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Life in Nigeria is getting harder, and Buhari should worry LOLADE AKINMURELE, JOSEPHINE OKOJIE & TEMITAYO AYETOTO

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rom the farmer in the northern city of Borno to the business owner and working class down south in Lagos and Aba, households and businesses across Nigeria are under

Continues on page 46

Investigation

With broken infrastructure, abandoned road projects, South-East feels cut off from Nigerian economy See story on P.45

Inside

L-R: Abubakar Jimoh, MD, Coronation Merchant Bank; Akinsowon Dawodu, MD, Citi Bank; Dave Uduanu, MD, Sigma Pensions; Roosevelt Ogbonna, group deputy managing director, Access Bank plc; Ibukun Oyedeji, vice president, CFA Society Nigeria, and Kaodi Ugoji, associate executive director, corporate development, FMDQ, at the CFA Society Nigeria career fair 2019 in Lagos.

PicbyOlawaleAmoo

Landmines dot Malami’s quest to force a review of PSC terms P. 45

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INEC worried over declining women representation in politics, elections ...Reps committed to the universal protocol on gender issues James Kwen, Abuja

I

ndependent National Electoral Commission, INEC is worried about the declined representation of women in politics and elective positions, despite huge efforts made by the Commission to support the participation of women in the electoral process.

Mahmood Yakubu, INEC Chairman, who gave this indication at a review meeting of 2019 general elections from a gender perspective in Abuja said, this has become worrisome as women’s participation in governance and leadership is not only essential prerequisite for removing gender inequality but also the attainment of basic human rights.

Yakubu observed that the 2019 General Election activities and engagements showed high-level participation of women in the electoral process as aspirants but due to barriers they regressed in the number that won elections, adding that party primaries amongst others fell short of expectations

as many women could not secure tickets to represent their parties.

According to him, “during the elections, only 5 out of the 73 candidates who ran for the position of President were women, 1,668 men and 232 women vied for the 109 Senatorial seats while 4,139 men and 533 women contended for 360 seats in the House of Representatives.

“At the end of the election, only 7 women won Senatorial seats and 11 were elected into the House of Representatives while 4 were elected as deputy Governors. However, other countries in the Sub-Saharan Africa have laid examples to follow.

“For instance, 12 sub-Saharan countries elected more than 30% women to legislative positions, while Rwanda reportedly had so many success stories and advancement in electing women to more than 60% of its legislative positions”.

He emphasised that INEC had remained committed to promoting a level playing field for political participation of all stakeholders in the elec-

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toral process within its regulatory mandate, with specific regard to gender equality in the electoral process.

“INEC developed its Gender Policy to ensure that its electoral functions and operations are gendersensitive and responsive.

The policy is expected to foster gender balance in the Commission and to stimulate stakeholders in the electoral process to do the same.

We will continue to engage with critical stakeholders at various levels to support and interrogate gender issues in politics and political processes in Nigeria”, the Chairman said.

In a goodwill message, Otunba Oriyomi, Chairman House of Representatives Standing Committee on Women Affairs and Social Development stated that the House and the Committee remain committed to the universal protocol on gender issues, and the Nigerian experience offers a great deal of reasons to focus on the impact of the political as well as electoral experiences of women in Nigeria.

Calls for increased OPS participation in governance heighten Tony Ailemen, Abuja

A

fter spending the first 100 days without much activities, President Muhammadu Buhari has been called upon by economic experts to allow for more private sector participation in the governance of the country.

They however hailed the President for appointing members of the Economic Advisory Council, but insist that their advice must be respected, while also allowing Vice President Yemi Osinbajo play his roles as the main driver of the economy.

In an apparent reference to recent reports of plans to strip the Vice President of some role, analysts believe that allowing acrimonious relationships between the President and his Vice would not augur well for the administration.

Some of the analysts believe that Osinbajo had played strong stabilising roles in the Buhari administration which had helped to stabilise the economy.

The Executive Director of the Civil Society and Legislative Advocacy Centre, CISLAC, Auwal Ibrahim, while speaking

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on the issue, urged President Buhari not to allow those he described as “outsiders” derail his administration.

“The Vice President has played a very strong role in stabilising this administration, so we will advise the President against allowing outsiders derail his administration. “ I am not amongst those who think this is about 2023; rather, I see what is happening as the action of a selfish few who are trying to cause confusion in the government.

Ibrahim who sees the current problem as “diversionary” stated that the government has much challenges to tackle “The government must not be distracted, it must be

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focused so that it can deliver of the promises made to the Nigerian electorates” he said X-raying the President’s June 12 Democracy Day Speech, the private sector players noted that the President was yet to fulfil most of the promises.

Bismarck Rewane, a member of the President’s Economic Advisory Council, had in his assessment of the President’s performance, noted that President Buhari had promised to assist private sector’s backward integration, beef up domestic economic production of basic goods, especially those consumed locally, as well as narrow class inequality gap using new socio- economic policies.

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United Nation’s stress test for Nigeria – cybercrime and substandard election conduct (fourth in a series of 8 articles)

BASHORUN J.K RANDLE

F

urther worries for the US secretary general was the front page of “Vanguard” newspaper of June 19, 2019: “Nigeria loses about N3.133 trillion to cybercrime.”

“The National Information Technology Development Agency, NITDA, said yesterday, that Nigeria loses about N3.133 trillion to cybercrime and foreign software annually. Isa Ibrahim Pantami, director general of the agency, who disclosed this at a stakeholder’s engagement on Nigerian Software Testing Guidance (NSTG), and the Guidelines for Information Systems Audit (GITA), in Abuja, also said N127 billion is lost to cybercrime annually due to the nation’s inability to adequately secure information systems.”

He said to guarantee safe delivery of services, it has become imperative to secure Nigeria’s information system.

He also said that there was urgent need to continually protect the country’s information systems from being compromised.

He said, “There is urgent need to continually protect the country’s

information system from being compromised. Today, most business processes are carried out electronically, and large amounts of information are stored, processed and transmitted over IT networks, which means businesses, administrations and citizens depend on proper operations of the information technology used.

Nigeria loses about N127 billion to cybercrimes yearly. This is caused in part by our inability to adequately secure our Information Systems (IS).

Therefore, securing our IS is a must, if we want to guarantee safe delivery of our services.”

Pantami, who deplored the huge loss by the country, noted that, “the indigenous software market in Nigeria loses about $10 billion (N3.06trn) annually to stiff competition from foreign off-the-shelf software used to meet local needs, where indigenous software could have provided the appropriate solutions.”

On CNN, Tabia Princewell was the toast of the hour with her vehement protest: “The former Chairman of the Economic and Financial Crimes Commission (EFCC), says Nigerian governors must disclose their spending on security.” He is right.

“Ecological funds, like security votes, are some of the murkiest, least transparent aspects of public spending. If ecological funds in the north and middle belt states had not been mismanaged for the past 30 years, the clashes between herdsmen and farmers would not exist, given what we know about climate change, soil erosion and what should have happened if those funds had impacted the environment, enabling sustain-

able development for the diverse populations that occupy and share its resources.

For a long time, security, both in concrete and abstract terms, has been used to conceal expenditures that are largely fraudulent or dubious. If we learn lessons at all from the famous arms probe of the last three years, it is that not everything written in the name of security actually gets spent for the intended purpose. We must insist that for accountability and transparency, Nigerians are told what monies are budgeted for our security apparatuses and for what purpose the monies are spent” Ribadu said.

The national assembly ought to be on the side of the people by championing such causes. Insecurity in Nigeria is a business, like kidnapping.

Individuals profit from it through endless fraudulent military contracts to buy non-existent or obsolete weapons and equipment. Despite what people think, kidnapping is not the exclusive preserve of any ethnic group: criminal organizations employ the services of a diverse set of Nigerians.

The “fulanisation” narrative is a political tool we must be weary of. It masks high-level corruption involving all ethnic groups.”

‘

The national assembly ought to be on the side of the people by championing such causes. Insecurity in Nigeria is a business, like kidnapping.

Individuals profit from it through endless fraudulent military contracts to buy nonexistent or obsolete weapons and equipment

ThisDay newspaper also waded in with its front-page report on June 19, 2019: “Again, foreign observers knock 2019 general election.”

“Like the European Union Election Observations Mission (EU-EOM) that recently slammed the conduct of the 2019 general election, two United States’ institutes that monitored the elections said yesterday that the election did not meet previous standards

and the expectations of Nigerians.

In their Joint report, presented in Abuja, the National Democratic Institute (NDI) and the International Republican Institute (IRI) said that 2019 elections were marred by irregularities, such as intimidation of voters/electoral officials, vote buying and election-related violence.

They also condemned the suspension of Walter Onnoghen, the former Chief Justice of Nigeria, saying the judiciary plays a crucial role in postelection matters.

“Although many new political parties nominated candidates for the 2019 elections, the polls were largely a contest between the incumbent All Progressives Congress (APC) and the Peoples’ Democratic Party (PDP); the APC hoped to renew the mandate of President Muhammadu Buhari and consolidate its majority in the national assembly and of governorship. However, the party faced internal wrangling and defections of some key figures in the months to the polls.

Atiku Abubakar, PDP fielded former vice president as its standard bearer and, entering the process for the first time as an opposition party, challenged the APC’s record, claiming the ruling party had not kept its campaign promises to fight corruption, improve security and boost the economy,’’ the report said.

Note: the rest of this article continues in the online edition of Business Day @https://businessday.ng Randle is Chairman/Chief Executive JK Randle Professional Services Chartered Accountants

Patience for the economy to grind through the gears

T

he economy has been bumping along the bottom since the start of 2015.

Real growth has been positive year on year (y/y) for nine successive quarters through to Q2 2019’s underwhelming 1.9 percent but is contracting when adjusted for the demographics. Elsewhere in the sub-region (Côte d’Ivoire, Ghana and Senegal for example), there has been a solid track record of increasing per head incomes. We have all seen the headlines about Nigeria replacing India as the poverty capital of the world.

In this column we are going to extract data from the latest national accounts for Q2, and attempt to draw some conclusions.

We are working with the output series since it is more current than the expenditurebased data. Our first point is the evidence of subdued household demand, which represents 77 percent of GDP. We can see from the trade segment, which has contracted in three of the past six quarters and not managed more than 1.0 percent y/y in the other three, that household budgets are under pressure.

For further evidence, we need look no further than manufacturing, which in Nigeria is synonymous with consumer goods industries. The sector contracted by -0.1 percent y/y in Q2, and its largest component (food, beverages and tobacco) grew by just 1.2 percent. Without opening the can of worms that is methodology, we wonder at headline PMI readings in the mid-fifties.

For a brief digression from the path, we

often hear that prominent multinationals in the space, particularly those producing food goods, enjoy some protection from competition by virtue of their iconic brands. It was put to us at a discussion group last week that the average age in Nigeria is now +/- 20 years and that therefore nostalgic memories of Lever Brothers in the 1960s and 1970s carry little marketing weight in the face of changing tastes, not forgetting social media.

Probably, the greatest disappointment in the national accounts is the underperformance of the largest sector, agriculture, which has averaged growth of only 2.3 percent y/y over the last six quarters.

We should remember that, almost alone among sectors, government policy has changed little over the past two administrations. This continuity would appear to have made limited impact. Also, agriculture has been the main beneficiary of CBN funding over the past three governors. Most likely, insecurity in food growing areas has been costly, and headline investments in export crops such as cashew nuts and sesame seeds form a small part of the overall picture.

We can pontificate about the scale of the returns on the CBN’s development finance initiatives. Yet, if the banks are reluctant to lend to the sector and the private sector has reservations about investing, then we should expect a continuation and even acceleration of those initiatives.

In contrast with agriculture, informawww.businessday.ng

tion and telecommunications (I&T) has grown at an average of 9.5 percent y/y over the same six quarters. Telecoms has taken the lead, proving the point that, rather than being a luxury item, the mobile phone is a core element of the household budget.

Fintech has also provided a boost. The two largest mobile operators, MTN Nigeria and Airtel, are applying for licenses as payment service banks, which shows that they are excited by the market opportunities despite the operational and political challenges in the field.

Motion pictures, sound recording and music production are another element of I&T, representing 0.9 percent of current price GDP. We hear that Nollywood is larger than Bollywood in terms of films produced but do not see the evidence in the official data.

When we are looking for the government input in the national accounts, we highlight the transportation and storage sector. Road transport, its pre-eminent segment, has expanded by an average of 15.0 percent y/y over the period. The capital expenditure of the Federal Government of Nigeria (FGN) has been the driver of this rapid growth off a low base, and will remain so.

This brings us back to our familiar argument that the FGN has to invest heavily in roads, power and other infrastructure if it is to diversify the economy (and make it less dependent upon movements in oil revenue). The local banks, the Development

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GREGORY KRONSTEN

Finance Institutions, the donor community and private equity can all contribute but ultimately, the FGN has to take the lead because of the scale of the challenge. Since its revenue collection is far short of its requirements for this investment, it has to borrow.

If that means tapping the Eurobond market again in the current favourable conditions, then so be it.

Our story in conclusion is that the economy will continue to bump along the bottom for the next two to three years as household budgets are slowly rebuilt. At some stage, the new national minimum wage will help, as will the FGN’s capital releases. While our growth forecast for this year (2.5 percent) is marginally ahead of the CBN’s 2.3 percent and the IMF’s 2.1 percent, we urge patience. The economy is too large, the neglect has been too great and the limitations imposed by the current federal system are too many for the transformation, if it comes, to be any faster.

Kronsten is the head, macroeconomic & fixed income research at FBNQuest

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LDR: A winning policy from the CBN?

PATRICK ATUANYA

S

ome policy thrusts of the Central Bank of Nigeria (CBN) have been criticised by this column in the past year, however there signs we are about to see some real positives emerge from a new policy announced by the CBN a few months ago.

The CBN on July 03, 2019 released a new guideline for Deposit Money Banks (DMBs) via a circular on regulatory measures to improve lending to the real sector.

The highlights of the circular were that: with effect from September 2019, DMBs are mandated to maintain a minimum loan to deposit ratio (LDR) of 60 percent (compared to sector LDR of 58.5% as at May 2019 and regulatory maximum of 80.0%), subject to quarterly review.

Loan-to-Deposit ratio compares a bank’s total loans to its total deposits for the same period, and is generally expressed in percentage terms.

A higher loans to deposits ratio means that the bank is issuing out more of its deposits in loans and vice-versa.

In a bid to encourage lending to

SMEs, retail, mortgage, and consumers, the CBN assigned a weight of 150 percent to these sectors in the computation of LDR. The CBN also disclosed plans to provide guidelines for the classification of businesses that fall under the named sector categories.

According to the apex bank, a failure to meet the minimum LDR of 60 percent by the specified date will result in a levy of additional Cash Reserve Requirement (CRR) equal to 50 percent of the lending shortfall of the target LDR. The Cash Reserve Requirement or CRR refers to a certain percentage of total deposits that commercial banks are required to maintain in the form of cash reserve with the CBN. In plain English the CBN was telling the banks to boost lending to the real sector of the economy or risk being required to park more of their excess funds with the CBN where it would not earn much in interest and could not be used to purchase Federal Government securities like bonds and treasury bills.

Predictably there was some push back from analysts.

Global rating agency, Fitch said the new requirement was creditnegative for the sector.

According to Fitch the new directive will push some banks to significantly increase lending to riskier borrowers, potentially with looser underwriting or under-pricing of risk.

S&P Global Ratings for its part warned that the directive is unlikely

to unlock credit, unless the government addresses other structural bottlenecks to investment in Africa’s most populous country.

It is understandable why the CBN is trying to change the behaviour of the banks and force them to undertake more of their core mandate of lending as they seem more comfortable investing in risk free government securities.

Net domestic credit (NDC) to the government surged by 64 percent between January and August this year, moving from N5.75 trillion to N9.456 trillion, central bank data show.

In the same period (Jan-Aug), credit to the private sector increased by just 8.29 percent, from N22.9 trillion to N24.8 trillion.

Since the CBN circular came out in July though, credit to the private sector has grown by 2 percent in the one month period to August (the most recent available data), while NDC to the government increased by a measured 3.42 percent.

This contrasts with the one month period between June and July when NDC to the government jumped by 20 percent, from N7.583 trillion to N9.143 trillion.

