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news you can trust I **TUESDAY 30 OCTOBER 2018 I vol. 15, no 172 I N300

Why the Economist expects Atiku to defeat Buhari next year CALEB OJEWALE

he prediction by the Economist Intelligence Unit that President Muhammadu Buhari will lose power in the 2019 elections to Atiku Abubakar appears to be driven by a bleak economic outlook for the country, which the Buhari administration appears unable to surmount. The collapse into economic recession by Nigeria in 2016, after over two decades of consistent economic growth, is the second occurrence of recession to be supervised under the watch of Muhammadu Buhari in charge of state affairs. The possibility of coincidence (or ill luck aside), it has also been attributed as a likely outcome of unpreparedness and incapability to manage the economic demands of a complex society like Nigeria. The need to get the Nigerian economy working and meeting the social-security needs of a population growing at a rate faster than the economy, is making it attractive to elect an alternative into office, since the incumbent seems stuck in his old-ways. The Economist Intelligence Unit (EIU), in its Nigeria country report for October, highlighted

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FG to begin construction of Apapa-Mile-2 Road November 17 CHUKA UROKO, JOSHUA BASSEY & AMAKA ANAGOR-EWUZIE

inally, frustrated and desperate residents, motorists and small business owners who have to go in and come out of the port city of Apapa, Lagos, daily may soon have reason to hope for better days

as construction work on the abandoned Tin Can-Mile-2 expressway will be flagged off on Saturday, November 17, 2018. It is also the day that the 500 capacity trailer park being built opposite the Tin Can Port will be opened to take out many of the trucks that have for years, taken over roads in Apapa, while the police and state government

traffic officers watch helplessly. The Apapa-Oshodi Expressway is a 27.5Km road that originates from Apapa Port and terminates at Oworonsoki junction and was constructed between 1975-1978 but has not received a comprehensive rehabilitation or reconstruction for many long years. It will be recalled however,

that about seven years ago, a contract was awarded to Julius Berger and Borini Prono for the reconstruction of the expressway. While Julius Berger did the portion of the road from Beachland Estate Junction to Cele Bus-Stop within 2011-2013 or thereabout, the portion from Continues on page 38

Continues on page 38

Inside Nigeria’s future bleak without restructuring P. 39 – Moghalu

Vice President Yemi Osinbajo (5th l) with Toyin Adesola, founder, Sickle Cell Advocacy and Management Initiative (SAMI) along with chair of SAMI Foluso Phillips (l), and supporters of the initiative including CEO of SystemSpecs John Obaro (2nd r), and Zouera Youssoufou, CEO of Dangote Foundation, at SAMI’s 10th anniversary dinner in Lagos, Sunday. The gathering drew other dignitaries like chairman of Zenith Bank plc, Jim Ovia.

2 BUSINESS DAY NEWS

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Africa’s smallest economies outperform Nigeria in Sustainable Economic Opportunity Index

David Ibidapo

abo Verde and the Seychelles, the smallest economies in Africa by way of gross domestic product (GDP) outperformed Nigeria in providing sustainable economic opportunity for their populace between 2008 and 2017 according to a report released by the Ibrahim Index of African Governance (IIAG). Sustainable economic opportunity is the pursuit of economic development that attempts to fulfil the needs of people, while maintaining natural resources in a sustainable manner, so they will be available for future generations. In contrast to Nigeria’s GDP size of $375.7 billion and growth rate of 0.82 percent in 2017, the Seychelles recorded a GDP of $1.48 billion with a GDP growth of 4.2 percent in 2017 while Cabo Verde recorded a GDP size of $1.75 billion, with a growth rate of 3.9 percent in 2017. According to the IIAG report, the Seychelles and Cabo Verde recorded sustainable economic opportunity scores of 63.5 points and 61.4 points respectively, above the Africa average score of 44.8 points. Meanwhile, data pooled from the study clearly identifies Nigeria as currently lagging the continent average by 1.3 points at 43.5 points. To this end, Nigeria currently ranks 29th, sitting in the lower half of the ranking of African countries. The study, conducted from 2008 to 2017 by the Mo Ibrahim Foundation, shows that sustainable economic opportunity in Nigeria improved slightly by +2.7 points, from 40.8 points to 43.5 points since 2008. Meanwhile, over a five year period, (from 2013 to 2017) sustainable economic opportunity declined by -0.1 point. According to the IIAG 2018 report by the Mo Ibrahim Foundation (MIF), despite the huge size of the Nigeria economy, compared to other African economies, building sustainable economic opportunities remains a struggle. This shows to an extent, the

difficulty the Nigerian government is having in translating economic growth into improved Sustainable Economic Opportunity for its citizens. According to classifications under the sustainable economic growth index, Nigeria was able to improve only infrastructure and rural sector to 39.7 and 47.2 points respectively, however below the African average score of 44.5 and 51.1 points respectively. Meanwhile, public management and business environment during the period were worse off after declining to 43.6 and 43.5 points respectively, but were however above Africa’s average score of 43.3 and 41.1 points respectively. BusinessDay analysts suggest that with the rising number of working youths and declining business environment in Nigeria, there will be an upward pressure on demand for jobs in an environment where on average, progress in Sustainable Economic Opportunity is almost non-existent. During the period, overall governance of Nigeria fell below the Africa average of 49.9 points, to 47.9. This is an improvement by 2.8 points since 2008. To this end, Nigeria currently ranks 33rd amongst all African countries, based on overall governance score and ranking in 2017. Meanwhile, Seychelles and Cabo Verde ranked second and third on the overall governance score chart. A deeper look into the IIAG 2018 report reveals that participation and human rights were the major drivers of the overall governance improvement in Nigeria during the period. Participation and human rights improved by 8.5 points to 53.2 above Africa’s average score of 49.2. Meanwhile, the Human development index shows that while Nigeria improved in the welfare and health sub categories, the education sector in the country still appears to be struggling. The education sector declined in performance by 1.7 points and lags the Africa average score of 44.5 points at 38.1 points.

The trailers park being built on Apapa-Oshodi Expressway to take trailers off the expressway to pave way for Pic by Pius Okeosisi the road construction work.

Can Buhari be disqualified over failure to present a WAEC certificate? Odunayo Oyasiji

here have been different arguments on the eligibility of President Muhammadu Buhari to contest in the 2019 election. The eligibility issue bothers on the fact that he hasn’t been able to present his WAEC certificate. He claimed that it is with the military while the military recently disclosed that they could not find the certificate. People have raised questions with regards to the legal implication of not producing a WAEC certificate. It has been submitted that without it, a person is not qualified to be the president of Nigeria. It has even been argued that evidence of higher qualifications is not a basis for not presenting WAEC certificate as it is a primary requirement under the law. What does the law really say about the qualifications of someone contesting for the highest office in the land? Section 131 of the constitution states what is required. The section states“A person shall be qualified for election to the office of the President if (a) he is a citizen of Nigeria by birth; (b) he has attained the age of forty years;

(c) he is a member of a political party and is sponsored by that political party; and (d) he has been educated up to at least School Certificate level or its equivalent.” The main focus is on ‘d’ above, which is has he been educated up to at least School Certificate level or its equivalent? It must be noted that the court in the course of interpreting statutes applies the literal rule first before using any other rules of interpretation. The literal rule means that the plain and ordinary meaning of words is adopted. This will be the approach here. The literal rule will be adopted before the adoption of any other rule of interpretation. To efficiently do this, questions relating to the issue will be raised and answered. The questions areWhat should be the level of education of the person? - The constitution only stated what the least qualification should be – School Certificate level. Therefore, someone with higher qualification can contest while a person with anything lower than School Certificate level is not qualified. IsWAECtheonlyacceptablemeans of proving that one is educated to School Certificate level? – The constitu-

tion is couched in a way that gives room for other forms of proving such level of education. The wordings of the constitution read “…at least School Certificate level or its equivalent.” The emphasis here is on ‘its equivalent’.Therefore, it is safetoconcludethatWAECcertificateis not the only acceptable means of proving such level of education. Does the constitution make the presentation of WAEC certificate mandatory? –No. The constitution does not make its presentation mandatory. The presentation of something equivalent will be acceptable. What happens in a situation where a person can show evidence of higher level of education without being able to present a WAEC certificate? – At this point, the mischief rule of interpretation will be adopted since the wordings of the constitution does not expressly cover this scenario. The mischief rule looks into the intention of the legislators while making the law. The intention of the legislator could not have been to out rightly disqualify anybody that does not have a WAEC certificate. If that was the intention, the word ‘equivalent would not have been used.

•Continues online at www.businessdayonline.com

FACTCHECK: NNPC pays subsidy of N60 per litre, not N52 ... PPPRA pulls down pricing template from its website DIPO OLADEHINDE

he Nigeria National Petroleum Corporation (NNPC) is paying N60 on every litre of petrol consumed by Nigerians and not the N53 declared by Ben Akabueze director general of the Budget Office, a fact check by BusinessDay has shown. Speaking at the Strategic Dialogue on the Morocco-Nigeria Relations in Abuja last week Wednesday, Ben Akabueze, the director-general of the Budget office said NNPC was subsidizing every litre of Premium Motor Spirit (PMS), popularly called petrol, by N53. “At the moment, in terms of pricing of petroleum products, for

every litre of petrol, there is a N53 under-recovery. Well, that is the term that the NNPC, which has this responsibility, calls it and so who am I? This represents a significant value for us. Hence, the need to diversify the economy remains urgent,” media reports quoted the DG as saying. But figures from the Petroleum Products Pricing Regulatory Agency (PPPRA) show that the Expected Open Market price for petrol had reached N205 per litre in May 2018, when oil price was hovering between $75 and $80 per barrel, despite the fact that the pump price remained at N145 per litre, creating a price differential or subsidy of N60 per litre. Jubril Kareem energy researcher

at EcoBank group said the higher level of subsidy being borne by the NNPC is an indication of the unsustainability of the decision to peg the price of PMS. “NNPC reported N78 billion in April and over N80 billion in May as Under Recovery which we believe mostly constitute subsidy on PMS estimating that the final figures on subsidy in 2018 could be in the region of N1 trillion. Such level of fund spent on subsidizing PMS is unsustainable and reduces NNPC remittances to the Federal government’s coffers significantly,” Kareem said.

•Continues online at www.businessdayonline.com

Tuesday 30 October 2018

BUSINESS DAY

Tuesday 30 October 2018

BUSINESS DAY

Tuesday 30 October 2018

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BUSINESS DAY

‘Address constraints facing FMCGs to boost Nigeria’s economy’

conomists and industry stakeholders have lamented the food companies’ prevailing unfavourable operating climate and called for urgent need for the Federal Government to address the constraints and challenges facing the Fast Moving Consumer Goods (FMCGs) sector in Nigeria. Such steps, they reason, will boost the economy and bring about improvement in the ease of doing business in the country. Speaking on the Business Morning programme

Emotan Gardens ‘ll redefine housing landscape in Edo – MIXTA Nigeria, EDPA

he Edo Development and Property Agency (EDPA) and MIXTA Nigeria have assured subscribers for the 1800 housing-unit Emotan Gardens of a new experience as the garden is going to redefine housing landscape in the state. The joint venture project being executed by the EDPA and MIXTA Nigeria on Upper Sokponba Road in Ikpoba-Okha Local Government Area, Edo State, have a wide range of housing offerings for low and high income earners. Speaking at the tee-off of the 7th Oba of Benin Invitational Golf Tournament at the Benin Club, representatives of EDPA and MIXTA Nigeria expressed their support for the golf tournament, one of the activities lined up for the second coronation anniversary of the Benin Monarch, Omo N’ Oba N’ Edo, Uku Akpolokpolo, Ewuare II. Executive chairman, EDPA, Isoken Omo, said, “We are here to identify with our Oba and to congratulate him on his second year on the Royal Throne.” Omo said: “We are also using this collaboration to market Emotan Gardens, it is our flagship estate and we have different housing types from affordable to high cost. We also have land for sale.” She explained that the first phase of Emotan Gardens project situated in Benin City, the Edo capital, will be handed over to clients by the end of November this year. “We are building in phases so that people can move into their houses as soon as we complete each phase. At the moment, we have 68 housing units on ground, at different stages of completion and we intend to hand over some of the property before the end of the year. By the end of November, people will have some of the houses that have been built,” the EDPA boss said.

of the Channels Television Network yesterday, Bismarck Rewane, chairman of Financial Derivatives Company Limited, in response to a question, listed some bottlenecks facing the under-performing companies in the abovementioned sector, which have affected their financial performance. To Rewane, these constraints include infrastructural constraints, low purchasing power and an unpredictable business environment. His response also corroborated the factors identified by Paul

Gbededo, group managing director/CEO of Flour Mills of Nigeria plc, in a his state of the industry position recently in Lagos. Gbededo, in the detailed interview, had also enumerated challenges facing flour millers and the need for government to encourage inclusive, sustainable and enforceable policies to encourage local investors. He also called for greater control on the quality of imported and homegrown wheat and better infrastructure, especially access routes at the factories and ports.

Rewane said, “Some of these constraints are selfinflicted. Take for example the Apapa gridlock; take for example the cost of funding, and low productivity. So we have all of these things. But more importantly is that in the National Income Identity Equation, you have government expenditure, but the most important component of this is investment. Total investment in Nigeria is about $65 billion; it is less than 17% of the total Gross Domestic Product (GDP). “A combative regulatory environment; an extortionary regulatory environment

and policy making environment is what kills investment. And investors are not interested in what you say because what you do is more important than what you say. What you are doing could be combative or disruptive while what you are saying is creative. “Talking about flour, price of wheat has gone up by almost 30% in the last year or 18 months. But the price of wheat now in Nigeria has gone up by almost 10%. The result is that, and the exchange rate has moved, okay now positively and they have the avail-

ability of foreign exchange; good news. But the reality is that Flour Mills of Nigeria has shown a 10% drop in revenue, and a 15% drop in PBT (Profit Before Tax). Honeywell has 2%, 3% drop in revenue and 83% drop in profit. Everybody is suffering this. “The problem is that there is low purchasing power. You know we haven’t done the minimum wage review for the past 8 or 9 years. There is low purchasing power; there is drop in productivity and there is high-interest rate environment”.

8 BUSINESS DAY NEWS Nigeria military opens fire on Shi’ite Muslim protesters - Reuters

igeria’s military shot at Shi’ite Muslim protesters marching in the capital Abuja on Monday to demand the release of their religious leader, according to a Reuters witness. Hundreds of members of the Islamic Movement of Nigeria (IMN) took part in the march for the release of Ibrahim Zakzaky, jailed since December 2015, when security forces killed hundreds of members in a crackdown on the group, estimated to have 3 million followers. Some victims were lying on the ground on a road in the area of Kugbo on Abuja’s outskirts, the witness said, adding that some had thrown stones at the military before the shooting began. The condition of those on the ground was not immediately clear. An army spokesman did not immediately respond to phone calls seeking comment. In April, police fired bullets and tear gas canisters during days of protests by IMN, wounding at least four. The violent repression of IMN and the detention of its leader have drawn accusations that President Muhammadu Buhari’s government is abusing human rights. The group says Zakzaky must be freed after a court ruled his detention without charge illegal.

Fayose regains freedom after two weeks in EFCC detention

he immediate past governor of Ekiti State, Ayodele Fayose has been released from EFCC detention after meeting his bail condition, according to his lawyer, Mike Ozekhome, on Monday. Ozekhome told Premium Times in a telephone interview that his client was released Monday evening. “Yes, he has been released. He has perfected his bail conditions and was released this evening. I was with him and he was in a very high spirit, vowing to fight till this clueless administration is voted out of power,” Ozekhome said. On Twitter, Fayose’s spokesperson, Lere Olayinka, wrote, “Fayose just regained his freedom. He left the Federal High Court, Ikoyi a few minutes ago. We will meet @ officialEFCC at the court from November 19. Thank you Nigerians.” Fayose was arraigned at a High Court in Lagos after he presented himself at the office of the Economic and Financial Crimes Commission in Abuja. He was later granted a N50 million bail, but failed to meet the conditions on Friday. Fayose and his company, Spotless Limited, are facing an 11-count charge of conspiracy and money laundering amounting to N2.2 billion.

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PIB: A panacea to Nigerian oil sector reform EMMANUEL NDUKUBA

igerian journalists have called on President Muhammadu Buhari and the National Assembly to swiftly resolve the Petroleum Industry Bill (PIB) contentious issues to boost the country’s oil sector reform. The call was made in a communiqué issued at the end of the recent one-day workshop on PIB organised for members of the Nigerian Union of Journalists (NUJ) from southern states in Uyo. It notes that the President’s decision to decline assent to the Petroleum

Industry Governance Bill (PIGB) represents a setback to the build up of momentum from 18 years of efforts to introduce policy reforms to the Nigerian oil and gas sector. “Non assent to the Bill has further thickened the atmosphere of uncertainty that is costing the sector trillions of naira in withheld and diverted foreign direct investments. “The complacency that has informed the hesitation of key actors to embrace policy reforms stems from the erroneous belief that the reform can wait. “All decision makers are

enjoined to be cognisant of the fact that time is running out for Nigeria to reposition herself as the energy market is becoming increasingly crowded with new oil producers with more business friendly petroleum laws. “The imperative to increase Nigeria’s competitiveness in the global energy market makes the need for reform urgent. Actualisation of the reform bills should be a national priority,” it adds. It states that the future of the Nigerian petroleum industry, which is the mainstay of the Nigerian economy, depends on the out-

come of the reform process. “This means that Nigeria will be met with an existential crisis if she does not hasten to ensure that her Oil and Gas sector is fit to survive and thrive in the current ecology of the oil market,” It notes. According to the communiqué, the fall of Venezuela’s economy, the country with the highest proven reserves in the world, into an economic abyss is a telling example of the consequences of the lack of political will to conform to international best practices. “Nigeria presently embodies most of the key en-

demic and structural dysfunctions that occasioned the devastation of Venezuela. “If decision makers fail to learn from that nation’s experience and change course immediately, Nigeria risks the prospect of falling into similar ruin. “Nigeria needs revenues from the Oil and Gas sector to diversify the economy because no other sector has sufficient revenue generation capacity to drive the diversification of the economy. Reforms will pave the way for the inflow of capital investment to stimulate our transition to a future without oil.

Tuesday 30 October 2018

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BUSINESS DAY

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Tuesday 30 October 2018

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How do we sustain improvements in the ease of doing business ranking?

MAZI SAM OHUABUNWA OFR sam@starteamconsult.com

y personal passion is to play a role in Nigeria’s ascendancy from a third world country to a first world nation. This passion has been the driver in most of the things that I do. My active roles in the Nigerian Economic Summit Group (NESG), Manufacturers association of Nigeria (MAN), Nigeria Employers Consultative Association (NECA), Business leaders’ Forum (BLF), etc have been driven by this passion. I am tired of seeing Nigeria occupy lowly positions in global rankings- Human Development Index, Global competitiveness index, Infant & maternal mortality, Corruption Perception Index, quality of tertiary education, Infectious and communicable diseases, life expectancy, poverty rate, misery Index, etc. That was why I wrote my seminal book in 2010 titled: ‘Nigeria@50: Time for the evolution of a new nation’, which title has been amended to: ‘Nigeria: Need for the evolution of a new nation’. I desire a new nation where things work, where quality of life is high and where we can compete squarely with most of the nations of the world in most aspects of human endeavour. I also know that no nation can achieve this feat of transformation or ascendancy from 3rd world to 1st world without a compelling vision. All countries that have

ISAAC-OGUGUA EZECHUKWU Isaac-Ogugua Ezechukwu writes from Lagos

whirlwind is described as a vertical column of air whirling around itself and said to be characterized by an inward spiral motion of the air with an upward current in the center. It is described further as a body of objects sweeping violently onward. Growing up in the village I had witnessed many episodes of whirlwinds. Many times, they could be very violent and could lift off thatched roofs of farm huts. One of my memorable experiences was watching a whirlwind lift off people’s clothes being dried outside their homes after washing them. Whirlwinds also lift off

made this transition like Singapore, South Korea and Taiwan have started with developing a vision, led by visionary leaders who effectively sold the mission to their people and mobilized them to pursue the achievement of the vision through dedicated implementation of a cohesive strategy. That was why we initiated the Vision 2010 project with General Abacha and when that failed, following the death of Abacha and the refusal of President Obasanjo to deal with any document bearing Abacha’s picture, we re-engaged with Yar’adua/Jonathan to devise the vision 2020. Though the vision was poorly sold to Nigerians and its implementation half hearted, there is no gain saying that the focus to be among the top twenty countries with the highest Gross Domestic Product (GDP) by the year 2020 helped Nigeria make significant advances in GDP growth during Jonathan years. By 2015, we were advancing quite steadily and there was a projection we could achieve the vision before 2020, until the 2016-2017 recession halted and reversed our journey. Nigeria currently has a medium-term economic recovery and growth plan (NERGP). This is no national vision as it is neither long term, not comprehensive, nor aspirational. But it is better than nothing. It is like Obasanjos’s NEEDS (National Economic Empowerment and Development strategy) - a set of economic targets and actions to be taken primarily by the public sector to pursue economic growth. Because of its limitations in concept and scope such plans do not mobilize the entire citizenry. Little wonder the NERGP is making slow progress as we struggle to resist falling back into recession. But there is one area, we can see

‘

...changing our economic, political and social conditions are possible if we inculcate the habit of breaking down the issues into identifiable manageable bits, designing the changes we want, working with stakeholders to take action to effect the changes, monitoring, rewarding compliance and punishing noncompliance

’

and feel real progress- improvement in the Ease of Doing Business How did we get here? In 2012 or so when Olusegun Aganga was Minister of Finance and was complaining about Nigeria’s global rankings especially in the areas of ease of doing business and competitiveness, that the more we tried, the worse our rankings became; I advised him to identify and benchmark those criteria that were used for the global assessment. Thereafter, we needed to set up mechanisms to take each criterion one by one and identified actions we needed to take to improve our ratings on each of the scores. He accepted this advice, which I gave at a breakfast

meeting of the Nigerian- American Chamber of Commerce (NACC). Aganga ran with this leading to the inauguration of the Nigerian Competitiveness Council. Things then began to improve for Nigeria. Similar strategy has been adopted by this government with a determined focus on improving Nigeria’s ease of doing business. Specifically the government set up a Presidential Enabling Business Environment Council (PEBEC) under the direct supervision of the Vice President. Specific areas of reform were identified and the government mandated changes in those areas. This involved the signing of some executive orders, marshalling of actions to be taken by the MDAs, involvement of the states and some effort at monitoring the agreed changes. This dedicated focus resulted in Nigeria moving up 24 places in the 2018 World Bank’s Ease of Doing Business report- moving from 169 place in 2017 to 145 place in 2018. What is more, Nigeria was judged as one of the ten most improved economies in the world. This is a no-mean achievement which deserves applause. Nigeria showed improvements in seven key activity areas- paying taxes (182-171), registering property (182-179), getting electricity (180172), getting construction permit (174-147), access to credit (32-6), enforcing contracts (139-96), and starting a business (138-130). As can be seen the most significant improvements were recorded in access to credit, enforcing contracts, construction permits and paying taxes. Anybody who has watched will have noted that these improvements were result of visible focus and actions taken in these areas. Though the recently released World Economic Forum (WEF) 2018 Global Competitiveness Index rating showed that Nige-

ria went back from overall 112 ranking in 2017 to 115 ranking in 2018, there is clear evidence that the free fall has been arrested and if we continue to mandate reforms and enforce and monitor the reforms, positive changes will occur. My main point is that changing our economic, political and social conditions are possible if we inculcate the habit of breaking down the issues into identifiable manageable bits, designing the changes we want, working with stakeholders to take action to effect the changes, monitoring, rewarding compliance and punishing noncompliance. Yes, some may argue that the changes have not yet made the expected impact on a wide scale across the economy, for example, the access to credit where Nigeria jumped 26 positions from 32 to 6. Many may still argue that the access is not yet universal and that the scores may just be the assessment or perception of the privileged who actually participated in the surveys. Yes, that may be right, but we must bear in mind that it is the same “privileged class” whose assessment put us in the 32nd position in 2017 that have revised their assessment making us jump to the 6th position in 2018. That shows that things have changed in these areas and if we continue to push those changes to endure, then the impact will percolate down. But that really is the challenge. Are these changes now permanent? Are they now engrained in our bureaucratic culture or shall we return to our old ways when the focus is relaxed or when new bureaucrats come on stage as happened with the war against indiscipline. Sustainability is a major challenge for desirable change in our economy. And we must find ways to assure this. Send reactions to: comment@businessdayonline.com

The return of political whirlwind other valuable items like cooking utensils, baskets and so on. This made young lads of my time dread whirlwinds. Whirlwinds don’t usually have a particular direction they are moving to. They cause commotion, disrupt and disorganize their immediate environment and off they go, carrying with them the random objects they have picked from the ground. Many times, whirlwinds would lose steam midair and let off the debris they have lifted from the ground. And here lies the danger inherent in whirlwinds. Those objects are let loose, falling in different locations like shrapnel from an explosion, causing havoc and inflicting injuries on many. At this point, the whirlwind must have dissipated its energy and vanished even as the objects keep falling on people and their assets in different locations. The season of political campaigns in Nigeria can be likened

to a violent whirlwind. Both share similar characteristics: they cause commotion and instead of giving hope raise high level of apprehension in the citizens. They also don’t have clear direction – any direction the internal force propels them, they go. Both are as disruptive as they can also be destructive. Whenever a whirlwind appears people give way and run for safety. In the same way, whenever it is time for elections and the attendant political campaigns, many economic and social activities will stand still in Nigeria, waiting for our politicians to be done. After each episode of whirlwind, you have chaos and disorder. Likewise, after each episode of elections in Nigeria, the country experiences some imbalance and a cloud of uncertainty. Each election Nigeria, rather than uniting the citizens produces deeper centrifugal sentiments. The country becomes more divided after every election. The whirlwind is now back in the country, it is another political season.

And rather giving hope, it sprays palpable apprehension across the land. Rather than being excited to have positive changes, many are afraid of the likely outcome. The actors are the same as in the last 30 years. They have dusted up the same rhetoric – promises that have never been met in the last 30 years. They will influence and induce the process. The voters become the objects tossed and taken up in the political whirlwind. And soon they whirlwind will lose steam and begin to drop these objects – you and I, the whole nation – in no particular order. As we fall, we crash. The crash produces shrapnel, hitting the country from different angles: joblessness, lack of infrastructure, hyper-inflation, insurgency and other forms of vices. The political emolument will grow and swell to several millions per month, while the ordinary civil servant is asked to make do with N18,000 (maybe N20,000) per month for himself

and his household, including his children’s education. What leaders we have in the country! While the politicians fly abroad for treating the slightest headache, our local hospitals are left without enough drugs and personnel. So, how will Nigerians vote in the coming elections in 2019? Are they going to vote as usual, after receiving a bag of rice, or N5,000 per vote and forget about the roads in front of their houses and continue to fuel their small generators every night? Or, are we going to vote for a leader who has come to serve and not to rule? The choice is ours as a people to demand our own kind of change, the change that will solve our common problems and build a future for the country. As you make your bed, so you shall lie on it, goes a popular saying. Vote wisely, Nigerians. Send reactions to: comment@businessdayonline.

