efficient”. “At the end of the last enrollment exercise, a total of 8, 146 academic and 86, 844 non-academic staff of federal universities were enrolled into the Integrated Payroll Personnel Information System (IPPIS). He said the figures represented more than 70 percent of the staff of federal universities”, he said.

Christmas: FCTA PS calls for spirit of giving as groups get food items James Kwen, Abuja

he Permanent Secretary of the Federal Capital Territory Administration (FCTA), Chinyeaka Ohaa has called on residents of the Territory to imbibe the spirit of giving and good neighbourliness as exemplified in the teachings of Jesus Christ. Ohaa who made the call when he distributed food items to twelve FCT welfare associations for the 2019 Christmas celebrations, used the occasion to wish residents a merry Christmas, while thanking the Almighty God for sparing their lives to witness yet another Christmas. He explained that the reason for the gesture by the FCTA was to enable the less privileged in the

society enjoy the joys of the season just like the rest of the society, calling on representatives of the benefitting associations to ensure that the items were judiciously used. The Permanent Secretary enjoined them to use the Christmas season to preach peace and unity in their domains as well as enlighten their members on the need to cooperate with government on policies aimed at ensuring road traffic sanity in the nation’s capital. He said: “As leaders and influencers of various communities and organisations in the FCT, please use the occasion of Christmas to preach peace harmony and unity in your various domains. You are also enjoined to enlighten members of your communities on the need to cooperate www.businessday.ng

with government on the implementation of the safe, functional and efficient traffic policy of the FCTA”. In a welcome address, the Director, Protocol Department, Sani Daura, represented by Terfa Agor said twelve welfare associations benefitted from the largesse He also commended the FCT Minister, Malam Muhammad Musa Bello for making it possible for the needy in the society to have a joyous Christmas. Speaking on behalf of the benefitting associations, the Principal, Vocational Rehabilitation centre, Bwari, Bala Musa described the gesture from the FCTA as a duty mandated by God for ‘those that have to do unto those that do not have’. He prayed that the gifts presented by the FCTA

will be a blessing to the management and staff of the Administration as well as peace and harmony in the FCT. The items distributed were bags of rice, cartons of vegetable oil and cows while benefitting twelve welfare associations include; School for the Handicapped, Kuje, School for the Deaf, Kuje, School for the Blind, Jabi, Lepers colony, Yangoji, Kari Majiji Disabled Community, Motherless Babies’ Home, Karu, Blind Persons, Kari Majiji and Vocational Rehabilitation Centre, Bwari. Others are; Unity Orphanage Home, Gwako, FCT Para Soccer Team, Area 10, Garki, Community Based Vocational Centre, Old Karu and Community Based Vocational Rehabilitation Centre, Zuba

https://www.facebook.com/businessdayng

Dangote Cement has approved the appointment of Michel Puchercos as the next GMD/CEO effective 1st February 2020. The outgoing GMD/ CEO of Nigeria’s largest cement manufacturer, holds a B. Sc (1st Class) honours degree in Mechanical Engineering from University of Nottingham, UK and an M.Phil. in Mechanical Engineering from the same university and is also an alumnus (mni) of the National Institute for Policy and Strategic Studies (NIPSS), Kuru, Jos, Plateau State.

3000 Residents Of Nasarawa Community benefit from HIV counselling testing Godsgift Onyedinefu, Abuja

o fewer than 3000 residents of Obi L ocal G overnment Area of Nasarawa State have received free HIV counselling and testing services. The programme was organized by Member of the Federal House Representatives representing Lafia/ Obi Federal Constituency, Abubakar Dahiru with support from Government of Nigeria through National Agency for the Control of AIDS (NACA). Speaking during the brief opening ceremony, Dahiru said the event was put together as part of the 2019 constituency project to empower residents of the area with information on how to prevent HIV transmission, provide other medical services which includes malaria test, high blood pressure check, blood

sugar level check and avail residents with the opportunity to test for HIV which is a very important aspect of the outreach being carried out within Obi Constituency. Dahiru who was represented by the Executive Secretary to Chairman of Obi Local Government Area Abdulmalik Abdullahi further stated that the outreach is slated for two days and free malaria, high blood pressure and diabetes drugs including HIV prevention tools such as educational materials and condoms will be provided for participants at the outreach. Also speaking at the event was the representative of Niphemy Solutions Ltd, Tunde Ojo who is coordinating the outreach on behalf of Dahiru said they were excited about the turnout of residents of Obi community as the crowd present is reassuring that the 2-day period for the outreach will be enough to meet its target.