One month is certainly not enough to assess a trend, however the Governor of the CBN Godwin Emefiele came out recently to suggest that most of the country’s banks have obeyed the directive to raise their loan-to-deposit ratios to 60 percent and are creating more loans, with compliance levels being excellent, according to him.

‘

Since the CBN circular came out in July though, credit to the private sector has grown by 2 percent in the one month period to August (the most recent available data), while NDC to the government increased by a measured 3.42 percent

Atuanya is the editor of BusinessDay. Email: patrick.atuanya@businessday.ng Twitter: @patrick_atuanya

The problem with the debt-for-infrastructure strategy

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igeria has serious infrastructure challenges. You see it in the quality of roads, the near absence of rail services, the relatively poor state of many of our airports, and the gridlocks around the ports. All these contribute to our lack of competitiveness and our inability to generate sufficient economic growth and jobs. According to the World Bank in 2011, we needed to spend at least $14.2 billion a year for no less than a decade to start closing up our infrastructure gap. The Federal Government’s (FG) infrastructure plan said we needed about $33 billion a year.

Unfortunately, anyone who has taken a casual look at the FG’s finances can see that it does not have that kind of money. In 2018, the entire FG budget was just under $30 billion at the official exchange rates.

That includes record levels of new debt.

Actual FG revenue was just under $13 billion. That is all revenue, before you think about salaries and debt servicing and votes to different ministries and all that.

In 2018, according to data from the CBN statistical database, only $3 billion was spent on capital expenditure. Keep in mind that capital expenditure is not just spending on infrastructure but includes things like Prado jeeps and office buildings for federal parastatals. So, the spending on infrastructure was likely less than $3 billion. You can already see the problem; $3 billion spent in a country that requires $33 billion a year, even with record levels

of new debt.

If the goal is propaganda then you can always show proof that you are working.

That $3 billion will allow you to start projects in every state and take pictures for social media showing that work is being done. But it is still only $3 billion. You can show pictures of the newly paved 10 kilometre on the Enugu-Onitsha expressway but the remaining 120 kilometre will still be a mess.

The Lagos-Ibadan expressway which is only 130 kilometre will continue to take decades to construct. Every government likes to believe that they are the only ones who tried to build roads, but the truth is every regime since 1999 has built something. However, because the funding is not adequate, they can only build a little at a time, while the rest continues degrading.

By the time the next regime comes, the ones that the past regime built have started to degrade. And the cycle continues.

Is this a problem that can be solved with debt? Obviously not. Since 2015 the FG has broken its deficit record almost every year.

If you add the mysterious line item in the budget implementation report titled “net deficit” then the amounts borrowed, presumably for infrastructure, are at levels not seen since the 1980s. Yet the fraction of all government spending that goes to capital expenditure has been falling consistently.

Between 2010 and 2013 the FG spent about 20 percent of its expenditure on www.businessday.ng

ECONOMIST

capital projects. Since then it has dropped dramatically. In 2017 the FG spent only 1.7 percent on capital expenditure, the lowest since the CBN started publishing such data. No doubt the collapse in oil prices played a role but oil prices were higher in 2017 than in 2016, and even higher in 2018.

In 2018, the FG spent just under 14 percent and for the first 3 months of 2019 spent just over 11 percent.

If you are wondering why the fraction keeps shrinking, it is because debt servicing costs keep piling up. Which should be obvious even to roadside economists. If $33 billion a year is required, then a government which can typically afford to spend $3 billion only, cannot borrow up to that amount. It will go bankrupt very quickly.

The case to borrow for infrastructure is based on the infrastructure project itself raising enough revenue to repay the loans, or the infrastructure generating enough extra economic activity that can be taxed to pay for loans.

We can already rule out the tax part for Nigeria for obvious reasons. The infrastructure paying for itself strategy, has also proved challenging for political reasons.

For instance, the Abuja-Kaduna rail line which was built with debt is currently priced so low that it cannot even generate enough revenue to keep itself afloat, not to talk of paying back some of the debt used for the project. Given these two realities, the debt-for-infrastructure strategy is a sure

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Anecdotal evidence suggests this may be true.

Non-performing loans of the banks have fallen sharply since 2015, giving them more leeway to take on riskier lending.

The banks have thus rolled out aggressive technology/ mobile phone based solutions for customers intending to access loans and most of the loans requests are granted in seconds following a less than 1 minute credit check.

Guaranty Trust Bank, which is the country’s largest DMB by stock market capitalisation speaking in an investors’ conference call, following its second quarter 2019 results said the bank is on track to grow loans by about N40 billion – N50 billion to meet the CBN’s 60 percent LDR limit by the 30 September 2019 deadline.

Polaris, a Tier-2 Bank announced that it has launched a collateral-free salary advance Solution, where customers can access up to 50 percent of their net monthly salary capped at N500, 000 for a 30-day tenor or next salary date by dialling a number and the service is available 24/7 on all telecommunication networks.

The major positive from all this is that the banks are now thinking of how to be innovative to provide core banking services to their customers.

It is an outcome which if sustained in the medium to long term by the banks, that the CBN should take a whole lot of credit for.

NONSO OBIKILI

path to FG bankruptcy.

A country with infrastructure problems and a bankrupt government, will unfortunately be worse-off compared to current situation as it won’t even be able to spend the meagre $3 billion.

So, what is the way forward?

As at today there are over $15 trillion of global funds that are desperately looking for where to put their money. That is trillion with a “t” in dollars. They even have to pay some governments to hold their money. If we are able to mobilise just one percent of these to fund our infrastructure every year for the next four years, then all our infrastructure problems will be solved.

The obvious policy question then is, how to mobilise global private capital to fund infrastructure projects in Nigeria. That is the question we hope our policy makers will try to answer.

Nonso Obikili is chief economist at Business Day.

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16

BUSINESS DAY

Monday 30 September 2019

EDITORIAL PUBLISHER/CEO

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

Bashir Ibrahim Hassan

GM, BUSINESS DEVELOPMENT (South) Ignatius Chukwu

Economics of border closure

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or a country adjudged to be the poverty capital of the world with an estimate of 90 million people living in extreme poverty, the government should be more worried about ameliorating the sufferings of the poor, ensuring food and basic necessities are affordable and growing the economy to bring out more people from poverty rather than shutting down borders in support of local rice cartels, who will then increase the price of the commodity.

On August 19, the federal government, citing incessant smuggling, especially of rice, and without recourse to the Economic Community of West African State (ECOWAS) protocol that guarantees free movement of goods and peoples across the region, shut the western border with Benin Republic indefinitely.

“We cannot allow smuggling of the product at such alarm-

ing proportions to continue,” says President Buhari who was quoted in a statement issued by his spokesman.

Since coming to power in 2015, the president has promised to revive the agricultural sector. One key area where progress is being made and the president has never failed to emphasise is in the area of local rice production. The country has ramped up local production of the commodity and, according to authorities, has saved huge sums of foreign exchange which would otherwise have been expended on importing rice.

To indicate success, the president, in his 2018 new year day address, said the country will totally stop the importation of rice in 2019 to encourage local production. However, worried by the spate of rice smuggling into Nigeria from Benin Republic, the president ordered the closure of the border until such a time when the practice stops.

Immediately, the prices of rice and other commodities

went up. A bag of rice that previously sold for between N13,000 and N15,000 now sells for between N20,000 and N21,000, more than a 40 percent increase. This is besides the severe dislocation to people’s lives and to trade, businesses and movements across the border; lost revenues and a generally sluggish economy hurting from the closure of the border. Nigeria depends on the border to import a lot of goods into the country.

It is surprising Nigeria didn’t consider its revenue crisis before shutting the border and denying itself all the revenues it could have got from the importation and trade across the borders. The interest of local rice producers, who have long advocated for such a closure to allow them raise prices, is paramount. It is not enough that the country does not waste scarce forex on rice importation anymore. Smugglers must be stopped even if it is at the expense of the poor, government revenues and the economy as

a whole.

Suffice to say that closure of borders will not automatically lead to cessation of smuggling.

Smugglers will look for new routes in our long and unpoliced borders to bring in their goods.

We cannot at one instance, be advocating free trade and be putting barriers to free trade all over. Secondly, the government cannot be stifling competition just so to support and protect some inefficient but big cartels of local rice producers. The government cannot claim to be interested in addressing poverty and at the same time encouraging or supporting monopolies that always results in higher prices.

Imported rice have continued to appeal to Nigerians because they are way cheaper and of more quality than the local ones. Instead of fighting the wars of the local rice cartel, the government would do well to improve their operating environment to be able to compete favourably with imported rice.

HEAD, HUMAN RESOURCES Adeola Obisesan

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BUSINESS DAY

Monday 30 September 2019

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Farewell Chiedu Osakwe, Africa’s consummate trade diplomat GLOBAL PERSPECTIVES

OLU FASAN

T

he death of Chiedu Osakwe, an ambassador, Nigeria’s chief trade negotiator and directorgeneral of the Nigerian Office for Trade Negotiations (NOTN) last week was shocking beyond belief!

When I saw a tweet announcing his passing, aged 64, in Geneva, Switzerland, on 22 September, I tweeted: “What a terribly, terribly sad news”! Indeed, it was a terribly sad news. Osakwe’s contributions to the world trading system, to Africa’s economic integration and to Nigeria’s trade diplomacy were so hugely significant that his death was bound to send shock waves across trade communities around the world.

For me, Osakwe’s death was also a personal blow. As I wrote last year, in a piece titled “Integrating Africa’s economies: The Osakwe factor” (Businessday, 30 April 2018), I first met him in 2005 when I joined the World Trade Organisation in Geneva as a research fellow and he was a director at the world body. I have fond memories of my interactions with him, and particularly the positive impressions I had of his depth of knowledge, sharp mind and passions for Nigeria and Africa. Even, years later, after I returned to the London School of Economics as an academic, he remained a sounding board on global trade issues.

Hardly has any other African, achieved anything close to what Osakwe did to develop international trade negotiations, including through support for policy reform and capacity building. In his 19 years’ spell at the WTO, from 1998 to 2017, Osakwe held, at the most senior level, all the major development-oriented roles. For example, he was: special coordinator for the leastdeveloped countries (LDCs), heading the inter-agency working group for the

integrated framework for LDCs; director of the Technical Cooperation Division; director of the Textile Division; director of the Doha Development Agenda, leading the DDA negotiation process; and director of the WTO Accession Division, helping several developing countries through the difficult accession process to become WTO members.

Osakwe oversaw the accession of several former communist countries, such as Estonia, to the WTO, actively supporting their domestic reform processes.

In 2005, Osakwe was on the verge of becoming a Deputy Director-General at the WTO but apparently paid a price for Nigeria’s negative image. The new Director-General, Pascal Lamy, was appointing his four Deputy Directors-General, one of which must be African. The WTO Secretariat was abuzz with speculations – who else was better qualified than Osakwe for the job? But, then, Nigeria had not paid its subscriptions to the WTO for nearly four years and hardly anyone had anything positive to say about the country. Thus, although eminently qualified, Osakwe didn’t get the job. Nigeria later became positively engaged in the institutional development of the WTO, and, in part, another able Nigerian, Yonov Fredrick Agah, has been a WTO DDG since 2013, reappointed for a second four-year term in 2017.

Osakwe resigned from the WTO in 2017, and immediately took up a role as Associate Professor of International Trade, Policy, Diplomacy and Negotiations at the International University, Geneva. It was from that position that he took a leave of absence to serve as trade adviser to Okechukwu Enelamah, the then minister of industry, trade and investment. He was later appointed as the first DirectorGeneral of the Nigerian Office for Trade Negotiations (NOTN), which he helped establish, and also became Nigeria’s chief trade negotiator.

Of course, given Osakwe’s pre-eminence as a quintessential trade policy expert, diplomat and negotiator, no Nigerian was more qualified than him to head the NOTN or to lead the country’s trade negotiations. But it was a tall order for him to transform Nigeria’s negative and defensive approach to trade policy and

trade negotiations.

From an intellectual perspective and given his hands-on experience of the economic transformation of the former communist countries, Osakwe knew what a developing country must do to generate prosperity. As he once said, “Countries that are open to trade grow faster and generate more jobs than countries that are closed up”. He strongly believed that only rules-based economic and trade opening can lead to welfare-enhancing and jobcreating opportunities, while protectionism would result in damaging deadweight costs. In one of his famous quotes, he said: “Blind protectionism does not protect.

It is an economic dead-end that cages the emergence and performance of an economic tiger”.

Osakwe was a powerful, if lonely, voice in President Buhari’s government for economic and trade openness in Nigeria, a country steeped in what he called “blind protectionism”. It is, however, to his great credit that, while President Buhari has not embraced his message about the welfareenhancing characteristics of trade opening and the deadwood costs of protectionism, the president acknowledged Osakwe’s “intellectual depth, fervour and sense of patriotism” as he said in his tribute to him.

So, Osakwe bestrode the world of trade and development, and tried to transformation, ideationally and institutionally, the trade policy and negotiation landscapes of Nigeria. But it is for his contribution to Africa’s economic integration that he will forever be remembered. In June 2017, two years after the negotiations on the African Continental Free Trade Area (AfCFTA) were launched but had effectively stalled, African leaders met at African Union summit in Niamey and appointed Osakwe as chairman of the AfCFTA negotiating forum.

Within a year, Osakwe steered the negotiations to a successful conclusion, leading to the launch of the AfCFTA and the signing of the agreement establishing it by 44 African countries in March 2018.

As President Buhari said in his tribute, Osakwe played “the frontline and historic role” of successfully chairing the AfCFTA negotiations. In his own tribute, Albert Muchanga, African Union’s Commissioner for Trade and Industry, described

‘

Of course, given Osakwe’s preeminence as a quintessential trade policy expert, diplomat and negotiator, no Nigerian was more qualified than him to head the NOTN or to lead the country’s trade negotiations.

But it was a tall order for him to transform Nigeria’s negative and defensive approach to trade policy and trade negotiations

Osakwe as “giant of AfCFTA”, adding: “He contributed immensely to what AfCFTA is and will be”.

But, in April 2018, I asked in the piece that I referred to earlier whether Osakwe was like Hannibal, who won battles but lost the war, given that Nigeria, his own country, refused to sign the AfCFTA treaty.

Well, again to his eternal credit, Osakwe worked tirelessly to secure Nigeria’s signing of the agreement and did before he died! As Paul Okolo, a freelance journalist, tweeted: “Even as his health was failing, Osakwe soldiered on passionately, strenuously canvassing Nigeria’s position on AfCFTA”.

He added: “One can safely say he finished well when he saw President Buhari sign the trade deal in July in Niamey”. Indeed, he finished well; the look on his face as Buhari signed the agreement said it all!

But how do you honour this great African? I tweeted that the African Union should honour Osakwe by naming the AfCFTA Secretariat building after him.

And, of course, Nigeria must also honour Osakwe; similarly, by naming the NOTN building after him. These would be powerful symbolic gestures, recognising his role as a great champion for developing countries in the world trading system and as an architect of the emerging African free trade area. Of course, in addition to naming physical structures after Osakwe, African leaders must leaders must also him by making AfCFTA work; that’s his greatest legacy!

Osakwe was, unquestionably, a trade diplomat extraordinaire. He joined the Nigerian Foreign Service in 1979 after graduating from the University of Ibadan; he later studied at Oxford University and obtained a PhD from New York University.

A prolific writer, he used his intellectual prowess to drive positive change in the world of trade. He did so for developing countries at large, for Africa and, indeed, for Nigeria. He will be sorely missed.

May his soul rest in eternal peace!

Dr. Fasan, a London-based lawyer and political economist, is a Visiting Fellow at the London School of Economics. e-mail: o.fasan@lse.ac.uk, twitter account: @olu_fasan

The Nigerian code of corporate governance 2018: Principle 20 - external auditors

P

rinciple 20 of the Nigerian Code of Corporate Governance 2018 (NCCG) provides that “an external auditor is appointed to provide an independent opinion on the true and fair view of the financial statements of the company to give assurance to stakeholders on the reliability of the financial statements.”