Tuesday 30 October 2018

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Manufacturing in Nigeria (2) RAFIQ RAJI “Dr Raji is chief economist at Macroafricaintel. He was previously an Africa Economist at Standard Chartered Bank, London, UK. (Twitter: @ DrRafiqRaji)”

ccording to Nairametrics, a business intelligence firm, five local vegetable oil brands currently dominate the Nigerian market due to the government’s import ban. They are Sunola Oil, Grand Oil, Power Oil, Mamador and Devon King’s. To increase patronage and accessibility to their products, local vegetable oil producers have been implementing bulk-breaking strategies, adding sachet packs to their array of packaging. There is not similar success with the cocoa processing sector, however, which is currently burdened by debt and utilizes less than 20 percent of its in-

STRATEGY & POLICY

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

he First Industrial Revolution of the 18th and 19th centuries, mechanized profoundly for the first time, most human activities. The Second Industrial Revolution which dominated the 20th century with the development of the nuclear technology was a mixed blessing. And since the end of the Cold War in 1989, technology has become more pronounced. Although, the 20th century was primarily a century of Cold War and ideological struggle, nonetheless, the later part of the 20th century and the early part of the 21st century gave rise to a world dominated by the Third Industrial Revolution following mindnumbing discoveries with regards to laser, fibre optics, super computers, biotechnology, robotics and genetic engineering. With a world on the threshold of the Fourth Industrial Revolution, one can safely say that

stalled capacity. As Nigeria is the fourth largest exporter of cocoa, this is probably an opportunity for financially buoyant foreign investors. There is certainly at least 80 percent of the industry’s 150,000MT capacity that could be filled momentarily. This could be done by either taking over existing firms or setting up greenfield operations. Incidentally, even at full capacity utilization, there is much more cocoa processing that could be done for export and thus rival neighbouring Ghana and Ivory Coast, which have been coordinating their efforts lately. Besides, the authorities’ import ban of cocoa butter, powder and cakes ensures almost guaranteed domestic custom for the output of the existing processing capacity. For spaghetti manufacturing, the government’s import ban has not been as effective as would be desired. Foreign spaghetti brands occupy as much shelve space as local ones. Local noodles manufacturing has been a huge success, however. At about 1.8 billion servings annually, Nigeria is now the 12th world’s largest instant noodles market. Owing largely to the government’s import ban on instant noodles, almost all of the noodles consumed in the country are locally produced. In fact, the success of the policy in the instant noodles manufacturing sector is

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In fact, the success of the policy in the instant noodles manufacturing sector is believed to be one of the reasons why the Nigerian government has been hesitant to sign the African continental free trade area agreement (AfCFTA)

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believed to be one of the reasons why the Nigerian government has been hesitant to sign the African continental free trade area agreement (AfCFTA). Fruit juice production is another venture of interest that could be worth the while of interested investors. According to the Raw Materials and Research Development Council (RMRDC), local firms currently meet less than 25 percent of the 550 million litres

local fruit juice demand. With imported concentrates accounting for most of the currently meagre local production, a noted preference by consumers for naturally produced fruit juice should be a boon for manufacturers with local resources and capacities across the entire value chain. Local cement production is perhaps the best example of how the authorities’ import ban policies have benefited local industry and entrepreneurship. Africa’s richest man, Aliko Dangote, owes his stupendous wealth to cement manufacturing in Nigeria. Dangote Cement accounts for more than 60 percent of the estimated 33 million metric tones (MMT) local cement demand in Nigeria, with margins as high as 70 percent when the cement import ban was first instituted; albeit they are now below 50 percent. With local producers now churning more cement than is needed, Dangote Cement, in addition to exporting its excess cement to neighbouring countries, has since broadened its horizons further afield, with operations in numerous African countries. Government efforts to encourage local tomato paste production has not met with similar success. As Nigeria imports at least 400,000 tons of tomato paste annually, there is a huge opportunity for the manufacturer that can get it right. Incidentally, Dangote

Industries is making an attempt at local tomato paste production. It set up a plant in northern Nigeria in March 2016 and entered into suppliers’ agreements with 5,000 farmers to guarantee supply of tomatoes. Shockingly, even as it agreed to pay above the market price, the local farmers could not deliver the goods. In one season, for example, the produce was destroyed by a pest. And that is beside the fact that half of the output tend to get spoilt en route factories from farms due to bad roads. The Dangote experience in this regard is not an isolated one. Its example is, however, significant because if there is one local conglomerate that can make a success of tomato processing, or any other local manufacturing venture for that matter, it is the Dangote Group. • The author, Dr Rafiq Raji, is a consultant at the NTU-SBF Centre for African Studies, a trilateral platform for government, business and academia to promote knowledge and expertise on Africa, established by Nanyang Technological University and the Singapore Business Federation. This article was specifically written for the NTU-SBF Centre for African Studies. This article was published on How We Made It In Africa on 27 September 2018. Send reactions to: comment@businessdayonline.com

The “technology train” is moving: Is Nigeria onboard? the 21st century is surely a century for advanced technology. The 21st century is likely to witness more of trade wars based on technological supremacy as we have seen in the past three years between the USA and other productive economies in Europe and Asia. These industrial revolutions have positively improved the living standards of developed countries but virtually institutionalized poverty through the widening gap between developed and developing countries. Even as globalization has led to unprecedented gains for many countries ranging from the movement of goods, services, people and ideas, there are those who have lost out economically, politically and culturally. Today, we live in a complex and fast changing world, a world where technology runs our lives daily. We have witnessed a change from analogue to digital, from electric typewriters to multimedia meshed in worldwide computer networking; a change from copper-wire communication system to either fibre optics, or wireless cellular, and even the satellite systems. A change from mono-component to hybrid component of telephone, television and computer all in one. A change from manual to robotics; a change from fossil energy to nuclear and to solar energy. These changes are products of the fast-changing technology. We therefore live in a world in which the primary indicator of progress is its level of technological devel-

opment. The technology train is on the move. There are no clear indications that Nigeria with a population of almost 200 million is onboard. With each industrial revolution, the world we live in has continued to undergo science-led development. Nations that want their citizens to be prosperous have embraced science, technology, engineering and mathematics (STEM). In Nigeria, the dismal performance in STEM-led development has always been blamed on political instability by those in government. To an extent, this is true. But not completely true because the root cause of political instability is purely economic. Worsening economic problems have resulted in political instability which we witness today. The result is insecurity across the entire country. Democracy is capital intensive. And if the cost of governance isn’t reduced, there won’t be enough funds to critical sectors of the economy such as education, health, transport and energy amongst others. The fourth industrial revolution refers to “how technologies and current trends such as the Internet of Things (IoT), robotics, virtual reality (VR) and Artificial Intelligence (AI) are changing the ways people live and work”. “The Fourth Industrial Revolution ushers in a new era rather than a continuation of the Third Industrial Revolution because of the volatility of its development and the disruptiveness of its technologies.” To deal with unprecedented challenges globally, the World Economic

Forum is creating a network of centres for the Fourth Industrial Revolution, enabling businesses, governments, start-ups, academia, and private organizations to work together to ensure human-centred future for innovation. Is Nigeria onboard this technology train? Where is Nigeria’s Fourth Industrial Revolution Centre? Countries such as Japan, China, India, and the USA have all established the Fourth Industrial Revolution Centres showing craving for new approaches and creating innovative ways of doing things. These countries have boldly expressed their mission statements as follows: a. USA: “How can we maximize the benefits of science and technology for society? That’s our mission. To achieve it, we’ve created a global hub of expertise, knowledge-sharing and collaboration, based in San Francisco.” b. India: “As the world’s largest democracy and the country with one of the highest number of scientists and engineers, India is a key political, social and economic player that will shape the course of the Fourth Industrial Revolution”. c. Japan: “Emerging technologies are advancing at unprecedented speeds, changing the world as they blur the boundaries between the economic, social and political spheres.” d. China: “We must proactively work together to harness the full potential of the Fourth Industrial Revolution.” Nigeria has no Fourth Industrial Revolution Centre, hence no objective for now. Policy makers are re-

minded that modern technology has overwhelming influence on us as a nation, and we either become part of it or be a victim to it. It is only technology as a factor of production that can make Nigeria’s economy competitive and sustainable. New technologies such as AI, precision medicine, autonomous vehicles and many others, offer great potential to lift humanity to new levels of well-being. The Fourth Industrial Revolution has brought fresh opportunities but also new questions about how economies, particularly those in Africa, South of the Sahara, can best integrate technologies for a faster path to broad-based prosperity. With Fourth Industrial Revolution, policy decision makers are disturbed that manufacturingled development model that lifted millions out of poverty in Asia is unlikely to be viable or possible soon in Africa. So, there is a call for more dynamic education systems and labour market policies to cater to a wide range of new technologyintensive, high skilled occupations which will be in demand in the future. This is along with new growth envisaged broadly across sectors such as health, education, and energy amongst others. There is need for the Federal Ministry of Science and Technology to determine ethical rules and policies around these technologies in collaboration with federal ministries of education, health, trade and industry.

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

Bashir Ibrahim Hassan

Tuesday 30 October 2018

Minimum wage conundrum

fter a three days warning strike, the government has propos ed to increase the minimum wage from N18, 000 to N24, 000. The labour unions have also climbed down from the initial N56, 000 they were demanding to a moderate N30, 000. We agree with the labour unions that a review of the minimum wage is long overdue. The current minimum wage, set in 2011, was at a time the Naira exchanged with the dollar at N150.00. Presently, the exchange rate hovers around N360 to a dollar. It even went as high as N500 at a time in 2016. Clearly then, inflation has eroded the value of the naira and the minimum wage as it stands is a huge joke. In saner climes, minimum wages are reviewed at periodic intervals to keep pace with inflation and the needs of the time. But that has clearly not been the case in Nigeria. The problem though, is not about reviewing the minimum wage but the ca-

pacity to pay. Even at the proposed N24, 000, the increase will push the federal government’s wage bill to N2.4 trillion, 90 percent of government’s total revenues in 2017. Last month, the budget office of the federation released the 2017 budget implementation report indicating that the federal government only realised half of its projected revenues last year and had to borrow N2.5 trillion from both the domestic and international markets to fund the deficit. The same thing is happening again this year and the government is borrowing to fund its budget. Recently the president sought permission from the National Assembly to raise a $2.86 billion Eurobond loan to fund its 2018 budget which has a deficit of N2.4 trillion and could even widen if ambitious revenue targets set out in the budget are not achieved, as has been the case for the past three years. Sadly, a higher minimum wage is being proposed at a time the government is being urged to cut down its

recurrent expenditure to be able to spend more on infrastructure. The situation of state governments is even direr. Before the recent upsurge in the price of crude oil, about 30 states of the federation were unable to pay salaries (the meagre N18, 000 minimum wage) and have to depend almost exclusively on bailouts to pay the little they were paying pay, like half salaries in some states or reduction in working days by s ome state governments. Meanwhile, the same NLC agitating for an upward review of the minimum wage has not been able to do anything to compel delinquent states to pay their workers the old minimum wage. The sad reality remains that as desirable as the new minimum wage is, the Nigerian federation (especially states and local governments) do not have the capacity to pay the amount. True, the labour unions and most Nigerians could point to the outrageous cost of running government especially the salaries and allowances of

elected and appointed government officials as the reasons behind the dire financial situation of the country. As genuine as that complaint is, it will not increase the capacity of states to pay the new agreed minimum wage. Expectedly, many state governments are already service notice that they will be unable to pay the new wage with their current revenue expectations. We foresee the new minimum wage causing upheavals and labour unrests in many states of the federation. It is our considered view that rather than focusing on forcing the government to review the minimum wage, the NLC and other labour and trade unions, in addition, should join hands with those calling for the restructuring of the Nigerian federation along fiscally viable lines such that states will be financially and economically viable enough to maintain and pay its workforce without recourse to the federal allocation. Only a viable federation can ensure fiscally strong and stable states.

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Tuesday 30 October 2018

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TECNO consolidates 2018 with record-breaking smartphones

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

Stiff industry competition shrinks Nigerian Breweries revenue by 6%

••• propose interim dividend of 60k MICHEAL ANI

he stiff competition, seen among players in Nigeria’s oligopolistic beer market is taking a haircut on the sales volume of Nigerian breweries, one of the major players, going by the firm’s 9 month scorecard. The brewery giant reported a decline of 5.6 percent in revenue from N270 billion in 2017 to N250 billion this year. A situation analyst said was as a result of an aggressive marketing strategy from competitors to gain more share of the market. “The decline in the top line of Nigerian breweries reflects weak volume sales following price increase in its mainstream and premium brands as well as lower demand occasioned by stiff competition in the industry”, said Gbolahan Ologunro, an analyst at CSL Stockbrokers, a subsidiary of First City Monument Bank Group. “Although, the backward integration plan embarked upon by the management should ease production costs in the medium term, the impact will be marginal due to higher excise duties imposed by the government. Hence, margins are likely to remain

L-R: Victor Aghahowa, zone head, North-Central, Stanbic IBTC Bank; Rita Ichuan, a guest; Ejelikwu Martha, Stanbic IBTC staff; Binta MaxGbinije, chief executive, Stanbic IBTC Trustees Limited, Usman Imanah, corporate communications manager, Stanbic IBTC at the Together For A Limb Charity Walk, held in Abuja at the weekend.

under pressure”, he added. “However, we expect that as the macroeconomic environment improves coupled with the impending festive season, revenue growth for the firm is expected to show modest improvement”, Ologunro said in a watsapp response to BusinessDay questions. Despite a decline in revenue, the firm’s expenses on excise duty surged 9 percent to

Guinness PBT raises N1.2bn amidst challenging environment FRANK ELEANYA

uinness Nigeria, one of the biggest players in Nigeria’s beer segment, has reported a profit before tax growth of N1.2 billion driven by lower finance charges. The company’s latest filings at the Nigerian Stock Exchange showed that the lower charges came as a result of the rights issue, which more than offset operating profit decline in a challenging operating environment. Gross profit declined by 12 per cent driven by continued inflationary pressure on the company’s raw material costs and volumes decline. Guinness’ marketing spend also dropped by 8 per cent, slightly above net sales decline. It also saw operating profit declining A statement from the company and sent to BusinessDay explained that the beer segment is experiencing intense competition, hence operators

are having to up their game to stay relevant. “Looking forward, we will continue to focus on the three strategic pillars of productivity, expansion of our portfolio, as well as the execution of the commercial footprint initiatives to improve performance in the business,” Baker Magunda, managing director and CEO, Guinness Nigeria Plc. “Whilst we remain optimistic about the execution of our strategy, we note that the operating environment is likely to continue to be challenging for the remainder of the 2019 financial year.” He also noted that the board of Guinness is confident in the direction of investments in the company and the brands to ensure long term competitiveness. “The board continues to support the management in its efforts to build a business that can win in the market and deliver growth,” Babatunde Savage, chairman of the board of Guinness Nigeria Plc.

N16.93 billion in 2018 from the N15.53 billion it spent within the same period last year. Similarly, selling and distribution expenses went up, gulping the gains that could have been seen from the 31 percent decline in finance cost, which in turn affected its bottom-line negatively. Profit before Tax slumped 37 percent while Profit after Tax stood at N14.78 billion from

the N24 billion last year when Nigeria was still struggling to get its feet from a recession its entered in a quarter of century. The beer maker has proposed an interim dividend of 60k subject to deductions of appropriate withholding tax and approval at the board of directors meeting slated 25th October 2018. According to a statement issued by the firm, the proposed

Standard Chartered to focus on businesses with high environmental, social impact

tandard Chartered Plc “the Group” has announced the launch of its refreshed public position statements, which cover new and tightened requirements of the Group, in order to undertake business in industries with high potential environmental or social impact. The refreshed position statements form part of a wider goal to increase support and funding for sustainable financing. As part of its Sustainability Aspirations, the Group committed to finance and facilitate $4 billion toward clean technology by 2020, and is more than halfway to meeting that goal. The Group strives to minimise damage to the environment and encourage positive social change as a result of its financing. Working with the 2 degrees Investing Initiative (‘2oII’), and peer banks, the Group is developing a methodology to measure, manage and ultimately reduce the emissions related to its activities and the financing of its clients. The new requirements announced today include: not

financing new plantations or livestock ranches which convert or degrade High Carbon Stock forests, peatlands or designated legally protected areas not financing operations that grow, process or trade soy from the Brazilian Amazon and Cerrado not providing financial services to clients who conduct testing on animals for cosmetic or personal care products not financing asbestos mines and mines that conduct Appalachian mountaintop removal only providing financial services to agri-business clients who use cage-free or crate- free production systems for livestock only providing financial services to shipping clients that have an Inventory of Hazardous Materials (“IHM”) for new vessels Each individual position statement was refreshed after consultation with a range of clients and NGOs, and will ensure the Group can balance supporting our clients in undertaking their business activities and supporting economic growth.

interim dividend would be paid to shareholders whose names appear on the register of members as at the close of business on November 22, 2018. It said the register of members would be closed from November 23, 2018 to November 28, 2018. The Nigerian beer market has three major players including Heineken N.V. owners of Nigerian Breweries (NB), AB

InBev owners of International Breweries and Diageo-owned Guinness Plc have stepped up their game in their bid to gain market share and profitability. NB currently owns two key brands in the premium lager segment (Heineken and Tiger) and continues to face a tough competition from International Brewery’s recentlylaunched global brand, Budweiser dubbed king of Beer while Guinness Nigeria has Harp in this segment. “The market penetration of international breweries and other cheap brands have posed a serious threat to Nigerian Breweries”, one financial analyst who does not want name mentioned said. “The company would be faced with two choices whether to consider raising prices marginally in Q4 or come up with new product into the market that will be cheaper. However, this would depend on what the firms competitors will do”, the person said. On the future outlook on the firms share price, analyst say the poor result would impact negatively on its share price, reducing investors’ appetite for the firms stocks. “NB still have the biggest market share but that status is being threatened now, with the current share price showing they are currently undervalued”, another analyst said.

RIMSON to deliberate on risk management and national building at Conference

he 2018 National Risk Management Conference of the Risk Management Society in Nigeria (RIMSON) will focus on ‘Risk Management and Nation Building: Transforming National Challenges to Opportunities” The two-day conference scheduled for Wednesday 31st October and Thursday 1st November, 2018, which brings together risks experts across the different facets of the national economy will be flagged off by the Nigeria’s second citizen, Yemi Osinbajo. The risk management practitioners comprise Risk Management professionals in government agencies and parastatals, the oil & gas sector, insurance, banking & finance, agriculture, manufacturing sector, telecoms sector, State and national disaster management agencies as well as Pension and Health Management Organisations amongst others. Jacob Adeosun, president of RIMSON in a statement said that the invitation of the Vice President, Yemi Osinbajo as the Special Guest of Honour and to declare the conference open un-

derpins the national importance of the 2018 Risk Management Conference, stating that “the conference is part of RIMSON’s contribution to Nation Building, especially in the clarion call for the enthronement of Risk Management awareness and culture in national planning and development”. Adeosun, a seasoned Chemical Engineer and lndustrial Risks Surveyor and Analyst, is the flag bearer of a committed crop of risk management professionals seeking to move forward the Risk Management landscape in Nigeria and ultimately in the West African Sub-region. RIMSON has remained committed to risk management education which it recently reinforced with the berthing of The Centre for Risk Management Development (CRMD), RIMSON’s Training, Education and Research Arm approved by the Federal Ministry of Education. The press release signed by Joseph Obah, RIMSON’s media consultant, also listed the focal areas of the 2018 National Risk Management Conference.

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COMPANIES & MARKETS Firm unveils technology for credible elections …grows SME loan book by over N1bn in Q3 JUMOKE AKIYODE-LAWANSON

our months to the 2019 general elections and ahead of the campaigns expected to kick off in November, Widenit (pronounced Widen-It) a Geo-Fencing firm is unveiling a new technology towards actualizing a credible election in the country (www.widenit.com). The technology, which is a location-based target campaign, is expected to, when deployed, galvanize youth participation in the election, address voter apathy, discourage vote-buying with the strong potential as an anti-rigging tool, and is ideal for political campaigns as it facilitates easy reach out to potential voters. Tagged ‘the game changer’, Bosco Onyeme, the chief facilitator of Widenit, said the technology when introduced into the Nigerian market is expected to revolutionalise the conduct of

and participation in elections in the country. “Statistics indicate that in the run-up to the general elections, the demographic distribution of voters is skewed heavily in favour of the youths with a commanding percentage of 65 per cent of the population aged 18 to 35 years. “Also, the Independent National Electoral Commission (INEC) recently released the updated figures of the voters register across the geopolitical zones of the country. Experience from our previous elections have shown that a paltry number of less than 50 per cent of registered voters come out to exercise their civic duty. “What this technology will do to address this nagging voter apathy that with Widenit, INEC, political parties and individual candidates can deliver targeted messages to specific recipients in specific areas. For example, the political parties and the electoral umpire can use

Union bank affirms commitment to Nigerian education sector

nion bank as part of its commitment to the growth of the educational sector in the country has decided to invest in an annual education fair tagged Edu 360. The two day fair which kicked off its maiden edition on Tuesday is seen to convene key stakeholders of the sector. Emeka Emuwa, CEO union bank at the event affirmed the bank’s commitment to making sure that there are a lot of investments in the educational sector. Stating that there’s a lot of work to be done, Emuwa said “For us at union bank, education is a very critical ingredient in everything we do. What we’re looking to do is for edu 360 to be the leading education platform in Nigeria. Bringing together various participants and actors in education and facilitate collaboration amongst all the stakeholders in the education ecosystem”. Union bank at its 100 years celebration last year made a commitment to drive private sector participation to delivering Nigeria’s sustainable development goals. The SDG number 4 which is Quality Education has been chosen by the bank to focus on. Emuwa stated that the bank is a financial and commercial institution committed to the active participation in developing the country. “The goal of the fair is accelerating development and much needed investments in this sector that’s why The theme for this year is investing

in the future”. Modupe Adefeso Olateju, managing director, Education Partnership Center, in her keynote address titled Investing in the future: Education and National development. Olateju said that the state of tomorrow’s economy and the quality of its workforce can be seen in its schools today. “Education is fundamentally important to the development of any nation at all, more so in a world that is rapidly globalizing. Education as a means for livelihood and a pathway for National development can not be over emphasized “. Says there’s need for massive investments in the sector to curb the effects of brain drain on the economy and the country as a whole. The cost of putting up infrastructures in school is quite phenomenal that is why the bank is partnering with stakeholders to finance schools in the country. The Executive director, union bank Adekunle Sonola made this observation at the event. Sonola said that “ To a large extent, the dimension of education in Nigeria has changed. We need intervention in education because we need to grow minds. It is important to grow minds because it is the minds that we grow that would ensure that the future is assured”. Says the bank has put together a group of solutions to help finance schools. Sonola also stated that the bank intervenes through providing finance at the right time and where necessary.

L-R Dada Thomas, erstwhile president, Nigerian Gas Association (NGA), Ibe Kachikwu, minister of state, petroleum resources; president NGA, Audrey Joe-Ezigbo and senior vice president, commercial and gas at AITEO Group Victor Okoronkwo, at the 2018 NGA International Gas conference and exhibition held in Abuja

it to send language-specific ‘Get out and vote’, ‘Collect your PVC’, and ‘Vote, don’t fight’ messages to demographically segmented sectors of the electorate,” Oyeme said.

He added that candidates can also send adverts and political messages out only to electorates within his/her constituency to eliminate wastage. “All that is required is for recipients to have a

‘Security of gas pipelines crucial to national development’

icolas Terraz, managing director of Total E&P Nigeria Limited, has pinpointed security of gas pipelines as one of the crucial areas that requires attention if the Nigerian Energy, Oil and gas sector must achieve its full potential. This is as he suggests placing emphasis on solving the myriad issues affecting the development of the gas sector over fixating on building new infrastructure. Terraz said this during a session on “Gas Infrastructure Development” at the Nigerian Gas Association (NGA) 11th International Conference and Exhibition in Abuja recently. Terraz posited that domestic gas supply challenges have contributed to problems in the power sector. Patrick Olinma, Executive Director, Asset Management and New Energies, Total E&P Nigeria Limited who represented Terraz added that

the industry should be focused on hindrances which if not dealt with, could impede the development of the sector. He said, “For instance, we and several other independent companies use the Trans-Niger Pipeline (TNP), which is a very crucial pipeline, to evacuate gas. When we make our plans we consider 25 per cent non-operational outage. This has nothing to do with maintenance or operational issues, but with security, vandalism and all sorts of things going on in the Niger Delta. I am talking about an existing pipeline not a new infrastructure.” Nigerian Gas Association’s 11th International Conference and Exhibition was attended by officials of the Federal Government and major stakeholders in the oil and gas sector who identified critical issues affecting Nigeria’s transition towards a gas-based economy.

C24 donates to less privilege on third anniversary

s parts of activities to celebrate C24 Limited’s 3 years in business, the personal loan company recently shows a benevolence visit to the Royal Diamond Orphanage and an environmental sanitation exercise, as ways of giving back to the society. C24 Limited in its 3years has successfully met the needs of numerous salary earners through its personal loan product and expanded many businesses through its business loan product. Through its loan without collateral, C24 created a simple way to help people get back up on their feet without delay and actualize opportunities; while it’s online and paperless application process has made access to loan seamless. The company’s excellence comes from its people’s drive to provide financial services in an

atmosphere of transparency with competitive interest rates and a simplified repayment structure. The company in a statement said, “We understand how it feels to be down and out of cash. So, we created a simple way to get back up on your feet without delay and actualize opportunities. For short, we give loan without collateral. “Our promise of excellence comes from our drive to provide financial services in an atmosphere of transparency with competitive interest rates and a simplified repayment structure. For now, we only operate within Lagos with plans to expand to various states nationwide anytime soon,” said C24. As a leading Fintech company, C24 is position to be customer’s first choice for quick financial solutions in Nigeria.

smartphone. “On galvanizing youth participation through this technology, the youth segment across our tertiary institutions in the country can be mobilised to partici-

pate in the election, monitor the election in their location and report any acts of violence or electoral malpractices which would serve as a veritable anti-rigging tool,” he said.

Law Union and Rock names Mayowa Adeduro new MD CYNTHIA IKWUETOGHU

nderwriting firm, Law Union and Rock Insurance Plc has announced the appointment of Ademayowa Adeduro as its new managing director /CEO, subject to the National Insurance Commission (NAICOM)’s approval. The insurer on Thursday notified the Nigerian Stock Exchange as well as the investing public of the new development in the Company. According to the notification sent to the exchange and signed by Stanley Chikwendu, company secretary, the appointment was approved at the meeting of the Company’s Board of directors held on Wednesday, October 24, 2018 and is sequel to the expiration of the contract of appointment of its managing director / CEO, Akinjide` Orimolade on October 20, 2018. Adeduro is a core insurance practitioner with a Bachelor’s degree in Insurance from the University of Lagos and Master’s degree in Marketing from Obafemi Awolowo University, Ile Ife, Osun state. He is also a fellow of the Institute of Chartered Accountants of Nigeria (ICAN), an Associate Member of the Chartered Insurance Institute of Nigeria (CIIN), and the Nigeria Institute of Management (NIM). In the third quarter 2018, the company saw huge growth in unrealized loss in Capital market combined with a decline in operating revenue, resulting to a 47 percent drop in profit.

The financial result for the third quarter ended September 2018 of the insurer was released on Thursday on the Nigerian Stock Exchange (NSE). From the result, fees and commission income declined 4 percent due to a decrease in reinsurance commission income The insurer posted a 5 percent growth in its Gross Premium written to N808 million whereas Gross premium income dropped marginally in three months to September. Both pre-tax profit and Profit after tax (PAT) of the company declined in the same proportion by 47 percent. Pre-tax profit declined to N185.4 million in Q3 2018 from N352.9 million recorded a year earlier while, PAT declined to N157.6 million from N299.9 million. Unrealised loss in Capital market grew largely by 663 percent to N1.5 million from N202, 000 recorded in the earlier year. On the other hand, operating revenue such as sundry-income dropped 85 percent in Q3 2018. Investment income classified into policyholders’ fund and shareholders’ fund also fell by 6 percent to N208.1 million during this period from its previous figure of N222.1 million in 2017. During this period, the company was able to manage its costs as expenses on income tax declined 47 percent. Meanwhile, the insurer reported 9-months PAT of around N521.8 million from N618.7 million in the same period a year earlier, a year-on-year drop of about 16 percent.

Tuesday 30 October 2018

BUSINESS

COMPANIES & MARKETS

Business Event

DAY

TECNO consolidates 2018 with record-breaking smartphones

t will be safe to say that 2018 has been a good year for Africa’s number one smartphone maker, TECNO Mobile as they have not only launched several record-breaking devices but have also won several outstanding awards along the line. The launch of yet another innovative smartphone, the TECNO Pouvoir 2 Pro Gold edition seems to have totally addressed that claim, as the device which was rumoured to flaunt an 18karat gold back case, is really a sight to behold. Nonetheless, we can now take it easy with the rumours and speculations about the 18karat gold story as the device was released some days ago and yes, it is gold! After some days with the new device, two things specifically stood out for - the Design and the Battery capacity. That being said, join me on this review and let’s discuss this new premium design from TECNO Mobile. In terms of the design and style, the TECNO Pouvoir 2 Pro Gold

edition is a choice device for any user who intends to have a sleek and premium looking pocket fitting device. The curves, Gold frame, placement of the rear cameras and flash, is just awesome. For a 6.0-inch HD+full display smartphone, the new device is very slim to handle which allows users the ability to handle the phone with a single hand.. Asides from its classy look and feel, the Pouvoir 2 Gold edition is a 5000mAH battery powered device that can run for up to four days after a single charge and is encased in a slim frame that acts as an amazing cover for the enormous capacity under the hood. This fits the habitual needs of smartphone users. The Pouvoir 2 Pro Gold runs on Android 8.1 Oreo OS and also sup-

ports 4G LTE connectivity, has 3GB of RAM, 16GB internal storage and so much more. The latest addition to the TECNO family is undeniably a strong contender for the best-lookingphone of the year. From a premium ‘18karat’ gold casing to a long-lasting battery life and so much more, the TECNO Pouvoir 2 Pro Gold edition, is an amazing smartphone pick for anyone out in the market scouting for a smartphone that truly combines the essentials of technological innovation, style and class. When I first heard about the camera quality on the smartphone, I wasn’t very surprised because TECNO Mobile is known to breaking records when it comes to the camera. So, for the new Pouvour to spot a 16MP rear camera and an 8MP selfie shooter shouldn’t be shocking, but what should be considered news is that the rear camera is supported by a dual tone LED flash for preferred lighting effects even in dim light scenarios- that’s a really good addition.

L-R: John Feyisetan, wnner of Godrej Nigeria Loud 2018; Ogbaji Mary, winner, Chitwan Singh, Business Head West Africa/chief executive officer, Godrej Nigeria Ltd; Uzoigwe Chiamaka, winner; Ganiu Adewunmi, winner, and Sodiya Oluwatosin, winner, at the Godrej Loud 2018 finalists and prize presentation to the winners in Lagos.

Dangote Flour celebrates World puff puff day with families

eading millers of baking flour, Dangote Flour Mills at the weekend celebrated the maiden edition of World Puff Puff Day with over 50 confectioners engaged to produce over 30,000 pieces of the local snack, as part of activities marking the day. World Puff Puff Day, according to the Group Managing Director of Dangote Flour Mills, Thabo Mabe, is an initiative of the flour miller to celebrate three categories of people, the confectioners who fry the delicacy, the consumers who enjoy the snack and even the sellers who make a living by selling it. He stated that the event was organized to celebrate Nigeria’s creativity in the local delicacy as well as further create awareness for the company’s 1.5kg size launched in March this year. He said, “The World puff puff day is one of the most modern festivals. It is celebrated on October 27; this is the maiden edition. For us, we thought how do you bring flavour to the household and this is why we introduce the 1.5kg. “This would make it easier for Nigerians to enjoy their puff puff, bread and

other pastries at a go and make it healthy as well, rather than buying it from the market measured with plastic, which may not be hygienic. But now the small kg is handy, it can be put in the cabinet and consumer can create flavour of their choice.” The event which also had in attendance Aliko Dangote, the president of Dangote Group, saw the company brake the Guinness book record of 200kg, which equals to four bags of flour recorded to have been fried at a location. To beat the record, Dangote Flour at the event had fried 2 metric ton of flour, which is over 40 bags of 50kg. Over 1,000 attended the event including school children drawn from different schools. Halima Aliko-Dangote,the executive director, Dangote Flour Mills, speaking at the event said that following the success of the maiden edition, the company has decided to henceforth celebrate the World Puff Puff day, on October 27 every year. She said that the 2019 edition celebration would be in collaboration with other flour

manufacturers in the country to further enlighten Nigerians on the various ways to use flour as well as its nutritional value. According to her, the event was organized specifically to give back to the community as Dangote Group believes in ensuring that the society benefits from its activities. “This is giving back to the community. Through this event, we’ve been able to empower the confectioners and all the puff puff fried in relation to this program are given out free to feed the community.” Group Marketing Executive, Dangote Flour, Funmi Bolarinwa said through the program, the company have come to identify that over 4,000 are making a living through frying puff puff, while over 100,000 are into other pastries businesses. She said the company experimented with various flavour, such as vanilla, coconut, fried chili and classic to show Nigerians different ways they can enjoy the snack. “We are showcasing our delicacy and also exporting one of the exciting products we love to the rest of the world”, she said.