Mayfield Specialist Hospital focuses on affordable healthcare, prioritises service Harrison Edeh, Abuja

ayfield Specialist Hospital, Suncity Abuja (MSH) -a 250-bedded multi-specialist hospital established to provide a complete range of outpatient and inpatient diagnostic and treatment services is focused on growing customer satisfaction with appreciable a service delivery. The Hospital Management at a recent launch in Abuja said it is focused on providing treatment in all different specialties including General and advanced Laparoscopic Surgery, Critical Care, Neurosciences, Orthopedics, Polytrauma, Joint Replacement and Sports Medicine, Gastro sciences, ENT, Obstetrics and Gynaecology among others. According to the Management, the Hospital was built as @Businessdayng

an institution which matches the highest standards of healthcare delivery across the world. Where care is provided to patients at an affordable cost. The Hospital management promises to continue to provide and extend further the best international standards quality care universally to every man, woman and child in Nigeria be they rich or poor. This state of the art hospital is equippedwithallmodernworldclass equipments and facilities, featuring multi-specialty and super-specialty departments, Mayfield specialist Hospital provide premier healthcare to all. Mayfield Specialist Hospital innovation and determination towards Women and Child Healthcare got even stronger as theyrecently established a new facility center for world class maternity care with a remarkable experience.

Company IN FOCUS

BUSINESS DAY Monday 30 December 2019 www.businessday.ng

Lafarge Africa plc: Set to regain vibe after a disappointing past OLUFIKAYO OWOEYE

ollowing five consecutive quarters of delivering negative Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) and the eventual sale of its lossmaking South Africa operations, Lafarge South Africa Holding Limited (LSAH) to LafargeHolcim Group for the sum of $316.2 million, Lafarge, Nigeria’s second-largest cement company by installed capacity is back on the path of profitability. Results from its third quarter for the period ended 30th September, the first post-divestment earnings report, show that the cement maker recorded gains on disposal of discontinued operation to the tune of NGN106.5 billion, after having recognised cumulative exchange differences on the asset and non-controlling interest derecognised, both of which summed to NGN7.6 billion. Wiping off shareholders’ loan totaling N1134 billion leaving the company’s total loans and borrowings at N64.75billion split across Bond (NGN35.01 billion), Power Fund (NGN13.31 billion), Lease Liabilities (NGN15.08 billion), and Bank loans (NGN1.15 billion) The group revenue which comprises Nigeria and LSAH was lower by 25.1percent to N53.91bn in Q3. This result accounts for July-September financial performance for Nigeria and July for LSAH operations. Within the period, Nigeria revenue dropped 7.25percent to N45.17bn in the third quarter on the back of lower cement volumes and price competition. Interestingly, despite this decline operating profit increased to N7.45bn with (EBITDA) growth of 73.9percent to N14.93bn supported by the sale of LSAH and reduction in cost base. Lafarge declared a net profit of N4.73bn as compared to a loss of N6.47bn recorded in Q3 2018. Net finance cost dropped 70.6percent year-on-year and 33.4 percent quarter-on-quarter to N3.18bn due to the repayment of $293mn parent company loan. The company had bought Lafarge South Africa Holdings in a bid to expand operations, however, the post-acquisition period in South Africa didn’t go as planned as the country’s cement sector became less unfriendly as the country slided into recession, increased in competitons,