The external auditor is widely regarded as a key player in the contemporary corporate governance structure and is expected to provide independent and objective assurance on the financial health of the company. Section 357(1) of Companies and Allied Matters Act (CAMA) provides that “every company shall at each Annual General Meeting (AGM) appoint an auditor or auditors to audit the financial statement of the company and to hold office from the conclusions of that, until the conclusion of the next AGM.” By the provisions of Section 360 of CAMA, the primary function of an auditor firm is to carry out such investigation as may enable them form an opinion as to whether proper accounting records have been kept by the company and whether the company’s balance sheet as well as the profit and loss account are in agreement with the accounting records and returns.

The auditor’s duty of skill, care and caution in performing the audit was succinctly articulated in RE: London & General Bank [1895] Ch.D 673 @ 683 as follows:

“It is the duty of an auditor to bear on the work he had to perform that skill, care and caution which a reasonably competent, careful, and cautious auditor would use.

What is reasonable skill, care and caution must depend on the particular circumstances of each case.

An auditor…is not bound to do more than exercise reasonable care and skill in making inquiries…He is not an insurer; he does not guarantee that the books do correctly show the true position of the company’s affairs;…

He must be honest – i.e., he must not certify what he does not believe to be true and he must take reasonable care and skill before he believes that what he certifies is true…Where there is nothing to excite suspicion very little inquiring will be reasonably sufficient…

Where suspicion is aroused, more care is obviously necessary; but still, an auditor is not bound to exercise more than reasonable care and skill, even in a case of suspicion…”

Auditors are required to be independent in the performance of audit activities, such that their professional judgement is unbiased and in such manner that will give the assurance of independence and objectivity to a third party having knowledge of all relevant information. Auditor independence refers to “the independence of the internal auditor or of the external auditors from influence by any party that may have a financial interest in the business being audited. Indewww.businessday.ng

pendence requires integrity and an objective approach to the audit process” – Wikipedia.

An auditor’s independence is impaired if the Auditor is not capable of exercising objective and impartial judgment on all issues encompassed within the audit engagement.

According to the Institute of Chartered Accountants in England and Wales (ICAEW) the most effective way to guarantee the independence of the auditor is to provide guidance centred on a framework of principles rather than a detailed set of rules that can be complied with to the letter but circumvented in practice.

The NCCG provides that external audit firms may be retained for no longer than ten years continuously and may not be considered for reappointment until after a 7-year cool-off period. Where an external auditor’s tenure has already exceeded ten years at commencement of the code, such auditor should cease to hold office at the next Annual General Meeting.

To further preserve the external auditor’s independence, the code provides that there should be a rotation of the audit engagement partner every five years. Also, a cool-off period of a minimum of three years is required between the retirement of a partner from an audit firm and his/her appointment to the board of a company which is a client of the audit firm. Similarly, a cool-off period is required before a company engages a mem-

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BISI ADEYEMI

ber of the audit team as a staff performing financial reporting function.

Additional measures for safeguarding the independence of the external auditor is the prohibition of the provision of certain nonaudit services to the company. According to the NCCG, an external auditor may provide only such other services as are approved by the board on the recommendation of the audit committee. The board must however ensure that these other services do not create a self-review threat.

Note: the rest of this article continues in the online edition of Business Day @https://businessdayonline. com/ Bisi Adeyemi is the managing director, DCSL Corporate Services Limited. Kindly forward comment(s) and reaction(s) to badeyemi@dcsl.com.ng. DCSL provides governance advisory, corporate restructuring & board evaluation, board & senior management training, retreats & strategy sessions, executive talent recruitment, HR outsourcing, company secretarial services.

@Businessdayng

18

Monday 30 September 2019

BUSINESS DAY

In Association With

The underground revolution

Better seeds could help African farmers grow far more But their governments are standing in the way

A

N AIR OF Malthusian gloom hangs over smallhold farmers in Sironko, in eastern Uganda. In the old days, they say, their parents reaped plentiful harvests from fields fed with manure. Now the soil needs to be coaxed into life with chemical fertilisers they cannot afford. As the population grows, farmers squeeze onto shrinking plots of land. The weather has become erratic: the growing season might begin with a week of downpours followed by drought. The rain and the sun no longer balance, complains one farmer, Zaituni Mudondo, banging a maize cob on the ground.

So there is something unusual about Ruth Akello, who lives just down the road. Her house is sturdier than the rest, with a solar panel outside.

She is also building another home in a nearby town. Asked about maize— Uganda’s most ubiquitous crop, which accounts for about 20% of people’s overall calorie intake—she pulls out a record book and phones her husband to check the numbers. The couple have grown 100 bags this year (about ten tonnes) and sold almost all of it.

Her neighbours use old-fashioned methods of farming, she explains. “But me, I use the modern way.”

One crucial difference between Ms Akello and her neighbours is the seed she uses. Whereas most smallholders keep some of the previous year’s crop to plant, as they have done for generations, she buys improved hybrid seeds. Her plot hints at the huge difference that modern seeds can make to the lives of Africa’s hundreds of millions of farmers. It also raises a question: why don’t more people plant them?

The green revolution began with seeds. By the early 1960s scientists had created dwarf varieties of rice and wheat, which put more of their energy into edible bits and did not topple over when fed with fertiliser.

Agricultural productivity duly took off in Asia and Latin America, making everybody richer. Douglas Gollin, an economist at Oxford University, and others estimated last year that a 10% increase in the share of land planted with high-yielding crops by the year 2000 is associated with 1015% growth in GDP per head. Maize, which is easier to hybridise than many crops, has steadily become

A OutBalkan with the betrayal Arab-style

China’s repression of Islam is spreading beyond Xinjiang Millions more Muslims are being targeted by the Communist Party

A

more productive in countries such as America and China (see chart).

Sub-Saharan Africa is decades behind. Some of its poorest countries, such as Chad and the Democratic Republic of Congo, scarcely have seed markets. Uganda has several seed producers and a president, Yoweri Museveni, who exhorts the wananchi (“common people”) to adopt modern farming practices. But it has a long way to go. Surveys five years ago revealed that only 21% of maize farmers and 15% of all crop farmers in the country used hybrid seeds.

Uganda’s wealthier neighbour, Kenya, ought to be doing much better. Hybrid maize seeds have been widely available there since the 1970s, and about three-quarters of farmers use them, according to the Tegemeo Institute in Nairobi, which conducts surveys. Kenya is also a leader in research. On a 200-hectare farm south-east of Nairobi, CIMMYT, an international institute, tests new strains in deliberately tough conditions. Thanks to a technique known as doubled haploid breeding, it can churn out new varieties quickly.

Yet Kenya is no Eden either. As its population has grown, crop farmers have moved onto parched soils that used to be seen as fit only for cattle ranching. Climate change may also be having an impact: three out of the past five years have been poor for maize.

Farmers are now being assailed by fall armyworm, a hungry caterpillar.

Gradual improvements in farming methods have not been enough to overcome these challenges. Like Uganda, Kenya awaits a proper green revolution.

In Kenya and many African countries supposedly high-yielding seeds do not always work. Emilia Tjernstrom of the University of Wisconsin in America has tested seeds bought from local dealers. On average only 76% of the seeds germinated and in some samples none did. Fake hybrid seed is widespread, says Mary Wangeci, an agricultural supplier in Machakos, near Nairobi. Clued-up farmers are gradually learning to scan the bar codes on seed packets with their phones to see if the product is genuine. Unfortunately, the neediest farmers are not so savvy.

And the commercial seeds on the market do not always produce bountiful harvests. Because scientists are always working on maize, new hybrids are generally better than old ones. Plants also need to be appropriate for local conditions, which vary more in Africa than in other parts of the world. But Kenya’s bestselling maize seed, known as 614, was released in 1986. And although it grows well in the rainy highlands, it fares poorly in the hotter, drier parts of the country.

Maize 614 is produced by a statecontrolled outfit, the Kenya Seed Company, which dominates the market.

It is cheaper than seeds produced by rival companies, partly because the government holds down its price.

Launching a competitor is difficult for other reasons. Getting approval is expensive and takes five years—“if you’re really sharp, four years”, says Saleem Esmael, who runs the Western Seed Company. The stringent trials that the government insists upon are supposed to protect small farmers, but the result is old, inferior seeds on the market. Stephen Mugo of CIMMYT compares the system to a bicycle with 100 padlocks—safe, but not useful.

Uganda has a less cumbersome approval process and a more open seed market. But its government still finds ways to meddle unhelpfully. In 2013 Mr Museveni launched “Operation Wealth Creation”,which involved troops distributing seeds, fruit trees and cows. By 2017 private companies were selling half of their maize seed to the government. It typically takes three seasons, or 18 months, to ramp up production; reputable growers could not keep up with the sudden surge in demand. Seeds reached farmers late, or grew badly. The government then cut its purchases just as suddenly as it had started them.

Companies were left with warehouses of seed they could not sell.

S DARKNESS BEGINS to settle on Duanjiaping village, a few men in white skullcaps head towards a large mosque. It is time for the Maghrib, the fourth of the five daily prayers of devout Muslims. It is clear even before they reach the building’s high yellow walls that all is not right. The prayer-hall’s four minarets, topped by golden crescent moons, are still a towering landmark.

But they are covered in scaffolding and green netting and they are not due for repair.

It is less than six years since hundreds of Muslim men gathered in the mosque’s courtyard to celebrate the completion of its new Arabstyle prayer hall. It had cost 9.8m yuan ($1.37m)—a tidy sum in a county that is officially classified as impoverished. The festivities had official blessing. The imam of one of the most important mosques in

Lanzhou, the provincial capital, was there. So, too, was a senior leader of the government-backed Islamic Association of China.

Much has changed. A chill political wind has been blowing over Duanjiaping and hundreds of other villages and towns in Linxia, a majority-Muslim prefecture in Gansu province, which borders on the Tibetan plateau and the far-western region of Xinjiang. Many villages in Linxia have at least one mosque, with minarets visible far and wide. The one with the scaffolding in Duanjiaping can accommodate 3,000 worshippers. Its grandeur is not unusual.

In recent decades rural communities in Linxia—China’s “little Mecca”, as it is often called—have vied to outdo each other in mosque-building. Now the government is not only reining them in, it is tightening controls on their faith as well.

The horrors of China’s campaign Continues on page 19

Monday 30 September 2019

BUSINESS DAY

19

In Association With

American politics

The promise and the perils of impeachment In America Nancy Pelosi has moved against President Donald Trump. It is not the moment to cheer

A

MERICA ALMOST didn’t have a president. The men who arrived at the constitutional convention in 1787 brought with them a horror of monarchy. Absent a figure of George Washington’s stature, the young country might have adopted a parliamentary system of government. Yet having created the office, the founders had to devise a way to remove presidents who abuse their positions—not all people are Washingtons. They defined the mechanism: an impeachment vote in the House, followed by a trial in the Senate. The question of what exactly a president should be impeached for—“treason, bribery or other high crimes and misdemeanours”—was deliberately left to Congress.

Hence, though impeachment is a constitutional provision, it is also a political campaign. That campaign began in earnest this week when Nancy Pelosi directed her Democratic colleagues in the House to begin impeachment hearings into President Donald Trump. This will not necessarily lead to impeachment. In the past, though, impeachment hearings have generated a momentum of their own. The process is fraught with risks on both sides. One thing seems certain: the process will further divide a country that is already set against itself.

Ms Pelosi has taken such a momentous step because she believes the president’s behaviour towards Ukraine’s government crossed a line. If that seems an obscure reason to contemplate unseating a president, remember that impeachment proceedings against Richard Nixon had their origins in an office burglary and the ones against Bill Clinton began with an affair with an intern.

Mr Trump appears to have let Ukraine’s government know that relations with America, including the supply of aid, depended on it pursuing an investigation into the family of a political rival—that would be more serious than a break-in or a fling. It would mean the president had subverted the national interest to pursue a political vendetta.

The federal government often gives foreign powers promises of aid in exchange for doing some-

thing that America wants them to do. The Ukraine case is different (see Briefing). America has an interest in ensuring that Ukraine is able to defend itself against Russian aggression, which is why Congress came up with a package of $391m in military aid for its newly elected government. Mr Trump acted against the national interest in putting that aid on hold, while pressing Volodymyr Zelensky, Ukraine’s president, to investigate Hunter Biden, who had business dealings in Ukraine and is the son of the Democratic front-runner, Joe Biden. If that were not clear enough, Mr Trump also sent his personal lawyer to meet an adviser to Mr Zelensky and repeat the message.

In a country as corrupt and vulnerable as Ukraine the link between American support and investigating the Bidens—you give us dirt on Joe and we’ll give you weapons and money—did not need to be explicit to be understood. “I also want to ensure you that we will be very serious about the case and will work on the investigation,” Mr Zelensky told Mr Trump in a call on July 25th.

You might have thought the Mueller investigation into his campaign’s dealings with Russia would have made Mr Trump wary of dallying with foreign governments. It seems not. His conduct looks a lot like bribery or extortion. And to use taxpayer funds and the might of the American state to pursue a political enemy would count as an abuse of power.

The founders wanted im-

peachment to be a practical option, not just a theoretical one.

Otherwise the president would be above the law, a monarch sitting on a throne for four or eight years.

Declining to impeach Mr Trump would set a precedent for future presidents: anything up to and including what the 45th president has done to date would be fair game. Republican partisans should consider to what depths a future Democratic president, thus emboldened, could stoop.

It would also signal to America’s allies and foes that snooping on Americans who are influential or might become so was a fine way to curry favour with a president. There would be no need for the dirt even to be true. Russia and China, are you listening?

Such are the risks of ducking impeachment. Yet the risks on the other side—of pressing forward—are great, too. Voters expect impeachment to be a last resort, not a trick by one party to remove a president from the other, or a means for the losers of an election to frustrate its result.

House Democrats risk looking self-indulgent as, rather than getting on with fixing infrastructure or health care, they obsess over the minutiae of internal White House communications. The hearings may spin out of control and make Democratic politicians seem ineffectual and obsessive, as the stonewalling testimony of a former Trump aide, Corey Lewandowski, did last week. The hearings may also be too confusing and rancorous for the public to follow.

Even if the House did decide to impeach Mr Trump, it is highly unlikely that he would be found guilty by the two-thirds majority needed in the Senate, where Republicans hold 53 of 100 seats.

Legally, Mr Biden junior’s sleazy dealings in Ukraine have no bearing on whether Mr Trump abused his office. Politically, though, the two are linked because they give Republican senators minded to defend Mr Trump a handy set of talking points.

A failed impeachment that leaves Mr Trump in office might not be much of a deterrent to this president or to a future one. In fact it might even help Mr Trump, who could argue that he had been found innocent after a partisan witchhunt by loser-Democrats. Until this week that was the calculus of Ms Pelosi and House Democrats from competitive districts. It is not clear that public opinion has yet shifted enough to change the equation. Though it may be bravado, Mr Trump’s campaign team has always insisted that the more Democrats talk about impeachment the better it is for the president’s chances of re-election in 2020.

Cast the die Faced with such a daunting choice, Ms Pelosi had until now held back. But Mr Trump appears to be becoming more brazen as re-election draws near.

The president’s behaviour needs investigating, with the extra authority that the impeachment process confers. Better, therefore, to lean towards principle than pragmatism. But it is a risky and perilous path.

China’s repression of Islam is spreading...

Continued from page 18

against Islam in Xinjiang are well known. About two years ago reports began to emerge of the building of a vast gulag there. Hundreds of thousands of ethnic Uighurs have been thrown into it—many simply for seeming too pious. There are about 10m Uighurs in China. But they form only about half of the country’s Muslim population. Linxia is home to more than 1.1m Muslims, mainly belonging to two ethnic groups: the Hui and the Dongxiang. There are Muslim communities scattered widely across the rest of China (see map). Most are made up of Huis. Because of Xinjiang’s history of separatism and terrorism, Uighurs are suffering by far the harshest clampdown experienced by any of these Muslim groups. Outside Xinjiang, however, other believers are starting to feel the effects, too.

The government’s attitude towards Muslims in the interior began to change in 2016 after China’s leader, Xi Jinping, set out plans for the “sinicisation” of the country’s religions.

Christianity and Islam, having strong overseas connections, became the main targets. Officials set out to purge them of foreign influences deemed threatening to the Communist Party. In the case of Islam the aim was partly to prevent the spread of radicalism and with it, terrorism.