Binatone unveils Trade Fair package for customers

t is going to be a free gift galore at this year’s Lagos International Trade Fair as Binatone is offering fabulous discounts, and numerous freebies for every purchase made at the Fair which will take place in Lagos between November 2 and 11. Prasun Banerjee, managing director of Global Appliances Nigeria Limited, the Sole distributors of Binatone products in Nigeria, said the gesture is part of the company’s 60th anniversary celebration this year. “Binatone, founded in the UK in 1958 celebrates its Diamond Jubilee this year. That is 60 years of consistently delighting customers with high quality, innovative products at affordable prices. The Trade fair free gift offer is to celebrate this occasion and to also say ‘Thank You’ to our numerous custom-

ers in Nigeria.” He stated Banerjee disclosed that apart from a flat 10 percent discount on all purchases, there will be specially branded gifts like personal mobile fans and calendars, Binatone hair dryers, hair clippers, various pressing irons, pressure cookers & kettles will be given out free to customers upon the purchase of any Binatone product during the Trade Fair taking place at Tafawa Balewa Square complex, Onikan Lagos. He explained that a full Range of Binatone products that will be on display during the fair, including a brand new design Rechargeable Fan (in 16 & 18 inches), the 10 KVA centralized stabilizer, suitable for an entire house, Multi cookers with a unique sauté function, heavy weight & high power Irons with Binatone’s Magi-cloth (specially

designed to absorb the extra heat that would otherwise spoil an expensive, dress, shirt or suit,). “In addition, there will be a full range of Air Coolers & a new collection of Ceiling Fans along with some exciting additions to their famous range of unbreakable jar blenders (now including a free stirring stick) and the ultra-innovative Bluetooth Tower Music Fan.” He added. Other products that will be on display during the 10 day trade fair according to Banerjee will be a new pressure pot with a transparent lid, an energy saving ceramic cooking plate, table top gas cookers, a premium garment steamer for larger items of clothing and of course, a whole range of other products in the fan, small domestic appliance and power categories.

L:R: Olaoluwa Babalola, marketing director, Nigerian Breweries, Emmanuel Oriakhi, brand manager, Heineken, Uche Unigwe, sales director, Nigerian Breweries, and Obabiyi Fagade, senior brand manager, Heineken, at the Heineken Lagos Fashion Week 2018. Pic by Pius Okeosisi

L-R: Babatunde Kasali, chairman, Wema Bank Plc; Bola Tinubu, national leader, APC; Segun Oloketuyi, former MD/CEO, Wema Bank Plc, his wife Abiola; Ademola Adebise, MD/CEO, Wema Bank Plc, and Raufu Aregbesola, governor, Osun State, during the sendforth party in honor of Oloketuyi in Lagos, at the weekend. Pic by Olawale Amoo.

L-R: Charles Kie, immidiate past managing director, Ecobank Nigeria; John Aboh, chairman, Ecobank Nigeria; Patrick Akinwuntan, managing director, Ecobank Nigeria; Ade Ayeyemi, group chief executive officer, Ecobank Transnational Incorporated (ETI), and Emmanuel Ikhazoboh, chairman, ETI, at the Ecobank director’s dinner and launch of the Ecobank Rapid Transfer app in Lagos, at the weekend. Pic by Olawale Amoo.

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Tuesday 30 October 2018

Marketing communication agencies position for political campaign jobs Stories by DANIEL OBI Media Business Editor

ampaigns for the 2019 general elections are gradually picking up as media agencies including PR practitioners, creative agencies, billboard owners and buying agencies eye lucrative jobs that will emanate from the political activities. To get the attention of the electorate who will ordinarily determine the chances of politicians and election outcomes, the vying politicians need outstanding marketing communication professionals, good copy messages and credible media platforms to send their messages. New jobs from political space are what some of the

L-R: Jagadish Swain, senior marketing manager, Spectranet 4G LTE; Ajibola Olude, executive secretary, Association of Telecommunications Companies of Nigeria (ATCON); Ajay Awasthi, chief executive officer, Spectranet 4G LTE; and Mike Ogor, head of marketing, Spectranet 4G LTE, during the presentation of 4G LTE internet service provider of the year award to Spectranet at the company’s head office in Lagos recently.

agencies are expecting this year as perhaps the last prospect to cushion the effects of economic recession on marketing communication busi-

ness. According to some marketing communication practitioners, the industry is still feeling the effects of recession

in the industry as there has not been substantial increase in marketing budget from advertisers as was anticipated at the beginning of the year.

Nigeria Brand Awards recipients extol organisers on professionalism, integrity

ecipients of the 2018 Nigeria Brand Awards have commended the organisers of the award for their professionalism and interrogative mind-set in determining deserving individuals and firms for the award. The award which is in its 8th year, recently crowned some distinguished brands and outstanding achievements of brand personalities across different sectors in Africa. Laolu Martins, CEO Nigeria International Securities Limited, NISL, an investment management firm, who received Best Customer Experience Award 2018 (Investment Management

Category)said what makes the award outstanding and credible is that it is based on research and background checks. “One major thing we noticed about the organisers of the award is that they are professional. They are different from those who make demands before giving award .They carried out their research on our work and we were delighted on their findings. We also researched into their profile before accepting and we found out that companies that have received awards in the past from them are notable brands”. Answering BusinessDay question on fears of investment lull as Nigeria goes into

election period, Laolu whose clients include pension fund administrators who control over N8.3 trillion said when investor is going into investment especially equities, the aim is to buy low and sell high. “Yes, the market has suffered over the last four months but for long time investors who are looking beyond the elections, this is the good time to buy”, he said. In his assessment, Innocent Oboh, CEO of Dijo Communication regretted that awards have been abused but said he appreciates the Nigeria Brand Awards because the organisers have gone extra mile to research on awardees. He said the organisers

L-R: Ama Ikuru ,General Manager, Nigerian Content Develop & Monitoring Board; Taba Peterside, Director Nigerian International Securities Limited, NISL; Benjamin Wilcox, Chairman NISL, Laolu Martins, MD NISL, Soba Wilcox, Greg Ozoya ,Manager, NISL at the Nigerian Brand Award recently in Lagos

Advertising spend dipped in 2017 by 3.3 percent from N91 billion in 2016 to N88 billion in 2017, according to Mediafacts. Early this year, there was anticipation that World Cup, economy bounce back after recession and pre-election activities will shape activities in marketing communication industry. But according to CEO of Dijo Communication, Innocent Oboh, marketing activities around 2018 World Cup were somewhat silent while effects of recession are still heavy on media industry. Preparing for political campaigns jobs, one of Nigeria’s leading Public Relations and Integrated Communications Consulting firms, Chain Reactions recently unveiled public affairs and political campaign management services for governments, politi-

cal parties, aspirants and candidates aimed at preparing them to structure their political campaigns better with better professional support in the run up to the next 2019 general elections in Nigeria. In a statement, its Managing Director and Chief Strategist, Israel Jaiye Opayemi, explained the various services governments and politicians should take advantage. “We have a Campaign Play Book for governments and candidates seeking re-elections. The package is themed, How to Win Re-Election Campaigns. We have a Play Book for challenger aspirants and candidates in a package named, How to Defeat an Incumbent. They are like two sides of the same coin we have learnt to toss up in favour of different clients who approach us for our services”

Jumia Black Friday to offer customers up to 90% discount on deals

made extra effort researching Dijo Communication’s campaign on Hero Beer brand. They told the story as if they were with us on the campaign journey. “For me that is the award. They studied the campaign and told the story that indicates that they know what they are doing. Dijo won Best Marketing Agency of the Year Diamond award. Emma Wenani, Business Director Global Media Alliance, Ghana said her company is excited when the news that the firm topped the Best PR Consultancy award category in W/Africa got to the managers. Adesanya Adedemi, Project director of Nigeria Brand Awards, said the award has been able to win brands’ confidence over the years because “we have a diligent process. “We have a consultant, who assists in shortlisting of companies; we also have a research team who focuses on what happens in different sectors of the economy. We also have panel of judges that assesses the awards. Our award is research based”. We look out for innovation, quality of customer service among other criteria. We also don’t emphasis money to give the awards so that it doesn’t seem that we are selling the awards”

ince the launch of Jumia Black Friday, Nigerian shoppers anxiously look forward to November to grab deals that ordinarily beat prices on stores. This year’s event billed to start on 2 November till 30 November will hopefully see shoppers opt for online treasure hunt bargain that according to Jumia promises to offer customers up to 90% discount on deals. The American tradition of a shopping extravaganza the day after Thanksgiving has made its way to Nigeria in 2012 when it was first introduced into the country by Jumia, the online trading company. Shoppers pick up the best cut-price deals on everything from clothes, electronics, to toys during Black Friday. Juliet Anammah, the CEO of Jumia Nigeria said the company is out to celebrate entrepreneurs with the spirit and vision to change Africa leveraging technology. She stated that special deals such as flash sales, treasure hunts and special vouchers will be exclusively available to customers who shop on the Jumia App. “We expect to see an increase of 50% website traffic as a build up over last year’s Black Friday. The rise of mobile penetration in the country which stands at 84% is one of the factors driving our App and website visits; others being our amazing deals. Last year, 79% of our

customers shopped on mobile phones (website & App), and we are looking to increase the number to 100% at the end of 2018, in order to achieve the country’s goal of becoming a mobile-first country,” she added. Shobhit Pandey, the chief commercial officer of Jumia Nigeria, said the company has doubled its product assortment compared to 2017 Black Friday campaign with efforts geared towards providing customers with a wide range of quality products to choose from. “This year, with the support of our vendors, we are offering our customers discounts as high as 80% on categories such as men’s and women’s fashion, 70% on wristwatches and sunglasses, 65% on health and beauty products, 50% on mobile phones, electronics, and groceries, and 40% on fitness and automobile products. Unlike last year, these amazing deals will only be available every Friday of the week in the month of November,” said Shobhit. Prasun Banerjee, managing director, Binatone Nigeria, said the partnership with Jumia for Black Friday will help deepen ecommerce penetration in Nigeria. “Jumia has made the Black Friday sales event a wonderful opportunity for us to offer huge discounts to their customers, thereby enabling us to sell more items than we projected. This means that more Nigerians will shop during this period,” he said.

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BRANDING

When heroic children win big prizes at Indomie brand CSR award

lthough Nigerian children are performing heroic feats, there are gaps in rewarding them. Dufil Prima Foods noticed such gaps in 2008 and decided to set up an award, Indomie Independence Day Awards (IIDA), for heroic children. The award is a corporate social responsibility (CSR) initiative organised annually by the maker of Indomie instant noodle to identify, recognise and celebrate children below the age of 15 for their intellectual, social and physical bravery. Established 10 years ago, the award, which is worth multi-million naira scholarships for the winners, has benefited over 39 children. This year, the award event was held at Federal Palace Hotel, Lagos, with a roll call of attendees that included industrialists, bankers, school administrators, musical artistes, students, the winners and their parents. In her speech, the guest speaker at the occasion and Chief Executive Officer (CEO) of Rise Networks, Toyosi Akerele-Ogunsiji commended Dufil Prima Foods for sustaining the award for these past 10 years, adding that what the company is doing through IIDA is capable of empowering the Nigerian child. “I want to thank Dufil Prima Foods for the remarkable work she is doing in Nigeria. IIDA is the biggest and most inspiring programme for children in Nigeria. It is commendable for an organisation like Dufil Prima Foods to have stayed consistent to doing social responsibility programme the way she has been doing it, by making sustainable substantial contribution to the growth and development of Nigerian children, without necessarily getting something in return,” Akerele-Ogunsiji said. The guest speaker said it was commendable to see Nigerian children breaking barriers to contribute meaningfully to the development of Nigeria. Akerele-Ogunsiji said: “I sat down with my fellow judges few weeks

L-R: Andrew Mashanda, executive director, Corporate and Investment Banking, Stanbic IBTC; Elijah Ephraim Umanah, winner of Intellectual Bravery Category; Nengi Ayomide Pepple, winner of Social Bravery Category; Andrew Hanlon, CEO, TVC Communications; Victor Olayiwola, winner of Physical Bravery Category, and Pawan Sharma, CEO, Multipro Consumer Products Limited, at the 2018 Indomie Independence Day Awards (IIDA) held in Lagos recently.

ago to watch videos of the entries for IIDA. It moved me to tears to see ordinary children from hinterlands of Nigeria performing heroic acts. Many of those children come from what one can describe as low income families; they do not have the privilege of acquiring proper education. However, those children have brazed all odds, and they are doing magic in their remote communities. My greatest lesson from that is it is important that leaders build values and values build society.” During the roll call of winners, 15-year-old Victor Olayiwola was announced as the winner of the physical bravery category. The story of the young Olayiwola is both interesting and pathetic. Olawiwola was only nine when he saved the life of his mother from a car accident. The incident happened on December 12, 2012 when his family was returning from a church service. The family was crossing a popular road at Fagba, Lagos, when a car, on a high speed, voraciously aimed for the life of Olayiwola’s mother. But Olayiwola was behind

the family to notice the oncoming vehicle. Without thinking twice, he dived and pushed away his mother and other family members. However, his legs were crushed by the car. He was rushed to eight hospitals, but was rejected by all the hospitals. The ninth hospital that accepted to treat him could only save his life, but not his legs. His left leg was so badly affected by the accident that it had to be amputated. Today, Olayiwola bears the brunt of the accident, for he walks around with prosthetics. But Dufil Prima Foods is changing the story of the teenager for the better, through IIDA. Making the announcement, IIDA panel of judges described Olayiwola as a brave child, whose bravery should not go unrewarded. The judges praised his self-sacrificing love for his mother, nothing that his leadership potentials were worth emulating. The panel of judges that independently examined, critic and nominated the winning stories included Managing Director of Rave

TV and Trend FM, Agatha Amata; Managing Partner of CC-Hub, Adetunji Eleso and Akerele-Ogunsiji. Others included the Managing Partner of Sanni and Co., Abiola Sanni; social critic, Adekunle Adeniyi and Television Continental (TVC) Director of Programmes, Morayo Afolabi-Brown. Afolabi-Brown, who spoke on behalf of the judges appreciated Dufil Prima Foods for providing such a wonder platform like IIDA for children to be appreciated. “It is easy to do things for a group of people who can pay back. But it is worthy to note that Dufil Prima Foods decided to give this award to a group of people who cannot pay back: children. I think that this award has actually set a pace of what CSR should all be about. To have done this award for a decade now shows that Dufil Prima Foods actually has the interest of children at heart,” Afolabi-Brown said. Speaking on the rationale behind the award, Chief Executive Officer of Multipro Consumer Products Limited, Pawan Sharma, stated that the IIDA programme

represents the firm’s commitment towards children. “As a brand, we at Indomie feel we need to celebrate our unsung heroes-Nigerian children, who are doing extraordinary works, without being celebrated. This year, we received hundreds of entries and when we went through those entries, we were amazed to see the kind of work Nigerian children were doing. Sometimes, we felt like crying for them because those children, as young as they were, sacrificed their lives with bravery acts. They did something brave that even 40-year-old people would think twice before they do them. We salute those children.” Thanking Stanbic IBTC Bank and TVC Communications for partnering with Dufil Prima Foods towards the success of IIDA, Sharma urged other stakeholders to join the firm in ensuring that Nigerian children are empowered. “We thank our partners such as Stanbic IBTC Bank and TVC Communications for supporting this noble cause. And we will welcome anyone who wants to join this noble

cause,” Sharma said. The search for this year’s IIDA heroes began in January this year when the firm began to make preparations towards the award. The leading food firm later engaged two independent research agencies-Marks Analytics & Research Services Ltd and BanahGrace Research Agency¬ to thoroughly search out outstanding young heroes for recognition and celebration. The field search exercise, which lasted for over eight weeks, took place majorly in 12 states: Lagos, Ondo, Rivers, Edo, Akwa-Ibom, Imo, Abia, Kano, Kaduna, Abuja, Jos and Benue states. At the end of the search, about 400 spectacular stories in different categories were harnessed for the award. Speaking at the award event, Dufil Prima Foods Group Public Relations and Events Manager, Temitope Ashiwaju said IIDA is all about selflessness. “Every day, while countless Nigerian children choose paths that make them rise above unfavourable conditions, several others exhibit acts that have saved the lives and property of others” Ashiwaju said. The social bravery category was won by nine-year– old David Nengi Ayomide Pepple, who uses recycling strategy and artistic talent to raise money for the treatment of his younger brother who has been diagnosed with cerebral palsy. Pepple, who lives with his parents and brother in Port Harcourt, possesses innate ability to work with discarded materials and convert them to various artistic items. Recently, he came up with the idea to display his art works in an exhibition, which has variously been supported by the Rivers State Chapter of the Society of Nigerian Artists, art professors and 10 other artists. Master Elijah Ephraim Umanah, a 13-year-old senior secondary (SS1) student of Centenary Staff College in Uyo won the Intellectual Bravery category for creating reading glasses, using torchlight, solar panel and universal serial bus (USB) ports.

Tuesday 30 October 2018

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LegalPerspectives

With

BUSINESS DAY

Odunayo Oyasiji What does force majeure mean?

The rules guiding the choice of name of a company under cama

hen registering a company or business name in Nigeria, one of the first steps that will be taken is the availability and reservation of name. At this stage, a thorough review of the name the company or business name will bear is done. The review is to ensure that the name complies with what is stated in section 30 of the Companies and Allied Matters Act (CAMA)- under the subhead “Prohibited and Restricted Names”. Section 30 is broken down into two i.e. names that are absolutely prohibited and names that needs the permission of the commission before they can be used. Under section 30(1) of CAMA, the prohibited names are-

a. Names that are identical or very similar to a name that has already been registered. b. Names that can mislead as to the nature of the activities of the company. c. Names that will violate existing trademarks or business name in Nigeria except where the consent of the owner has been obtained. d. Undesirable and offensive names which are contrary to public policies. The names that fall under restricted names falls under section 30(2) of CAMA. These names need the consent of CAC before they can be used. The categories area. Names that contains the words – Federal, National, Regional, State, Government

or any other name which appears to the commission to suggest that it enjoys the support of government or its ministries. b. Names that contains the words- Municipal or chartered or that suggests a relationship with a local authority. c. Names that contains the words- Cooperative or Building Society. d. Names that contains the words- group or holdings. It is best to avoid the prohibited names when trying to come up with the name for the registration of a company. If the company must bear the names under the restricted category, then it is essential that the consent of the commission be sought and obtained.

Implication of an indemnity clause in an agreement

ommercial transactions come with risks. Therefore, one of the ways to protect or reduce the risk is to insert an indemnity clause in a contract. An indemnity clause usually states the person that is indemnified (the person enjoying the protection) and the person that is indemnifying (the person promising to protect). It comes in different forms depending on the type of contract and the type of loss against which the clause is deployed to protect the indemnified party against. An example is when a soft-

ware agreement states that the client is protected against copyright claims. If the client gets sued then the developer will be under an obligation to cater for the client’s legal cost of defending the suit. Basically, indemnity clauses transfer risks. The party indemnifying is promising to make good whatever loss the other party suffers. It is different from a guarantee, it is a primary obligation on the party that promises to indemnify while a guarantee is a secondary obligation in a situation where the original

party defaults. It must be noted that an indemnity can be drafted in a way that the loss it covers will be limited or even a limit can be set on the amount that the person indemnifying can be liable to pay under the indemnity agreement. Therefore, it is essential to read and understand the content of an indemnity carefully so as to be sure that you are well covered if you are the indemnified. On the other hand, the person indemnifying can also exclude loss caused by or contributed by the indemnified party.

orce Majeure is the French expression for “superior force”. It is usually inserted in contracts to permit a party to suspend or terminate the performance of a contract based on the occurrence of some situations. The situations covered are usually situations that are beyond control i.e. situations that makes performance under the contract agreement impossible. The situations that falls under force majeure are usually subject to the agreement of the parties to the contract. Typically, the following events forms part of things that are usually listedriots, war, fire, flood, earthquake, hurricane, typhoon, explosion etc. The parties are to draw up their list. This provision is an essential part of contract as nobody is sure of tomorrow. However, it is essential to go through this aspect of a contract agreement very well and agree on what constitutes or falls under force majeure before entering into the contract. If there is anything that falls under

it that you do not agree with, ensure that you point it out and same is addressed before signing a contract. It must be noted that the force majeure provision in a contract can either state that the contract is temporarily suspended or terminated if the event continues for a certain period. What will be the implication is to be agreed by the parties. The force majeure clause should address the followinga. The events that constitutes force majeure b. The implication of the occurrence of the event on the contract c. Which of the parties can suspend performance d. What will be the fate of the contract if the events continue beyond a certain period? It must be noted that the only alternative available to the parties in the absence of force majeure clause is to claim under the doctrine of frustration which most times do not protect the party claiming under it.

Meaning and implication of a garnishee order on an account

arnishee orders are instruments or tools to enforce the judgement of court in a situation where judgement has been given in favour of a party (with an award of a certain amount of money). To explain it better, Mr A and Mrs B entered into an agreement for the supply of certain goods. Mr A is the supplier while Mrs B is the buyer. However, Mrs B refused to pay Mr A after supplying the goods. Mrs B still did not pay after repeated demands by Mr A. Mr A decided to institute an action in court against Mrs B claiming money due to him under the contract, damages and cost of the action. The court after hearing both sides gave judgement in favour of Mr A to the tune of One million naira. Mrs B still did not pay. The judgement makes Mr A the judgement creditor and Mrs B the judgement debtor. In the situation above, Mr A’s counsel can approach the court for a garnishee order nisi based on the judgement of court. The order will be obtained ex parte (i.e. without the presence of Mrs B). The order will direct banks to disclose the amount in the account of Mrs B and hold the judgement sum (being one million naira). The order will also direct the banks to file an affidavit disclosing whether they have Mrs B’s account or not. If they have it, they should disclose the amounts in the account. Upon full disclosure by banks, the court will go ahead to direct that one million naira should be

paid to Mr A if the accounts have sufficient fund. If the accounts do not have sufficient fund, the court will still direct that the available funds in the accounts of Mrs B be paid to Mr A. It must be noted that a garnishee order only affects the amount disclosed on the face of the order. Therefore, Mrs B will not have access to the sum of one million naira in her account but will have access to any amount exceeding one million e.g. assuming Mrs B has the sum of two million and five hundred thousand naira in her account, the bank will hold one million naira while she will still have access to the remaining one million and five hundred thousand naira. Furthermore, garnishee order only affects the amount in the account at the time the order was served on the bank. Therefore, if Mrs B only ha five hundred thousand in the account, the bank will hold the five hundred thousand naira and disclose same to court. However, if one million naira is paid into Mrs B’s account the following day the order will not have effect on the new inflow. A bank that fails to disclose by filing an affidavit to show cause can be held liable to pay the full amount on the face of the order regardless of whether they have the money or account. The above is an explanation broken down for the purpose of proper understanding of how a garnishee order operates.

BUSINESS DAY

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AVIATION

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GUIDE

BUSINESS DAY

in association with

How new Port Harcourt airport terminal will boost trade, investment in Nigeria Stories by IFEOMA OKEKE

he new terminal of the Port Harcourt International Airport terminal is the first fruit of the Nigeria-China economic partnership in the aviation industry. It is the actualisation of dream started in 2012 by the federal government and its commissioning is the harbinger for the addition of five new airport terminals to the aviation infrastructure. It is also an answer to the ceaseless clamour for modern Airport facilities in Nigeria by travellers. The partnership with the Chinese will also usher in concession in a grand scale as the airports may be managed on buildoperate-and-transfer basis. This is a successful system in Nigeria pioneered by Bi-Courtney Aviation Services Limited. Funding model for the new terminal The new terminal along with three others in Lagos, Abuja and Kano, which was commissioned in February 2014 is funded through the China-Exim bank loan of 500million dollars with a 100million dollars counterpart fund facility. The project was expected to be delivered within a period of two years. At the time the president Muhammadu Buhari’s administration came on board, the work was bedevilled with various technical challenges ranging from foundation design change, inaccessibility to apron, inadequate apron, master plan distortion, water and sewage provision, litigation and inadequate water supply. However, the presidents graciously approved that the ministry should go ahead and rectify all discrepancies and subjected it to due process. This was carried out and the president in council approved that the total of 461million dollars be sourced from China Exim bank to complete the projects. However, this requires 69.15million counterpart funding.

If the government is able to source and pay the counterpart funding, Hadi Sirika, the minister of state, aviation promised to deliver the remaining projects shortly, as they are all at advance stages of completion. Capacity of the new terminal Port Harcourt airport being the third-busiest airport in the country is very important to the Nigeria economy as it served 1,080,284 passengers in 2017. The old terminal, which was undergoing rehabilitation is unable to provide the requirements and space to handle such volume of passengers. However, the new terminal has the capacity to process about seven million passengers annually covering a space of approximately 28,000m2. Features Features of the new terminal include 24 check-In counters, three baggage

collection carousals, 12 Immigration desk at arrival, 16 immigration desk at departure, four security screening points, four passenger boarding bridges plus remote boarding and arrival, two food courts, three premium lounges and spa, more than 2000m2 of duty freespaceand morethan1500m2oflettableutilityspace. Economic benefits No doubt, the establishment of the New Port Harcourt airport terminal plays an important role in promoting the economic prosperity of the Rivers State and strengthening foreign trade, cultural exchanges with foreign countries and the development of tourism. The new terminal will strengthen the linksbetweenRiversStateandotherstates within Nigeria as well as external links abroad,shortenthegeographicalgapand bringmoreopportunitiestoacceleratethe process of economic and social develop-

ment of civil air transport. In addition to these, the new terminal will open more convenient air routes, which will help Nigeria participate in China’s ‘the Belt and Road’ initiative and benefit the in-depth development of China-Nigeria economic and trade relations.Itwillalsofacilitatethedevelopment ofChinesecompaniesinNigeriaaswellas offer better and more convenient service for Chinese companies’ investment and trade in West Africa. The mark structures in River State and beautiful cultural landscape in the city of Port Harcourt, which has a great significance in promoting the city image, will be showcased to the rest of the world throughtheestablishmentoftheterminal. Nyeesom Wike, Rivers state governor, who was present at the launch of the terminal, assured the president that the people of Rivers State and indeed the

South-South are happy with the project stating that it would foster further investment in the State. Wike said,”I can tell you this today that the people of Rivers State and the Niger Delta are happy with you Mr. President. This terminal here will help the drive of the state to grow the economy and it will attract investment to the state. What has happened here shows that Rivers State is safe, Rivers State is secure and if it was not CCECC,we will not have been here to construct this.” Buhari assures on infrastructure upgrade During the launch of the terminal, Muhammadu Buhari, president of the Federal Republic of Nigeria, said government is making deliberate efforts to increase handling capacities and infrastructure of the nation’s transport sector which was not taken care of since the 70s and 80s when they were built. Buhari made this known as he commissioned the newly built Port Harcourt terminal stating that it was part of his promises to upgrade Nigeria’s transport infrastructure in all geo political zones of the country. The president said,” Todays commissioning is a significant landmark for international travellers especially those in the South-South region. “Not much was done after these airports were built in the 70s and 80s to increase handling capacity of the airports and so we needed to take decisive steps to ensure that our terminals meet the minimuminternationalglobalstandards. “In the 2017 budget, I promised to upgrade Nigeria’s transport and complete a number projects that will be beneficiary to the nation economically and these include construction of new terminals, railways and power projects,” he said. “Today’s commissioning is a direct policy to sustain economic growth in all geo political zones of the country,” the president stated.

Dana Air wins ‘Best Customer Service Airline of the Year Award’

ana Air, has won the Best Customer Service Airline award at MamaJ’s Aviation Careers Conference held recently in Lagos, at the Nigerian Civil Aviation Authority Annex, Lagos MamaJ Aviation Careers conference is an annual seminar to create a platform to introduce and mentor aspiring youths and other invited guests to the many career opportunities that exist in the aviation industry and also to celebrate

and honour outstanding Aviation Professionals and stakeholders who have contributed immensely to human capital development in the aviation industry in Nigeria. Kingsley Ezenwa, the media and communications manager of Dana Air, while receiving the award on behalf of Dana Air, said “I want to say a big thank to MamaJ Aviation Consult for this award. We are delighted that our customer centric products and our efforts

towards providing excellent service to our valued guests is being rewarded and this will only spur us to continue.’’ Kingsley while reacting to a comment by one of the invited guests about the short lifespan of airlines in Nigeria said,’ Dana Air will be 10 years in November and this only shows that we have a structure and management style that is worthy of emulation and we are in it for the long haul.’’

Also speaking at the conference, Joy Ogbebo, the founder, MamaJ Aviation Consult limited, said, the conference is a non – profit career initiative to promote aviation education advocacy for youths in an emerging world. ‘The conference, every year brings together aspiring next generation of Aviation Professionals and Participants on the career opportunities that exist

in the industr y and I want to express our heartfelt gratitude to our sponsors, partners and everyone involved in this project,” she added’. Having flown over 2.7 million pass eng ers in the last 9 years of its operation, Dana Air is one of Nigeria’s leading airlines reputed for its innovative online products and services, world-class in-flight service and unrivalled on-time performance.