importation of cement in South Africa and increase in the price of cement price peaked. In 2016, Lafarge S.A. France and Holcim Limited, Switzerland two large global players merged to form LafargeHolcim Group based in Zurich, Switzerland. Lafarge Africa is now a subsidiary company of Lafarge Holcim. The board of the company earlier in the month announced the resignation of Michel Puchercos as the group managing director/chief executive officer with effect from the 17th of January 2020, having served as an executive director on the Board since the 1st of April 2016. It also announced the appointment of Khaled Abdelaziz El Dokani as the new group managing director/chief executive officer. The new helmsman holds a bachelor of commerce degree from Alexandria University, Egypt and joined LafargeHolcim in 2004, and prior to taking over this position, he was Country CEO of Iraq (2018-2019), Qatar (2016-2018), Saudi Arabia (2013–2016), Vice-President for Business Development and Strategy North America (20102013), and CFO in Lafarge Algeria (2004 – 2010). Mobolaji Balogun is the chairman, other non-executive directors include Elenda Giwa-Amu, Adenike Ogunlesi, Adebode Adefioye, among others. For cement makers in the country, it was a mixed fortune during the year as analysis of

performance during the year shows a surge in cement demand in Q1 on the back of increased pre –election CAPEX spending in a bid to woo electorates. However, demand plummeted in Q2 caused by the prolonged 2019 general elections postponements, together with the raining season in the country. Consequently, performance improved markedly in Q3 even as the double whammy hammer of heavy rainfall in the period and land border closure, put a cap on sales uptrend. Also, intense competition in the cement industry means that producers remain price sensitive as they struggle to maintain market share. With cement makers such as Dangote Cement introducing promotional launch during the period in a bid to drive sales volume in the country The good news is that the early signing of the 2020 budget into law by President Buhari, would eliminate slow-down in government spending on critical infrastructure across the country. Of the total N2 trillion earmarked in 2019, a total of about N294.63billion had been released for capital projects as at September 30th 2019. In the 2020 budget, a total of N2.14 trillion has been earmarked for Capital Expenditure (CAPEX) spending, excluding CAPEX components of statutory transfers. The government has also vowed to prioritise in favour of critical ongoing infrastructur-

al projects in the power, roads, rail and agricultural sectors. If the government could keep to his promise, it could further spur the growth of cement makers in the country. Notable projects in 2020 budget which would be heavy cement consuming projects include the National housing program which is expected to gulp N17.5billion while the social housing scheme (family homes fund) would cost N30billion. While over N210 billion has been earmarked for the construction and rehabilitation of roads across the country. Interestingly, there is a growing preference for cement paved roads by the government as evident in the 28km Itori-Ibese road in Ogun State which was commissioned in 2016 and the 43km long Obajana-Kabba road in Kogi State, the 32km ApapaOshodi-Oworonshoki-Ojota road in Lagos State is almost done. In aviation, N1 billion has been set aside for the construction of terminal building at Enugu Airport and N10 billion for the construction of the second run-way at the Nnamdi Azikwe International Airport in Abuja. N67.17 billion is also set aside for the counterpart funding for new and ongoing railway projects Also, in the 2020 budget, N2billion has been set aside for the Mambila hydropower project, a 3.05GW hydroelectric facility being developed on the Dongo River near Baruf, in

Kakara Village of Taraba State. The project is being undertaken by Nigeria’s Federal Ministry of Power, Construction and Housing, with the help of Chinese investments. Mustapha Wahab, analyst at Cordros Securities said the upside risk for the industry in 2020 is a stronger demand growth, with average cement prices to rise by 1bp to NGN2,197/bag. “While we acknowledge the significant shortfall from the NGN2.93 trillion budgeted in the prior year, our optimistic view hangs solely on a higher implementation rate, given better revenue prospects,” “However, the downside risk to our prognosis remains the possibility of significant cost pressure occasioned by currency devaluation, which would force players to re-think their pricing strategies,” he said. For 2020, the completion of the debottlenecking of its Ashaka cement plant, plant reorganisation in Ewekoro I & II, gains from energy efficiency, and lower finance burden, will combine to drive strong earnings for the company. Also, analysts at Chapel Hill Denham, expects stronger volumes to support revenue growth for its Nigeria operations “Lafarge’s ready to mix business presents another avenue for growth as private infrastructure spend recovers,” The cement maker concluded a merger with Lafarge Ready Mix Limited in August 2019.

Published by BusinessDAY Media Ltd., The Brook, 6 Point Road, GRA, Apapa, Lagos. Advert Hotline: 08033225506. Subscriptions 01-2950687, 07045792677. Newsroom: 08169609331 Editor: Patrick Atuanya. All correspondence to BusinessDAY Media Ltd., Box 1002, Festac Lagos. ISSN 1595 - 8590.