Among Muslims elsewhere in China, however, there have been no reports of terrorist links. The Huis were once China’s model Muslims, quite unlike the Uighurs in Xinjiang who have chafed at Chinese rule for decades. A few Uighurs have occasionally used violence to vent their grievances. The Huis have no separatist ambitions. They claim descendancy from Arab and Persian traders who settled more than a millennium ago. After centuries of intermarriage they have become ethnically assimilated with Han Chinese, who make up more than 90% of the population.

Huis in Linxia have historically played an important role as middlemen in trade between Tibetan and Han communities. Many have grown rich by trading a Chinese medicine that is often used as an aphrodisiac, known as caterpillar fungus. It is harvested from the Tibetan hills. Linxia is home to one of the country’s biggest caterpillar-fungus wholesale markets; its traders are mostly Muslims.

20

Monday 30 September 2019

BUSINESS DAY

In Association With

Natty Nigerians

Why an “Uber for tailors” is gaining ground in Lagos Tech may help the stylish avoid sartorial sorrow

“R

ICH AND poor, everyone has a tailor here,” says Olajire Omikunle, a couturier for Nigeria’s powerful. So great is the appeal of a well-cut outfit in Lagos, Nigeria’s commercial centre, that roadside stitchers rove the streets armed with their sewing machines and clicking their large scissors to drum up customers.

David Peterside, a local entrepreneur, hopes to capitalise on this sartorial obsession with a new app that is being dubbed an “Uber for tailors”. Fashion Map allows natty Nigerians to find a suitmaker at the press of a button. It may be a perfect fit for Africa’s most populous country. Nigeria has a fast-growing base of smartphone users and “over 100,000 registered tailors”, says Otunba Wasiu Taiwo of the Nigeria Union of Tailors.

“We are still counting.”

In down-at-heel areas, like Oshodi, entire streets are filled with them, often just an elbow’s distance from one another. They

sew traditional caftan suits made of stiff Chinese-made wax print fabrics for 5,000 naira ($14). Poorer customers often take out loans to buy one. Well-heeled Nigerians can head to Mr Omikunle’s store, Magnum Stitches, in the upmarket

area of Lekki. He makes agbada robes and sokoto trousers of soft Swiss-made cotton for 250,000 naira. But many customers have tales of tailor despair, from bespoke clothes that are paid for but never delivered, to sleeves falling

off at the seams.

“Finding a tailor you trust is hard,” says Mr Omikunle. Fashion Map hopes to help by allowing its 3,000 customers to rate the 1,500 tailors using the app. The idea, says Mr Peterside, is “to build trust

between two strangers, someone who makes good clothes and someone who wants good clothes”.

Quality wrinkles aside, the future of Nigerian tailoring looks good. Because people love madeto-measure clothes it is hard for local e-commerce giants, such as Jumia and Konga, to penetrate the market with their ready-made garb.

Demand is being fuelled by an economic recovery: the IMF reckons GDP will expand by 2.3% this year, its fastest pace since Nigeria slumped into recession in 2016.

Euromonitor, a research group, forecasts that the country’s $1.2bn apparel industry will grow by 25% a year over the next four years.

The boom may tempt some tailors to cut corners with their cloth, making it even more important for Nigerians to take their measure.

“When you find a good tailor in Africa, you better keep it as if it was gold,” Mr Omikunle says.

This article appeared in the Middle East and Africa section of the print edition under the headline “The tailors of Lagos”

Le Bulldozer

Obituary: Jacques Chirac died on September 26th The former president of France was 86

F

ANS COULD praise his charm, wits and warmth (unlike most French politicians, he enjoyed hobnobbing with the voters, preferably over a beer in an unpretentious zinc-clad bar). He was successful too: mayor of Paris, twice prime minister and president from 1995 to 2007. But cynicism was his hallmark.

Abroad, he seemed to favour dictators over democrats. He told African strongmen not to worry about elections. He sold a nuclear reactor to Saddam Hussein’s Iraq.

A Russian-speaker (as a student, he translated Pushkin’s “Eugene Onegin”), he proudly counted Vladimir Putin as a personal friend and loathed the “badly brought up” east Europeans with their high-minded talk and Atlanticist outlook.

Where others had principles, he had prickles. A proud defender of the French language, he stormed out of a summit meeting when a French businessman dared to use English (he also said, only half-jokingly, that Britain’s deplorable cuisine made it inherently untrustworthy). Despite a happy student summer at Harvard, he bridled at America’s overweening ways, arguing for a

“multi-polar world” as a way to counter its post-war dominance.

Equally, he set up France 24 to rival the “Anglo-Saxon imperialism” of the BBC and CNN. At home, Jacques Chirac was better at campaigning that governing. His years in power bequeathed France higher unemployment, worse public finances and deeper social divisions. His disillusioned people lost faith both in the European ideal and largely in their own governing class—not least, in him. He won a second presidential term by a fluke landslide: a first-round upset meant that his opponent was a far-right leader, Jean-Marie Le Pen. The political establishment united against the rabble-rouser,

amid caustic slogans such as “Vote for the crook, not the fascist”. By the end of his ill-starred second term, Mr Chirac was the Fifth Republic’s most unpopular president (though François Hollande later beat that dismal record).

It was easy to see why. The country was suffering from what he himself admitted was a “profound malaise”, playing a humiliating second fiddle to a resurgent Germany in European politics.

His nadir came when he lay low for a week while rioting, shockingly, engulfed the big cities in 2005. He was prone to petulance and rudeness in official meetings, bore mammoth grudges, and took some spectacularly bad gambles, notably calling a parliamentary

election in 1997 which the opposition Socialists won easily.

Much of his energy was devoted to dodging impertinent questions, of which there were many. In his 18-year stint running Paris he bloated the city payroll (particularly with jobs for party workers). He threw huge, lavish parties for his supporters, while cultural notables and other influential friends gained chic municipal apartments.

The stink rose with him. Even the most world-weary could not shrug away the stories of bundles of cash, foreign bank accounts and murky quids pro quo. One puzzle was Japan: a keen Japanophile, Mr Chirac made dozens of private trips there. Nobody knew why. A son? A mistress? Perhaps both?

Or several? The indiscretions were scandalous. When Princess Diana died in a Paris car crash, his long-suffering wife Bernadette appeared alone at the morgue; the president was nowhere to be found. His chauffeur wrote a scabrously detailed book about the president’s energetic private life, for which he was dubbed: “trois minutes, douche comprise” (three minutes. shower included).

He was shamelessly unbothered about it. A favourite toast

was “Allons boire à nos femmes, à nos chevaux et à ceux qui les montent” (“Let us drink to our women, our horses and those who mount them”). For most of his misdeeds, loyal lieutenants took the rap. Prosecutors landed only one belated blow: in 2011 he was convicted of misconduct in office, with a suspended twoyear sentence (he declined to give evidence, pleading memory loss).

Monday 30 September 2019

BUSINESS DAY

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Monday 30 September 2019

BUSINESS DAY

COMPANIES & MARKETS

COMPANY NEWS ANALYSIS INSIGHT

MARKETS

Analysts see 2019’s African eurobond issuance falling short $28.4bn record level ISRAEL ODUBOLA & BUNMI BAILEY

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frican countries, just six of them, since January 2019 have raised $17.7 billion from Eurobond issuance, the second-largest on record. But chances are pretty high that total issuance in the continent by 2019-end may not surpass the all-time high of $28.4 billion seen last year.

Total African sovereign Eurobond issuance has been on the upward trend since 2016 when a combined $9.7 billion was raised. It almost doubled to $16.5 billion in 2017, rising further to $28.4 billion in 2018, according to data by emerging markets-focused investment bank, Renaissance Capital.

But analysts do not envisage an upward trend this year.

“It may not match up to 2018 level due to factors like trade tensions which could affect investment decisions by companies,” said Tosin Ayanfulu, a fixed income analyst at Lagos-based Zedcrest Capital.

According to Ayanfulu, slowing global growth and monetary accommodation of major central banks have prompted investors to adopt a wait-and-see approach because they are taking longterm decisions. “The possibility of a further cut in Feds rate will make them wait the

more.”

In the nine months through September 2019, Egypt, Benin Kenya, Ghana, Tunisia and South Africa issued foreign currency debt notes comprising a total $14.1 billion and £3.2 billion. So far, 21 African nations have issued sovereign Eurobonds in US dollars and euros, with maturities of about 30 years.

In 2018, a sizeable fraction of total issuance occurred in the first quarter largely due to dovish stance of most apex banks in developed economies at that time.

“The fourth quarter is historically dull for new issuances. We might not see more than two issuances in the next quarter” said Yinka

Ademuwagun, a research analyst at Lagos-based United Capital Plc. “Most African countries are already focusing on 2020 budget. It is in first quarter when a new administration starts and budget is passed that they will decide where to go to get funds.” Ademuwagun added.

On his part, Gbolahan Ologunro, a research analyst at Lagos-based CSL Stockbrokers, attributed the reduced Eurobond issuance among African nations do change in monetary policy stance of US central bank which has raised bets on further downward adjustments in global interest rates.

“Emerging markets might

be seeking to maximize the tapering of refinancing risk associated Eurobonds, given the moderation in global yields.

Hence they will prefer to hold off on further issuances to allow the US Feds continue with its ‘hawkish’ rate cut will enable them to issue Eurobonds at a lower cost compared to 2018,” he said.

After a strong rebound in the first half of 2019 from a harsh 2018 characterized by massive capital flows reversals from emerging markets, African Eurobonds market saw mixed performance in the third quarter, according to a report by Renaissance Capital.

The continent’s mostdeveloped economy, South Africa, issued a twin-tranche

$5 billion Eurobond towards the end of September, with $2 billion and $3 billion maturing in 2029 and 2049 respectively.

But better sentiment helped it borrow cheaper at 5.73 percent coupon (for September 2019) compared to the previous 30-year Eurobond issued last year at 6.30 percent.

Tunisia made way into the markets mid-July to issue 7-year £700 million at 6.38 percent coupon, more expensive than a similar amount of 7-year euros issued February 2017 at a coupon of 5.63 percent.

No Eurobond matured in full in the third quarter although South Africa and Kenya repaid Eurobonds in the first half of 2019, bringing

the number of African nations that settle obligations to 11.

A Eurobond is a special type of bond issued in a currency that is different from that of the country or market in which the bond is issued.

Private organizations, international syndicates and even governments who are in need of foreign currency borrowings for a specified duration find Eurobonds suitable for their needs.

While Rwanda, Cameroon, Morocco and South Africa did best with average yields dropping slightly as prices for their Eurobonds increased, Tunisia, Angola, Egypt, Ghana, Kenya, Nigeria and Namibia all saw their average yields increase.

Average yields of African Eurobonds have dropped to 6.1 percent by September from 7.6 percent. Also, the average additional premium gained for investing in African Eurobonds above risk-free assets like US treasury bonds rose by 50 basis points to 4.9% points of yield from 4.4% points.

Nigeria has not issued Eurobond since this year as it has showed preference for bilateral loans from international agencies. The last time the country raised dollardenominated debt notes was in November 2018 when it raised $2.8 billion to finance budget deficit.

OIL & GAS

Seplat pushes oil & gas index to biggest daily gain since 2015 OLUFIKAYO OWOEYE

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hares of major oil companies were heavily sought after on the nation’s bourse as bargain hunters take advantage of the relatively low prices of these stocks to increase their stake in the currently undervalued stocks for future growth and dividend.

The oil & gas index, an index that comprises the most capitalized and liquid companies in oil and gas marketing gained 6.43percent the highest recorded since April 2015.

Shares of Seplat, the most capitalised company in the oil & gas index recorded a 10percent gain (the highest possible gain in daily trading) two days in a row last week to close trad-

ing at N556.60 on Friday.

Seplat had earlier in the week announced the transfer of shares 8.16million shares held by Vitol Energy Limited back to Shebah BVI. Total another major player

also recorded 10 percent gain on Thursday it, however, recorded a 9.09percent gain on Friday to end trading for the week at N120.

Gbolahan Ologunro equity analyst said the recent

bullish sentiment is not driven by any fundamental factor adding that no major event has occurred to warrant a change in the outlook in the oil & gas space.

“It is not a broad-based

demand from investors which could mean renewed investors’ interest” he said.

In his view Fola Abimbola, equity research at FBN Quest noted the outlook for the crude oil prices is positive based on what is happening in the global market adding that it is also an opportunity for bargain hunting.

Moody’s, global rating agency said its outlook for integrated oil & gas companies globally for the coming 12 to 18 months remains stable.

According to Moody’s in its annual outlook report noted that the key driver of the stable outlook is an expected increase in earnings by around 5percent in 2020 driven by production increases and higher refining margins.

Sven Reinke, a Moody’s Senior Vice President said after two years in the black, free cash flow will fall to zero in 2019-20 driven by a combination of lower funds from operations (FFO), gradually rising capital investments and higher dividend payments.

“Production costs and capital spending are likely to tick up after bottoming out in 2018, but the sector will remain leaner and more capital efficient than it was before the 2015 oil price crash,” he said Investments in low-carbon energy businesses will continue to rise with Royal Dutch Shell Plc (Shell, Aa2 stable), Total S.A. (Aa3 positive), BP plc (A1 stable), Equinor ASA (Aa2 stable) and Repsol S.A. (Baa1 stable) leading the way.

Editor: LOLADE AKINMURELE (lolade.akinmurele@businessdayonline.com) Graphics: Samuel Iduh

Monday 30 September 2019

BUSINESS DAY

COMPANIES&MARKETS AVIATION

Air Peace begins flights to Warri

N IFEOMA OKEKE

igerian and West African largest carrier, Air Peace on Friday, Sept. 27, 2019 began flight operations from Lagos to Warri, in Delta State.

The airline’s inaugural flight which took off from the Murtala Muhammed Airport 2, Lagos touched down at the Osubi Airport, Warri at 11.15pm. The ERJ 145 aircraft piloted by Crosby Otobo and Senior First Officer Usman were welcomed with a water guard salute by fire-fighters stationed at the airport.

Allen Onyema, Air Peace Chief Executive Officer, who was represented by Adeyemi Ayodeji, Manager, Ground Operations, Air Peace, said

the move by the airline to extend its operations to Warri was part of the airline’s No City-Left-behind project, adding that Warri was the 16th city the airline was operating into in Nigeria.

“We want to assure our passengers that this is just the beginning. We have plans to introduce flights from Warri to Port Harcourt and also from Warri to Abuja, “ he said. Adeyemi said the airline operates to five regional locations in West Africa (Ghana, Liberia, Sierra Leone, Gambia and Senegal) and had on July 5, 2019, began flight operations to Sharjah- Dubai in the United Arab Emirates.”

According to him, Mumbai in India and Guangzhou, China will soon come on board as part of the airline’s

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expansion on the international routes with its fleet of B777 aircraft. He said the flight to Warri would be once daily and assured the Air Peace passengers of on-time departure and safety which were very key to the airline’s operations.

Receiving the airline’s officials were, Paul Erugbenu, Chairman, Osubi Community and Williams Eyarunu, the Community Secretary, thanked Air Peace for extending their operations to the airport.

Also, passengers onboard the inaugural flight who were gifted various items by Air Peace expressed delight with the development noting that it would make the route more competitive for the airlines thereby reducing airfares.

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Monday 30 September 2019

BUSINESS DAY

Monday 30 September 2019

BUSINESS DAY

25

BASIL AGBOARUMI

CEOINTERVIEW

MD/CEO, SAHCO

Interview with Private Sector Leaders

SAHCO has invested N8bn on equipment in 10 years - Agboarumi

Over the last ten years, Skyway Aviation Handling Company PLC (SAHCO), has gone from importing to locally building some of its equipment enlisted on the Nigeria Stock Exchange and acquired key international certifications to aid its operations. BASIL AGBOARUMI, MD/CEO, SAHCO tells BusinessDay’s IFOMA OKEKE, how the company is making these giant strides.

Can you tell us some of the activities you do in SAHCO? e are an aviation ground handling company and what it means is that we provide services in the area of ramp operations and by that we are talking about ramp handling services, where we provide equipment for aircraft on the ground. It means that every activity that the airline will need while it is packed at the apron is what we do.

The activities are numerous. We load the aircraft and by loading, it is not just loading in terms of passenger and cargo, we have a specialised service called the ‘Load Control’. Here we balance all the loads that go into the aircraft.

This is handled by only certified professionals.