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Energy Report Oil & Gas

Power

Renewables

Environment

Implications of acrimonies between Nigerian companies and their foreign partners OLUSOLA BELLO

he acrimonies between some Nigerian companies and their foreign partners are bad omens for the country. This is because the adverse consequences of such acrimonies are usually grave, especially on the much desired foreign investment inflows into the economy. The list of companies having one issue or another with their partners is long, notably LADOL Logistic Company and Samsung Heavy Industries( SHI), MTN versus the federal government, Intel and the Nigerian Ports Authority, Korean national oil company and the federal government. There was also the problem between a Norwegian oil firm, Statoil Nigeria Limited and Inducon Nigeria Limited. Outside the oil and gas industry, are also the issue of Etisalat Nigeria Limited, Nigeria’s fourth largest telecommunication firm, and Mubadala, the company’s largest shareholder. Experts argue that if these issues are not resolved to the satisfaction of all the parties involved, Nigeria will pay

dearly for it as it will be difficult to get foreign investors having confidence in doing business with Nigerian companies, especially in the oil and gas sector They add that it is difficult to ascertain what really is contained in the agreement signed by both LADOL and Samsung and until such agreement is seen and juxtaposed with what has been implemented, nobody can really say who has defaulted or not. But observers of the industry are of the view that the local content policy of the government will be grossly affected if things like

what are currently going on between these two parties continues without it being resolved amicably. They said logistic bases are for companies to do their jobs and move on. But when they begin to have issues with their landlords, then, there comes a big problem for local and foreign companies that plan to engage in one partnership or the other in future. The problems between LADOL and SHI they said must not be allowed to discouraged investors eyeing Nigeria. The completion of the Egina FPSO at LADOL is poster child for the country

and the oil and gas industry. They also said it was a good start for the industry. They however sees dispute between the two current controversies could dent the image of Nigeria as the country could be tagged an unfriendly country for business. This will consequently lead to investors being careful in dealing with Nigerian company companies. It would therefore be in the general interest of Nigerian economy for LADOL its partner to resolve this issues with Samsung. So that confidence could be created. Will like to invest in

the country by establishing their facilities. Because of local content policy many foreign companies But if this kind of thing continues to happen between Nigerian companies and their foreign partners, then country may lose out in a number ways. Godwin Izomor, managing director of MG Vowgas said there is need to appeal to both LADOL and SHI to amicably resolved the issues because it is the country that would ultimately suffer for it. “If foreign partners are sees Nigerian indigenous companies as not keeping to agreement the local content policy may be grossly affected. We need foreign partners to develop the local capacities”, he said. The controversy between the Nigeria Ports Authority (NPA) and the Intels caught a global attention. The Intels facility in Onne which service oil and gas companies has now become almost an abandoned facility because of the problem with NPA. Many companies have relocated to other areas to do their jobs thereby swelling the unemployment profile of the country. Dada Thomas , the immediate past president of

the Nigeria Gas Association also described frosty relationship between Nigerian companies and their foreign partners is capable of discouraging other investors from coming to the country. The current problem between the telecommunication giant, MTN and the federal government in which the company is asked to pay about $8 billion for infractions that were committed several years ago could the experts said is capable of eroding investment confidences. According to some of the experts, Nigeria has also lost a great investment opportunity that would have accompanied the participation of the Korean National oil company in upstream sector of the oil and gas with the revocation oil prospective leases (OPLs) of 321 and 323 by the Federal Government. The construction of Ajaokuta to kano gas pipeline in addition to the construction of 1000 megawatts power plants was part of the conditions given to the Korean company for winning the bid for the assets.The Koreans today are demanding the refund of the money paid for those blocks and has already moved out Nigeria seek investment in other clime.

Muhammadu Buhari said investors were moving their capitals to countries with well-defined laws. “Instead of giving incentives, the feelers we are getting are that the Nigeria Ports Authority (NPA) is going to levy $1 per barrel of crude and other such levies are going to be imposed. We urged them to quickly pass the law to make our oil and gas more competitive to investors” Ruwase said. Meanwhile, Libya, one of the most volatile and politically fragmented oil producers, expects to pump as much crude by the end of next year as it did before the 2011 revolt against former strongman Moammar Al Qaddafi. The country plans to refurbish its pipeline network and raise output at some

fields to reach a target of 1.6 million barrels a day, Mustafa Sanalla, chairman National Oil Corp. said in an interview. The North African nation currently pumps 1.25 million barrels a day, he said in the eastern city of Benghazi. “We’ve put together a plan to boost field production, including pipeline maintenance and addition of new pipelines,” Sanalla said. “We aim to reach 1.6 million barrels a day by the end of next year and this level can increase.” If it reaches this target, Libya would be producing at the level it last maintained in the years before Qaddafi’s ouster and death and the nation’s ensuing civil war. Political divisions and internal fighting have plagued Libya since then.

Money managers go bearish on oil as OPEC turns on tap …Iran sanctions only five days away STEPHEN ONYEKWELU

oney managers have slashed bets on West Texas Intermediate crude to the lowest in more than a year, with total positioning on the United States benchmark down to a level last seen in 2015 as OPEC adopts “produce-asmuch-as-you-can-mode” to offset sanctions on Iran. The net-long position in Brent fell 12 percent to 360,785 contracts, ICE Futures Europe data show. For a fourth straight week, longs slid while shorts rose. Money managers reduced their netlong positions on benchmark U.S. petrol and on diesel by about 13 percent, according to the CFTC.

“You have sanctions on Nov. 4 that kick in and the big question is how much will those other countries” produce to make up the gap, Mark Watkins, who helps oversee $151 billion at U.S. Bank Wealth Management told Bloomberg. At the same time, “the global economy is showing some signs of stress and that’s making investors just a little bit more nervous as a whole.” Saudi Arabia already boosted oil production to 10.7 million barrels a day, near an all-time high, and it can increase it even more to help plug any supply shortfalls due to U.S. sanctions against Iran, according to Khalid Al-Falih, Saudi Arabia’s energy minister. Iraq also chimed in and said it will increase oil out-

put. OPEC has been raising production since May. Yet, OPEC later said the rise in oil inventories in recent weeks, coupled with fears about an economic slowdown, “may require changing course.” A crude oil loading programme seen by Reuters indicates Nigeria Bonny Light crude oil stream will load 263, 483 barrels per day in December, up from 169, 467 bpd originally scheduled for November, and Forcados crude oil have been set at 217, 900 bpd in December, versus 210, 500bpd in November. “The market is grappling with the fundamental question: Are we oversupplied or under-supplied?” Tamar Essner, an analyst at Nasdaq Inc. in New York said in response to questions from Bloomberg. “We’ve been

Olusola Bello, Team lead, Analysts: Isaac Anyaogu, Stephen Onyekwelu, Graphics: Joel Samson.

given very mixed signals from major producers.” Hedge funds’ net-long position, the difference between bets on higher prices and wagers on a drop -- in WTI crude tumbled 15 percent to 206,295 futures and options in the week ended Oct. 23, according to the U.S. Commodity Futures Trading Commission. Longs dropped 9.8 percent to the lowest in almost three years, while shorts bumped higher by 13 percent. However, Nigeria’s oil and gas sector also scaring investors off foreign investments by the non-passage of the Petroleum Industry Governance Bill (PIGB). Babatunde Ruwase, president of the Lagos Chamber of Commerce and Industry during recent visit president

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Axxela boss identifies major constraints to sustainable gas development OLUSOLA BELLO

he major issues that have hitherto affected the sustainable development and growth of the infrastructure needed for the domestic gas sector can be aggregated into market readiness, supply assurance, policy and regulation, suitability of financing, and execution discipline. This was the view of Bolaji Osunsanya, chief executive officer of Axxela Limited who delivered a keynote address titled “Actualising Gas Infrastructure Development; Untangling the Bottlenecks” at the just concluded Nigeria Gas Association conference and exhibition at Abuja said the challenges are significant

and might seem daunting; nevertheless, given the imperatives of the gas policy and the significance of gas

infrastructure development to the achievement of its objectives, we must confront the challenges head on.

Experts task FG, others to give priority to human capital development

xperts have tasked the Federal Government and other stakeholders to give priority to the development of human capital, capable of driving operations in Nigeria’s oil and gas industry. The experts who spoke at the opening of 3th Africa Oil & Gas Talent Summit, AOGS, in Lagos said only 7.14 per cent work in any form of industry including the oil and gas industry, out of the 85.08 million Labour force by 3rd quarter 2017. Udom Inoyo, Vice Chairman & In-Country Human Resources Manager, ExxonMobil, tasked stakeholders to embrace automation of

workforce in order to boost output while adding value to bottom-line. Also speaking Prof. Wumi Ilerare, Director, Emerald Energy Institute, University of Port Harcourt said: “We don’t have adequate skills that will enable us to close the skill gap in the industry, and by extension, Nigeria’s economy. “We do not have many engineers who can go into deep part of the ocean to weld and do various engineer ing works and designs.” In his opening remark, Felix Amieyeofori, chairman, AOGS Advisory Council, said developing human

capital has become necessary, especially as, ‘people are the real assets’ in any economy. Amieyeofori said the nation’s oil and gas industry currently needs very skillful human capital to drive operations while delivering value to stakeholders. He expressed regret that Nigeria has been ranked as one of the least nations in human capital index stated: “Nigeria ranked 152 out of 157 countries on the World Bank 2018 Human Capital Index list. Nigeria shared the bottom of the index with countries like Chad, South Sudan, Niger, Mali, and Liberia.

According to him the time to act is now and these solutions must be locally-owned and driven. “I trust that all

stakeholders within the gas sector will endeavour to collaborate effectively towards ensuring the accelerated

development of gas infrastructure across the region.” Osunsanya was also presented with the NGA Leadership Award in recognition of his exemplary leadership during his tenure as the NGA president from 20142016. Speaking on the awards received, he said: “It is an honour and a pleasure to be recognized for our sustained efforts in spurring economic empowerment and industrialisation across the region, particularly Nigeria, through our business enterprise. We must also commend the NGA for its proactive approach in advocating the gas advantage, engaging key stakeholders on opportunities to anticipate and bolster legislation and policies, and promoting investment in the Nigerian gas sector.”

Total raises production target 2.8 mbpd

otal’s third quarter adjusted net income increased by 48 percent from last year to $4 billion, while oil prices increased 44 per cent to $75 per barrel supported by supply tensions and the geopolitical context,” Patrick Pouyanne Total’s Chief Executive Officer , has said. With Brent crude oil prices at around $80 per barrel at the start of the fourth quarter, Total said its exploration and production business will continue to profit thanks to the expected growth in output. Total raised its production growth target for 2018, after a new record output and high oil prices during the third quarter enabled it to report its highest net income in a quarter since 2012. Its production rose 8.6

per cent to 2.8 million barrels of oil equivalent per day (Mboe/d), a new record output in a quarter, supported by the start-up of production at the Kaombo project in Angola and the ramp-up of projects such as Yamal LNG in Russia. The net income figure was above an average analyst forecast of $3.75 billion. Industry watchers had expected oil and gas production in the third quarter at 2.7 Mboe/d. The launch of other plans such as its Ichthys liquefied natural gas (LNG) project in Australia, and increased production from Moho Nord in Congo and Fort Hills in Canada, enabled Total to raise its output target to around 8 per cent in 2018 from over 7 per cent previously.

Production will also be boosted in the coming months by the launch of a third train at Yamal LNG in Russia, the start-up of the 200,000 barrels per day Egina in Nigeria, the Tempa Rossa oil field in Italy, and a second train at Ichthys LNG. In the downstream segment, Total said that although its European refining margin remained volatile, those downstream businesses generated $4.8 billion in cash flow in the first nine months of the year and was in line to hit 2018 objectives. The firm maintained its savings target for the year, and adjusted its capital investments to $16 billion from $16 to $17 billion previously, while Total added it would pay a third quarter dividend of 0.64 euros per share.

since the days of dictator Muammar Qaddafi. Libya’s production has been volatile since 2011, but seems to be on the upswing, having recently

topped 1.25 mb/d. “We’ve put together a plan to boost field production, including pipeline maintenance and addition of new pipelines,” Sanalla said. “We aim to reach 1.6 million barrels a day by the end of next year, and this level can increase.” At the weekend, ExxonMobil was hit with another lawsuit this week when the New York Attorney General sued the company for allegedly defrauding investors. The fate of the case is unclear, but the suit poses a legal challenge to the oil major. The NY AG argues that Exxon defrauded investors by “systematically” undervaluing the risk that the company faces from future climate regulation. Exxon said the lawsuit lacks merit.

Oil suffered losses over fears that supply surplus might make a comeback

audi Arabia and Russia agree to extend cooperation. Saudi Arabia and Russia agreed to extend their pact to manage oil production levels, according to comments from Saudi oil minister Khalid al-Falih. “Saudi Arabia and Russia will interfere together, along with the heads of the other producing states, to prevent the market from falling out of balance,” he said. This echoes his interview in which he said he was looking to formalize a partnership with Russia within an official OPEC+ architecture. Main while as the fears of $100 oil seem long gone. OPEC has however suggested that it might need to cut output in 2019 to avoid

a return of the supply glut. There are some mixed messages coming from the cartel. Saudi oil minister Khalid al-Falih said that the group was in “produce as much as you can mode.” But a technical committee offering recommendations to the OPEC+ group said that it would prepare “options” for production plans in 2019 to avoid a glut. Even as OPEC wonders whether or not it should cut output, the IEA pressed the cartel to increase production. “Global oil markets are going through a very sensitive period -- global economic growth as well,” IEA Executive Director Fatih Birol said in a Bloomberg interview on Thursday. “If the oil producers care about

the health of the growth of the global economy, which I believe they do, they should take the steps to further comfort the market.”

The head of Libya’s National Oil Corp., Mustafa Sanalla, said that Libya is hoping to reach 1.6 mb/d by the end of next year, a level not seen

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In association with

‘It is important to develop solutions that address market demands’

Jacqueline Jumah is a digital financial services market specialist and the newly appointed managing director of Intermac Consulting, a firm focused on e-business with emphasis on e-banking and e-payment intermediation services across Africa. In this interview, she talks with Jumoke Lawanson about the company’s determination to drive Nigeria’s financial inclusion agenda with the promotion of digital banking solutions. Excerpts.

What are your expectations and what do you particularly want to achieve given your new role as the MD of Intermac Consulting? y vision is to transition the institution into fully exploring intervention areas in the financial services space, because previously, Intermac has been known for a lot of events and some research work but now, I want to push a lot of digital, financial services in line with different projects including the national financial inclusion strategies, not only in Nigeria but in other markets as well. I also want to help with empowering its training output, meaning to work with other players in the industry to support capacity building activities, as well as consulting for the space. There is a lot of work that can be done in terms of hand holding the institutions because I believe that Intermac is best positioned having been in the market for more than two decades and considering its relationship with different institutions in Nigeria to plan out good strategies and interventions that will propel the institutions on digitasation projects and processes.

day is to leverage the power of the mobile phone. Today in Nigeria, mobile phones are at 90 percent penetration. In terms of teledensity, in terms of use cases, which the telcos have very rich data can give a lot of information on behavioural patterns of people. Social media data, institutional data can also be used. We can only make meaningful inferences and create more solutions beyond just having a bank account when we use this data. I don’t believe that just having an account makes us financially inclusive, it is about what these people are using their accounts for.

What is intermac doing to ensure that Nigeria moves from being a cash based economy to fully embracing digital payment options? A lot is happening with initiatives around the cashless policies and the national financial inclusion strategies, but what is happening in that space is that many of the people who are involved are not taking market demands into consideration, so it become a question of are we developing market initiatives that are boardroom based or that are market led? There is a whole difference because when you go with board room based strategies, you are generating solutions that you think will work, and not actually generating solutions that are needed by the people who are going to use them. Part of my role here

Jacqueline Jumah

is to open up the market and shift people to begin designing solutions that cater to what the market wants. I intend to use my behavioural science knowledge to help the market to start thinking in terms of putting themselves in the shoes of the user. I am also in talks with other existing players in the market to see how we can together come up with a frame work to shift the attention to the market instead of designing beautiful strategies in boardrooms that really don’t suit the intended user. Nigeria still has a huge percentage of unbanked population, how possible is it to successfully use Artificial Intelligence (AI) to drive the financial inclusion agenda? It goes back to understanding the grassroots. Before we think about all these interfaces and technological architecture, we need to first understand the 40 percent financial services excluded are not entirely addressable. In every market there is a category of people who are bankable, meaning that they are able to fit in formal solutions if meaningful solutions are provided for them, but there is also a category of people

that are un-bankable due to various reasons such as religious beliefs. I see a lot of opportunities in Northern Nigeria and I intend to work with a lot of players including banks to see how the North can be financially included because apparently, 68 percent of Northern Nigeria is financially excluded and that calls for going into the grassroots, sitting with the key influencers and trying to understanding the real issues and customise solutions to suit them. How do you intend to generate and analyse data from Nigeria to push financial inclusion in Nigeria? There are many data points and it again begins with understanding the addressable market. We need to first understand that 90 percent of the 40 percent financially excluded Nigerians are addressable, then from there, segment the market, get different types of data and observe this data over time to be able to understand basic requirements of the people. Gathering and making meaningful insights from data takes time but the industry can make use of existing alternative data and the easiest way for them to do that to-

Fintechs are creating a lot of financial solutions and banks are finding it difficult to play catch up. What is your view on this and what do you think the banks can do to relate and work with Fintechs? The banks and the emerging Fintech companies are very different in terms of their institutional nature. The banks have for a long time focused on big tickets, highly corporate solutions. The Fintechs are coming in at a time when they have seen some laxity on the part of banks and this has created an opportunity for them. The financial industry needs to understand that banks and Fintechs are very different in terms of character. Since the banks are sitting with the licenses and the Fintechs have the agility to move, my advocacy is for them to work together in such a way that banks can encourage Fintech players to be their front in terms of innovation because the bank of the future is agile. In Nigeria there is an underground war going on currently between the telcos and banks on who to run and handle mobile money, using Kenya where Mpesa thrives as a case study, what is your take on telco led and bank run mobile money services for financial inclusion?

The issue that is going on in Nigeria is a misinformation issue. A lot of key stakeholders are misinformed about the two models. I have observed over time and across markets that both models work. Once everybody understands what is best for them, they can leverage each other’s comparative advantage and push the market forward. The misinformation around threat that the telcos will takeover the business of the banks is what is really stalling the market. When you look at the leading markets like Brazil and Kenya, you will realise that the market has been setup in such a way that everybody leverages their comparative advantage. Even if the telcos play in the space, the funds will still sit with the banks. If it is a bank led model, the banks also need to understand that they have to be very good at driving innovation and distribution of these solutions by leveraging the infrastructure of the telcos, so they cannot survive by themselves. The core business of banks is in mobilisation of funds and telcos who come into financial services space are not interested in mobilisation of funds, they are interested in payment. Telcos provide the payment gateway where money is remitting from one end to the other. This tells you that they are not competing, they are actually complementing each other. Kenya has an open market and the telcos have made banks what they are today because mobile money came before agent banking. By the time the agent banking guidelines were introduced in 2011, the banks had to partner with these people to have the entire network of agents by the telcos. Equity bank endorsed Mpesa by Safaricom in Kenya and although it had its challenges, Mpesa was originally built as a micro finance loan repayment solution, they then realised that people were using the solution to send funds to each other, not repaying the loans alone, so the solution was tweaked and Equity bank supplied liquidity to the agents.

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Firm advocates human-centric approach against cyber attacks Stories by JUMOKE AKIYODE-LAWANSON

orcepoint, a cybersecurity solutions provider, is advocating the use of human-centric approach by organisations to counter the devastating effects of cyber attacks on computer systems and establishments The firm insists that risk adaptive security is an effective cybersecurity strategy against the monsters aiming to destabilise the digitalised world of corporate information and communication technology. Christo Vanstaden, the company’s regional manager, Sub Saharan Africa says that Forcepoint cybersecurity solutions will use human-centric approach to fight cyber attacks. According to Vanstaden, human-centric approach is necessary because human element is present in almost all cases of exploit and one needs to understand all of these behaviours. “In fact, 81 percent of hacking-related breaches have exploited compromised credentials and as you know, people make mistakes,” he says. Speaking on the modern challenge of securing an increasing digital world of corporate information and communication technology, at a

From left: Ope Adesina; tech. manager CBC GEDU, Happiness Obioha; human resources and communications manager CBC GEDU and Wayne Forsman; Forcepoint account manager for Africa, at the Forcepoint partner event held in Lagos, recently.

partner event held recently in Lagos, Vanstaden said Forcepoint designs each of its product elements to be best in class. He said one of their products, Next Gen Firewall (NGFW), which was voted by NSS Labs in 2018, is not only the best in blocking exploits but also in intrusion prevention and can reduce cyber attacks by up to 86 percent and slash incident response as much as 73percent. Vanstaden also said Forcepoint’s DLP product has maintained its leadership in the Gartner Magic Quadrant

in the last nine years. He said: “Our CASB has one of the broadest application supports with unique customised risk assessment based on behavior and data access classification. He added that the company has made sure that its product elements are best in class. Explaining how this works, Vanstaden said, “instead of trying to manage this extended network, or figure out how to block all the various access points and to make sense of all the events, we suggest you focus on the two true constants, which is people and data.

“The intersection of people and data, we believe, will be much more effective in protecting your critical data and IP. “To protect the human point, you have to understand the rhythm of your people and the flow of your data. You have to understand the normal operating flow of your people, where the data is going, who’s handling it. Bringing those two together gives you visibility; it gives you a way of having a single policy across distributed systems. It allows you for quick enforcement, and it allows you to meet compliance regu-

lations,” he said. He said this is executed through something called the Human Point System, which brings together portfolio of products. “This broad portfolio helps to address and understand the rhythm of people and the flow of your data. It brings together User Behavioral Analytics, UEBA, Data Loss Prevention, DLP, InsiderThreat, Cloud Access Security Broker, CASB, Next Gen Firewall, Data Guard, web and email security- all, under umbrella, analytics, common management and orchestration,” VanStaden explained.

Terragon introduces digital platform to bridge financial inclusion gap JUMOKE AKIYODE-LAWANSON

erragon Group, a leading data and marketing technology company has introduced an Artificial Intelligence-enabled platform to help banks in Nigeria bridge the financial inclusion gap. Elo Umeh, CEO, Terragon Group, while speaking to journalists said that Terragon’s Adrenaline solution is right at the heart of the bank-telco partnership required to push forward Nigeria’s financial inclusion target. Drawing on the advantages of mobile technology, messages can reach the last mile, as long as they have a mobile phone.” Confident that the technology solutions is exactly what Nigeria needs at this time, Umeh said that the platform can double the

access to bank accounts through already available data which can be mined, analysed and intelligently used to tailor offerings to meet specific need for the purpose of financial inclusion. “We have already integrated some financial institutions and because of our IP flexibility, we have the option to put our solution in a server and put it in the bank’s information center and use data already gathered by the banks to discover and address the needs of their customers,” Umeh said. The company hosted a fireside chat with Adebisi Shonubi, the managing director, Nigeria Inter-Bank Settlement System (NIBSS) & deputy governor designate, Central Bank of Nigeria (CBN), and top executives of financial institutions

in Nigeria, on the theme “Transforming customer experience on digital channels through data science and artificial intelligence”. The discussions centered on how banks and other financial institutions can use data analytics and artificial intelligence to close the financial inclusion gap. The Artificial Intelligence-enabled platform is able to deliver messages to audiences and draw realtime insights from customer feedback or behaviour; whilst also giving banks access to Terragon’s database of over 80million Nigerians, inclusive of Nigerians that are offline. According to Adebisi Shonubi, “recent discourse on financial inclusion stresses that homogeneity does not exist among financial service consumers. Thus, there is a need

to properly identify, understand and predict the lifestyles, habits, and challenges of the target market to better inform product design, which would lead to better adoption. Terragon’s Adrenaline makes this home-grown technology solution capability available to Financial Institutions today. This is a timely development as we push towards closing the financial inclusion gap.” “The solution also takes cognisance of low literacy levels, which has been identified as an impediment in reaching the unserved; and makes it possible to reach audiences in other formats through audio and video”, Umeh added. In a joint venture with leading telecommunication companies, Adrenaline delivers high impact, short audio and video messages

in as little as five seconds via SMS. The key difference is that audio/video will render within the SMS environment without consuming the subscriber data or the need for a smartphone. Other features of the solution include a 360 degree view of current and potential customers, allowing more accurate Customer Relationship Management (CRM) profiling, customised messaging leading to precision targeting, reduces wastage and increases conversion. With AI & data analytics embedded in the platform, banks and other financial institutions can create dynamic, custom products, offers & messaging for their different customer segments and prospects in unserved or underserved areas as they now have full visibility into customers’ psychographics.

Layer 3 expands portfolio, provides automated multicloud for enterprise customers

elivering on its promise to empower digital transformation for enterprise customers, Layer3 has expanded its portfolio with a new multicloud orchestration platform designed to simplify deployment of enterprise workloads, managed services and third-party cloud resources. In advancing this course, Layer3 very recently, organized a two-day workshop with the theme “Simplify Your Path to a Secure and Automated Path to Multicloud” for a diverse group of companies from various industries at the Lagos Intercontinental Hotel. The workshop which was held in conjunction with Juniper Networks, one of the global leaders in networking, outlined the steps organizations should take when planning their multicloud migration strategies. Companies are moving more workloads from onpremises to the cloud to keep up with the need for agility and more flexibility. A recent study conducted by PwC found that a majority of enterprise workloads currently on-premises are expected to migrate to the public cloud in the next one to three years. As a result, enterprises will need to adopt even greater multicloud strategies as workloads become more distributed across IT environments. “The promise of multicloud is to deliver an infrastructure that is secure, ubiquitous, reliable and fungible and where the migration of workloads will be a simple and intuitive process.”, said stated Godwin Michaels, Layer3’s Head of Engineering. “The value proposition justifies the increasing adoption of multicloud infrastructure solutions and some of its advantages are: increase in ROI, superior security, low latency, end-to-end visibility and control, autonomy and less disaster prone. Layer3 will help support the evolution of the operations of organizations smoothly to enable them to be more agile and automated.” To eliminate roadblocks that could prevent enterprises from realizing the multicloud promise, end-to-end security and automation must be integrated throughout all places in the network. Juniper’s extended offerings across its data center, campus, branch and cloud portfolio are designed to enable enterprises to migrate to a multicloud architecture on their terms, using natural refresh and expansion activities to meet today’s needs, while also ensuring they are multicloud-ready.

BUSINESS DAY

Tuesday 30 October 2018

EDUCATION

Weekly insight on current and future trends in education

Primary/Secondary

Higher

Human Capital

Stakeholders advocate improved investment in vocational education to spur productivity KELECHI EWUZIE

takeholders in the education sector have obser ved that the population of students in tertiary institutions across the country is on the increase without adequate investment in vocational education training. This situation they say if not urgently addressed will worsen unemployment crisis and stifle the development of the country. Those who are familiar with the matter have urged managers of the education system to give the needed attention to Vocational Teacher Education (VTE) in order to address the growing unemployment challenges and boost the productivity levels of youths. Matthew Ozoemena, an education analyst, declared that skills development is a vehicle for attaining sustainable development. “A

L-R: Nkeiru Nnamdi, human resources manager, PKF Nigeria; Tajudeen Akande, senior managing partner PKF Nigeria and Tom Isibor, Country head, ACCA Nigeria at the presentation of approved employer certificate to PKF Nigeria by ACCA in Lagos.

skilled man is employable. VTE makes a man employable; an educated man who lacks skill has no advantage over an uneducated man. VTE is indispensable if Nigeria is to make meaningful progress in local technology, which can be a source of revenue for the country”, he

averred. Ozoemena added that the National Policy on Education should be reviewed to address the seemingly stigmatisation associated with vocational institutions. “The policy should provide for VTE to be run as an educational programme in

Union Bank advances SDG goal for Nigeria through Edu360 initiative KELECHI EWUZIE

s part of its commitment to achieve the United Nations Sustainable Development Goal (SDG) four agenda for Nigeria, Union Bank organised the first edition of its annual education fair, edu360 in Lagos. The SDG four which strives to ensure inclusive and equitable quality education and promote lifelong learning opportunities for all is championed by the bank through investment to reform the education sector to be able to educate and train youth for jobs of the future. The event tagged “Investing in the Future”, served as a platform for collaboration among the education sector stakeholders, with the goal of accelerating development and much needed investment in the sector. Emeka Emuwa, Chief

Executive Officer of Union Bank while speaking at the ceremony to mark the kickoff of the 2-day event reiterated the Bank’s focus on education as a key driver of national development. According to him, “Edu360 is positioned to be the leading education platform in Nigeria, facilitating collaboration among stakeholders within the sector. We firmly believe that the private sector, working closely with the government and other stakeholders, can play a critical role in fast tracking solutions to move the educational sector forward”. Emuwa said that the Bank is committed to identifying sectors that are vital to shaping a better, sustainable future for Nigerians. Modupe Olateju-Adefeso, managing director, The Education Partnership (TEP) Centre while delivering the keynote address, spoke extensively on the linkages between and edu-

cation and national development, drawing examples from the health sector. Over200 teachers from government and private owned schools benefited from free training sessions as part of Union Bank’s drive to upskill the workforce of the important sector. The teachers also received free teaching aids to support their teaching efforts. There were also digital training sessions for parents and children courtesy Google in addition to Coding and Robotics classes. The fair also featured private workshops and seminars to address sensitive issues concerning raising well-adjusted children in today’s world. Union Bank remains committed to supporting Nigeria’s growth by identifying and investing in sectors that are vital to shaping a better, more sustainable future for generations to come.

which students will start at a basic level and terminate at senior level, equivalent to senior secondary school. Students from Vocational and technical colleges can then be admitted into universities or colleges of technology to study in VTE areas necessary to advance

Nigeria’s technology base”, he said. Despite the difficulties that VTE face in the country, the National Youth Service Corps (NYSC) realised the value because of the skills it provides for graduate employability, Ezendu Nwokocha, a research fellow observed. He further added that to achieve this, the curriculum of technical schools should have content that enables the learner in VTE to solve problems encountered in their immediate environment. It should be formulated in such a manner that familiar learning content that address real life situations can be addressed noting that this will help the students to apply the content to their own real life situation. Nwokocha however called for the provision of adequate facilities relevant to delivering the learning content. “Without facilities, there will be disconnect between the learning content

in the classroom and real situations that exist in work places. Without facilities, teaching will be all about theorising. This should be discouraged in VTE for relevant problem-solving skills to be acquired in the end”, he said. To him, Teachers and administrators in VTE programmes need to be high quality personnel, possessing relevant qualifications for teaching in VTE. Teachers in VTE should be good in their course areas and possess the ability to deliver their course content to learners in various areas. “It is a fact that the quality of an educational system is as good as the quality of its teachers. Recruitment and placement of teachers and administrators in VTE should not be done in a manner comparable to putting a square peg in a round hole. The need arises for quality assurance in teacher preparation programmes in VTE” he added.

ACCA harps on collaboration to boost human capital development …As PKF Nigeria receives approved employer certificate

he Association of Chartered Certified Accountants has said it will not relent on its quest to boost Human capital development in the country’s financial sector even as it pushes for collaboration among organisations. Tom Isibor, Countr y head, ACCA Nigeria says as a global body for accounting and finance professionals, it is ready to engage a lot with accounting firms to achieve the desired human capital development of its members. Isibor stated this in Lagos at the official presentation of certificate to PKF Nigeria as an approved employer. He observes that ACCA in the last five years have done a lot of research to try and understand what accounting of the future

would look like, what the skill set and expectations of business would be adding that in response to this, ACCA did a lot of modification to its qualifications. According to him, “One of the objectives of such modification is to ensure that accountants that are ACCA trained have the right competencies and skill set to become a preferred accountant of the future”. He further opines that going forward ACCA will collaborate with organisations to see how to fill in the skills gap that accounting and non accounting practitioners require. Tajudeen Akande, Senior managing partner PKF Nigeria lauded ACCA for the recognition and for finding the organisation worthy of the certificate. Akande observes that

ACCA and PKF are partners in developing accounting and finance related profession by making it relevant to the economy. Earlier in his opening address, Abayomi Qassim, business relationship manager Lagos and West, ACCA says the certification indicates that PKF has joined the league of over 7, 000 companies globally that have received this seal from ACCA. He noted that the presentation of the certificate shows that ACC A recognises the effort PKF Nigeria has put in terms of human capital development. Qassim pledges ACCA support to fill capacity gaps identified by PKF Nigeria in its daily operations free of charge at no cost to the organisation.