If the load control officer has not given his load sheet to the pilot, the pilot cannot take off from the ground.

We have so many other equipment we provide to support the aircraft while it is on ground from passenger step to aircraft pushback, ground power unit and air-conditioner unit amongst many other equipment we provide. We also provide the passenger-handling services. When you get to the terminal building, most of the people you see at the checkin counter are staff of the ground handling company. We take charge of the passengers of airlines we have a contract with. We collect their luggage and drop it in the conveyor belt where you find our staff at the loading hall.

They pick the bags and load them into the aircraft. These are people that have been trained to offer these services.

After that point, we have the gate service, which is the final boarding point. When you are travelling, after you have left the boarding counter, you go in through the building and when an announcement of boarding is made, you see our staff at the gate again, where they finally check you into the aircraft.

We also have cargo handling services. Most times we call it the cargo handling and warehousing, under which you have mail and cargo.

Cargoes are those goods weighing more than luggage that could go through the cargo warehouse. They could come in as barely cargoes from passenger aircraft or they are freighted into the country by solely cargo aircraft. To offload or load a cargo aircraft, you need specialised equipment that is required from the high loaders and some other bigger loading machines. From there, we take them into the warehouse and get in touch with people that own the cargo.

We are a gate-way. When you talk about a gate-way, you are talking about maritime and aviation. The sea-port is where you have borders. We are a major gateway for the movement of passengers and goods, in terms of imports and exports. In summary, the three services we offer are called ramp handling, passenger handling, and cargo handling services.

Are there plans for you to diversify considering the economic downturn which is impacting on the airlines and the ground handling business?

Change is the only thing that is constant.

If you look at the way the world is going, from time to time, there are a modernisation of things. Even though the ramp has not really changed but the processes and procedures are changing. There are many things that are built

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around our businesses and we can always look for ways to provide these services and ensure that we improve on those services. There is no doubt that we are looking at engaging in certain things but until we are done with some processes, we cannot be selling them to the public. But we are looking at some areas where we need to expand and grow our businesses.

These are things connected to what we are doing at the moment.

You entered into Nigeria Stock Exchange, (NSE) about six months ago.What has been the experience since then? Has anything changed as a result of your enlisting in NSE? People go to the stock market for various reasons but people need to understand why we went to NSE because it is key for people to understand why SAHCO was listed on the NSE. If you go back to history, you will understand that SAHCO was at a time subsidiary of the liquidated Nigeria Airways, which was the national carrier then. When the Nigeria Airways was liquidated SAHCO was saved. SAHCO was doing well and made to stand alone, reporting to the Federal Ministry of Aviation.

But in 2009, the government saw the need to let SAHCO become privatised. So SAHCO was pushed forward for privatisation, alongside the SIFAX group of companies. When the company was handed over to the SIFAX group, there was a share purchase agreement that was signed then. That share purchase agreement stated that after a period of time, some percentage of the company will be sold to the Nigerian public. So, what we were just doing was obeying the share purchase agreement. You will understand that at the time we were going to the market, if we are to speak as business people, it was not the best of time. But as a company that prides itself to do business with a high level of integrity which is one of our core values, we felt we needed to honour that agreement. In honouring the agreement, we had to go to the stock market.

There is no doubt that we are learning quite a lot by going to the stock market. We are very new at the market but we have learned a lot, we have gone through a lot of training. To be in the stock market, you have to have integrity in your business. Yes, there are expectations and laid down rules. We are not strange to obeying regulations and rules. We are an IATA’s Safety Audit for Ground Operators (ISAGO) licensed organisation for so many years now. In 2010, we had our first ISAGO and ISAGO has to do with compliance operationally. Since 2010 till this time, we have had renewal for three to four times. Every time, we are getting better in our processes and procedures. This time around, going to the public through the NSE, we are going through another level of compliance, which has to do with compliance in terms of financial management, report writings and the likes. To the glory of God, we have not been doing badly on that. We have been submitting our reports as at when due.

What really sets you apart in your operations and what international certifications have you gotten to boost your operations?

Every establishment on earth deals with human beings whether directly or indirectly.

You can introduce machines or robots but humans are always key. One of our strengths is our people. They are the pride we have in this www.businessday.ng

organisation. We invest a lot in training our staff. We have been very fortunate as over the years, we have had investments and support from the time SIFAX Group took over the company. Most times, companies face problems of sufficient capital to invest in key areas but we have been very blessed in that area, even before we went public. This company was 100 percent owned by the SIFAX group through our chairman, Taiwo Olayinka Afolabi. He is a man with a very positive disposition. Even up till recently, we are celebrating a Nigerian in the person of Allen Onyama, chairman of Air Peace who took an aircraft and brought back stranded Nigerians from South Africa.

Taiwo Afolabi sees Nigerians with expertise outside the country, he invites them back into Nigeria and he employs them. He invested so much into this company and that is why SAHCOL was the first privatised company by the government that went public because of the way he nurtured the company. Before it was sold, no one had confidence in it but he was able to nurture it. Before the company was bought, the staff strength was less than 1,000 but as at today, we have over 1,500 staff.

Usually, when you privatise, you downsize but for SAHCO, we have increased staff strength.

For instance, I came in from the privatised company to become the managing director of SAHCO today by the grace of God. In terms of training, expertise, and equipment, we have it. From 2010 till today, we have had a massive deployment of equipment of

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various kinds. As at the time we were going public, we had invested in equipment worth over seven billion naira; this is between 2009 till 2018. Since we went public, we have spent another one billion naira in equipment. So in the last 10 years, we have spent eight billion naira on equipment. Last week, we had six full containers of equipment that came in and we are expecting three to come in soon.

There are so many other things we have done. For instance, we have built a warehouse from scratch. When SAHCO was handed over to SIFAX Group, the value of SAHCO was N5.52 billion but as at today, the value of SAHCO is about N17 billion. This is over three times higher than what it was. There were times we could barely count the number of airlines we had in the system. Now, new airlines are not just joining us but some leave competitors to us. Many of these airlines are European carriers and they are freighters.

Before you can ship a product from here to Europe, you must be EU Regulated Agent Third Country (RA3) certified. For Lagos, we have been RA3 certified for more than five years now. As I speak to you, we just did revalidation and we have signed it off. We have a transit warehouse. There are processes we are currently going through now and when we conclude that, it will mean that transit shipments can move through our warehouse. We are building a cold room facility there. SAHCO today has the right international certifications to do business. We are RA3 certified for Lagos,

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Abuja and Port Harcourt. We do those things in areas where we feel they are needed because it has to be done in places where there are shipments going to particular areas of the world.

RA3 is specifically for Europe. We are a member of the Airports Services Association, (ASA) an international association that brings together ground handling operators and operators within the airport.

Apart from RA3 certifications, are there other certifications you have to export to other continents apart from Europe?

We export to every part of the world; it is just that Europe require that special certification.

The United Kingdom is very careful of things that come into their system. Before having RA3 certification, there are things you must have on ground. We have some of the most modern scanning machines in our system. Recently, we expanded our export facility, making it more modern. We realised that export shipments are growing. Before Nigerian was configured to just import but recently, people are aware of export and suddenly we have seen an increase in export and we are stepping up to meet the demand. When the auditor got to our warehouse, she was surprised at what she saw.

We want to pride ourselves as people that do things in line with international best practices.

We said to ourselves in SAHCO that we want to have a culture of best practices and from that, we had to do a total mind reset of our staff. We consult the same manuals across the world so that when you come into our system, you will see that things are working. So, that is what is

endearing airlines to patronise us. We just installed two brand new scanning machines and we also increased the number of our Explosive Trace Detection (ETD) machines.

We don’t just want to be telling the stories and that is why I go round to get feedback from customers using the facility and I’m telling you, the feedback has been very amazing. The clients we offer services; especially exports services have been happy. For imports, it is no longer news that we have the best warehouse in West Africa. We ensure everyone is operating in line with the standard we have set in place. We cannot have Virgin Atlantic coming to us if we don’t have RA3. Virgin Atlantic released a statement telling the public why they moved and reasons were because they were expanding and they want their customers to have the best of services. We have some core European carriers like Air France/KLM moving to us as well.

We have a slogan that says ‘See something, say something, do something.’ We don’t just want to leave it at the point of seeing or saying but we also want to do. We want to do things that will impact and bring pride to our nation.

How many airlines do you currently handle?

We currently handle 22 airlines.

You have built equipment locally that is cost-effective. Apart from this saving you huge costs, what other advantages does this have on your operations?

I was in a conference in Casablanca and one of the people who work in one of the equipment manufacturing companies came to me and brought out the news on the equipment we built. She said we have become a competitor and I just laughed. We will have loved to reproduce. When you work on a piece of particular equipment for a period of time, there is that feeling to try your hands on certain things.

If we want to order equipment from outside the country, it will not take us less than 90 days to produce the equipment. This is just for production. The process of shipping the equipment from Europe, for instance, will take about 15 days to get to Nigeria. When it gets to the seaport, we can now start the process of clearing before you know, time is far spent. So, at a point, we felt we needed to produce locally.

The push came in from one of the equipment that we built for Port Harcourt. We had gotten one for Lagos and our team felt they could do it and they started the process and before you know it, the equipment was tested. We called some people that were using the equipment and they came to inspect and they did their certification. But this started from having a need. Even if we had the money and we needed to ship, the time in which we will place order takes months.

We don’t buy second-hand equipment. We go directly to the manufacturers, we place our orders and they will produce for us and when they are ready, they will ship. So, this time around we decided to do it ourselves because we have almost all the facilities. We have a welding department, volcanizing department, painting department, mechanical and electrical engineers amongst others. So, we have all that it takes. We source some of the materials locally and we started production and look at where we are today.

We have built fuel bouncer and baggage carts. From time to time, we felt that rather than placing orders, we needed to build our own. It www.businessday.ng

has helped us to save cost rather than going to source for foreign exchange. Sometimes we go through the same process to get foreign exchange like any other person. There was a time in Nigeria that it was difficult to source for foreign exchange and you know this business must go on. The idea came up when there was a recession in Nigeria. So, we had to think outside the box.

Data shows that exports are currently low, what are you as an operator in this space doing to improve this?

One of the first encouragements is to provide the facility. That was why we invested massively in our facilities recently. We increased the number of ETD machines in our export warehouse, which cost a lot of money. I have gone through some airports and you only see one despite the number of passengers they process.

Recently we had to invest massively in scanning machines. We have one of the most modern scanning machines which we just started using about two weeks ago. We just installed the new ones and dismantled the old ones. We are installing a massive freezer which is costing us quite a lot. If you want to export and the airlines do not want to take your exports because the facilities are not there, then there is a problem. So SAHCO invests on the right facilities.

There are some parts of the world where aircraft cannot go to carry cargo because the facilities are not there. We have invested hugely on cold rooms so that people that want to export perishables have the facilities there.

We have invested on our generators. In SAHCO, the light is on 24 hours because the cold room has to be on and running. We had to expand the packaging segment so that when exports come in they can package quickly before they move the cargo to the next stage.

We also support in training and enlightenment programmes for exporters. We have had the opportunity to talk with the government on the things that needed to be done because this is a holistic thing. First of all, we have to bring the products, we have to have the right products and it has to be products that can be accepted internationally. Before now, most of our yams are exported through Ghana, which is

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not supposed to be but recently, we have yams going through our facility outside the country.

Export is better than what it was. So, it is a continuous sensitisation, so people can have an understanding of what it takes. This is one business that can give you foreign exchange.

Are you currently charging airlines the right prices and if you are not, how do you think pricing can be addressed?

The truth is that we need to charge the right prices for the services that we render. We operate in aviation and in aviation safety is key.

There is nothing like Nigeria aviation services.

Aviation services are the same anywhere in the world. What we do here is monitored by International Air Transport Association (IATA) and that is why we are certified by IATA through the ISAGO process and the license is not forever.

Every three years, the audit will be repeated.

They will send people to go through all the processes to know if you can retain the license.

It is the international certifications we have that have kept us in business. It is so bad that if I am not certified, I cannot continue in the business. We buy equipment from Europe, America or the UK and the money is sourced in foreign exchange before we can buy equipment. Most of our training are also international based. Sometimes we arrange them in Nigeria by bringing resource people to train us here. Everyone that works here is certified.

Records of training are also checked and you cannot be one day behind. Safety starts from the ground and if you fail in safety on ground, you have failed in the sky. Aircraft are very expensive, so you have to be sure that the right people are people that go close to the aircraft in the first place. With all these efforts, we are given peanuts.

The ground handling companies in Nigeria are under-priced for the kind of services we render. It is not done like that in other climes. It has been like this in Nigeria over the years because we have been competing on price. This business is about safety first. Service is a better competition not on price. Based on media reports, we have been called by authorities to ask questions and I know that they are looking into it before they know how to address it. Every airline wants the best services and we must give best services in line with best practices.

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Monday 30 September 2019

BUSINESS DAY

COMPANIES&MARKETS

Business Event

OIL & GAS

11 Plc rewards customers with SUVs, motorcycles, cash prizes DIPO OLADEHINDE

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1 Plc, formerly Mobil Oil Nigeria Plc, has rewarded some of its loyal customers with various gifts, including cars, televisions, generating sets, motorcycle and tricycle popularly called Keke NAPEP, as well as other cash prizes.

At a well-attended event which was designed, not only to appreciate loyal customers across Nigeria’s six geopolitical zones, but also to draw attention to its products Mobil Super 1000 (XHP) and Mobil Super 2000 lubricant, the company also drew the attention of the public to the superior quality of Mobil Super 1000 (XHP) and Mobil Super 2000 lubricant, two of 11 Plc’s major lubricants delivered to Nigerians over the years.

Speaking to participants who were drawn from across the country, the Managing Director of 11 Plc, Adetunji Oyebanji, said, “Through this campaign, our customers have restated their commitment to the high-quality products that we offer them.

“We are proud of the success of the campaign as it has offered

us an opportunity to reward our growing number of customers; hopefully, we will sustain this campaign in the coming years,” Oyebanji said at the event.

The Mobil Super Peel and Win 2.0 also produced winners from; Kano, Abuja, Ibadan and Benin where winners carted away various gift items including motorcycles, tricycles, 40-inch TV sets, smartphones and cash prizes.

Manager, Lubricant Sales and Marketing at 11 Plc, Umesh Malik said 11plc have spared no effort at delivering quality products that are based on research and the needs of the market.

He added, “The Mobil ‘Peel and Win’ promotion is our way of rewarding those end-users that are loyal to the Mobil brand – end-users who have truly shown their loyalty to the brand.”

According to Malik, these categories of end-users include car owners, motorcycle and tricycle owners/riders, generator operators/owners, auto-repairers and mechanics.

Malik said the company remained committed to maintaining high standards of integrity, adherence to safety, health

and environmental standards in its business processes.

Two customers, Adewole Adeboboye and Oduwale Bashiru, won a brand-new car each, while Kayode Adebayo and Samsudeen Adesina got a tricycle and a motorcycle respectively.

Bola Ilori won a 40-inch TV set; Adebisi Gbenga, generator; Mojisola Oluwatoyin and Abogunrin Sunday, smartphones; and Aminu Abdulwasim received a cash prize.

“The company is a leader in the promotion and sharing of best practices in the downstream sector of Nigeria’s oil and gas industry,” Manager, Lubricant Sales and Marketing at 11 Plc said.

Among its peers in 2018, 11plc recorded the highest Return on Equity (ROE) among peers operating in Nigeria downstream sector.

What this means is that these firm are effective in turning the cash put into the business into greater gains and growth for the company and investors.

The higher the return on equity, the more efficient the company’s operations utilizes available funds.

L-R: Ifeoma Udoh, founder, Shecluded; Osaigbovo Omorogbe, divisional head, managed SMEs, Fidelity Bank plc; Jameelah Sharrieff-Ayedun, MD/CEO, CreditRegistry; Patrick Akhidenor, head, credit analysis and processing, retail public sector subsidiaries, First Bank; Sucex Bright, SME Clinic host, and Linda Ochugbua, digital sales manager, BusinessDay, at the BusinessDay SME Clinic in Lagos.

Pic by David Apara.

L-R: Kate Adesomoju, CEO, Spectrum; Innocent Idibia (2Face), brand ambassador, Oraimo, and Chidi Okonkwo, general manager, Transsion Holdings, at the unveiling of 2Face as ambassador of Oraimo in Lagos.