BUSINESS DAY

C002D5556

Tuesday 30 October 2018

EDUCATION

A lesson in education - the Oando Foundation example

ecades of neglect within the e ducational sector has seen the value of its human capital plummet at an alarming rate; leaving the economy stunted and with little room for improvement. With Nigerian government investment in education at 7.04 per cent in the current budget, we now lag behind other less endowed nations within sub-Saharan Africa. It is hard to reconcile that Niger ia in the sixties, seventies and eighties created brilliant minds through its free public school systems. Now education has become a luxur y, with those who can afford it opting for private schooling and those who can’t with little or no choice. With a Government overwhelmed by the sheer magnitude of change required to write a different growth story for Nigeria, several private entities are rolling up their sleeves and investing in developing multiple sectors across the economy. One such organisation is the Oando Foundation, established by Oando PLC in 2011. The Foundation is an independent charity, who through its Adopt-aSchool initiative is improving access to quality basic education by empowering

tics (NBS), the number of Out of School Children in Nigeria is 9.1 million. With these figures, the chances of Nigeria being able to leapfrog and benefit from the much touted fourth industrial revolution seems nigh on impossible. With basic literacy still seeming like a pipe dream for many, how do we then make the necessary advancement towards digital literacy, especially for the poor and marginalised? Haven’t we already lost the race before it’s even begun? Though the Foundation is contributing positively towards meeting critical demand and supply needs in basic education, their best efforts still represent a tiny drop in a huge ocean,

considering the scale of our current educational needs across all levels. Adegoke Adekanla, Head of the Oando Foundation pointed out that “While these figures may seem insurmountable, we remain undeterred in our vision for the Niger ian child. Over the years, we have d o g g e d l y d e m o nstrated our commitment to achieving the right of every child to quality education and we are working with multi-layered stakeholders, using integrative and participatory approaches to increase learning opportunities for children. We knew from the onset that this would be a challenge and it could not be done overnight. Not only

are we working to change an inbuilt culture of complacency where education is concerned, we are also in a race towards innovation in rapidly changing times. The definition of schools and learning has shifted radically with brick and mortar schools now being challenged by borderless learning. The notion of traditional classroom needs rethinking and working with our partners that is exactly what we are doing. To date we have established 33 ICT centers in adopted schools and supported them with content for learning and capacity building, trained 2,169 teachers and awarded 1,123 scholarships to students. We are making inroads to giving the Nigerian child access to fundamental basic education. It is essential not only for their personal growth but for our survival as a Nation.” The sustainability of Oando Foundation’s Adopt-A-School model is hinged on effective community engagement and various stakeholder partnerships. Speaking on the latter, Adekanla said, “The Foundation thrives on progressive partnerships with Government and other private sector actors both local and international. These partnerships strengthen

the parents. The reality is that some parents are distant. So this also depends on the effort parents put into establishing intimacy with their children. Another school of thought is that infants and preteens tend to favour the parent who is less disciplined and spoils them more. With siblings, those closer in age tend to be closer to one another for the simple reason of being at the same stage in life at the same time. So they are probably in school at the same time and are at a similar stage of maturity. Siblings who are about six or more years apart do not tend to be as close. However, this still boils down to family dynamics and how members of the unit interact with one another. But again, over time, if a family remains linked as one healthy unit,

this maturity gap closes up and siblings could grow closer. The trickiest bit of favouritism in family dynamics is that of parents towards the children. No matter what the situation with other relationships in the family may be, this parent-child relationship could affect children as far as into their adulthood. So parents must be very careful; otherwise it could potentially ruin the dynamics of the entire family. Studies have revealed that majority of parents do indeed have a favourite child; and this is purely human nature. So how we manage this is very important because it could go a really long way in influencing the way our children and family turn out. Obvious favouritism of one child over another, no

matter what age the child is, could affect the children involved in many ways: • The child who is not favoured may start to resent the one who is. As a result, this affects the relationship between the siblings, and could cause feuds that could last many years (and in some cases would never be resolved). • The child who is not favoured may feel underappreciated and lose confidence in him/herself. • The child who is favoured may become arrogant about it and flaunt it in the faces of the other siblings. This also gives this child a false sense of overconfidence, which is also not a positive character trait. • The child who is favoured may even go in the other direction and try to subdue the favours he re-

A cross section of students at a career seminar in Lagos

thousands of children in public primary schools in marginalised communities across Nigeria. The Foundation is committed to utilising a holistic and integrated approach to basic education, which includes creating better learning environments, leveraging resources through partnerships, utilising best practices and cross-cutting solutions to improve the overall learning achievements of children in their adopted schools. To date they have adopted 88 public primary schools across 23 States in Nigeria, spanning 6 geo-political zones. According to the Multiple Indicator Cluster (MIC) 2017 survey report by the Nigeria Bureau of Statis-

programme delivery and initiate outcomes that complement the Foundation’s overall objectives. We will continue to seek partners to assist in all aspects of improving access to universal primary education.” This battle against a failing educational system is not one that can or should be fought alone. Organisations like the Oando Foundation who are making very conspicuous impression in addressing the problem need to be supported. A fact that Adekanla agreed with, According to her, “This is a problem that surpasses any barrier that might exist between sectors, tribes etc. Not tackling it now leaves all of us open to a very uncertain future. We need the Government to increase funding of the education sector. While we applaud the introduction of the Universal Basic Education in 1999 and the supporting Universal Basic Education (UBE) bill in 2004; a lot still needs to be done to reduce the number of out of school children. “Outside of Government support, we also need a renewed sense of urgency among key players in the organised private sector to explore opportunities for scaling up support for the basic education sub-sector in Nigeria,” she said.

ceives from the parents. This may be a good thing, depending on the dynamics between the siblings; otherwise such behaviour could severely irritate the less favoured sibling(s) and lead to even deeper resentment. The truth is that this issue is very complicated. While relationships and family dynamics are complex and require a great deal of work, we should learn to show love all our children equally. We might tend to like one more than the other and this depends on various factors such as birth order, gender, our own childhood experiences, our environment and many more. But as parents, we need to set aside our selfishness and think ahead about the precedence we are setting for our family dynamics through the actions we make when it comes to our children.

Favouritism in Families OYIN EGBEYEMI

s human beings, we tend to have preferences for certain things and certain people. We have our favourites for one reason or the other, and this is based on our personal tastes, experiences, environments or simply just what makes us feel good: a favourite meal, circle of friends, travel destinations, sense of style, and so on. But isn’t that the beauty of human nature? The ability to have your very own unique preferences, such that people can identify that thing as something ascribed to us is such an amazing concept! For instance, on the quest for a gift for a friend, you have a good idea of what that person would appreci-

ate the most and you select that gift accordingly. Given this, when it comes to the subject of favouritism within the family, in theory, it would seem reasonable to have a preference for one person over the other, be it a parent, a child or even a sibling (for those who have more than one). Unfortunately, we are human beings in a family unit, and related by blood. So that makes this a very sensitive area. However, whether we like to admit it or not, we do sometimes feel like there is some imbalance in the dynamics of love in a family. This feeling is more pronounced in some families than others. In a complete family unit (married parents with children living together), children may have a favourite parent. This depends on the age of the child and the relationship built with

Tuesday 30 October 2018

C002D5556

Real estate future here as LekkiCyberville offers buyers automated community

BUSINESS DAY

Infrastructure Maintenance With TUNDE OBILEYE

Impact of an ideal workplace environment

CHUKA UROKO

vidently, the future of real estate is here as technology is, increasingly, driving modern estate developments, leading to the delivery of smart cities, gated and automated communities where residents live in comfort, convenience and luxury by just pressing the right button. As an innovative and transformational tool, technology has taken position in the real estate space, accounting for the significant changes which increased data availability and information has brought into real estate market transactions and development processes. For investors and developers, technology has brought opportunities that call for increased investment in real estate and the future of real estate anticipates unmanned, robotic and smart buildings that will be able to run wholly remotely such as in driverless cars and delivery vehicles. This is the innovative idea driving the development of LekkiCyberville, a state of the art automated community set in the burgeoning Lekki Phase 1 and the sprawling city of Lagos. LekkiCyberville is in a class of its own and, according to the developers, it is a new normal and a clear departure from the norm.

“LekkiCyberville depicts the future of real estate in Nigeria. Located in the Lekki axis of Lagos, LekkiCyberville is an efficient, fully automated gated community that features technologically advanced smart facilities and appliances, all of which are construed to ensure a paradigm shift in how we do things and live day-to-day,” Joy Ogbebor, LekkiCyberville’s Head, Business Development, told BusinessDay. Continuing, Ogbebor, explained, “relying heavily on smart technology alongside world renowned partners who have immeasurable experience in building world class technology and delivering ground breaking solutions, LekkiCyberville is on a daunting task of combining the pinnacle of luxury living in Lekki with the height of technological inclusion”. The technology-driven estate is tastefully designed to implement luxury, innovation, inclusiveness, participation and customizable living options, making it a home that represents a new way to live. LekkiCyberville is targeted at first time home owners, especially the millennials, who are at the core of technology and its limitless possibilities. The project is also targeted at better life seekers, savvy investors, couples with a combined monthly income of about N300,000 and young professionals with

the same earning power. “A home at LekkiCyberville is a must have; the offers are the best in town; this is convenience personified; ask me why the project is an innovation and I will tell you that it is the first smart hub of its size in Africa; it has a list of unique offerings such as fiber optic WIFI, automated gate, automatic air conditioning system at the gym, cycling park and bicycles for residents, ecofriendly construction materials and green power”, the head, business development, assured. Cycling or bicycle riding in the estate is part of its green and eco-friendly concept, because to be truly green and sustainable, residents have to be encouraged to walk and ride bicycles in order to reduce or completely eliminate pollution that comes with driving cars that emit smoke and carbon substances. The developers are well aware that modern architecture has taken housing development to a level where design considerations are no more on space comfort and convenience alone, but also, increasingly, on economy and sustainability. “We are aware that green economy is, in many ways, being incorporated into design concepts such that green building is now the future of housing; the importance and economic

benefits of green building cannot be over-emphasised, hence as housing investors and developers we are making a paradigm shift and embracing the new green order”, Ogbebor assured further. She pointed out that besides other considerations, location makes LekkiCyberville especially different, explaining that Lekki is today a residential and commercial destination in Lagos where iconic developments like the 650,000 barrels per day Dangote Refinery and the Lekki Free Trade Zone make a lot of investment sense to patient investors who have long term view of the real estate market. “Again, homes at LekkiCyberville are on the market for between 40 and 70 percent lower rates than other properties of the same quality, class and within the same location; the payment plan is up to 60 months, making it convenient, flexible and affordable”, she said, adding, “LekkiCyberville is a greener and more luxurious option with quality work and world-renowned construction partners”. For these reasons and more, the question potential buyers should have on their lips is why shouldn’t I buy, given that the estate is innovation at its peak; it is affordable, of quality and luxury; it is easy to pay for, Continues on page 30

acilities managers face the daily challenge of providing an ideal workplace environment for staff and visitors which contributes to productivity, wellbeing and experience. In trying to achieve this, it is often the responsibility of the facilities manager to provide a pleasant first and lasting impression for visitors and it can be a challenge to get it right. From the things visitors see upon arriving at a workplace to the scent of the office and its washrooms, pleasing all end users is a key consideration in workplace design and management. First impressions can have a lasting impact and it is, therefore, vital that businesses have a wellinformed strategy in place when it comes to the overall staff and visitor experience. There are many researches that show majority of people will be more likely to return to an establishment with clean and pleasant smell washrooms. This is notable and first impressions for a customer or client can mean the difference between buying a product and requesting a service. However, as a crucial part of an organization, it’s not only the visitors that facilities managers are striving to please. It’s also the very people who populate the workplace each and every day. With most employees believing that better office cleanliness will improve their workplace, this begs the question of what impact an unpleasant working environment has on employee productivity and wellbeing of a team, yet studies have identified that workers reported unpleasant smelling washrooms

as having a profoundly negative impact on staff in the workplace. Improving the fragrance in the office and helping to eradicate bad odour can, in fact, enhance well-being, reduce stress and boost productivity. Having visited many offices, I’ve noticed that many have washrooms that are not well maintained or lack a good fragrance. Many fragrance solutions are unable to improve the environment because the scent itself may have a somewhat unattractive smell or simply not able to hide transient odour. The future is a more scientific approach to workplace fragrance. Facilities managers, through their cleaning team, should go for a technologically driven ‘fragrancing’ system capable of tackling the transient and permanent odour. That provides a highly effective, longer lasting fragrance which has the ability to neutralize bad smell rather than just masking them. This technology uses high frequency resonating plates which force pure fragrance oil through microscopic holes resulting in a fine mist comprising tiny atomized molecules. This technology also provides an additional environmental benefit as there are no aerosols or propellants just pure fragrance oils. The key to a happy workforce is of vital consideration for all organisations and the implementation of improved facilities thus making staff feel valued and increase loyalty. Obileye is a UK-trained lawyer and CEO, Great Heights Property and Facilities Management Limited Email: Tundeobileye@greatheightslimited.com

BUSINESS DAY

Tuesday 30 October 2018

Expert sees collaboration, PPP driving FDI into Nigerian property market

Real estate future here as LekkiCyberville... Continued from page 29

…as FIBACI-Nigeria trains real estate professionals

or Nigeria to at- Endsley stated. tract more foreign He noted that Nigerian direct investment players are individually do( F D I ) i n t o i t s ing what they want to do, property market, which is not working out there is need for stakehold- well for the growth of the ers including players, gov- property market, stating ernment and associations that such will not work unto come together with the less the sector has a corporight solution, Bill Endsley, ration called public private principal, World Citizen partnership (PPP) for the Consulting, has said. people. To him, Nigerian propStating that Nigerian erty market has great po- government is interested in tential and there are lots moving towards getting FDI, of institutional and other Endsley pointed out that the investors around the world next step lies in achieving who are looking to invest in transparency, which the the property sector. institutional investor can Endsley, who disclosed see in order to price the risk this in Lagos on Thursday, and to come to Nigeria. at the opening of a 2-day Right now, Nigerian training programme for property market may be real estate professionals opaque and not so clean. on ‘Understanding Global I always talk about clean Real Estate Market System: windows that people can Exploring Real Estate In- see in and it does not matter vestment’, explained that what they see. If you clean the training was aimed at the windows and the invesequipping the participants tors can see the situation, with the knowledge and no matter what they risks skill required to convince are, they can mitigate those investors to come to Nigeria. risks,” Endsley advised. According to him, for On the role interest rate investors to invest, there is plays in growing the propneed to have risk assess- erty market, Endsley attribment and transparency to uted the high interest rate enable them to look into to the inability of Nigerian Nigeria and see the risks. banks to price the risk of giv“What I will really like ing loans. “Banks realised to see is the government, that it is so risky to give loans the private sector and civil which is why they have to society showing under- charge very high to protect standing that this job is for their money. In US, the rate everyone and that it cannot is so low because there are be done by the government millions of transactions that or others alone. All three they can put together using players must come together the database. to understand the system “Nigeria has to start with and find the right solution,” the property rights, what

L- R: Adeniji Adele, president, FIABCI-Nigeria; Akin Opatola, treasurer, FIABCI-Nigeria, and Bill Endsley, FIABCI-FIREC Consultant, USA, at the FIABCI-Nigeria training programme for real estate professionals in Lagos recently

that risks are for the banks and what the regulations are because most times in the developing countries the regulations are there to protect the companies and not to spur innovations”, he noted. To improve on Nigeria’s property right, Endsley said people should be able to register their title, find where their titles are and transfer their property from one person to another. Adeniji Adele, president of FIBACI-Nigeria, had in his opening remarks stated that one of the goals of the chapter was to develop expertise in the built industry using education as its tool. He hoped that the train-

ing would provide the participants with knowledge of investment and global perspective in real estate. The training, he pointed, would also enable Nigerians to gain competitive advantage, increase its earning potentials, expand its business network and effectively build global business. “This gathering is to collaborate and change the perspective of real estate in Nigeria. It has to do with doing things alongside international standards. Nigeria is still at the low middle level and we need to be up there,” he added. E a r l i e r, E l i z a b e t h Mendenhall, the president of the National Association

of Realtors (NAR), United States of America; Richard Mendenhall, the former president, and Bill Endsley, Principal World Consulting, who were on a visit to the Nigerian chapter, had held a meeting with Rowland Abonta, president of the Nigerian Institution of Estate Surveyors and Valuers. At the meeting, Abonta sought the support of NAR towards improving the Nigerian real estate industry, especially in strengthening ties with US professionals as well as boosting the capacity of practitioners in the area of training at both individual and corporate levels to enable them become globally relevant.

and it is it is eco-friendly? There are, therefore, opportunities for home ownership at the first Cyberville which could be reached on 08149906620 or www. hzelekki/lekkicyberville. The estate has flexible and convenient payment plan and so the need to be part of this piece of cake is just compelling. The estate offers three different house-types including 2-bedroom, 3-bedroom and 4-bedroom apartments, each with affordable prices and flexible payment plan. Each of the 2-bed apartments sells for N21.95 million naira outright, or N6.99 million initial deposit and the payment balance spread over 60 months ; each of the 3-bed terrace duplexes sells for N33 million outright payment, or N8.99 million-naira initial deposit, and the payment balance over 60 months, while each of the 4-bed apartments sells for N34.99 million outright; N8.99 million initial deposit, Pay balance over 60 months. “Upon all these incentives, we are also offering N1 million discount for all outright purchases made before November 10, 2018”, Ogebor said, urging home seekers and investors to avail themselves of this opportunity.

Conservationist canvasses more govt involvement in nature preservation DIPO OLADEHINDE

igeria Conservation Forum (NCF) has called on governments at all levels to do more in preserving the full range of Nigeria’s biodiversity and also promote sustainable use of natural resources for the benefit of the present and future generations. The foremost conservationist in Nigeria explains that governments need to do more in preserving nature in order to increase the quality of human life, minimize pollution and also enable efficient utilization of renewable resources. While giving an account of the NCF 2017 activities, NCF BOT Philip Asiodu, NCF Board of Trustees (BOT) chairman, who made this call at the foun-

dation’s Annual General Meeting (AGM) recently, observed that diverse concerns and issues raised in its 2017 lecture generated long discussions in the traditional media, which NCF followed up with a market survey in some South Western states to study the trade in vultures as stakeholders’ con-

ferences were also organised in selected states as part of a vulture advocacy campaign. “In furtherance of our mission to promote forest conservation, our new flagship project, Green Recovery Nigeria Initiatives (GRNI), which was launched in 2016, made progress with the convening

of a meeting of stakeholders in June 2017 which helped to chart a strategy for national reforestation programme,” Asiodu said. According to him, NCF also added its voice to the campaign to save parts of the Cross River rainforest from potential destruction through the proposed route for the construction of the 257km Super Highway in the Calabar-Ikom-Katsina-Ala axis. “Our Abuja office advocated for the establishment or improvement of laws and policies such as the establishment of a national policy on Wetlands; protection of some important species and key biodiversity areas and upgrading of these sites to Protected Area,” Asiodu said. He also noted that there

was a slight increase in the foundation’s membership base for the year which encourages it to put in more efforts at becoming a mass membership organization in the coming years. Ede Dafinone, chairman, executive council of NCF, said the year under review kickedoff with the foundation’s Vulture Advocacy Campaign conducted in partnership with Birdlife International which was aimed at reducing the threat of human activities on vulture populations in Nigeria. “As part of NCF’s advocacy efforts and the importance attached to the illegal trade in wildlife, the Foundation’s 2017 calendar was themed Stop Wildlife Trade, the publication was used in highlighting the need to conserve six endan-

gered wildlife-Nigerian-Cameroon Chimpanzee, African Forest Elephant, Cross River Gorilla, Pangolin, Sea Turtle and Vultures,” Chairman of NCF said. He noted that NCF’s activities in Calabar and environs were focused on community based projects aimed at improving the livelihoods of various communities by training people on how to live sustainably within their environment which was sponsored by UNDP Global Environment Facility, Small Grant Programmes. Muhtari Aminu-Kano, director general of NCF, appreciated every NCF’s member for his support to the foundation in these times when environment challenges were becoming more intense and complex.

Tuesday 30 October 2018

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FEATURE Future of health 2018: Will the brain gain from Nigeria’s diaspora revive the health sector? VIVIANNE IHEKWEAZU

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addy, you know this would never have happened when you were working in Lincoln, right,?” Dr. Olujimi Coker, Medical Director of Lagoon Hospitals, Lagos was telling an enthusiastic audience of 400 people at the Sheraton Hotel, Abuja, how his awestruck children reacted to his cancelling a family weekend trip, because he had been asked to be on standby in Lagos as a renowned global political personality was visiting Lagos and he might be needed in a medical emergency. This was one of the positive experiences of his move back that Dr Coker, who returned to Nigeria in 2009 after 20 years as a surgeon in the UK NHS shared at the Future of Health Conference 2018 last Thursday. On challenges, he cited concerns around poor quality and the ability to continue to deliver high standards of care as key issues facing healthcare professionals abroad wishing to return to work in Nigeria. Emphasizing the need for tertiary hospitals in Nigeria to rise to the challenge of improving their standards of care, he identified family support as essential for any planned move back as making the transition back to Nigeria is never easy. Despite the many challenges, Dr Coker and the other 10 speakers at the conference, which had the theme “The Diaspora as Nigeria’s Brain Gain,” agreed that there is a need for many of the Nigerian health professionals abroad to come back, mentioning several opportunities and benefits for Nigerian health workers who take the step to return. Dr. Ukwori-Gisela Kalu, a consultant clinical psychologist, who returned from the UK a few years ago talked about the great unmet need and the many opportunities to make a difference in mental health in Nigeria. Testifying to the incomparable satisfaction that she derived from her work in Nigeria, she mentioned opportunities to use technology to provide therapy online, and using mass media to raise awareness about mental health concerns as two things that excited her. The Future of Health Conference organized by Nigeria Health Watch and partners is rapidly acquiring a reputation as Nigeria’s premier conference that brings to the fore critical health issues which affect the entire health sector. Since 2015, the Conference has brought together key stakeholders in the health sector to share their insights, knowledge and expertise to foster collaborations that will improve health and advance healthcare access and delivery in Nigeria. This year, the focus was on the many Nigerian healthcare professionals in the diaspora and highlighting how over the last decade, many are bringing their skills, experiences and resources back home to improve Nigeria’s health sector. The conference also explored ways in which government and other partners can help create a better ecosystem for those wishing to return. Speakers at the conference shared a variety of experiences, some had returned fully, others visited periodically and regularly. They shared the challenges they faced upon returning

as well as opportunities in their fields of practice, sharing valuable advice for others interested in returning. For Dr. Chummy Nwogu, CEO of Lakeshore Cancer Centre Lagos, despite challenges like corruption, high interest rates and bureaucratic bottlenecks, coming back to Nigeria is all about inspiring the next generation of professionals. He advised intending returnees to ensure that they aligned their ‘head, heart and pocket’ when planning their return. Dr. Fatima Kyari, Founder of the Centre for Community and Rural Eye care, said her stay outside the country opened her eyes to how passion, integrity and information are critical for healthcare delivery. Describing her experience visiting over 300 hospitals across the country while working on a national survey, she lamented that 4 out of every 5 cases of blindness in Nigeria are preventable. A hostile business environment and the absence of a favourable ecosystem to support a start-up healthcare practice were some of several challenges Dr. Atinuke Uwajeh, cofounder of Paediatric Partners Hospital, faced when she cashed in her retirement savings and left her private practice in the US to relocate to Nigeria. Other challenges were the high cost of power and the prevalence of substandard medications. Even after setting up, attracting patients was difficult because of the Medical and Dental Council of Nigeria rules on medical advertisements. Dr. Uwajeh said she used social media like WhatsApp to network and create a market for her practice. “Returning to Nigeria requires a lot of planning and determination, but the Nigerian patient is worth it”, she said. Businesses need capital, and the business of healthcare is no different. Dr. Olumide Okunola, healthcare program manager of the International Finance Corporation (IFC) at the World Bank, believes that the cost of capital for healthcare investments should not be unnecessarily high. He noted in his talk that India has been able to provide a concession model for healthcare, providing access to poor

and vulnerable people, suggesting that Nigeria can emulate that model. He advised returnees to take advantage of the state health insurance schemes operating in 16 states across the country, and tap into various loan schemes of the Federal Government. One of the many advantages of practicing in the diaspora is the opportunity to build networks, which can continue to support your practice when you return, according to Dr. Zainab Bagudu, CEO of Medicaid Foundation. She recalled how, upon returning to Nigeria after her studies in the UK, applying the lessons she had learned abroad, she worked hard to establish and maintain relationships with her paediatric patients and their parents. This, she said, helped her build trust, a practice that distinguished her from some of her colleagues. Mr. Temitayo Erogbogbo, who is based in Switzerland but visits often in his role as Director of Advocacy, MSD for Mothers said that maternal health should be made a priority in Nigeria as women contribute significantly to the GDP of the country. He revealed that contraceptive use in Nigeria is at 10%. For him, maternal mortality is an emergency that must be engaged and argued that everyone, including the private sector, has a part to play. For consultant neurosurgeon, Mr. Douglas Emeka Okor, a massive gap in expertise in neurosurgery during his time in medical school in Benin, influenced his decision to be a brain surgeon. He said that Nigeria needs grit and passion to make the desired gains in the health sector possible and when these gains are achieved, they can be maintained through, cultural integration, quality of life of patients, availability of innovative information and Public-Private Partnerships (PPP). He also emphasized that most Nigerians do not know that many of the conditions that they go abroad to treat can now be treated successfully at high quality in Nigeria. Dr. Olufemi Sunmonu, co-founder/director, PurpleSource HealthCare, advised health professionals who are planning to return to come back with

an open mind, take the time to find out what is happening on the ground, explore the unknowns as if they were children and begin with asking very basic questions and listen and learn. He advised returning health professionals to focus on interventions that are within their skills and expertise to help them focus and perform optimally. Highlighting the level of need in the Nigerian health sector, Prof. Rotimi Jaiyesimi, Secretary, Medical Association of Nigerians Across Great Britain (MANSAG), revealed that there is only 1 doctor to about 60,000 patients in Nigeria. He said that 70% of the diseases in Nigeria can be treated at the primary care level therefore focus should be on the primary health care system in Nigeria. For him, patriotism, passion and patience are the three most important qualities any intending returnee should have. A panel discussion followed each session and provided an avenue for the audience to interact with the speakers. The first panel discussion highlighted volunteering in medical outreach missions across the country as a way for diaspora professionals to test the waters and get acquainted with the healthcare community back home. The session also discussed the need for greater government engagement with the medical missions being carried out by various NGOs, and the importance of collaboration and mutual respect among healthcare professionals. The second panel discussion revolved around how to sustain and expand gains that have been made from the skills. The panel also talked about how creating a system that prevents disease is more sustainable in the long run, with Dr. Bagudu using her cancer awareness campaign and advocacy as an example. The consensus among participants was that government should take the lead in providing an enabling environment to encourage more diaspora participation in Nigeria’s health sector. Senior Special Assistant to the President on Diaspora Affairs, Hon. Abike Dabiri-Barewa, represented by

Dr. Badewa Williams, affirmed that the expertise of Nigerians in the diaspora is very important. She announced plans by the government to hold a diaspora summit between the 27th and 29th of November with the sole aim of encouraging Nigerian professionals in the diaspora to return home and invest in the country. The Nigeria Medical Association (NMA) represented by Dr. Tonnie Okoye, National Strategic Program Manager, announced efforts by the NMA to create an electronic directory that will connect various medical professionals with each other anywhere in the world to facilitate knowledge transfer. Nigeria Health Watch Co-Founder and Curator, Dr. Ike Anya noted that the problems of the Nigerian health system are well known, so greater focus should be placed on solutions to change the status quo. “The Nigerian health system is not where it should be but also, it is not where it used to be decades ago. It can only improve when there is sincerity of purpose and collaboration by people who are passionate to see that Nigerian patients live their lives to the fullest,” he said. The #BrainGain4Naija conference on the 18th of October was followed by a workshop on the role of financing healthcare investments in Nigeria on October 19, hosted by Nigeria Health Watch in partnership with the International Finance Corporation of the World Bank. The workshop brought together experts in health financing and investments and healthcare professionals to explore the many opportunities for health financing and funding for healthcare businesses in Nigeria. Nigeria Health Watch will publish a detailed report on the workshop. The #BrainGain4Naija Conference saw over 300 participants in attendance with live audiences on Facebook and YouTube. Despite the huge challenges that come with practicing and investing in healthcare in Nigeria, there was a consensus that the opportunities which exist for returnees are numerous and that it is time for everyone to leverage on the brain-gain momentum. Diaspora health professionals should bring in their specialist skills, advanced training and networks while home-grown health professionals should provide context and guidance. However, the brain-gain must be sustained by a responsible government, providing an enabling environment for these collaborations to thrive. We must all contribute our quota to make the health sector work…because, as more than one speaker emphasized, the Nigerian patient is worth it. As part of the conference, Nigeria Health Watch produced the first edition of a directory of innovative health services now available in Nigeria. The directory will be available online and new services will be added to it as they come to our attention. In addition, as with all of our previous Future of Health conferences, the speaker presentations and panel discussions will be available on our YouTube channel to serve as a resource for those contemplating a move back.

Published courtesy of Nigeria Healthwatch.

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Tuesday 30 October 2018

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

Tough and unpredictable macroeconomic environment hurts flour millers BALA AUGIE

he tough and unpredictable macroeconomic environment have left operators in the food and beverage industry grasping for breath as most of them can no longer breakeven. When Nigeria existed its first recession in 25 years in the fourth quarter of 2017, one would have expected companies to thrive and magnify shareholders earnings. H o w e v e r, d w i n d l i n g purchasing power among consumers, insecurity in the northern part of the country, decrepit infrastructure, high incidence of smuggling, counterfeiting locally manufactured products, and the menacing grid lock at the Apapa Ports have made it practically difficult for manufacturers to make profit or bolster margins amid sky high cost of production. Other challenges bedeviling the industry are: high excise duties on products, exorbitant cost of haulage, and congestion at the Lagos seaports arising from the nonfunctionality of other seaports in the country. Firms like Flour Mills Nigeria Plc, Honeywell Four Mills Nigeria Plc, Northern Nigeria Flour Mills Plc, and Dangote Flour Mills that belong to the food sub sector of the manufacturing sector have had to weather the storm. But, many others especially the small and medium scale businesses in the sector had to close shops due to the unfavorable operating climatic conditions as macroeconomic shocks continues to disrupt planning. The insurgency in some parts of the country- which has claimed millions of lives and displaced farmers- have hindered companies from shipping their products to these crisis region hence resulting in loss of significant market share. Honeywell, a major player in the industry, attributed the key impediment to growth during its first quarter result to the Apapa traffic gridlock, which has virtually crippled business activities in Lagos State. Its management said the dilapidated road infrastruc-

Aliko Dangote, CEO, Dangote Groups

ture and chaotic traffic situation in and around the nation’s premier port made it inordinately difficult, and enormously expensive to transport goods out of the factory in Tincan Island, adding that the challenge resulted in an effective freight cost increase of about 25 per cent. Of course the above bottle neck to growth will balloon distribution and administrative expenses and holding costs, as inventories will be lying fallow at the factory. The Management of Dangote Group says its sugar and salt companies lose about N 2 billion monthly to the perennial traffic gridlocks on Apapa Port roads every month. If we multiply the amount (N2 billion) by 12 calender months, it then means that the company will lose N24 billion annually, an amount that could be reinvested for future expansion or distributed as dividend to shareholders. Nigeria will need about $3 trillion in the next 26 years to bridge the infrastructure gap in the country, according to Nigeria Labour Congress (NLC). Marcus Adiele, Executive Director in one of the Flour Mills Company, said problem of logistics occasioned by the bad roads and the dwindling economy is taking a toll on the industry. “Flour Companies are just

struggling. Apart from Dangote Flour Mills that relies on the parent company transport unit, for its transportation needs, the transport sector also lacks capacity in terms of ability to invest in quality trucks for movement of goods and services,” said Adiele. Experts bemoan the influx of cheap and substandard products through the porous Seme borders of Benin Republic is undermining the growth of operators in the food and beverage sub sector because it is creating undue competition, while the relative stability in the foreign exchange market has made it easy for importers to bring in goods, further stoking the supply glut. “Within the last nine months, one could notice a drop in demand for flour products, largely due to the availability of cheaper agricultural produce and the slowdown in economic activities as a result of the upcoming election. Also, we have influx of foreign Pasta products. These are available at a lower price, which comes back to issue of appropriate tariff,” said Adiele. The President of the National Union of Food Beverage and Tobacco Employees (NUFBTE) Lateef Oyelekan equally decried smuggling as one of the problems of the food sector. “Smuggling in the North-

ern part of Nigeria and the Seme axis of the Nigerian border with Benin Republic is alarmingly worrisome,” said Oyelekan. Despite the ban on importation of flour based products like noodles and spaghetti, smuggled products dot the shelf of many markets and stores in Nigeria. A visit to Balogun Market (Trade Fair Complex) revealed that Bonita, a variety of spaghetti is the toast of buyers especially for those cooking for sale. Bonita is smuggled through the Seme border with the security agents turning a blind eye to the activities of the smugglers. Rather than confront them, the security agents line up along the route and various bus stops for their settlement. To further exacerbate the already anaemic position of manufacturers, consumers have refused to open their wallets, as Nigerians are getting poorer by the minutes, while unemployment rates are rising amid growing population. According to a recent World Bank data, 92.10 percent of Nigerians live at below $5.50 a day. The reality is that most people cannot afford to buy a packet of Spaghetti or proteins. Nigeria with a population of 180 million people, has 87 million people, nearly half

BD MARKETS + FINANCE Analysts: BALA AUGIE

its population, in extreme poverty; as high inflation environment continues to erode discretionary income. More worrisome is that the country’s population is expected to hit 400 million by 2050, according to World Bank. This means there will be more mouth to feed in a country where policy makers are insensitive to the plight of the people. The Nigerian Industrial and Revolution Plan, published in 2014, identifies weak purchasing power as an obstacle to industrialization in Nigeria. Christian Orajekwe, equity research analyst at Cordros Capital said Nigerians suffered significant erosion from Naira devaluation and increase in price of fuel while wages are yet to be at per with inflationary consequences of those events. “After the recession, a lot of middle income class left the country in search

A visit to Balogun Market (Trade Fair Complex) revealed that Bonita, a variety of spaghetti is the toast of buyers especially for those cooking for sale. Bonita is smuggled through the Seme border with the security agents turning a blind eye to the activities of the smugglers. Rather than confront them, the security agents line up along the route and various bus stops for their settlement. of greener pastures thus dampening sales volumes as patronage reduced,” said Orajekwe. Nigeria’s economy remains fragile as GDP grew by 1.50 percent in the second quarter of 2018, a downturn

from 1.95 percent in the first quarter. President of the Manufacturers Association of Nigeria (MAN), Frank Jacobs said that these challenges are still manifesting in the form of high inventory of unsold finished products, inadequate electricity supply, frequent increases in electricity tariff in the face of poor services from distribution companies and abnormally high interest rates. Patronage by people for consumer goods products has slowed due and as expected firms’ inventory days has gone up hence resulting in huge holding costs. The cumulative average stock (inventory) turnover ratio of the largest consumer goods firms fell to 2.83 times or 234.05 days between 2018 and 2017 from 3.70 times or 144.52 days recorded in the period of between 2017 and 2016. Experts blame the country predicaments on the inability of policy makers to think out of the box and formulate policies that will make businesses thrive while contemporaneously creating jobs and lifting people out of poverty. China, world’s second largest economy- through copious investment in infrastructure, aggressive industrial revolution, and investment in Agriculture business that began in the late 1970shas lifted more than 800 million people out of poverty, slashing the rate from nearly 90 percent in 1981 to under 2 percent, as measured by the World Bank’s latest spending benchmark. Indonesia, South East’s largest economy, through diversification way from oil and accelerated economic reforms, recorded tremendous reduction in poverty rate as it was able to reduce unemployment rate below 7 percent from a high of 40 percent in 1960. However, stakeholders are upbeat that things will turn around with the completion of the Apapa road project, expected before the end of 2019; Stability in the international price of wheat and Seasonal improvement in flour products demand and the conclusion of the 2019 elections.

Tuesday 30 October 2018

Harvard Business Review

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An Office Where Everybody Knows Your Name 71%: Research from multinational PGi shows that 71% of American millennials want their work colleagues to be like a second family. + Against All Odds 28.6%: In 2016, data journalism website FiveThirtyEight forecast that Donald Trump had a 28.6% chance of winning the American presidency and that Hillary Clinton had a 71.4% chance. + Downturn in Sweden One-quarter: In the past four years, onequarter of bank branches in Sweden have closed down, according to estimates based on figures from the Swedish Bankers’ Association. + Demanding Privacy 4%: Companies can face fines up to 4% of global revenue for not complying with the European Union’s General Data Protection Regulation law. + Einstein’s ‘Miracle Year’ 1905: Scientists call 1905 Albert Einstein’s “miracle year” because it was the year in which he discovered relativity, wrote the equation E=mc2, won the Nobel Prize for physics with a paper on the photoelectric effect, and published a paper on the Brownian motion.

When announcing change, explain how it will make the company better

hen you’re one of the only women in the office, developing the genuine relationships you need to advance can be a challenge. Look for easy ways to connect: Get to the office 10 minutes early and walk around to see who else is in. Use 30 seconds in the elevator to catch up with a colleague, or to find a time to do so. Arrive five minutes early to meetings and talk to someone you don’t know (instead of hiding behind your phone). Walk to

the train with a co-worker who’s going your way. Being fully present in the office can help you make many more crucial connections. And don’t force yourself to take up hobbies or participate in activities just because your male colleagues like them. If golf isn’t your thing, that’s OK. Decide what you do like and invite a few colleagues along for the fun.

(Adapted from “4 Ways Women Can Build Relationships When They Feel Excluded at Work,” by Brenda F. Wensil and Kathryn Heath.)

How to email someone you’ve lost touch with How to support your spouse

if workis stressing them out

Tips & Talking Points How women can build relationships in a male-dominated office

TALKING POINTS

hen you really need a favor from someone you haven’t talked to for a while, reaching out can be awkward. Re-break the ice by sending them an email with a clear subject line, like “Reconnecting.” Early in the body of your email, acknowledge that some time has passed since you last spoke, and briefly update them on what you’ve been doing professionally. This will provide useful context for your request. Then let them know what kind of help you need. You want to sound friendly and

BUSINESS DAY

confident that your request is something they’ll want to say yes to. But give them an easy way to say no, and offer to return the favor either way: “I’m sure you’re really busy, so thanks in advance for considering it. Please let me know how I can be helpful to you, either now or in the future.” And then stay in touch — that way it won’t be awkward the next time you want to say hello.

ven if you find it easy to leave your worries at the office, your spouse or partner may not. How can you help them cope with work stress? For starters, really listen. When your partner gets home and begins telling you about an office frustration, don’t “half listen” while you do the dishes or make dinner. Stop, pay attention and empathize. Sometimes they may just want to vent; other times they may want your advice. If you’re unsure

what they need from you, ask. You can offer advice — but be gentle about it. Say something like, “I have a suggestion for that problem. Can I share it?” And if you get the sense that your partner is misreading a situation at the office, ask nonthreatening questions to learn more: “What makes you think that’s the case?” Whatever you do, never compare your spouse’s stressful day with your own. Stress endurance is not a competition.

(Adapted from “How to Help

hanges can make employees nervous. Whether you’re announcing an acquisition, a reorganization or a new human resources policy, people often need help processing the information. Make the announcement go more smoothly by explaining the reason behind the change. Give the background on what’s not working and why the new plan will alleviate that organizational pain point. For example, talk about how customers have been hurt or how the business is incurring extra expenses, and explain exactly how the change will solve the problem. Also, discuss how the change will affect people on an individual level; employees’ first reaction is often to ask, “What does this mean for me?” Don’t sugarcoat any inconveniences the change will bring. And avoid the urge to say that delivering the news is hard for you — that may sound manipulative. Instead, demonstrate humility and responsibility, and focus on what your employees need. (Adapted from “How to Tell Your Team That Organizational Change Is Coming,” by Liz Kislik.)

If a career change would reduce your salary, try living on that salary first

hen it comes to a major career change, pay is often a sticking point. Can you afford to switch jobs if you’d be making less money? Eliminate some of the uncertainty by testing out your new salary. Figure out what you expect to earn, and live on that for two to four months. This will give you a realistic picture of daily life in your new career. If you’d be making significantly less money, think hard about what you could cut back on — meals out, expensive groceries, or TV sub-

(Adapted from “How to Your Spouse Cope with Work Email Someone You Haven’t Stress,” by Rebecca Knight.) Talked to in Forever,” by Rebecca Zucker.) c 2017 Harvard Business School Publishing Corp. Distributed by The New York Times Syndicate

scriptions, for example. At the end of your test, revisit your budget to see how you did. And, of course, check in with your spouse, partner or other family members to discuss the financial implications of your career change. Setting expectations for what you will, and won’t, be able to afford will leave less room for surprises.

(Adapted from Harvard Business Review’s “HBR Guide to Changing Your Career.”)

BUSINESS DAY

Tuesday 30 October 2018

Tuesday 31 October 2018

BUSINESS DAY

36 BUSINESS DAY NEWS Former Lagos speaker, others arrested over death of policeman JOSHUA BASSEY

former speaker of the Lagos State House of Assembly, Joko Pelumi, and 49 others have been arrested by the police in Lagos over alleged attack and killing of a police officer attached to the anticultism unit. Imohimi Edgal, Lagos commissioner of police, told newsmen in Ikeja that the former speaker, along with others, attacked and killed Akingboju Akindele, a deputy superintendent of police, while trying to effect the arrest of some suspected cultists. According to Edgal, “On October 27, at about 4:30p.m, a team of anti-cultism policemen attached to Area ‘N’ Ijede, were attacked while trying to effect arrest of some suspected cultists. “In the process, a police

officer by name Akingboju Akindele, a deputy superintendent of police (DSP), was killed. “Investigation into the case led to the arrest of 49 suspects including a former speaker, Lagos State House of Assembly, Rt. Hon. Joko Pelumi.” Edgal said the suspects were traced to the former lawmaker’s house where they were reported to be hibernating after committing the dastardly act. He said investigation had narrowed down the arrested suspects to five who actively took part in the crime. “The policeman’s rifle had been recovered at water front Ijede where it was buried. The other suspects and the former lawmaker will be treated as accomplice. “All the arrested suspects are currently being investigated at SCIID Panti, Yaba and would be charged to court on Monday,” he said.

Edo approves N21.3m contributory pension pay-out to families of deceased workers

overnor Godwin Obaseki of Edo State has presented a cheque of N21 million to the families of 10 deceased workers of the Edo State government, as their benefit in the Life Insurance Policy of the State Contributory Pension Scheme. Presenting the cheques to beneficiaries of the deceased staff, Governor Obaseki said families of every Edo State worker registered under the contributory pension scheme would not be abandoned as their benefits would be made available to them. “We want to demonstrate to families of the deceased, civil and public servants as well as the people of Edo State that the government will never abandon them because their family member died in active service,” the governor said.

The scheme is less than two years old but that does not hinder beneficiaries from receiving some amount of money due to their enrolment into the pension scheme, he said, noting, “I hope now that our Labour Union is convinced that the presentation of cheques to families of deceased state workers is real. “This is the second batch of beneficiaries in the state. Edo State government under my stewardship will never deceive Edo workers as we hold them in high esteem and it is our goal that workers get their full due.” The governor expressed hope that the state workers would work with his administration to develop similar arrangements to own their own homes under a new home ownership arrangement.

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May & Baker sees rights issue expands shareholders’ earnings BALA AUGIE

… revenue to hit N50bn by 2023

ay and Baker Nigeria plc is optimistic that proceeds from the proposed rights issue of N2.45 billion will magnify shareholders’ earnings, as the company adopts a mission to become leading healthcare brand in sub-Saharan Africa. The company is going to raise the funds through Rights Issue of 980 million shares of 50 kobo each at N2.50 per share on the basis of one new share for every one share held as at the close business on Tuesday, September 4, 2018. The drug maker advises shareholders to take up the offer because the new funds will be used to strengthen their investments and make the company more profitable. “Our plan is to invest the proceeds of the rights to some key projects. For instance, over N400 million of the N2.45 billion will be used to

finance part of our equity in Biovaccines Nigeria Limited, the joint venture company for local vaccine production,” Nnamdi Okafor, managing director, May & Baker, said. “We are also going to invest over N500 million on capacity expansions for one of our cash cow products, paracetamol, for which we are building a dedicated plant. Marketing brand is expected to take over N500 million,” Okafor said. According to Okafor, about N400 million will be used to offset part of the current loans portfolio of about N950 million, while the remaining will be used to buoy working capital. Experts say shareholders should not fret to take up the offer because the company had used existing funds to finance infrastructure, reduce debt, bolster assets utilisation and underpin profit. Fixed Assets Turnover

(FAT) - which measures how efficient firms are in using assets in generating higher profit - of May & Baker has been improving steadily in the last five years as it increased to 2.45 times in December 2017, from 0.71 times recorded year ended December 2013. The higher the ratio the more efficient a company is using property plant and equipment in generating higher sales and profit The drug maker’s net profit margin increased to 20.57 percent in June 2018, this compares with 5.98 percent in the corresponding period of (Q2 2017) and 1.02 percent recorded in the first quarter of 2017, according to data gathered from Bloomberg. Its debt to equity (D/E) ratio fell to 49 percent in the period under review from an all-time high of 100 percent in the fourth quarter of 2015 and 115.14 percent in the fourth quarter of 2014.

Tuesday 30 October 2018

New Sims digital centre opens at Alausa CBD

ims Nigeria Limited, owner of Sims Digital Centres and the official representatives of Samsung, Royal and Panasonic in Nigeria, has opened a digital centre beside the Ikeja City-Mall at Alausa. This is apparently the very first of its kind in the country as it showcases most of the internationally respected electronics and home-appliance brands in a very customerfriendly layout. Products are displayed at very competitive prices and the staff, made up of both Nigerian and expatriate customer-service professionals, are very courteous to customers. To top it off, early shoppers at the centre are being thrilled with an offer of an eye-popping gift for every purchase. According to the MD of the company, Simeon Eyisi, the digital centre was conceived to give buyers of Electronics and Home Appliances in Nigeria a shopping experience similar to what they enjoy in the major commercial cities across the world.

Kayode Fayemi (l), Ekiti State governor, with new appointees: Wale Fapohunda, attorney general and commissioner for justice; Dapo Kolawole, commissioner for finance; Biodun Oyebanji, secretary to the state government, and Biodun Omoleye, chief of staff, during the swearing in of newly appointed state officials in Ado-Ekiti, yesterday.

Obaseki urges 19 female aides on gender to mobilise grassroots women, girls for Alaghodaro Summit

US Consulate General unveils Naija Gems at LagosPhoto Festival

do State governor, Godwin Obaseki, has charged his 19 aides on gender issues residents in the state’s 18 local councils to mobilise women and girls in their respective councils to the second edition of Alaghodaro Summit, scheduled to hold in Benin City from November 9-12. Special adviser to the governor on media and communication strategy, Crusoe Osagie, said the governor gave the charge at the weekend in Benin City, the state capital, while ratifying the theme for the 2018 edition of the summit. The state governor has a Special Adviser on Gender Is-

s part of efforts at harnessing the artistic talents and showcasing the best of Nigeria to the world, the United States of America has unveiled Naija Gems, an exhibition of 50 most impressive photographs of attractions across the country taken by Nigerian photographers. The exhibition was opened on Saturday at the African Artists’ Foundation, Victoria Island, Lagos, one of the venues for the ongoing Lagos Photo Festival. As well, the exhibition is courtesy of a photography context, which saw over 330 submissions by photographers across the country, and

sues and 18 Special Assistants on Gender Issues, all charged with gender mainstreaming functions in the 18 local government areas of the state. “Governor Obaseki is passionate about women’s issues and he is committed to improving their socioeconomic conditions. “He has maintained at different fora, that any society that denies itself the full participation and contribution of women, does so at its peril and under-utilises its human resources,” Osagie said. The governor’s spokesman further said: “Everyone who has been following the developmental strides of Governor Obaseki closely, can attest to the high pre-

mium he places on policies and programmes that affect women and girls. “His appointment of 19 female aides on gender issues, his hard and tough stance against child abuse and molestation, a crime for which some paedophiles have been sent to jail by the appropriate court and the ongoing empowerment programmes for women and girls in the state validate the governor’s commitment to the welfare of women and the girl child.” He explained that the theme: “Edo of Our Dreams – Investing in People,” has been approved by the governor for the 2018 edition of the summit.

OBINNA EMELIKE

42,000 Nigerians who voted their best photographs. At the end, the Top 3 photographs were selected and rewarded, while the Top 50 photographs were exhibited in Abuja. In fulfilment of its promise to further showcase the pictures across the country, the US Consulate General of Nigeria partnered the organisers of Lagos Photo Festival to show the beauties to the Lagos audience. Speaking at the opening ceremony, Russell Brooks, public affairs officer, United States Consulate General Lagos, noted that Naija Gems is a travelling exhibition created by the US Consulate General of Nigeria under Ambassador Stuart Symington who travelled across the

36 states of Nigeria to see the beauty of the country. According to Symington, the motivation for the context is similar to the reasons the US engages in a range of cultural and artistic activities in Nigeria. “We believe that through cultural exchange, we build better understanding between the two countries”, he said. “Nigeria and the US share a lot in common in terms of the appreciation for music and the art, and by sharing these common attributes, we can build better bonds, it is also important for Americans to understand the beauty that exists here in Nigeria, that Nigeria has a lot more to offer than just the petroleum resources that everyone talks about”.

Tuesday 30 October 2018

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FG tasks National Assembly on speedy passage of privatisation reform bills HOPE MOSES-ASHIKE, DIPO OLADEINDE, GBEMI FAMINU

he Federal Government has charged the National Assembly to ensure speedy passage of eight privatisation sector reform bills currently pending before it. Minister of information and culture, Lai Mohammed, made the plea on behalf of the Federal Government on Monday, saying the reform bills, centred on Transport, Competition, Consumer Protection and Postal sectors, drafted by Bureau of Public Enterprises (BPE) and approved by the Federal Executive Council (FEC) had been transmitted to the National Assembly for enactment “The bills are The Railway Bill, The Inland Waterways Bill, The Ports and Harbour Bill, The Federal Roads Au-

thority Bill, The National Roads Fund Bill, The National Transport Commission, The Competition and Consumer Protection Bill and the Postal Bill,” the minister said at the event organised by the BPE and the Stakeholders Engagement Committee of the National Council on Privatisation (SEC-NCP). The minister noted that these bills, when passed, should liberalise the relevant sectors and lead to the setting up of appropriate regulatory agencies to create the much-needed conducive and enabling environment for private sector investments. “An expeditious passage of the reform bills and the establishment of the regulatory agencies and institutions created by the bills will greatly enhance the inflow of investment in the sectors,’’

he said. Speaking in Lagos at stakeholders media interactive forum, Alex Okoh, director general, BPE, said the primary challenge faced by the BPE is the reluctance of some of the MDAs involved in the privatisation process. He said paucity of funds had caused serious setbacks to the attainment of some of the objectives of the BPE, the treasury of the federal government is becoming leaner in view of competing demands and dwindling government revenues. “The current initiatives of the bureau of public enterprises are poised to positively impact the economy in areas of power generation and supply, improvement in overall infrastructure employment creation, food security and human capital development leading to overall economic growth.”

Financial inclusion: 13,000 SMEs in Jigawa access loan facility KELECHI EWUZIE

ederal Government financial inclusion drive across the country has benefited over 13,000 small businesses in Jigawa State even as the traders vow to achieve 100 percent of the 30,000 slots allocated to petty traders from the Trader Moni initiative of the Federal Government. Hauwa Adam, programme coordinator of the Government Enterprise and Empowerment Programme (GEEP), stated this during the public enlightenment campaign on the programme in Dutse ultra modern market, saying so far over 13,000 had received the loan since the commencement of the pro-

ject in the country. The ongoing programme is an opportunity for Nigerians created by the Federal Government early this year with a target of over 2 million traders across the 36 states to access N10,000 collateral free loans. Adam said it was created and established to alleviate poverty among the teaming populace with a view to supporting small traders to expand their business trade via the provision of collateral free loans of N10,000. She said the Federal Government launched a new initiative under the GEEP called the Trader Moni, which would empower about two million petty traders between now and the end of the year. According to Adam, “The

initiative, which is mobile phone-based, is aimed to support about 2 million Nigerians with collateral-free loans to boost their businesses and no interest rate added.” Ibrahim Musa, one of the beneficiaries, said in his lifetime nobody and no government ever had deemed it fit to assist people like him. Musa, who is above 45 years of age, said he had never held the sum of N20,000 as his personal money neither had anybody ever assisted him. The enlightenment programme witness high turnout of the petty traders ranging from motorcycle riders, small and medium scale merchants across the many registration centres in Fagoji and Dutse New markets well as Yan Tifa and Yoruba Jumat mosques.

Lagos tasks tech firms on more investment JUMOKE AKIYODE-LAWANSON

agos State commissioner for science and technology, Hakeem Fahm, has urged all the Information and Communications Technology (ICT) companies in the state to increase their technology investments across the state. Fahm made the challenge while speaking as special guest at a seminar tagged ‘Insight Day,’ organised by data solution company, Hitachi Vantara, in Lagos. According to Fahm, the state is encouraging companies like Hitach to invest in the state, especially in information technology, as the state is willing to partner relevant stakeholders to make Lagos a technological hub for the country and the continent as a whole. “When you take a look at Lagos State, the population is

about 22 million and it continues to grow. We are still managing the state with minimal technology but cannot continue that way. We have to invest more on technology, and that is why we are moving heavily into the use of technology to manage the state,” he said. “If you look at Lagos State, the economy is larger than all the other countries in West Africa combined. So, we need to build technology to manage not only the eGovernment initiatives but also other activities. Lagos is always open for business and we are building applications on e-government, e-health, esurvey, and so on. “Lagos State is encouraging companies like Hitachi to continue to invest in the state. Lagos set up an innovation and education centre at Yaba called Kite. Kite stands for knowledge, innovation, tech-

nology and entrepreneurship. It is very important that we provide an enabling environment for the citizens as well as corporations to be able to work together and continue to build Lagos so that it will emerge a smart city,” he said. Hitachi used the seminar to present solutions on its stable that can help organisations put their data into better use, including how to monetise such data. The company said that since everyday business is under pressure to meet up with set goals and objectives, only digital transformation, can help businesses accelerate cost efficiency and time to market by automating operations and processes. The company added that data transformation would help increase loyalty and grow revenue by improving customer experience and unlock innovations.

37 NEWS

BUSINESS DAY

NACAN raises alarm Edo commences restructuring of over malfunctioned state-owned media organisations do State governor, The governor promradios at airports Godwin Obaseki, ised to support and work IFEOMA OKEKE

embers of National Air traffic Communicators Association of Nigeria (NACAN) have cried out over the malfunctioning of its radio equipment in some stations across the country. Speaking in an interview at the just concluded fifth annual general meeting held in Benin City, Edo State, Nkambo George, the president of NACAN, disclosed that it was difficult for some stations to read each other beyond 9am and 10am in some cases. According to Nkambo, this situation has led to the use of telephone lines, which ought to be the backup as the primary source. “We resort to telephone; we are using this close user group telephone line which ought to be back up. It is more or less the major equipment we are using now in most communication centres except for Lagos, Kano, Abuja and Port Harcourt where all is still functional.” The southern network with the HF radios that was deployed as a stop gap to assist HF modulates from frequency to frequency and causes delay in messages as long as the network is bad, the NACAN boss said.

says his administration has commenced the restructuring of state-owned media outfits to make them more viable and dependable primary sources of credible information. Obaseki disclosed this when the Nefishetu Yakubu-led new executive of the Correspondents’ Chapel, Nigeria Union of Journalists (NUJ), Edo Council, paid him a courtesy visit on Monday at Government House, Benin City. Obaseki said: “Our goal is to reposition Edo as an information hub in this part of the world and we are working to resuscitate the state-owned Nigerian Observer and Edo Broadcasting Service.” He said the Nigerian Observer would be split into two components – the Printing Press and the Publishing Company – while the Midwest Newspaper Limited would also be restructured. He stressed that he does not believe in retrenching workers, but in giving them the opportunity to improve themselves through training and retraining. “The members of staff of these media outfits will be retrained on digital reportage and publishing,” he said.

with the new executive of the correspondents’ chapel and said, ‘’I believe in the freedom of the press and would support you in the discharge of your duty. He also promised to digitise the chapel’s centre at the NUJ premises in Benin City, and donate a bus to them, to make their work easier as the 2019 electioneering period is near. In her remark, Yakubu commended the Obaseki-led administration for delivering on the promises made to the people, especially for providing conducive working environment for workers and investing in human capital development. The new chapel’s chairman said the visit was to present the new executives to the governor and to assure him of their continuous fair and balanced reportage of all government activities. “The Correspondent Chapel of the NUJ is the largest constitution of accredited reporters of various media organisations. “So, there should be a strong synergy between your government and the media for effective, credible and balanced reportage of government’s activities,” she said.

38 BUSINESS DAY NEWS FG to begin construction of Apapa-Mile-2 Road... Continued from page 1

Liverpool Road, up to Sunrise

Bus stop, was not done, which is why that portion of the expressway has collapsed. Instead, the trailer park which was part of the Borini Prono part of the contract was constructed up to 80 percent before work on it stopped for a while. The expectation now is that it will be ready for use by November 17. The critical road which used to carry the bulk of the nation’s import cargo collapsed more than five years ago and was over-run mostly by petrol tankers which have turned the hitherto busy expressway into a parking lot while waiting to pick up petrol and diesel from the many fuel tank farms built on the axis. The construction of the expressway is being done at an estimated cost of N72 billion by Dangote Group, in lieu of taxes which the company would have paid to the Federal Government. Dangote would be joined by two or three other construction firms which it contracted, to speed up completion of the construction work, according to Babatunde Fashola, Power, Works and Housing Minister. “We have been making efforts behind the scene for months and now we are delighted to say the construction workonthisimportantroad,whichwas

abandoned by previous governments will be flagged off on November 17”, a relieved Fashola told BusinessDay. In its tradition, Dangote will be constructing the road with its trademark concrete hard surfacing, which gives assurance of long lifespan for the road. Unlike asphalt-surfaced roads, which have a 25-years lifespan, concrete roads, according to Aliko Dangote, president of Dangote Group, last for two generations. Fashola said he was aware of the pain that residents, motorists and businesses in the port city were going through, assuring that work on the Leventis Bridge outward Apapa, was now being handled by Julius Berger, which was at the moment taking delivery of imported equipment and materials from the port for the work, for speedy completion. He disclosed that the process of asphalting the section of the bridge from 7Up to Costain, would be completed ‘soon’ to ease exit from Apapa. Construction work on the two-kilometre Apapa-Wharf Road funded (at N4.3 billion) by Dangote Group, Flour Mills Nigeria and Nigeria Ports Authority (NPA) has been completed and put into use but this has had no meaningful impact on the traffic congestion. Because of bad roads and congestion in and around Apapa, businesses

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are either relocating, operating at below installed capacity or dying altogether. A report by the Lagos Chamber of Commerce and Industry (LCCI) notes that Nigeria’s inability to undertake holistic port reforms has led to an annual loss of N6.7 trillion. A breakdown of that figure shows that the country loses N600 billion in customs revenue, $10 billion (N3.6trn) in non-oil export sector and N2.5 trillion in corporate earnings across various sectors annually. Exporters shipping 1,700 tons of commodities per day, when the Apapa Port Road was in good condition, now manage to only ship between 100 and 250 tons, Tola Faseru, president of the National Cashew Association of Nigeria said. “The key to trading or manufacturing business is the amount of time it takes you to turn around your working capital. If it should take 20 days and it takes 25, it adds more costs, which is exactly the situation,” said Ede Dafinone, chairman of the MAN Export Group. Though residents and businesses hail the planned construction of the Apapa Oshodi Expressway, amidst concerns for the degradation of their environment and loss in their property value, motorists say the mere construction of the roads in Apapa will not solve all the problems of traffic congestion unless the other two issues of port management and

L-R: Olusegun Quadri, consulting partner, Renner & Renner Consulting; Bello Koko Mohammed, Executive Director, Finance and Admin, Nigerian Ports Authority (NPA); Efiong Bassey, consulting partner, Renner & Renner Consulting; Hadiza Bala Usman, managing director, NPA; Ibby Iyama, country director, Renner & Renner Consulting, and Sekonte Davis, executive director, marine and operations, NPA, at the management awareness workshop on ISO 9001:2015 and occupational health safety assessment series (OHSAS) 18001:2007 ISO certificate for NPA, organised by Renner & Renner Consulting in Lagos, yesterday.