Pic by Olawale Amoo

ENERGY

Bhojsons Powerhub rolls out cost-effective power solutions for SMEs, corporates KELECHI EWUZIE

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igeria’s emerging power solution company Bhojsons Powerhub has introduced into the market Kirloskar Remote Management System (KRM) a new innovative feature technology to aid businesses achieve operational efficiency, costs reduction and productivity.

The company also introduce a new 1, 000 KVA range of Kirloskar Green Generator to meet the growing demand for higher capacity generators.

Rajneesh Gupta, Business Unit Head, Bhojsons PowerH says the newly introduced Kirloskar Remote Management (KRM) system offers a unique experience for users as it avails them the opportunity to realtime monitor the use of their generators anytime, anywhere and foresee issues to undertake preventive maintenance Gupta while speaking during the launch at the 2019 Power Nigeria Exhibition in Lagos said the KRM technology is a new unique innovation from Kirloskar Green, which gives users a winning edge by putting them in complete control of their generators.

Vishant Dalamal, managing director, Bhojsons Plc says the new range of Kirloskar generators with the KRM has complete monitoring panel that has been designed to enable customers view all critical indicators on either the laptop screen or their mobile with an added advantage of receiving alarms for critical parameters of their Kirloskar Generator.

Balaji Thiruvenkatam stated that KRM provides real time data of several critical parameters of the Generator that include fuel level, engine oil pressure, battery monitoring, engine speed, generator run hours, voltage usage and routine maintenance.

According to him, “The KRM technology gives necessary indication or signal to end users particularly when there is low fuel level, low lubricating oil pressure, fuel theft, engine speed, High Engine temperature and low/high battery voltage. It sends real time alerts to your maintenance team, as well as our Bhojsons care team, if configured, to address the issues before they become critical.

He revealed that the system would enable organizations especially large corporations

with large number of generating sets in different locations to monitor the usage, performance and health of their generators in one control room thereby ensuring efficiency, reducing costs and maximizing productivity.

On the newly launched 1,000 KVA range of Kirloskar Green Generators, Thiruvenkatam stated that the new range was designed to meet the yearnings of the customers obtained through deep customer feedback and market insights.

“It is easily adapted to any configuration, such as standalone, interlocked, synchronized or grid connected. It is also built on globally renowned design and has patented winding design that helps withstand operating harsh conditions. Apart from that, it is quick and has affordable door step service coverage”, he added.

Also speaking, the Service Manager, Bhojsons Care, Naveen Joshi mentioned that the company delivers 24x7 after sales service and support to its customers at their door step, emphasising that business has a Pan Nigeria service network coverage.

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L-R: Agboola Afolayan, deputy director, Standards, Standard Organisation of Nigeria (SON); Soromidayo George, corporate affairs and sustainable business director, Unilever PLC Ghana and Nigeria; Miranda Amachree, director, inspection and enforcement, National Environment Standards and Regulations Enforcement Agency (NESREA), and Bilikiss Adebiyi-Abiola, director-general, Lagos State Records and Archives Bureau, at the Plastic Waste Management Policy Workshop in Lagos.

L-R: Awele Ajibola, chief risk officer, FBN Quest Merchant Bank; Magnus Nnoka, President, Risk Management Association of Nigeria (RIMAN); Taiwo Okeowo, Deputy Managing Director, FBN Quest Merchant Bank; Kola Ajimoko 1st Vice President, RIMAN, and Victor Olannye, Executive Secretary RIMAN, during a Courtesy Visit by Executive Council of RIMAN to FBN Quest Merchant Bank in Lagos.

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This is MONEY

• Savings • Travel • Debt & Borrowing

A guide to your Personal Finance

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• Utilities • Managing your Tax

How to reproduce wealth creators in the midst of abundance The Solid Wealth Messenger

Grace Agada

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very parent hopes that one day their children will turn out to be wealth creators just like themselves. But hope is not a strategy especially when money is involved. The only way for parents to reproduce wealth creators in subsequent generation and prolong the longevity of their wealth beyond their lifetime is for parents to strategically create a viable family environment that support the development of a wealth creator. Children, who create wealth, manage wealth and steward existing wealth well and those who squander wealth do not just fall from the sky they are made, and the environment that makes them is the family environment. If this family environment has a limited supply of wealth, a child has the appropriate dose of pain it needs to develop into a wealth creator. However, if the family environment is surrounded by the trappings of wealth, it can fuel dysfunction and this is how spoiled children are made. Wealth Creators are a rare breed in subsequent generation, not because one is not born every day but because parent creates dysfunctional family environments and shield their children from real life pain that transforms potential wealth creators into dependent beneficiaries.

Wealth itself brings certain complexities to families and at certain levels of wealth parenting a child into a wealth creator becomes harder not easier. The only way to make the creation of wealth creators possible across subsequent generations is for parents to introduce into the lives of their children some of the pain factors that drove them to wealth Pain is critical for the development of a wealth creator. At certain levels of discomfort a person is naturally driven to strive towards wealth. Unfortunately, parents who created wealth from scratch are more prone to create a perfect family environment and life

for their children. However, what children seldom need to grow into wealth creators is a perfect and painless life devoid of hardship.

To reproduce wealth creators across subsequent generations’ parent must brace up for the hard work of resisting the temptation to buy their children happiness and success rather than let them earn it. Children can earn their own success even in the midst of wealth when the right structures are put in place.

Raising financially responsible children in the midst of abundant wealth especially within the traditional family system is almost an impossible feat. In most wealthy families, money is given away for free, loans are given without accountability, money is lost without consequences, safety nets are created to shield children from pain and money is bestowed rather than earned.

This creates dysfunctional family members who depend on existing wealth rather than create their own wealth. The more wealth is experienced within a family environment the more dependent children will be created.

To begin the process of turning things around, parents must begin to ask important questions like-Will giving my child the kind of life I did not have make it easier or harder for my child to succeed?, How do I make sure that wealth has a positive impact and not a negative impact on my child? How can I help my child learn some of the valuable lessons life has thought me?. Can raising a child in the midst of abundant wealth compound a child’s problem? And so on. Parents must redefine what it means to help their children without ruining them.

But how can parents reproduce wealth creators across subsequent generation-A Family Bank system is the answer.

A family bank is not a “bank” in the formal sense of it but a private financial system set up by families of means. In a Traditional family bank system parents or grandparents form a trust that designates a portion of the family’s wealth for the financial support of family members’. This type of traditional family bank system comes with a number of challenges.

First, it breeds beneficiaries rather than wealth creators. A beneficiary is someone (a child)

Objectives • Solid Wealth Creation • Solid Wealth Preservation www.businessday.ng

who derives benefits or advantages from the hard work of somebody else (the wealth creator.) In such traditional family bank systems children get financial support in exchange for nothing but for the fact that they are bloodline heirs of the wealth creator. Money bestowed this way cannot lead to the development of a wealth creator. To develop a wealth creator, parents must shift focus from the traditional family bank system to the new family bank system.

The new family bank system is focused on the development of a wealth creator. Unlike the traditional family bank system that dole out cash to beneficiaries, the new family bank system is designed to expose children to some of the real life situations that supported the growth and development of their parents.

Children under this new system learn how to create their own money, practice savings, learn about investing, and are held accountable for their financial decisions. Children also engage in collaborative activities with their siblings that help them acquire leadership, interpersonal, financial and entrepreneurship skills.

This new family bank system help to groom financially responsible, business savvy and leadership effective children across multiple generations. So rather than give children financial support for free as is evident in the traditional family bank system, financial support within the new family bank system is tied to a series of developmental activities that introduces hard work, delayed gratification, critical thinking, financial intelligence and the ability to work with other siblings in a way that foster stronger family bonds.

If parents have come to value money only because the crea-

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tion of wealth cost them a lot of sacrifice then, this is the only way children will also come to create a healthy value for money. If children must become responsible wealth creators, they must truly work hard and earn their own wealth. Earning their own wealth takes away the guilt of free money, makes them derive fulfillment from their own hard work, and helps them put the money to more productive use because their sense of value for money is improved.

Money that is beneficial is never bestowed. To perpetuate wealth within a family, the human beings in that family must be wealth creators and not beneficiaries. If these human beings are beneficiaries, wealth will ultimately dissipate. With the new family bank system parents can now integrate some of the life experiences that supported their own development as wealth creators into the lives of their children and reproduce their own kind across subsequent generations.

To get more information about our ‘Wealth Creator focused Family Bank System’ and how you can set one up for your family and create more financially responsible behavior in your children kindly text “Wealth Creator Family Bank” to 08101860042 to get started.

Raising children that are selfreliant, responsible and independent is seldom achieved by making free money abundantly available to them.

‘

A family bank is not a “bank” in the formal sense of it but a private financial system set up by families of means. In a Traditional family bank system parents or grandparents form a trust that designates a portion of the family’s wealth for the financial support of family members’

Grace Agada is a Senior Wealth Advisor and Author with extensive experience in wealth creation, wealth preservation and wealth transfer.

Email: info@createsolidwealth.com Tel: 08101860042

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Live @ The Exchanges Nigeria at 59: My observations about the Nigerian Stock Exchange ... Market in Resilience

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he Nigerian capital market and indeed many emerging markets have not fully recovered from negative risk-return relationship since the global financial crisis of 2007-2008. The financial crisis which instigated economic recession had at its formative year whipped off over one trillion United State’s Dollar from the world economy.

The Nigerian Stock Exchange is not insulated from the global economy. On January 1, 2008, its market capitalisation which stood at N10.18 trillion nosedive by 32 percent to N6.957 trillion. In the same vein, the measure of corporate earnings, All-Share Index, fell from 63, 016.60 in January to 31 450.78 at the close of the year. The market had earlier enjoyed unusual and unsustainable boom before the meltdown. However, the collateral damage to Return on Investment (ROI) afterwards should be blamed on the regulators, operators and investors themselves. The market had contended with several cases of huge amount, arising from unethical practices, involving high profile stockbroking

houses.

The market capitalisation and All-Share Index are currently far ahead of the early period of meltdown. But It has been a mixed grill in terms of ROI and the market has suffered more downswing than upswing.

It should be appreciated that a major drag to market rebound in Nigeria, compared to other emerging markets is unstable macroeconomic environment, nurtured by uncertainty in the political and economic space. The market has faithfully continued to serve as a barometer that gauges the economy. Nigeria’s economy is characterized by sluggish growth while insecurity and weak economic fundamentals, among others have further worsened the precarious nature of the market. This is not peculiar to Nigeria. Trade tension between the United States of America and China is taking tolls on the world economy.

This has dire effects on the operations of emerging markets. The emerging markets in which Nigeria is a member is characterized by high volatility and high returns while they provide diversification oppor-

Sola Oni

tunities for investors in developed markets. ...Hope on the Horizon There is hope on the horizon as many initiatives have been put in place to revive the market. For the first time in the history of the market, Nigerian Capital Market Master Plan has been put together by the Securities and Exchange Commission (SEC) primarily to conduct review by peer emerging markets to articulate strategies for global com-

petitiveness. There is a more effective and efficient regulatory approach with the deployment of Information and Communications Technology (ICT) by SEC and The Nigerian Stock Exchange to operationalize their services. Market monitoring, enforcement of rules and ease of exchange of information between the regulators and other stakeholders in the ecosystem have been upscaled. Unethical acts are treated with dispatch. The arrival of Lagos Commodity and Futures Exchange (LCFE) in addition to NASD Plc and FMDQ Exchange have further diversified the market.

They have created multiple sources of transaction for the

stakeholders in the capital market ecosystem. The future is bright. .....Challenges Ahead The federal government’s lethargic approach towards utilising the market remains the elephant in the house. The market is grossly undervalued across the board as investor apathy is deepened by the day.

But this provides a buy signal as market fundamentals remain strong. Investors are still apprehensive of macroeconomic instability and inclement operating environment.

This partly explained the prolonged downward trend on The Exchange. Aside from mega listing of MTN and a few others, there is abysmal dearth

eTranzact reports turnover growth of 59% in 2018

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espite the harsh business environment and declining consumer spending, eTranzact International Plc, Nigeria’s leading electronic and mobile payment processing company, grew its revenue by 59 percent in 2018.

The financial statement presented to the shareholders at its 15th Annual General Meeting (AGM) held in Lagos on Thursday shows that the company’s turnover increased from 11.68 billion naira in 2017 to 18.62 billion naira in 2018.

Speaking at the AGM, Chairman, Board of Directors of the company, Wole Abegunde, said eTranzact has entered into new strategic partnerships and created innovative products that would lead to even better performances in the coming years.

Abegunde said: “The Company fully understands the benefits of strategic alliances and the potential business opportunities these can create. We have fostered new relationships, enhanced and

deepened existing ones and explored newer opportunities within the ongoing associations with existing partners.

We are positive that our alliances will lead to improved performances in the years ahead” “We are poised and committed to being a regional leader in the medium-term and in the long term, a global leader in electronic and mobile payment industry. To this end, we will continue to deliver secure, cost effective and innovative electronic and mobile payment services that are compliant with globallyrecognised standards.”

According to him, the company’s product, PocketMoni was honoured as the Mobile Money Operator of the Year by the Central Bank of Nigeria (CBN) and the National Interbank Settlement System in 2018, will continue to adopt global best practices in its quest to become a leader in both regional and global markets.

The Chairman reinstated eTranzact’s unwavering comwww.businessday.ng

mitment to strong corporate governance policies and robust risk management framework, which he said are critical to delivering superior value to all stakeholders.

Its Chief Executive Officer, Niyi Toluwalope, noted that the unprecedented growth in revenue was driven by the growth in the public sector business, the deepening of its financial inclusion and innovative product offerings.

He added that the CBN’s renewed zeal to implement the cashless economy policy would help to consolidate the growth of the payment industry and that eTranzact would take advantage of it to showcase its exceptional solutions and deliver more value for its stakeholders.

“Organizations that are able to provide solutions that align with the lifestyle of the critical demographics of the society are the ones that will drive the next phase of growth in the industry. And eTranzact is very visible in that space,” he noted. https://www.facebook.com/businessdayng

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of new listing. Government is crowding out equity investors as monetary policy favours investment in fixed income.

The new Economic Advisory Council (EAC), headed by Professor Doyin Salami should conduct a clinical review all policies that impact on market growth and development for effective implementation. The Council’s engagement should be focused onhow to fix the economy with multiplier effects on global competitiveness of our market. The Nigerian capital market remains a major hub by which the country can serve as an investment destination.

Oni is CEO, Sofunix Investment and Communications

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Insurers float not enough to propel investment income Bala Augie

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stuttering economy characterized by stock market rout and low yield environment has prevented insurance float from translating into higher profit and increased investment returns.

Not all the money an insurance company accumulates are paid out immediately. Instead, they receive premium, invest the money, and then pay out claims as needed at some future date.

Therefore, the insurance float represents the available reserve or the amount of funds available for investment once the insurer has collected the premiums, but not yet obligated to pay out in claims.

This means the float is invested in stocks and bonds to generate returns that compensate for weak underwriting profit.

In his 2002 letter to shareholders, Warren Buffet, One of the richest men in the world, and Chairman Berkshire Hathaway, said that floats is the money we hold

but don’t own.

“In insurance operations, float arises because premiums are received before losses are paid, an interval that sometimes extends over many years,” said Buffet.

To understand what is going on, let’s return to a simple model. The moment policy holders pay insurers premium for indemnifying risk, that money has become a loan to these companies because not all customers will be involved in accidents or be hit by fire or flood at the same time.

“We generate premium but we are reluctant investing it because the economy is not doing well. Yields are falling

and stocks have been stumbling,” said Moronfola Monsuru, senior actuarial analyst at Wapic Insurance Plc “Some two to three years ago a lot companies were generating investment income that helped propel their profit before tax, but they are no more making money because the market turmoil and low yield environment,” said Monsuru.

The capital market is suffering from investor apathy as foreign investors have dumped Naira assets in search for riskless assets across the globe as the country’s economy continues to flatter.

Yields on short term securities, which hovered around 22 percent and 18 percent in 2017, now hovers between 13 percent and 14 percent.

The equity market has lost 11.95 percent since start of the year. The All Share Index opened at 31,430.5 points on January 2 and closed at 27,675.04 pts on Friday.

Insurers are reeling from huge underwriting losses caused by mounting claims, while margins are increasingly deteriorating, which validates NAICOM’s decision to jerk up minimum capital of insurers.

While the 17 largest insurers quoted on the bourse

recorded a 13.31 percent increase in investment income to N20.15 billion as at June 2019-18, it is below the 35.25 percent uptick in 2018-17.

The e combined net income dipped by 2.77 percent to N16.75 billion to N20.19 billion in June 2019.

Insurance index has pared 9.95 percent since January.

It opened at 126.48 pts and closed 113.89 pts.

“In insurance there has to a matching of assets and liabilities. General Business will invest their money in short term investment because they don’t want a situation where they are unable to settle claims as at when due,” said Jide Orimolade, former Managing director and CEO of Law Union and Rock Plc. “On the other hand, Life Business can lock their money in long term investment because they are in custody of funds belong to retirees. The investment person should look at the liability of the organization before putting money in either long or short term investment,” said Orimolade.

Gross domestic product expanded 1.94 percent in the three months through June

from a year earlier, according to a recent data from the National Bureau of Statistics (NBS). That compares with a revised expansion of 2.1 percent in the first quarter.

The insurance industry is beset by apathy towards insurance, poor regulations, and literacy, which is why its contribution to the economy is abysmally poor.

The country’s insurance penetration is 0.31 percent and density of $6.0 of capita That is abysmally poor when compared to South Africa’s penetration rate of 12.89 percent and density of $840; Namibia, ($390/7.25 percent); Morocco ($127/3.88 percent), and India ($74/$3.69).

Penetration rate is measured as the ratio of premium underwritten in a particular year to the GDP. Insurance density, on the other hand, is the ratio of insurance premium to the total population.

“A weak macro environment presents lower investment returns, would see low investment income at the end of 2019 as yields continue to drop,” said an industry expert, who didn’t want his name mentioned.

Verod Capital acquires Metropolitan Life Nigeria Modestus Anaesoronye

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erod Capital Management (Verod), a leading West African private equity firm, has received regulatory approvals for its acquisition of 100 percent of the shareholding of Metropolitan Life Insurance Nigeria Limited (Metropolitan Life Nigeria, or, the Company), from South African-based Momentum Metropolitan Holdings Limited, (Momentum Metropolitan, formerly MMI Holdings Limited). The transaction, for

an undisclosed amount, sees Momentum Metropolitan exit the Nigerian market, in line with its articulated Reset and Grow strategy.

The insurance sector in Nigeria as a whole is entering a new growth phase, with the recent announcement of increased minimum capital requirements by the industry regulator. This, in addition to various other initiatives being pursued by both regulators and industry participants, is expected to result in improved insurance penetration and performance in the sector. Having closely moni-

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tored these developments over the last several years, Verod sees significant opportunities within the sector and believes that this inflection point is the right time to enter the market and that Metropolitan Life Nigeria presents a solid platform for rapid growth.

“Low levels of insurance penetration, even compared to other African economies, point to untapped opportunities within the sector,” said Eric Idiahi, Partner at Verod, pointing out that, “NAICOM, the insurance regulator, has made concerted efforts to-

wards creating an enabling environment; we believe that these actions, in addition to product innovation supported by increased public awareness and investments in technology-driven distribution channels, are the triggers that this sector needs to close the insurance penetration gap”.

Metropolitan Life Nigeria is a life insurance company offering group life and credit life products to clients across the public and private spheres. Verod has plans for expansion and with their added expertise, anticipates

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growth in market-share in this sector.

Momentum Metropolitan has been a major shareholder in Metropolitan Life Nigeria for the past 12 years and has steered the Company through various phases of its growth trajectory. Over the last three years, as the sole shareholder in the Company, the Momentum Metropolitan led Board has made some bold decisions with respect to risk management, underwriting practices and claims process that have positioned the Company on the right footing for future growth.

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In 2017, Momentum Metropolitan announced its intention to initiate an ongoing review of its African footprint.

The company advanced this focus with the announcement of its Reset and Grow strategy in September 2018.

The strategy includes an increased focus on successfully growing the core businesses in South Africa, ongoing review of African operations, as well as delivering and enhancing shareholder value in the countries in Africa where Momentum Metropolitan will maintain a market presence.

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Insurance stakeholders identify legislation, mentorship as key in boosting women inclusiveness Modestus Anaesoronye

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onversation around women inclusiveness and increased presence in leadership positions in the insurance industry has received a boost with stakeholders pointing on the need for legislation as well as mentorship.

The stakeholders who gathered at the ‘Dive In the Festival’ for diversity and Inclusion in Insurance’ forum held in Lagos emphasized on the need to push a legislation like what is obtainable in the banking industry, that will make it mandatory to have a certain number of women in the board of insurance companies.

Also, it was agreed that there must be a conscious effort to mentor women, so that they can be prepared for such tasks, as corporate objective and goal of organisations should not be compromised for gender inclusiveness.

Dominic Christian, chairman of Inclusion Lloyd’s, and also Global chair of Aon Benfield who was the guest speaker at the forum said that Dive In festival was launched five years ago in London with the message that diversity and inclusion are good for business.

He said that the event has continued to offer opportunity to open conversations around topics such as gender equality, social mobility and cultural differences, physical and mental health and well-being.

“Since we launched in 2015, the festival message has spread across 4 continents and I am particularly proud to be invited to address you today, opening this milestone event in Lagos, the commercial heart of Nigeria - Africa’s leading economy and one that is full of potential, as a growth market for business services, and particularly insurance.”

Dominic noted that the Lagos event focuses on Empowering Women in Leadership, quoting the World Economic Forum, he said.

‘If you exclude 50 percent of the talent pool, no wonder you find yourself in a war

L-R: Dominic Christian, chairman of Inclusion Lloyd’s, and also Global chair of Aon Benfield; Egbe Oyegun-Adeoye, moderator of the event; Mary Alade, reinsurance solutions , Aon Benfied; Funmilayo Omokhodion, regional director, Africa Re Lagos Office; and Duncan Mukonyi, manager, underwriting and marketing, West Africa Regional office , Africa Re during the Dive In the Festival for diversity and Inclusion in Insurance held in Lagos

for talent. Gender is one of the most apparent signs of diversity – walk into any workplace and it is immediately apparent that there is a problem if the room is almost exclusively male.”

Egbe Oyegun-Adeoye, moderator of the event said the conversation at the event is the first of the series of conversations that need to happen.

What I found while preparing to host and facilitate the event is that the industry globally is making a very constructive effort to move forward around the diversity and inclusion.

“And so my words to regulators and legislators is that, they should borrow the best practices examples around them like in the financial services sector where banking industry has shown the way.

Oyegun-Adeoye said “They had a conversation around it and they got it done. I advise the insurance industry to have this conversation and get it done.”

“But bringing women into leadership positions is the first thing, giving them a voice is second and making sure that their voice has power and can be effective is the third thing. But they need to be brought in first because if you don’t bring them in, nothing can follow suit.

“So, I think there is definitely room for reform. We want to see more women leading insurance, and being on the Boards. And i think the conversations needs to be started to say how many women we need and what need to shift, she noted.

Dive In is a global movement in the insurance sector aimed at supporting the development of inclusive workplace cultures. Its mission is to enable people to achieve their potential by raising awareness of the business case and promoting positive action for diversity in all its forms. Since its birth in 2015, Dive In has grown exponentially, reaching global heights with events taking place in over 50 cities across 27 countries world-wide,

attracting more than 9,000 people.

Dive In promotes year-round best practice in diversity and inclusion with tools and advice that culminate in an annual festival in September. Events are hosted in insurance firms of all types and sizes, all around the world.

Funmilayo Omokhodion, regional director, Africa Re Lagos Office said getting into conversations around women inclusion in insurance industry is a welcome development.

May be, what we should do is to copy what the banks have done, they have a legislation that mandates board of every bank to have at least three women directors on their board.

“When you use legislation to drive women inclusion, it definitely yields result than pushing it only by moral suasion. It is a cultural thing, so it takes long time to sink into psychology and consciousness of those who currently cut the shot across, Omokhodion said She said, for me first is legislation, second is mentorship and this is where Professional Insurance Ladies Association (PILA) I think are doing a great job, mobilizing women in insurance, mentoring them and helping them grow in their career through training and empowerment.

Bekeme Masade - Olowola, CEO of CSRIn-Action, who was part of the Panel discussant said to break the barrier and assist women to leadership, there must be intention, strategy and commitment.

She noted on the importance of work place policy, advocacy and support women initiatives, stating that for everything in life there have to be intentionality so that strategy can be devised to drive it”.

Leadership must be convinced to buy into the idea through commitment for a good result to happen.

Yomi Badejo-Ogunsanya, managing director/CEO, CMC Connect who also was a member of the panel discussion identified the influence of culture and religion in women inclusinvess across all sectors of the economy.

He noted that this require reorientation of everyone involved including the men fold who should begin to have a new perception about women and accommodating.

Premium Pension rebrands, position to deliver stronger value to members Modestus Anaesoronye

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remium Pension, Nigeria’s fastest growing pension fund administrator, recently announced a major rebranding to better reflect the company’s evolved positioning as a futurefocused organisation, actively growing their members’ wealth so they can embrace their golden years.

The new look of the brand is a final step in a transformation that includes a revamped technology infrastructure designed to provide a ‘premium experience’ for its customers.

The re-launch event, which took place at the Civic Centre in Victoria Island Lagos, provided an opportunity for the brand to unveil its new logo and brand promise. The occasion afforded the audience a sneak preview of the about to be launched multi-stakeholder

app, which is set to revolutionize the pensions industry. Guests at the event were also updated on the recently introduced micro pension product, aimed at small business owners and the blue collar sector.

According to Umar Sanda Mairami, chief executive officer of the Company “The renewed and refreshed Premium Pension is a

delicate blend of the old and the new. Whilst we will continue to provide premium returns to our customers who have been with us over the years, we are conscious of the needs of the new generation and have designed products specifically for their lifestyle, to ensure they can look forward to and then enjoy their golden years” Alongside the logo unveil is an advertising campaign, which also features the brand’s new theme song, which is set to run across the country from the 26th of September 2019.

Kemi Oluwashina, executive director, Business Development South & Strategy said the company has raised the bar in the pension industry with the unveiling of the app and other giants strides, stressing that the app would give full access to customers of the company, who she referred as member’.

She implored the public to download the app and use it to interact with the firm, stressing that the app also has features that

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would help the firm’s retirement savings accounts holders update their data in line with the ongoing pension industry’s data recapturing exercise.

Premium Pensions is a leading pension fund administrator, that provides a wide range of financial services to a substantial and diversified client base that includes corporations, financial institutions, governments and individuals. Founded in 2005, the firm is headquartered in Abuja and maintains offices in major cities around the country.

Premium Pensions is a leading pension fund administrator, that provides a wide range of financial services to a substantial and diversified client base that includes corporations, financial institutions, governments and individuals.

Founded in 2005, the firm is headquartered in Abuja and maintains offices in major cities around the country.

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How 28-year-old Fowowe became CEO of 6 businesses ODINAKA ANUDU

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nly few young Nigerians can own six virile businesses at the age of 28.

Even before her 28th birthday, Omonike Fowowe had founded six companies cutting across real estate/ construction, jewellery, facility management, interior décor, talent and booking agency, as well as brand management.

She achieves all these through her EMR Group.

Originally from Osun State, Fowowe is an alumni of Airforce Primary School, Christ Redeemers’ Secondary School and Redeemers University where she completed primary, secondary and tertiary education respectively.

The entrepreneur was motivated to set up EMR Group because she knew that opportunities in the country had not been scratched.

“I saw that there was so much more that needed to be done,” she says.

“In my young eyes, there were so many opportunities that needed someone to fill and I thought, who else would do it if I chose not to,” she adds.

Fowowe was a very ambitious person right from primary school and she never envisaged working for anyone while in secondary school. For her, the National Youth Service Corps (NYSC) was also a huge drag.

This was why she founded EMR Group as soon as she concluded the service.

“I was convinced that if I put all my energy into building my own business, I would make a success of it. And that is the journey I am on, right now,”

she recalls.

Like every business, EMR Group has had its fair share of good and bad days. But overall, it has recorded more successes than failures.

“It has been net-positive so far,” Fowowe says. “And that is the part that excites me about

the possibilities of the future,” she adds.

She says it has been a learning experience all the way. For her, entrepreneurship is more useful in how it develops the personalities of entrepreneurs than how much income it is able to generate.

Which of the segments of EMR Group is most profitable? Fowowe responds that it is difficult to rate any as more lucrative than the other because each business has its own peculiarities. “In real estate or construction, for example, it would appear than one is making a lot of money, but at the same time, expenditure is very high,” she says.

“Marketing is very braintasking and time-consuming.

Interior décor has its own upsides and challenges. Today, you are chasing carpenter, tomorrow, painter, next week it could be the tiler. So every single business we have is lucrative for us,” she explains.

She points out that EMR Group needed to create multiple streams of income, especially after the economy crashed in early 2016.

So far, she has built a formidable brand in the properties industry in Lekki Phase 1 Lagos, Nigeria, providing a solution in that space.

“I remember asking my friend to lend me money to pay for my Corporate Affairs Commission registration after I was cheated by a another friend who had a registered company.

As of 2011, people weren’t comfortable paying for services to individuals. It must be through a company. So, I sat down one Sunday in the church and the pastor’s message seemed like it was just for me. I literally cried my eyes out listening to him speak. At the end of the service, I got up and decided to register EMR Limited,” she recalls.

Today, her bulk of investments is in real estate construction and refurbishing for rental.

Currently, she has the highest number of living and com-

mercial spaces in Lekki Phase 1.

She is also in the jewellery industry, investing a huge amount of money in her Emah Luxury.

“We have had to consider new markets and see how much we can apply to take advantage of existing opportunities in them,” she says.

Fowowe tells Start-Up Digest that eight years down the line, she is humbled each time she requests her group’s bank statement.

Currently, she has a young team of 40 full-time employees.

In most of the industries Fowowe has worked, she has had to deal mostly with men.

“So in managing them, I have learnt to treat them like an extension of our family,” she says.

“So I try to show genuine concern in matters that I can (because, most times, men do not talk about their problems) and ensure that there is clarity in terms of each person’s deliverables so we can all smile at the end of the day,” she notes.

The innovative entrepreneur also plans to deepen her imprint in some of the industries she plays by driving further geographical spread.

“We want to see EMRSpaces—our real estate rental business— in other major cities across the world, including New York, Accra, Dubai and London,” she says, underlining her ambition.

For her, the biggest challenge she faces is human resource quality.

“I wish I could scream it in capital letters. In Nigeria, I find that I am not alone. It is very difficult to find people that can do what they have promised to do and deliver to the quality you want,” she says, re-echoing the sentiments of other entrepreneurs.

Entrepreneurs urged to leverage networking for speedy growth GBEMI FAMINU

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aul Ayo Olugbade, managing director, Atlantic Exhibition, has urged entrepreneurs to engage in networking relationships, extending it to people beyond the shores of the country, in order to increase their chances of attaining prosperity.

“The Lagos Fashion Fair has been successful partly due to the relationship formed with foreign business partners,” he said.

Delivering his address of welcome at the 7th edition of the an-

nual Lagos Fashion Fair hosted

by Atlantic Exhibition, Olugbade said he was passionate about promoting the industry, adding that the objective of the fair has remained to create an enabling platform where creative Nigerian designers and fashion entrepreneurs could connect with international designers to showcase the beauty and creativity of both worlds through their designs and innovations “This year Fashion Fair also looks to celebrate Nigerian entrepreneurs who have mastered the art of fashion by using it to www.businessday.ng

make bold statements and create more value and versatility in their designs and brands,” he said.

He encouraged young entrepreneurs not to rely on government or lament over the current economic condition but to build the economy through their services.

On her part, Iyalode Alaba Lawson, former president of the National Association of Chambers of Commerce, Industry, Mines and Agriculture (NACCIMA), said networking was the bedrock of any economic improvement in any society.

Lawson, who was the chair-

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person at the event, said interaction among people would encourage progress and provide opportunities.

“When we interact with each other, definitely, we can make progress,” she said.

She advised participants at the exhibition, especially the entrepreneurs, to remain focused on the goal.