Why the Economist expects Atiku to defeat... Continued from page 1

Atiku Abukabar’s pledge to rein-

vigorate the economy with pro-market reforms. The former vice president, according to EIU, advocates a free-market and reformist agenda, with more private participation in public services, as well as liberalisation of the oil sector and exchange rate. It is projected that policy reform under an Atiku presidency will be based on pro-market measures and diversification of the economy away from oil. The EIU report notes that with “vote likely to be split in the North, Abubakar will find it easier to garner support from the country’s south, which has traditionally been a safe haven for the PDP. This gives Abubakar an edge, as does popular frustration over the rise in joblessness and poverty (two of the biggest voter concerns) on Buhari’s watch, as well as growing insecurity in central Nigeria.” As at the third quarter of 2017, data from the National Bureau of Statistics (NBS) puts Nigeria’s unemployment rate at a six-year high of 18.8 percent, while underemploy-

ment rate reached the highest on record at 21.2 percent. Nigeria has also been ranked as the country with the highest number of poor people in the world. With approximately 87 million Nigerians now considered to be in extreme poverty, the challenge of making the economy productive becomes a paramount task for the next government. The EIU report also suggested, there are expectations progress on free-market reform will be more rapid under an Atiku presidency. With this, the ease of doing business will record more progress, and foreign investors will be inclined to pay more attention to the country, to be followed with substantial investment commitments. “Buhari has been ideologically disposed towards state intervention in the economy, meaning there was little cause for him to overhaul the status quo. A more concerted effort to open up the economy to investment by Abubakar could produce positive results,” stated the report. However, an Atiku presidency will not be a completely smooth-sailing ride, as “progress will be hampered by vested interests, ideological op-

position, and bureaucratic inefficiency,” wrote the Economist. It further postulated that “his administration will be fragile”, in the event of Atiku’s emergence as Nigeria’s President. The potentially fragile administration is attributable to the absence of a party system based on shared principles, which will make it difficult to overcome Nigeria’s multilayered security threats. Other potential hurdles include; overhauling Nigeria’s currency regime (and thereby unleashing inflationary spike and upsetting those who benefit from an overvalued exchange rate) and; dissociating the Federal Government from the Oil and Gas sector – from which it gets most of its revenue. If successfully implemented, this would make the country’s economy more diversified (on account of revenue) and prepared for a future without oil. Driven by harsh economic realities; unemployment, low purchasing power, and a severely battered naira, many Nigerians are once again, desperate for another wave of change, which this time around, may not come from the ruling All Progressive Congress (APC), which parades the change mantra. But the economist may be wrong. Only 2019 will tell.

traffic management are handled. “You can have the best of roads but if you do not have a modern approach to port management, you will have congestion of cargo or of traffic in the port vicinity”, said Kevin Obiekwe, a senior official of a maritime company in Apapa. According to Obiekwe, “the question of a call up system for trucks has to be better handled. It is unacceptable that the NPA and the shipping companies cannot come together to enthrone a simple process to manage the flow in and out of traffic around the port.” But the NPA has assured that as part of their port management strategies, the call-up system will be deployed ‘soon.’ Hadiza Bala Usman, NPA’s managing director, told BusinessDay that the authority was working to have the call-up system for trucks with shipping companies in different port locations. It is expected that with increasing challenges with Lagos ports, the NPA should have resuscitated the Eastern ports, but despite the nearness of these Eastern ports to markets in the North and the East, importers in these locations have continued to make Lagos ports their preferred destination. This can be attributed to the rising security threats along the water channels leading to the Eastern ports, widening infrastructural gap and the shallow draught of the water channels leading to some of the ports in the East, limiting bigger oceangoing vessels with higher capacity from berthing in those ports. Motorists have also condemned the poor response of the Lagos State Government to the Apapa crisis, especially given that it is the responsibility of the state and municipal authorities to manage traffic in Nigeria’s commercial capital. “Inner roads in Apapa bear the shame of a state government which from inception, turned deaf ears to the cries and pains of the citizens and businesses within Apapa. Many businesses in Apapa have had to close shop in the last three years, due to the daily traffic lockdown in the area.” Roads such as Point Road, North Avenue, Liverpool, Park Lane, Bristol Road, Crowther Crescent, Elean

Tuesday 30 October 2018

Pepple, within the Government Reserved Area (GRA), Apapa have remained in bad shape. All these roads should ordinarily serve as alternative exit from Apapa due to the fact that major roads like Wharf Road, Creek Road and TincanMile 2 Expressway are permanently blocked by petroleum tankers and dry cargo trucks,” said Ismaila Mustapha, a Customs licensed clearing agent. Remi Ogungbemi, president of the Association of Maritime Truck Owners (AMATO), however, insisted that even when the roads are fixed, there might still be traffic issue to contend with, unless adequate parking spaces are created for truck drivers. The motorists point to the failure of the state government to play a central role in both traffic management and in intervening to improve side roads that have now become the main gateway into and out of Apapa in the time that the bridge is taken over by trailers. Ade Akinsanya, the Lagos State Commissioner for Works and Infrastructure, recently announced a programme tagged “Operation Fix The Potholes” in Lagos. Akinsanya had said the operation would last about three to four weeks and appealed to the residents and motorists to cooperate with officials and contractors, as well as follow traffic diversion signs to ensure early and smooth completion of the repair work. But one month after the plan was unveiled, no official or contractor has been seen engaging in any road repair in Apapa, even as the Akinwunmi Ambode-led administration has less than seven months to go. But Habib Aruna, the Chief Press Secretary to Ambode said the “Fix The Pothole” programme was being implemented gradually. “Work is ongoing in other parts of the state and gradually they will get to Apapa,” said Aruna. Similarly, Sina Thorpe, deputy director, public affairs, Lagos State Ministry of Works and Infrastructure, when contacted, said 11 roads had been rehabilitated in Apapa and plans are afoot to take on other roads. According to Thorpe, government is executing the road rehabilitation in phases subject to availability of funds.

I&E window trading slumps for sixth successive week as foreign exit takes toll LOLADE AKINMURELE

he value of foreign exchange traded at the Investor and Exporters window has now slumped for six successive weeks, as the impact of retreating foreign inflows into Nigeria takes a toll on dollar supply. Since hitting a record high of $2.14 billion in the week ended September 14 2018, turnover at the window, created in April 2017 by the Central Bank of Nigeria (CBN) to ease a dollar crunch that starved the economy, declined to $880 million in the week ended October 19, according to data from trading platform, FMDQ. The decline is supply-driven and a reflection of fund outflows from emerging markets, according to Wale Okunrinboye, head of research at Lagos-based Pension Fund Managers, Sigma Pensions. “The I & E window relies on autonomous foreign portfolio inflows, but a shortfall in that supply has capped liquidity and led to the CBN becoming the sole supplier in the market to protect the naira from weakening,” Okunrinboye said. “The Nigerian market has been selling off since August on the back of

broaderemergingmarketfundoutflows andthepoliticaluncertaintyinthecountry hasn’t helped,” Okunrinboye added. The naira has weakened 1 percent against the dollar since July, trading at N363 per dollar October 29 according to Bloomberg data, from N360.16 per dollar at the end of July, an indication of weaker dollar supply. The naira depreciation is amid the rally in global oil prices which went as far as crossing the $80 per barrel mark in October, the highest in four years. Brent crude has since slipped below $80, declining 0.26 percent to $77 per barrel, Monday Oct. 29. The CBN has had to up its dollar interventions to save the naira some face, as emerging market currencies buckle under a market sell-off. The interventions have come at the expense of foreign reserves which have declined 10.6 percent from $47 billion as the end of July, to $42 billion at October 26, according to CBN data. Despite oil prices gaining four percent in the third quarter of 2018, Nigeria reported net reserve outflows of USD3.5 billion in that quarter, as against net inflows of USD1.5 billion in the second quarter.

•Continues online at www.businessdayonline.com

Politics & Policy Tuesday 30 October 2018

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BUSINESS DAY

Nigeria’s future bleak without restructuring - Moghalu INIOBONG IWOK

residential candidate of the Young Democratic Party (YDP) in the 2019 general election, Kingsley Moghalu, has said only restructuring of the country with the total overhaul of the 1999 Constitution, which he believes would aid the practices of true federalism, was the solution to the myriads of problems bedeviling Nigeria, stressing that such a move would aid the attainment of the nation’s potentials. Moghalu, who was a former deputy governor of the Central Bank of Nigeria (CBN), made the observation in his keynote address at the 6th annual conference of the Nigerian Political Science Association, Southeast chapter at the University of Nigeria, Nsukka (UNN), berating the current structure of the country which according to him, was called a Federal Republic but unitary in practice. The presidential candidate blamed the incursion of the mili-

Moghalu

tary into politics for the nation’s loop-sided structure, noting that the current system which concentrates power at the centre was defective, unjust and favouring certain part of the country which

is in power, against a region that contributes the major wealth for the sustenance of the country. “The only form of government that can create national unity and cohesion, and enable Nigeria

achieve the promise of its dynamic people is true federalism. “Such a government requires a fundamental overhaul of the 1999 constitution presently in force to achieve national unity and cohesion as well as the development of part of the federal state at their own pace. “Nigeria is today called a Federal Republic but in a reality is a unitary state. This reality is the result of military intervention in our polity through the first coup in 1966,” Moghalu said. Moghalu emphasised that restructuring of Nigeria was the only antidote to the waves of ethno-religious clashes and conflict across the country, noting that the creation of state police or deployment of the military to curb the conflict was just a temporary solution. He stressed that restructuring of the country was the best form of economic transformation of the country, adding that the system could afford the six regional governments opportunity to mobilise tax and revenue and use it for their development.

The presidential candidate further canvassed for a new constitution for the country which would be driven by Nigerians, stressing that it was wrong for constitution initiated by the military to guide the nation’s democracy. “Restructuring is necessary because of the destabilisation that the current conditions have bred. We can either stabilise Nigeria by restructuring it, continue to play the ostrich insisting that our ‘processes’ not the structure, are the problem. “Restructuring is imperative so that it takes care of what I call some of the ‘fundamentals’. We need a people’s constitution. A constitution that was made by military dictators should not guide our democracy, if such a democracy truly is a government of the people, for the people, and by the people. “Restructuring is also the best path to economic transformation. A six-zone federal structure will offer economiies of scale in terms of the ability of a regional government to mobilise adequate tax revenue and utilise these resources for development,” Moghalu added.

Certificate: Group dismisses PDP’s stance on Buhari

Atiku mourns Tony Anenih

pro-Buhari group, ReElect Buhari Movement (RBM), has dismissed the outrage that followed the submission of an affidavit in place of certificates to the Independent National Electoral Commission (INEC) by President Muhammadu Buhari to pursue his second term ambition by the People’s Democratic Party (PDP). RBM Convener, Emmanuel Umohinyang, in a statement said there was nothing strange in the action as the President did same in 2015. According to him, since President Buhari had said his certificates were with the military, the onus is on the PDP and others in doubt to take advantage of the Freedom of Information Act to clear the doubt.

…Says, ‘I have lost a great friend of decades’

“The PDP reminds one of the story of Saul in the Bible. You know Saul was rejected and he was still parading himself as the king of Israel, but it was not until David was anointed king that he knew that his end had come. The PDP are always quick to make allegations that are meaningless in the eyes of the ordinary man on the street,” the group said. The RBM further said: “President Buhari in 2015 had also made the same affidavit to INEC where he said then that his certificates were with the Secretary of the military board. “I do not think anything has changed because it is the same affidavit that the President has equally submitted this time.

“It is elementary that when something is in the public domain, thanks to the Freedom of Information Act, the people have a right, if they are so concerned to write to the appropriate authority to demand that they furnish them with such information, and the PDP is part and parcel of it. “If they are so bothered about it, they can write, relying on the Freedom of Information Act, but I think the President’s position has been very consistent.” “May be, they do not know President Buhari. He is as constant as the northern star. Whatsoever he tells you today, if you go back to him in the next hundred years, he will still repeat the same,” the group said.

2019: ‘Buhari too decent to use might to rig’

President Muhammadu Buhari support group, ReElect Buhari Movement (RBM), has declared that the President and the All Progressives Congress (APC) will not engage in any illegality to win the 2019 general election. The group was reacting to insinuations that the APC was trying to use Federal might against the opposition People’s Democratic Party (PDP) in Akwa Ibom State in the countdown to the coming election. The group, in a statement signed by its convener, Emmanuel Umohinyang, stressed that President Buhari was averse to illegality and would not condone same. “I think it was Senator Akpan from Akwa Ibom State that raised that concern at the Senate where he alleged that there has been information that the All Progressives Congress is trying to use Federal might

to destabilise the state for election not to hold. “As ridiculous as the position of the distinguished senator may be, one is drawn aback because it seems to me that the People’s Democratic Party has a particular pattern of doing things. Whenever they foresee defeat, they throw tantrum into the air so that when they lose, they will try to justify their earlier statement as the reason why they lost,” the group said. According to the group, “Having said that, I do not think the APC would want to create such a scenario in a state that is almost an APC state now. You know the PDP was in government for sixteen years and we are all witnesses to how the institution of the Federal Government was badly abused during the period. “Under President Muhammadu Buhari, we have seen a president

who has allowed institutions to work even at the detriment of his party. Election was conducted in Anambra and APC lost. They should not push us to remember the ugly days of the PDP where the police, military and even masked SSS men rigged elections as we saw in Osun during Aregbesola’s second term.” “I happen to come from Akwa Ibom State, and I know that Governor Udom Emmanuel has no structures. He rode into Government House in 2015 through the goodwill of former Governor Godswill Obot Akpabio, and since the senator took his leave of the party, the PDP has been in disarray. “At the last count, I cannot remember the number of aides of the governor that have resigned and when you look at their resignation letters as reported by the media, you will see that the governor is no longer in charge,” the group claimed.

residential candidate of the People’s Democratic Party (PDP) and former vice president of Nigeria, Atiku Abubarkar, has joined the list of prominent Nigerians who have condoled the family of Tony Anenih, Iyasele of Esanland, over the death of the former politician. Atiku described the news of the death as shocking. A statement on Monday signed by Paul Ibe, media adviser to Atiku Abubakar, said that Anenih’s death has left a vacuum in the country as his roles in ensuring the stability, not only of “our great party but also for our nation at large, stood him out as a patriot who dedicated his life to the service of humanity.” Atiku said that Anenih did his best for the country and that his death at this time that the nation is going into electioneering campaigns was saddening.

“Indeed I have lost a great friend of decades. I am particularly pained that Chief Anenih left the stage at the time the party and the nation needed his wealth of experience the more, especially in our collective quest to restore good governance and democratic ideals in our country.” Atiku, who described Anenih as a great political colossus and patriot, said his ability to consistently, at every turn, resolve knotty political puzzles would later earn him the sobriquet of ‘Mr. Fix It.’ Commiserating with the family of the late Iyasele of Isanland and the government and people of Edo State, the former Vice President asked them to take solace in the fact that the elder statesman left his indelible footprints on the annals of the nation’s democratic history. He prayed God to grant the family the fortitude to bear the loss.

Fayemi inaugurates new EXCO in Ekiti …Pledges in appointments SIKIRAT SHEHU, Ilorin

he Governor of Ekiti State, Kayode Fayemi, yesterday sworn-in four new members of the State Executive Council with a charge on them to immediately swing into action and offer only the best of services to the people. Speaking at the swearing-in ceremony held at the Osuntoku Pavilion, Government House, Fayemi said the new cabinet members were appointed based on their track record, expertise and experience, and as such, must immediately settle down in office and inject new ideas to reinvigorate the government machinery to the

overall benefit of the people. Addressing the appointees, the governor said their immediate mandate was to correct whatever needed to be corrected as well as discharge their duties with fairness and courtesies to everyone. The newly appointed cabinet members are Attorney General and Commissioner for Justice, Wale Fapohunda; Commissioner for Finance, Oladapo Kolawole; Secretary to the State Government, Biodun Oyebanji and the Chief of Staff, Biodun Omoleye. Governor Fayemi used the occasion to assure everyone that the process of appointment was a continuous one, adding that all strata of Ekiti community would be represented.

Tuesday 30 October 2018

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BUSINESS DAY

FINANCIAL TIMES Big miners need to reinvent themselves says Rio Tinto CEO

Business education: have we reached peak MBA?

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World Business Newspaper

Germany’s Angela Merkel steps down as CDU leader Chancellor says she will also leave politics after current term ends in 2021 GUY CHAZAN

erman politics prepared on Monday for the end of the Angela Merkel era as the chancellor said she would stand down as leader of the ruling Christian Democratic Union after 18 years in charge. Angela Merkel also said she would not seek another term as chancellor when her term ends in 2021, and would seek no further political office. “I have the strong sense that it’s time to open a new chapter,” Ms Merkel said at a press conference in Berlin. The decision was announced after a disastrous showing by her CDU in elections in the western German state of Hesse, where the party barely managed to cling to power after its share of the vote fell by 11 percentage points. The chancellor has ruled Germany for the past 13 years, a period during which Berlin’s authority and influence in the EU has steadily grown and she has become Europe’s most powerful politician. Her decision will set in train a succession battle that is also set to become a potentially bitter struggle for the soul of the CDU, one of Europe’s most successful political parties. Ms Merkel admitted that the CDU’s campaign in Hesse had been overshadowed by public anger with her government in Berlin. Her “grand coalition” with the centre-left Social Democratic party has been rocked by disputes over policy virtually since being sworn into office in March.

The frequent rows between her partners in government — also including the CDU’s Bavarian sister party, the CSU — made it clear that “we can’t just return to business as usual”, the chancellor said. The image the government had in the minds of voters was “unacceptable”, she said. “I bear responsibility for everything — for our successes, as well as our failures.” Standing down as party leader would, she added, allow the government “to concentrate its energies on good governance”. Many in the CDU resent the way the chancellor, the daughter of an East German pastor, has dragged the party to the political centre, and want it to return to its conservative roots. Already, a number of candidates have emerged to replace her as party

Africa’s leaders at risk of wasting demographic dividend Ibrahim Index says the continent has failed to create enough jobs

DAVID PILLING

of Europe will decline by 85m, while that of China is expected to shrink by 200m, marking a huge shift in the locus of the world’s workforce to Africa, where the median age is 19. But Mo Ibrahim, the Sudanese businessman whose foundation produces the index, said African governments were in danger of “squandering” this demographic divided. “Our gross domestic product has grown by a considerable amount over the past 10 years, but we haven’t translated that into a sustainable economic opportunity,” said Mr Ibrahim, referring to an increase in GDP of 40 per cent since 2008. “Some people got really rich and enjoy all the fruits of economic boom, but no more jobs or economic opportunity were Continues on page A2

leader. One is Annegret KrampKarrenbauer, the party’s secretarygeneral, who is widely seen as Ms Merkel’s anointed heir. Another is Jens Spahn, the health minister and a popular rightwinger, who has been a notable critic of Ms Merkel’s refugee policy. Friedrich Merz, another conservative who used to be head of the CDU’s parliamentary group but left politics about nine years ago to pursue a career in business, has also expressed an interest in the post. The move to abandon the chairmanship of the CDU is a major personal defeat for Ms Merkel, who has consistently argued that the jobs of chancellor and party leader should never be split. “It’s a gamble, no doubt,” she said on Monday. But she said it was “justifiable” because she had no intention of running

again in 2021. Her decision to stand down from the party leadership will be seen as bowing to the inevitable. Though she remains one of Germany’s most popular politicians, Ms Merkel’s standing in the CDU has dwindled, especially in the wake of the refugee crisis of 2015. Some on the right of the CDU have never forgiven her for allowing in more than 1m migrants, an influx that fuelled the rise of the far-right Alternative for Germany — which after Sunday’s vote in Hesse is now represented in all of the country’s 16 regional parliaments. In perhaps the clearest sign of Ms Merkel’s fading authority, a close confidante of hers, Volker Kauder, was kicked out as head of the CDU’s parliamentary group last month.

Whether Ms Merkel will be able to hang on as chancellor till 2021 is an open question. Her fate could rest with the SPD, which in Hesse performed even more poorly than the CDU, garnering just 20 per cent of the vote, a third less than in the last election five years ago. The result reignited calls for the SPD to quit the government and renew itself in opposition. If it did so, the government would fall and new elections would have to be called. Ms Merkel has made clear she would not stand again in such an eventuality. The euro held its poise after the news of the German chancellor’s decision broke. The shared currency traded flat for the day at $1.1405, leaving its decline for 2018 at just under 5 per cent.

The World Bank pushes fragile finance in the name of development

he World Bank’s Maximising Finance for Development agenda is constructing a new financial world order with shadow banking at its core, argues Daniela Gabor, professor of economics and macro-finance at UWE Bristol and one of 120 scholars critical of the approach, in this guest post. When the global policy elite gathered for the recent IMF and World Bank annual meeting in Bali, their optimism was hard to ignore, along with the new buzzwords of sustainable infrastructure. As Lord Stern, of the influential Eminent Persons Group, put it: “the challenge of achieving the Sustainable Development Goals (SDG) is in large measure that challenge, of fostering the right kind of sustainable infrastructure’ To do do, he said, “you have to have good finance, the right kind of finance, at the right scale, at the right time”. The ambition, spelled out in the World Bank’s new Maximising Finance for Development agenda, is to create investable opportunities in poor countries that can attract the trillions of global institutional investors.

Yet many observers, including a group of over 120 scholars in the Global North and South, are rather more pessimistic about these efforts to catalyse institutional investment into development interventions. Our concerns go beyond those of civil society organisations, that the agenda pushes the privatisation of public services in poor countries, in order to generate cash flows for infrastructure-backed securities. The UK is a poster child for the negative outcomes of such privatisation. We view the Maximising Finance agenda as a deliberate political choice, made in global policy communities and in national polities, to policy-engineer a new financial order with shadow banking at its core. To explain what we mean by that. We follow the Financial Stability Board in understanding shadow banking as market-based finance, connecting banks and shadow banks in the production (eg. securitisation of illiquid bank loans) and funding (via wholesale markets) of tradable securities. The new financial order, we worry, means a more fragile (global) financial system, one that is cyclically vulnerable to

swings in securities prices, and that reduces the space for autonomous developmental strategies in poor countries. The turn to securitisation To tap institutional investors, the World Bank and other multilateral development banks (MDBs) plan to rely on securitisation markets, markets systemic to shadow banking. Here’s a line from a statement by the G20 Eminent Persons Group: ‘Securitising on a large scale, across the MDB system, will in effect create new asset classes and attract a wider range of investors’. But will the new push for securitisation learn from the systemic mistakes that transformed the collapse of the Lehman Brothers investment bank in 2008 into a global financial crisis? Take for instance Room2Run, the African Development Bank’s path-breaking synthetic securitisation deal announced in September 2018. Mizuho International, the structuring bank, noted that “AfDB’s leadership through this transaction has now set the stage for broader adoption of the instrument throughout the MDB community.”

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NATIONAL NEWS

FT Africa’s leaders at risk of wasting...

Somaliland port development highlights Horn of Africa potential

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created. Trickle down doesn’t work.” The report said that the “dismal trajectory” in the business environment threatened to lead to “brain drain, political and social unrest, instability and armed conflict”. It added: “On average, African governments have failed to produce environments that enable their citizens to pursue economic goals and provide the opportunity to prosper.” In 39 of the continent’s 54 countries, representing fourfifths of Africa’s population, there was a decline in the business environment, with important economies such as Angola, Egypt and South Africa among the worst performers. Rwanda, where the government of Paul Kagame has sought to lay the foundations for economic growth, overtook Mauritius as the most business-friendly economy on the continent. Ivory Coast, Morocco and Nigeria were among other high scorers, although Nigeria has deteriorated slightly over the past decade. The decline in business environment was moderated by improvements in infrastructure — much of it funded by China — and quicker customs procedures, according to the report. Regional integration had also improved, with the majority of countries signing up to a continental free trade area this year. However, countries had failed to diversify their economies, with the diversification of exports actually falling over the past decade. Despite the difficult business environment, Acha Leke and Saf Yeboah-Amankwah, writing in the Harvard Business Review this month, found that there were 400 African companies with revenue of more than $1bn. On average, these were more profitable and growing faster than their international peers, the authors said. According to the index, considered the most comprehensive in Africa, overall governance has improved slightly over the past decade. Almost three out of four citizens lived in a country where governance, defined by more than 100 criteria, had improved. Health had improved markedly, although initial advances in education had gone into reverse. Ivory Coast, a fast-growing west African country that emerged from civil war in 2012, is the only country to have shown improvements in all 14 categories monitored by the Ibrahim index, which range from human rights to access to basic services. Kenya and Morocco were other strong performers. Mauritius stayed in the top slot for overall governance, despite falling back slightly, while South Africa fell out of the top five. Somalia, although it has improved, remained bottom of the heap.

Tuesday 30 October 2018

Unrecognised state set to benefit from vital position on Red Sea Corridor TOM WILSON

CDU supporters react as the first exit polls were announced on television during the state elections in Hesse on Sunday evening © AFP

Angela Merkel’s retreat as party chief betrays weakened position Hesse election deals big blow to German coalition hoping for full-term survival GUY CHAZAN

he pressure had been building on Angela Merkel for months. But Sunday’s election in Hesse was the last straw. Ms Merkel announced on Monday that she was preparing to stand down as leader of the Christian Democratic Union, a move that spelt the beginning of the end of the 13-year Merkel era. It came after an election in the central German state of Hesse that saw the CDU’s share of the vote shrink by 11 percentage points, a bitter blow for a party that has ruled the region for the past 19 years. Ms Merkel will stay on as chancellor. But the chances of her surviving a full term at the government’s helm have weakened dramatically. Even on Sunday night, it was evident that the pressure on Ms Merkel could prove inexorable. Jens Spahn, the CDU health minister and a leading figure on the right of the CDU, said it had to set out clearly by the next party conference in December

“how it intends to return to its old strength”. The party was now polling nationally at about 25 per cent, a disaster for an organisation that just five years ago won 41.5 per cent in Bundestag elections. “That’s not enough, that’s more than a little dip, that’s a structural problem,” he said. Standing down as party leader will lance the boil of internal discontent with Ms Merkel’s rule. But the more urgent question is what it would mean for her government in Berlin. Already, her grand coalition is dangerously weak. Her junior partner in government, the Social Democrats, saw their share of the vote shrink by one-third to 20 per cent in Hesse, a state that used to be a stronghold. The SPD’s weakness could threaten the stability of the grand coalition. One camp in the centreleft party believed the only way it could avoid further defeats was by quitting the government and renewing itself in opposition. Another believed that quitting would be even more self-destructive

than staying in. If the first group prevails and the SPD pulls out, Ms Merkel’s government will fall apart and new elections will have to be held. That would spell an abrupt end to Ms Merkel’s reign. However, on Sunday night, the pragmatists in the SPD appeared to be prevailing. The government must make clear “that we’re ending all these debates about whether we will rule together or not”, said Andrea Nahles, the SPD leader. “The people expect results from us, and they’re right to.” Nevertheless, the message was that something had to change in Berlin — and fast. Ms Nahles blamed the SPD’s poor showing in Hesse firmly on the coalition ructions in the capital. “The state of the government is not acceptable,” she said. It must, she added, present a “clear, binding road map for a politics that is in the interests of voters”. Based on how that plan was then implemented, the SPD would have to decide whether to continue to prop up Ms Merkel’s party or not.

Africa’s leaders at risk of wasting demographic dividend Ibrahim Index says the continent has failed to create enough jobs DAVID PILLING

frican governments are in danger of squandering the continent’s demographic dividend by failing to create enough jobs, according to findings based on a decade of data from the Ibrahim Index of African Governance. In a continent whose workingage population is expected to rise by a staggering 900m people between 2015 and 2050, the business environment had deteriorated over the past decade. Surveys showed that Africans across most of the continent’s 54 countries were unhappy with their employment prospects. Most jobs remain in the informal sector. Over the 35 years from 2015, the working-age population of Europe will decline by 85m, while that of China is expected to shrink by 200m, marking a huge shift in the locus of the world’s workforce to Africa, where the median age is 19. But Mo Ibrahim, the Sudanese businessman whose foundation produces the index, said African governments were in danger of “squandering” this demographic divided. “Our gross domestic product

has grown by a considerable amount over the past 10 years, but we haven’t translated that into a sustainable economic opportunity,” said Mr Ibrahim, referring to an increase in GDP of 40 per cent since 2008. “Some people got really rich and enjoy all the fruits of economic boom, but no more jobs or economic opportunity were created. Trickle down doesn’t work.” The report said that the “dismal trajectory” in the business environment threatened to lead to “brain drain, political and social unrest, instability and armed conflict”. It added: “On average, African governments have failed to produce environments that enable their citizens to pursue economic goals and provide the opportunity to prosper.” In 39 of the continent’s 54 countries, representing four-fifths of Africa’s population, there was a decline in the business environment, with important economies such as Angola, Egypt and South Africa among the worst performers. Rwanda, where the government of Paul Kagame has sought to lay the foundations for economic growth, overtook Mauritius as the

most business-friendly economy on the continent. Ivory Coast, Morocco and Nigeria were among other high scorers, although Nigeria has deteriorated slightly over the past decade. The decline in business environment was moderated by improvements in infrastructure — much of it funded by China — and quicker customs procedures, according to the report. Regional integration had also improved, with the majority of countries signing up to a continental free trade area this year. However, countries had failed to diversify their economies, with the diversification of exports actually falling over the past decade. Despite the difficult business environment, Acha Leke and Saf Yeboah-Amankwah, writing in the Harvard Business Review this month, found that there were 400 African companies with revenue of more than $1bn. On average, these were more profitable and growing faster than their international peers, the authors said. According to the index, considered the most comprehensive in Africa, overall governance has improved slightly over the past decade.

t the Berbera container port in the internationally unrecognised state of Somaliland, employees of Dubai-based DP World unload 40-foot crates from a hulking cargo ship as more vessels wait on the horizon. The facility on the Gulf of Aden has been operated by DP World for about a year, with the company set to invest $442m in an expansion project that would more than quintuple the capacity. That a global port operator is preparing to spend such a large sum in a state that is not recognIsed by the UN or anyone else is a stark example of the political and commercial battle taking place in the under-developed Horn of Africa — a gateway to lucrative trade routes through the Suez Canal and the fast-growing markets of Africa. It is also a testament to the relative stability that Somaliland’s isolated government has achieved since breaking away from Somalia 27 years ago. “More and more cargo is moving from Europe to the Far East and every ship passes in front of Berbera,” said Sultan Ahmed bin Sulayem, DP World chairman and chief executive, at a colourful groundbreaking ceremony this month in the Somaliland capital, Hargeisa. “Berbera is going to regain its [role] as a hub and an important port in a very important maritime transportation route.” The Red Sea corridor that separates the African continent from the Arabian Peninsula has long been fought over by global powers. Britain established the Protectorate of Somaliland in 1888 to help it control the shipping routes from East Asia through the Red Sea to the Suez Canal. Later, after independence in 1960 and the ill-fated union with Somalia to the south, both the US and Russia built sections of the current quay at Berbera. The new DP World investment comes at a time when Middle Eastern states including the United Arab Emirates, Saudi Arabia, Turkey and Qatar are projecting greater political and economic power in the Horn of Africa region. This year the UAE pledged $3bn in aid and investments to Ethiopia and played an important role in negotiating a historic peace deal between the country and its neighbour Eritrea. The UAE has also extended its military reach by building a naval base at the Eritrean port of Assab. It has similar plans for Berbera, where it is constructing an Emirati air force base and a harbour. The facility is just five miles from DP World’s port, though the company said there was no connection between the military agreement and their commercial investment. Saad Ali Shire, Somaliland’s foreign minister, said: “The Red Sea corridor has always attracted superpowers because of the importance of the maritime lane.”

Tuesday 30 October 2018

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BUSINESS DAY

FINANCIAL TIMES

COMPANIES & MARKETS

@ FINANCIAL TIMES LIMITED

Big miners need to reinvent themselves says Rio Tinto CEO Quest to find raw materials is disrupted by technology NEIL HUME

ig miners need to reinvent themselves as the quest to find raw materials is disrupted by technology and the shift toward more sustainable forms of consumption, according to the chief executive of Rio Tinto. In a speech that will be delivered to the International Mining and Resources Conference on Tuesday, Rio CEO Jean-Sébastien Jacques will say the mining industry needs to change to remain competitive in the future. While the sector has modernised, using automation and artificial intelligence to make its mines more productive and safer, Mr Jacques says it has not changed to the same extent as other industries, which are facing existential threats because of innovation and changing consumer tastes. “Let me give you an example. Our technology partner Apple, has a goal to recycle 100 per cent of the metals and minerals that go into our iPhones, iPads etc. And where Apple goes, others will follow. It may take some time to get there, of course, but it is coming,” Mr Jacques says in the speech. “What does this mean for our industry? This may mean we need to pioneer new ways to mine or think seriously about our business models at some point in the future. There’s no question. This will be difficult, and it will take a long time.” He adds: “As we speak, there are scientists from Boston to Perth, inventing materials to replace those that are mined today — including cobalt. Companies like Renault, Nissan and Mitsubishi are already investing and

supporting these types of projects. Should we all be doing the same?” With governments from Tanzania to Indonesia demanding a greater share of their mineral wealth through new laws and regulations, Mr Jacques also asks in the speech if there needs to be a new way of funding mining projects. Big mines can cost billions of dollars and more than 10 years to develop, which means host nations don’t see an immediate payback from large projects. This can lead to anger and frustration and ultimately new mining laws and regulations that are often challenged in international courts. “If a community or government wants a bigger share of the pie, they may need to be willing to take on more of the risk, that’s a really important part of our very capital intensive industry,” said Mr Jacques. “So, maybe there needs to be a new way of funding mining projects. As an industry, perhaps, it is time to think about a different business model — where we provide mining as a service and let other people finance projects that need billions in upfront investment, before the benefits can be shared,” he added. Mr Jacques said Rio would like to “kick off a piece of work” with partners like the World Bank, Harvard University and others, to really get to the bottom of this conundrum. “What is the best way to share value from mining projects in a way that preserves and grows investor returns, creates lasting value for host governments and communities and provides the metals the world needs in an environmentally sustainable way?”

UK P2P lender looks into selling the loans on its platform

US stocks rebound as Wall St seeks to recover some October losses MAMTA BADKAR

S markets rebounded on Monday as financials advanced and tech found favour amid deal activity, following another sharp drop on Friday that had left stocks near correction territory at the end of last week. The S&P 500 climbed 1.2 per cent to 2,690.33 in a broad-based gain. Financials and real estate were the biggest gainers up 1.8 per cent and 1.7 per cent respectively while energy clocked the slimmest advance, up 0.3 per cent. Tech shares, which were hit hard last week and are eyeing their worst month since the financial crisis, were up 1.6 per cent as IBM’s $34bn purchase of software pioneer Red Hat, the largest acquisition in IBM’s history, buoyed the sector. Meanwhile, the Dow Jones Industrial Average rose 0.8 per cent to 24,880.03, the Nasdaq Composite rose 1 per cent to

7,241.90. The Russell 2000 index of small-cap stocks was up 1.3 per cent to 1,503.76. Wall Street also tracked European bourses, where a rally in carmakers — following reports that China was considering tax break on vehicle purchases — helped fuel the market uptick. Investors also appeared relieved after Italy escaped another rating downgrade, as S&P Global left its rating at BBB, or two notches above junk status. Meanwhile, Goldman Sachs argued the sharp decline in US stocks this month, which has cost Wall Street equities $2.8tn in market value, has gone too far. US markets could still face another choppy week as investors ready for another busy week of earnings, non-farm payrolls on Friday and look to headlines about the upcoming American midterm elections. Fear of peak earnings has been one of the key drivers behind the dour mood in markets, with a dis-

appointing outlook from Amazon and a miss from Google wrangling nerves last week. “With valuations high, any earnings miss is important, but there is some concern that earnings misses are the first sign that the underlying economy is not as good as we have come to believe,” Peter Tchir, strategist at Academy Securities, noted. “Earnings misses deserve the attention they get for their own reason, but the potentially signalling effect of a slowing global economy is far more dangerous to stocks, if that view gathers momentum,” he said. Elsewhere in markets, sovereign bonds slipped amid a risk-on mood. The yield on the US 10-year rose 2.3 basis points to 3.098 per cent, while that on the two-year climbed 2.2 basis points to 2.828 per cent. Yields move inversely to price. The dollar index, a gauge of the buck against a weighted basket of peers, rose 0.3 per cent to 96.65.

Lendy in talks over deal that would involve selling loanbook at discount to face value NICHOLAS MEGAW

he chief executive of Lendy has spoken to distressed debt investors about arranging a sale of the loans on its platform, highlighting the pressures on the peer-to-peer property lender as it deals with legal issues and spiralling numbers of late loans. A potential deal would involve selling the loans at a discount to their face value, exposing thousands of retail investors to losses, according to people familiar with the discussions. Lendy said that it had been carrying out “fairly standard loan servicing steps”, and holds discussions “on a regular basis, with a wide variety of lenders who could provide refinancing to selected borrowers where their loans have gone over term.” “It is often in our lenders’ interests that borrowers refinance rather than have to sell their collateral to settle their loan. Helping the borrower to refinance is typically a less contentious, timely and more cost-effective method by which lenders can be repaid,” it added. A sale of all or a large number of the loans would represent an escalation of one of the biggest crises to hit the young industry in Europe. Lendy’s troubles come at an awkward time for the sector, with the Financial Conduct Authority already considering stricter rules to prevent overly

risky behaviour. Lendy received full authorisation from the FCA less than six months ago. Politicians and regulators encouraged the growth of peer-to-peer lenders as they helped to fill the gaps left by mainstream banks that cut lending to certain sectors after the financial crisis. However, a recent FCA study identified “poor business practices” at some lenders that meant investors may not fully understand the products and risks they were exposed to. The peer-to-peer sector has experienced several high-profile scandals or collapses in the US and Asia, but only a handful of small companies such as Collateral, TrustBuddy and Be The Lender have encountered significant problems in Europe. There are about £180m in outstanding loans on Lendy’s platform. The company does not own the loans originated on its platform but acts as an agent for peer-to-peer investors. Its terms and conditions give it power to take action on “lender matters” that could affect investors’ returns. Investors in peer-to-peer platforms are not protected by the UK’s financial services compensation scheme. Lendy maintains a provision fund that can help make up some shortfalls if investors lose money on loans, but use of the fund is “entirely discretionary”. The fund is currently worth about £3.9m.

Brazilian stocks hit new high after Bolsonaro cruises to victory Currency and bonds also extend gains PAN KWAN YUK

razilian assets added to their month-long rally on Monday, with the Bovespa stock index jumping to a new record high, after far-right candidate and market favourite Jair Bolsonaro won the country’s presidential election on Sunday. While the market had largely priced in a Bolsonaro win in the run-up to this weekend’s run-off, the wide victory margin — along with the former army captain’s pledge last night to press ahead with fiscal and government reforms — were enough to prompt investors to keep piling in. The Bovespa stock index jumped more than 3 per cent within minutes of the market open to hit a new peak of 88,276.50. Within this, state-owned oil major Petrobras saw its shares advance 4 per cent while Vale, the mining company, gained 1.5 per cent. The Brazil-focused iShares MSCI Brazil exchange-traded fund climbed 3 per cent higher in New York. Meanwhile, the real rose as much as 1.5 per cent to R$3.58 per dollar, the highest level since mid-May, and takes the currency’s gains since midSeptember to over 14 per cent.

Strong demand for the country’s sovereign bonds helped push down borrowing costs. Yield on the country’s 10-year dollar-denominated bonds fell 9.4 basis points to 5.292 per cent, compared to the 6.304 per cent seen at the start of September. Despite his inflammatory attacks on women, minorities and the gay community, Brazilians and investors alike have flocked to back Mr Bolsonaro’s bid to lead Latin America’s largest economy, with many seeing him as the “least worst candidate.” Mr Bolsonaro’s promise to trim the country’s deficit and reduce the size of the government have also won him support among those who had feared another presidency under the leftwing Workers’ Party (PT). The party has been blamed for years of corruption and economic mismanagement that culminated with the country falling into its worst recession on record and the loss of its investment grade credit rating. “We will break the vicious cycle of growing debt,” Mr Bolsonaro said in his victory speech last night. “Substitute it with the virtuous cycle of smaller deficits, falling debt and lower interest rates.”

Some analysts have been warning that Mr Bolsonaro’s promise of reform is likely to be easier said than done given how infamously fractured the country’s congress is, with over 30 parties all vying for power. However, Joao Pedro Ribeiro at Nomura said on Monday that Mr Bolsonaro’s emphatic 11 percentage point win over the PT’s Fernando Haddad will provide the new administration “with significant political capital.” William Jackson, chief emerging markets economist at Capital Economics, said the bigger question for investors going forward is how committed Mr Bolsonaro will be to his pledges of reform. “It’s certainly true that Bolsonaro’s team has talked a good game on economic policymaking,” he said. “But it is also unclear quite how committed Bolsonaro himself is to such policies. Indeed, in the run-up to the second round vote, he rowed back on fiscal tightening, pension reform and privatisation.” “What’s more, there has always been a lingering uncertainty about whether he will really expend his political capital on economic reform or on his conservative social policy.”

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Tuesday 30 October 2018

ANALYSIS Venezuela: oil producer’s slump reflects nation’s decline PDVSA’s decline is intensifying the search for a solution to the country’s woes n the lobby of the building where Iván Freites works, a photograph of an oil rig covers one wall. Emblazoned across it is the Venezuelan flag and a quote from former president Hugo Chávez. “We want Venezuelan oil to bring peace and love,” it reads. Mr Freites, a union leader at PDVSA, the state oil company, would like that too. But having seen the Chávez government and subsequent regime of Nicolás Maduro plunder the oil producer, strip it of investment, sack experienced managers and replace them with military officers, he no longer thinks that outcome is possible, at least not for now. “I’ve worked at PDVSA for 35 years and I’ve never seen anything like this,” he says. “What we need above all is to get our democracy back.” The parlous state of PDVSA, which oversees the world’s largest energy reserves according to the US Energy Information Administration, helps to explain the depth of Venezuela’s collapse and why it finds itself in the eye of a political storm. Corruption and mismanagement have seen Venezuelan oil output, which accounts for 90 per cent of legal export revenues, plummet to its low-

by strong.” Regional leaders and diplomats are usually the last to support such belligerence. But Luis Almagro, head of the Organisation of American States, believes no option should be discarded. “The entire premise of ideas such as ‘responsibility to protect’ is that we must act before we are counting the dead,” he has said. Amnesty International has called Venezuela’s human rights crisis “unprecedented” and five Latin American countries, alongside Canada and France, have asked the International Criminal Court to investigate Mr Maduro for crimes against humanity. All the while, Mr Maduro repeats his mantra that the US is subjecting Venezuela to “economic war”, and wants to get its hands on the nation’s oil. Few believe him. And given PDVSA’S shrinkage, there is currently not much of an oil industry to seize. “Leave Maduro be for the next year and you’ll see where that level of production goes to. The US really doesn’t have to do much,” says Raul Gallegos, a Venezuela analyst at Control Risks. Ever since it was discovered in Lake Maracaibo in the 1920s, oil — or “the devil’s shit” as one energy minister called it — has dominated the country’s economy. Venezuela was a founding member of Opec and when

est level in three quarters of a century. The economy has halved in five years, a contraction worse than those in the Great Depression or Spanish civil war. Rates of hyperinflation, meanwhile, are similar to those in Germany in 1923. The brutal recession has sparked an exodus comparable with the flight of Syrian refugees. More than 2m of Venezuela’s 30m population have fled since 2015. With the UN estimating 5,000 departures each day, another 2m could have left by the end of 2019. It has turned the country into a major source of regional instability. Latin American neighbours, especially Colombia, are struggling to cope. As the oil industry implodes and exacerbates the plight of Venezuelans, the international community increasingly believes something must be done. The burning question is: what? From the start of his presidency, Donald Trump made Venezuela a US foreign policy priority, alongside North Korea and Iran. “President Trump started on day one — literally on day one — asking about Venezuela,” says Fernando Cutz, a former Trump White House adviser, at a recent seminar at the Wilson Center in Washington. “It was a priority of his from the very start.” The US, alongside Canada and Europe, has since levied sanctions on officials accused of corruption and human rights abuses. Last month, Mr Trump hinted again at the possibility of invasion. “All options are on the table,” he said. “The strong ones, and the less than strong ones. Every option — and you know what I mean

President Carlos Andrés Pérez nationalised the industry and founded PDVSA in 1976, it pumped over 3m barrels a day. Today, the figures speak for themselves. Production has halved in six years and dropped by a third in the past year alone. Rig counts, an indicator of future production, are at historic lows, pointing to further declines. In September, Venezuela pumped just 1.2m b/d, its lowest output since the 1940s. Although most analysts consider 1m b/d to be a floor given its joint ventures with foreign producers, some believe output could drop as low as 700,000 b/d by the end of 2019. “It is one of the worst collapses in history,” says Francisco Monaldi, a fellow in Latin American energy policy at the Baker Institute. PDVSA’s demise has rippled through the country. The biggest refinery, Amuay, is running at 20 per cent capacity, Mr Freites says. The smaller Cardón, El Palito and Puerto La Cruz refineries barely function as PDVSA struggles to deliver mixing chemicals and crude to these sites. With less oil being refined, blackouts are common. “There are towns and villages that go five or six days without electricity,” Mr Freites says. Gasoline is also in short supply. “I’ve just been to fill up my car and I waited in line for an hour,” he says. “That’s quite normal.” PDVSA itself is on the brink of financial collapse. It has defaulted on all its bonds except a 2020 issue because, if it fails to pay that, PDVSA risks losing Citgo, its US refining asset, which has been pledged as collateral.

GIDEON LONG AND JOHN PAUL RATHBONE

Business education: have we reached peak MBA? Competition from online courses and rising costs have seen applications in the US fall even as demand grows in Asia and Europe

JONATHAN MOULES AND ANDREW JACK

t its peak, the University of Iowa’s Tippie College of Business enrolled 240 20-something high achievers each year on its core MBA programme. Today, the flagship public research university, with one of the oldest and highestranked US business schools, is down to its last 35 students. When this cohort submits their final dissertations in May, the two-year course will close, 57 years after it was launched as the university’s flagship business masters qualification. It is the end of an era for Tippie’s dean, Sarah Fisher Gardial, who had the unenviable job of announcing the course’s closure 14 months ago. The surprise move — at the time, Tippie was ranked 84th in the FT’s global list of top MBA programmes — sparked anger from students, faculty staff and alumni. Those who had completed the qualification appeared most upset, outraged at what they saw as a sudden devaluation in what was for them a considerable investment, both in terms of tuition costs and time away from the workplace. “Social media blew up on us,” Ms Gardial says about the hundreds of former Tippie students that took to Twitter and Facebook to vent their anger. “It was an emotional [reaction] with them that we could not fix.” The closure of such a highly regarded course suggests that those rising up through the ranks have lost some faith in the qualification, put off by the time commitment and expense of studying for a degree whose tuition fees now run into six figures at most top US business schools. Many are opting instead for shorter courses that cost less money or decide not to study for an MBA at all. Few have gone as far as Tippie, but there is an expectation that others will also close their programmes in the coming years. Some leading universities, such as King’s College London, have opened business schools without an MBA option, claiming that their corporate advisers no longer see a need for such a qualification. The fate of the MBA has a significance beyond its importance commercially to a business school, according to Ms Gardial, who says Tippie’s core two-year MBA was losing $1.5m a year when the decision to close it was made. “It was a difficult decision for me because the MBA is very close to my heart,” Ms Gardial says, noting that her first management role in academia was running the full-time MBA course at the University of Tennessee. “But

that is not a good enough reason to keep it going.” The first MBA, devised at Harvard Business School as a generalist management degree, dates back to 1908. It combined classes in “quant” subjects, such as finance and accounting, with courses in soft skills, including leadership, entrepreneurship and communication. The first curriculum was based on Frederick Winslow Taylor’s principles of scientific management and quickly gained traction, with the number of students taking the course at Harvard rising from 80 in 1908 to 1,070 by 1930. It was adopted by other fledgling business schools across the US, making the MBA a staging post for many in search of the American dream. But for the past four years, interest in the full-time MBA course has been on the decline in the country of its birth. Highly ranked schools in other countries are taking note. “I think the MBA has peaked,” says Arnoud De Meyer, former dean of Insead, Europe’s highest ranked school, and now president of Singapore Management University. “There were a few very good years in the US in the 1980s. Then with the emergence of European MBAs there was an explosion of the good, the bad and the ugly. Now we have a bit of rationalisation.” This year 70 per cent of US schools with full-time MBA degrees reported declines in applications for their two-year programmes, according to figures compiled by the Graduate Management Admissions Council. That was offset by growth of 8.9 per cent in business school applications in the Asia Pacific region, a 7.7 per cent rise in Canada and a 3.2 per cent increase among institutions in Europe. Sangeet Chowfla, GMAC’s president and chief executive, puts a positive spin on the numbers, by saying that the overall demand for graduate management education was now “stable”. But like-for-like comparisons by GMAC showed a 0.02 per cent decline year on year, with 52 per cent of programmes reporting declining application volumes. The deans of US business schools had blamed previous declines in the MBA market overall on a “flight to quality”, in which students, keen to find the best return on their total course costs — which run to over $200,000 for the two-year programme at Stanford Graduate School of Management, for instance — limited their interest to a few highly ranked schools. But the 2018 figures showed that demand for MBA places also fell at first-tier institutions, such as Harvard, Duke University’s Fuqua School of Business and University of California

Berkeley’s Haas School of Business. Some have even blamed the falloff in numbers on Donald Trump’s presidency and the impression that the US is closing its door on overseas students, which make up a significant proportion of many MBA cohorts. But the problem predates the current White House administration. Bill Boulding, dean of Fuqua, where MBA applications are down 6 per cent this year, says it would be “too strong” to pin the decline on Mr Trump. While not dismissing the impact of the president’s anti-immigrant rhetoric he believes a bigger factor has been the longer-term tightening in work visas for foreign students, many of whom are now choosing to apply to schools in Canada, Australia and Europe. “That has been building over a number of years,” Mr Boulding says, adding that he expects other lowertier US schools to close their MBA programmes in the future. Demand for traditional MBAs is not weakening because people view the teaching as less relevant, Mr Boulding insists. The issue, he says, is that people now have many ways to gain these skills, either by taking online degrees or specialist business masters qualifications. Geoffrey Garrett, dean of the Wharton School at the University of Pennsylvania, talks of a “bifurcation” in the MBA market. For the best business school brands, students are still prepared to pay a premium for the experience, and face-to-face learning is likely to go up on the courses they run, Mr Garrett says. At the other end, cost and convenience will be more and more important. “We’re doubling down with a two-year residential MBA, but the geographically challenged [those in remote locations], cash strapped schools are moving online,” Mr Garrett says. Another factor in the US is the booming economy — gross domestic product grew by an annualised 3.5 per cent in the third quarter — and when the jobs market improves people are less willing to put careers on hold to return to full-time study, fearing that they might miss out on promotions. Stacy Blackman, who has run an MBA admissions advice service since 2001, believes that for the top tier of US institutions this year’s declines are part of a cycle from which they will recover. But she is less optimistic for lower ranked schools. “Quality will always win out,” she says. “The MBA market for lower-ranked programmes may be reaching saturation.” Deans of business schools with the strongest global brands remain bullish.

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INSIGHT/INNOVATION

Let’s queue behind Atiku

OGHO OKITI Dr. Okiti is the president, Time Economics Ltd @ Dr_Okiti 081.7153.0058

ne of the best books I have ever read is Ray Dalio’s Principles. In the book, he asked us “to think of every decision as a bet with a probability and a reward for being right and a probability and a penalty for being wrong”. Without boring you with the analysis, Ray Dalio was simply showing us how to make repeated decisions with realistic probabilities rather than idealistic possibilities. Understanding this principle has become imperative for the outcome of 2019 elections. Following the campaigns by Kingsley Moghalu, whom everyone admits is running an excellent campaign, the efforts of other presidential candidates such as Oby Ezekwesili, Donald Duke, Tope Fasua, Sina Fagbenro, Fela Durotoye etc, some have argued that those that are not satisfied with the candidacy of President Muhammadu Buhari should rather vote for these ones.

PROPHYLAXIS

AYULI JEMIDE Ayuli Jemide is Founder and Lead Partner of Detail Commercial Solicitors. An entrepreneur, public speaker and writer. Email: AJ@ayulijemide.org Twitter: @JemideAyuli

o understand the chart below, we need to first define the basic concepts: ‘’FDI’’ and ‘’GDP’’. Foreign direct investment (FDI) is defined as any investment in a country that gives a foreign investor at least 10% ownership of a local company operating in any sector. FDI is reported on an annual basis, i.e. how much new investment was received into the country during the current year less money taken out (divestments). Gross Domestic Product (GDP) measures the value of economic activity within a country as the sum of the market values, or prices, of all final goods and services produced in an economy during a period. The chart shows the relationship between FDI and GDP, simply net inflows (new investment inflows less divestment) from foreign investors into Nigeria divided by Nigeria’s GDP. The data shows that between 1970 to 2017, FDI into Nigeria averaged 2.54 % of GDP with a minimum of 1.15% in 1980 and a maximum of 10.83% in 1994. As at 2017 it was about 1.5%. To put this in comparative context, the top 3 countries for

Underlying this argument is the recognition by most Nigerians that President Muhammadu Buhari has failed to inspire in governance as he did in the campaign 2014 – 2015. In that campaign, he inspired a new generation of voters to commit time, energy and resources, but since 2015, has failed to meet expectations, the minimum of which was to provide a greater level of security of lives and properties compared to the period leading to his election in 2015. So, the reality and perception shared by majority of Nigerians is that President Muhammadu Buhari has failed. Even his strongest supporters, when this is pointed out, agree that he has performed below expectations, but rather than blame him directly, lay blame at the collapse in oil prices between 2014 and 2017. But those that judge the President a failure concentrate on three areas. First is that he has been clannish and raised the bar on Nigeria’s already dangerous level of nepotism. They argue that it is not appropriate to govern a diverse and multi ethnic country in such a manner, and provide evidence that he naturally sees something wrong in those that do not have the same background as he or do not share the same religion. The second is the way he has managed the economy that has seen the number of those unemployed rise to levels not seen before since the emergence of data and Nigeria becoming the capital of global poverty, overtaking India as the country with the largest number of people living in extreme poverty. The third is the scale of the herdsmen and ethnic clashes under his leadership. While that has subsided, many are not in a hurry to forget the indifference in the attitude of the President. Given these, the support for the President is therefore based on the notion that the President has more to offer. The support is also based on the notion that the President will change. When they fail to make this argument, they latch onto

…while the possibility of these young and intelligent candidates becoming President does exist, even they will acknowledge that the probability is very low. Given this, I am not willing to stake a claim or waste a vote, especially given that the likely resultant effect will be another four years of President Buhari that has carefully, though not successfully, pretended that I matter

the fear of return to the era of corruption, waste, and kleptocracy. But I never thought for one second that the era left us. But more importantly, the President cannot offer more, because the pattern and manner in which he has managed governance show that the President cannot raise the bar, become more empathetic, or suddenly become broad minded. In the area of his clannishness, there is no chance of the President suddenly seeing all Nigerians as equals. He will continue to revisit what he has always known and believed. On the economy, there is no chance of the President presiding over reforms in the economy, including the oil and gas sectors. He has convinced us beyond reasonable doubt that he sees the start and end of all Nigeria’s problems as corruption. But most of his critics see corruption, not as the start and end of Nigeria’s problems but as a symptom of the manner in which we have governed Nigeria that continues to squeeze the political and

economic spaces in the country. I will therefore always argue for reforms that limit the possibility for corruption, provide the enabling environment for growing the economy, reform education and health care, which together will mean less dependence on government and expansion of economic spaces outside of government. That sorted; at least to the extent that I do not think it is wise to reward failure with another four years. We cannot possibly think it wise to reward the failure to reform education, health care, and any other part of the economy with another four years. The President has exhausted his ideas, and there is no new one on the table for the coming four years. Indeed, there is no pretension that the only idea they have is campaign on the fear of returning to corruption, giving the erroneous impression that we ever left that circle in the first place. As Nigerians took risk four years ago, we must be bold and take another risk. Rewarding failure is entrenching failure. In conclusion, though dissatisfied with the President, many are not convinced of the Atiku Abubakar option. So, some will argue, why not give any of the new faces a chance. As much as I have ideals and may want to pursue fantasy, I do not think for a second, nor do those campaigning outside of the APC and PDP think they have any chance of becoming President. And that brings us back to the probability theory expounded by Ray Dalio. For the purpose of this article, it means that, while the possibility of these young and intelligent candidates becoming President does exist, even they will acknowledge that the probability is very low. Given this, I am not willing to stake a claim or waste a vote, especially given that the likely resultant effect will be another four years of President Buhari that has carefully, though not successfully, pretended that I matter. So, let us all queue behind Atiku Abubakar. I thank you.

Should Nigeria look inward? FDI to GDP ratio are Hungary 55+%, Luxembourg 45+%, Hong Kong 41+%. Hungary has a low average GDP growth of 0.5%, whilst Luxembourg and Hong Kong are financial havens with little internal production and high dependence on FDI’s. To further contextualize this, public data shows that thriving economies like Canada and America are just above 2% in FDI to GDP ratio. This means it is not an adverse situation that Nigeria’s FDI to GDP ratio is under 2%. India, one of the fastest growing economies has a ratio of 1.95%. It means that Nigerians by themselves are responsible for creating <> 97% of our internally generated income as a country. How significant is the fact that Nigerians are in the driver’s seat of the Nigerian economy? I am of the view that most countries have an economic thrust that leans towards either a free market open-door foreign investment policy or a protective mechanism for stable home-grown entrepreneurship. Countries realize that trying to pursue the two in a wholesome manner does lead to certain conflicts as in certain regards they can be diametrically opposed. Therefore, most countries lean more in either direction. Donald Trump for example says ‘’America First’’ and has created jobs. Ireland entices foreign investors via 12.5% corporate taxes and its open doors but also

It is also obvious that FDI is not a likely solution to our unemployment problem or our poverty index unless we grow it exponentially over the next few years… we need to look inwards, decide what is important to Nigerians, and find a core philosophy that leverages on domestically available resources

creates jobs. Where does Nigeria lean? From the chart, it is obvious that Nigeria is endowed with human and natural resources to grow an economy that is not dependent on FDI. It is also obvious that FDI is not a likely solution to our unemployment problem or our poverty index unless we grow it exponentially over the next few years. The chart buttresses my view that we need to look inwards, decide what is important to Nigerians, and find a core philosophy that leverages on domestically available resources. Let me share with you about Bhutan, one of the smallest countries in the world, population about 800,000, which is currently rated as the 3rd fastest growing economy in the world. Note that their FDI/GDP ratio is 0.36% so FDI is not responsible for its growth. What is most interesting about Bhutan is its underlying philosophy that drives economic policies. In 1972 the 4th King of Bhutan, King Jigme Singye Wangchuck, coined the phrase ‘gross national happiness’ when he declared, “Gross National Happiness is more important than Gross Domestic Product.” Since then the idea of Gross National Happiness (GNH) has influenced Bhutan’s economic and social policy and captured

the imagination of others far beyond its borders. In creating the Gross National Happiness Index, Bhutan sought to create a measurement tool that would be useful for policymaking and create policy incentives for the governmentand businesses of Bhutan to increase GNH.The GNH Index includes both traditional areas of socio-economic concern such as living standards, health and education and less traditional aspects of culture and psychological wellbeing. It is a holistic reflection of the general wellbeing of the Bhutanese population rather than a subjective psychological ranking of ‘happiness’ alone. Today, in South Asia, Bhutan ranks first in economic freedom, ease of doing business, and peace; second in per capita income; and is the least corrupt country as of 2016. Bhutan continues to be a least developed country and has its problems, but it has set the parameters for driving policy and achieving year on year results. What central philosophy drives Nigeria’s socioeconomic policies? Don’t you think Nigeria needs to look inward and decide what is important to Nigerians?Shall we continue to dither and ride on clichés that have minimal socio-economic effect on our citizens?

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