She said in an exhibition, people should be ready to learn, for knowledge is power and can be extended to other people. She commended the conveners of the fair, which she said was a plat@Businessdayng

form through which the economy could improve globally.

Kone épouse Maman Toure, Ivory Coast Ambassador to Nigeria, also present at the fair, said quality interaction would encourage unity among countries.

Funmi Ajibade, CEO of Fajib Couture, a participant at the event, said she was delighted to be there. Ajibade said she made vast sales from her readyto-wear collection and got a prospective international partner who was ready to engage in business partnership with her company.

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Monday 30 September 2019

BUSINESS DAY

START-UP DIGEST

Meet Onwuka, entrepreneur disrupting Nigeria’s fashion industry with technology JOSEPHINE OKOJIE

I

n 2017, Chy Onwuka quit her banking job to start Fabrics.

NG, a tech start-up focused on making quality fabric sourcing easier and accessible for businesses and creative individuals.

Chy was inspired to establish her business owing to the constant frustration experienced when shopping for fabrics.

She was prompted to set up a tech market platform where people can source and shop for fabrics and get them delivered to their choice locations.

“As a young female professional, the idea came after being constantly frustrated whenever I had to shop for fabrics or the popular asoebi,” she says.

“It was unbelievable that for a fashion-conscious nation such as Nigeria, there is no organised infrastructure for fabric sourcing and distribution. America alone has hundreds of structured online fabric stores,” she further says.

She adds that the markets for shopping fabrics in the country are disorganised with quality inconsistency and pricing issues stressful.

To change it for others, she established Fabrics.NG in 2017 to design a structured online fabric marketplace where all types of fabrics are being sold.

“Basically, Fabrics.NG is an ‘Amazon’ for fabrics. The idea is that within five minutes, you can find and order the fabric you need,” she discloses.

“We have 1000+ fabrics and up to 100 new fabric designs uploaded weekly. Fabric sourcing is now truly efficient and delivery is available worldwide,” she states.

The banker-turned-entrepreneur started her business small from her personal savings, from family and friends.

The business has expanded

LCCI introduces Africa Hall initiative for the 2019 LITF GBEMI FAMINU

T

he Lagos Chamber of Commerce and Industry (LCCI) has introduced the Africa Hall initiative to host African businessmen and women as part of the programme for the upcoming 2019 Lagos International Trade Fair.

Gabriel Idahosa, chairman, Trade Promotion Board, LCCI, said the objective of the Africa hall initiative is to bring exhibitors from African countries together in order to showcase their goods, services, arts, and crafts.

“We believe Africans must grow trade and investment among themselves. The LITF platform is a great opportunity to do this. Therefore, in pursuit of this objective, we will have the Africa special day at the fair,” he said.

On foreign participation, Idahosa said the LCCI has received interests from over 25 countries to participate in the 2019 LITF, adding that member states of the Economic Community of West African States (ECOWAS) like Benin Republic, Cameroon, Ghana, among others,

have expressed interest. He also said that the foreign exchange earnings received this year have surpassed the record of the previous year.

The trade fair has over 15 partners and sponsors, including the United Bank for Africa (UBA) as the headline partner and its official banking partner. Airtel Nigeria is the official telecommunications partner; Max. ng is the official on-demand motorbike hailing service partner of the fair, while the African Export-Import Bank (Afrexim Bank) is the pan African partner, among others.

Idahosa said that by the 2nd of October, the media center and customer care centers would be available in order to fully plan and prepare for the event.

Emphasising the major highlights of the fair, Idahosa, who is also the vice president of the LCCI, stated that the 2019 trade fair will be different but better than the previous years as its many sponsors and partners have taken it up to play innovative roles and as well encourage all the participants with various incentives.

Toyin Seriki, head, SME segment for Airtel, said www.businessday.ng

apart from providing fast and reliable internet connection at the fair, the micro, small and medium scale enterprises will also be given due attention as participants of the fair through the introduction of affordable internet plans to run their businesses.

Tony Anele, UBA’s group head, consumer and retail banking, said the bank will provide a discount of 20 percent on all its products and services for all the participants at the fair while helping participant MSMEs with business advisory services.

Anele said, “As the official funds manager for the trade fair, a branch will be available at the fair which will provide all the products and services the bank has to offer as well as simplifying payments with different currencies.”

The 2019 Lagos International Trade Fair will commence from Friday the 1st of November toand end on Sunday the 10th of November at the Tafawa Balewa Square Lagos in an exhibition space of about 40,000 square meters and 2,000 expected exhibitors out of which 200 are foreigners from about 16 countries.

since starting and has continued to grow its return on equity consistently. “Our growth & performance indicators are positive. Though we don’t currently share our figures publicly, we have done double digits in asset turnover ratio and consistently grown our return on equity,” she says.

Onwuka tells Start-Up-Digest that Fabrics.NG emerged winner of the 2019 African Women in Technology Pitch and is also a recipient of the 2018 She Leads Africa Accelerator programme.

The business currently has over four full-time employees.

“Our team is made up of a senior management team of four and several other junior level skilled & competent employees.”

The young entrepreneur says that she has a network of wholesale textile suppliers where she sources her raw materials from both locally and internationally.

Speaking on what the Fabrics.

NG is doing differently to remain in business, she says that the business is seeking collaboration with existing fashion brands across the country and continent.

“The bulk of our customers currently are fashion brands and apparel companies. Although we have other industries such as furniture & interiors, which source

their textiles needed for production from us, our major focus is on the fashion industry,” she says.

In evaluating the Nigerian fashion industry, she points out that despite the increase in global interest and demand for African textile, there is a need to address the numerous challenges in the industry for Nigeria to fully harness its potential.

Answering questions on the business expansion plans, she says Farbrics.NG plans to scale up its operation and fully integrate into textile production in the long run.

In the short run, the business plans to expand its product offerings and launch its digital printing unit to make it possible for designers to customise their own unique prints, she says.

On the challenges limiting the business, the young entrepreneur says that huge infrastructural gaps have remained the major challenge facing the business.

She calls on the Federal Government to provide the needed infrastructure for businesses to thrive.

On her advice to other entrepreneurs, she saya, “Build for the market.That disruptive idea might not be the solution your customers need at the moment. Listen and understand your customers’ needs.”

How IP rights can boost job creation, economy, by US Mission, ABC MICHAEL ANI

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he United States Mission in Nigeria has tasked the Federal Government to develop a strong legal framework that would protect the intellectual rights of citizens and businesses, saying it is essential for creating the needed employment and boosting economic growth.

In a two-day Intellectual Property (IP) Symposium entitled ‘the bane of counterfeit pharmaceuticals and piracy’, held by US Mission and American Business Council (ABC), including members of the private sector, last week, the US noted that there was a positive correlation between strong intellectual property rights and economic development.

“As Nigeria moves ahead with goals of diversifying and shifting to a knowledge-based economy, a strong intellectual property rights regime will help attract investment and protect Nigerian ideas and Nigerian businesses,” Kathleen FitzGibbon, U.S. Embassy Chargé d’affaires, said.

FitzGibbon urged stakeholders—government, consumers, and businesses— to join forces in ensuring the protection and enforcement of intellectual property rights.

Overtime, Nigeria has become a target destination and transit route for counterfeit and pirated goods, according

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to a report by global consulting firm, PricewaterhouseCoopers with the title ‘The impact of intellectual property infringement on business and the Nigerian economy’. Both foreign and local traders flood the market with cheap sub-standard fakes, while local manufacturers illegally imitate products of established brands.

The reasons for this widespread proliferation, PWC noted, include informal structure of the economy, corruption, outdated legislation, weak policy and enforcement mechanisms and lack of proper awareness on the dangers of consuming substandard and counterfeit products.

Stakeholders present at the symposium explained that strong IP rights would create an enabling environment for the innovation necessary for economic development. Unfortunately, Nigeria is home to one of the weakest intellectual property protection regimes, which hampers growth prospects of its economy.

They noted that IP violation hinders economic growth by discouraging investment, decreasing innovation, discouraging research and development, while diminishing financial benefits.

“A weak IP protection regime hinders foreign direct investment (FDI), innovation, R&D and technology transfer, which robs entrepreneurs of profits and could harm con@Businessdayng

sumers,” PWC noted in the report.

Adebambo Adewopo (SAN), a leading intellectual property scholar and the IP Chair at the Nigerian Institute of Advanced Legal Studies, said building strategic alliances within and outside the country is, therefore, critical, considering the global nature of digital technologies that are readily available to this formidable industry.

“In these alliances, Nigeria must seek to strengthen key institutions responsible for protecting IPRs and combating counterfeiting and piracy,” he said.

While Fani Fakeye, chairman, House of Representatives Committee on Commerce, explained that the House has over time pushed for the signing of Intellectual Property (IP) bill into law but has failed to get presidential assent.

“Under the President Muhammadu Buhari’s government, we have pushed to see that the IP bill is signed but the bill has received pushed backs from the executive on the back of lack of funds. However, we assure that we won’t relent until we see that the bill comes into law,” he said.

The symposium brought together a broad range of stakeholders including senior officials from Federal ministries, departments and agencies, legislators, lawyers, business, and technology leaders.

Monday 30 September 2019

BUSINESS DAY

REAL SECTOR WATCH

35

India’s dairy success provides perfect example for Nigeria Stories by ODINAKA ANUDU

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ndia’s milk production rose by 6.6 percent to 176.35 million tonnes in 2017/18, from 165.4 million tonnes in 2016/17.

Between February and April 2019, export of dairy products from India hit a five-year high of 152,736 tonnes, amounting to $404 million, according to the Agricultural & Processed Food Products Export Development Authority.

Exactly one year before, India had exported 86,913 tonnes dairy products valued at $260 million.

India is the world’s largest milk producer, with 21 percent of global production, followed by the United States of America, China, Pakistan and Brazil, according to Food and Agricultural Organisation (FAO).

But how did India attain this height and what can Nigeria learn from the South Asian country?

The FAO answered this question in a report authored by a dairy consultant Meeta Punjabi entitled ‘India: Increasing demand challenges the dairy sector’.

FAO said the phenomenal success is attributed to a Government initiative known as Operation Flood (1970–1996) and its intense focus on dairy development activities.

“In that initiative, rural milk shed areas were linked to urban markets through the development of a network of village cooperatives for procuring and marketing milk,” it said.

The FAO explained that milk production and productivity were enhanced by ensuring the availability of veterinary services, artificial insemination (AI), feed and farmer education.

“The investment paid off, promoting production gains of 4–5 percent per annum,” the report added.

The Operation Flood was done in three phases. In the first stage, which started in 1970 and ended in 1979, 18 of the country’s main milk sheds were connected to the consumers of Mumbai, Delhi, Chennai and Kolkata.

The total cost of this phase was Rs.116 crores. According to Agropedia, an online knowledge repository for information related to agricul-

ture in India, the main thrusts of the phase were commanding share of milk market and speeding up development of dairy animals especially in hinterlands.

The second phase started in 1981 and ended in 1985. During the phase, milk sheds were raised from 18 to 136, as 290 urban markets expanded the outlets for milk.

“By the end of 1985, a self-sustaining system of 43,000 village cooperatives with 42.5 lakh milk producers were covered,” Agropedia said.

It said that domestic milk powder production increased from 22,000 tons in the pre-project year to 140,000 tons by 1989—with all coming from dairies set up under Operation Flood.

In the third phase, which lasted between 1985 and 1996, dairy cooperatives expanded the infrastructure required to procure and market increasing volumes of milk.

“Veterinary first-aid health care services, feed and artificial insemination services for cooperative members were extended, along with intensified member education. It went with adding 30,000 new dairy cooperatives to the 42,000 existing societies organised during Phase II,” Agropedia added.

It pointed out that milk sheds peaked to 173 in 1988-89, with the numbers of women members and Women’s Dairy Cooperative Societies increasing significantly.

Nigeria has the National Livestock Transformation Plan, which

has the capacity to transform the country into a dairy giant. It is supposed to be implemented in phases, but Nigerians do not generally accept it owing to improper communication and mistrust for the Fulani.

“You should not be talking about cows when Fulani herdsmen are suspected to be killing people everywhere,” a farmer in Ondo State said.

Ibrahim Maigari Ahmadu, cofounder/chief executive of Livestock247.com, Nigeria’s first livestock online marketing and listing platform, told BusinessDay that the citizens must first appreciate that livestock business is a multi-billion industry.

“The cow does not understand Igbo, Hausa, Yoruba or Efik. Most livestock producers are looking for market. They want to get away from the shackles of middle-men; they want good margins,” he said.

There are, however, several lessons from India. First is that there was a proper education about livestock in India. Unlike in Nigeria where livestock business is dominated by Fulani ethnic group, Indians see it as another enterprise.

According to FOA, dairying in India is seen as part of the farming system, not a separate enterprise.

Feed is mostly residual from crops, whereas cow dung is important for manure. It is not entirely so in Nigeria, where farmers of other products see livestock as a separate enterprise.

There was a heavy investment in cross-bred animals in India.

The National Dairy Research Institute was established to pursue research and education in all aspects of dairying, including technology, microbiology, chemistry and animal husbandry. “Where is the research institute that will pioneer the Livestock Plan?” Oluwaseyi Odukoya, a market consultant, querried.

More so, there were subsidies and support for dairy firms to increase production. Government ensured strict regulation and provided subsidies for developing infrastructure for milk processing and testing.

The Clean Milk Production Programme, which is a centrally sponsored scheme being implemented by the State Department of Animal Husbandry, Dairying and Fisheries, was meant to ensure that milk met expected standards. Nigeria is not yet doing this.

Dairy cooperatives in Nigeria are not very strong, the way they are in India and most famers in India do not move their cows from one place to another. Farmers settle in places close to their homes and provide fodder for their cattle. Dairy firms maintained their own cows, with the linkage between manufacturers and farmers strong.

In Nigeria, dairy is still underdeveloped, meaning that government should create the environment and allow the private sector to drive the initiative, said analysts.

FrieslandCampina WAMCO is the only Nigerian maker that supports farmers by settling them in one place and providing incentives for them to grow. In turn, the Dutch firm gets raw milk from the farmers, paying them in the process.

Milk makers import raw milk, with local production put at 600,000 tonnes while demand is 1.3 million tonnes.

The Central Bank of Nigeria (CBN) recently said time was ripe to restrict milk importers from the foreign market to ensure high local input preference.

The Lagos Chamber of Commerce and Industry (LCCI), however, said the government was putting the cart before the horse.

The LCCI said the proposed restriction of milk from the foreign exchange market would hurt the

dairy industry and put over one million jobs in jeopardy, according to In a statement signed by Muda Yusuf, director-general of the LCCI, the chamber said the Nigerian economy is not ripe for the policy and argued that it is tantamount to a ban on importation of milk in whatever form as most banks would not process Form M for any product on the CBN forex exclusion list.

“We currently do not have dairy cows in the country,” the chamber said.

“The dominant milk producing system in Nigeria is the Fulani Nomadic System whose cows have a milk yield of less than two litres a day, whereas a good dairy cow will produce an average of 28 litres of milk per day over ten months. During peak lactation, a high yielding dairy cow can produce as high as 60 litres of milk per day,” it further said.

Nigerian cows have very low yield because of poor genetic composition, poor feeding practices and the laborious nomadic system of breeding, which should first be addressed.

The LCCI recommended robust incentives to attract investors to the supply chain in the dairy industry in line with the backward integration aspiration.

Average yield per cow in Nigeria is one litre per day, which is among the lowest in the world, findings show.

Other countries have done much better. The average milk yield per day from exotic/crossbred cows in India, United States, the Netherlands, Turkey, China and India is between 30 litres and 90 litres per cow per day, statistics shows.

Dairy products include milk, cheese and yoghurt, among others.

Euromonitor International said in September 2018 that cheese in Nigeria was dominated by Lactalis International Snc through its Président brand, widely available at key modern retailers, such as Shoprite and Spar.

FrieslandCampina WAMCO Nigeria led the drinking milk products in Nigeria by virtue of its ownership of the strong Peak brand, it said, adding that CHI Ltd led yoghurt and sour milk products in 2018.

Beyond manufacturing, Flour Mills supports R&D, capacity building

F

lour Mills Nigeria (FMN) Plc has reiterated its pledge to continue to support tertiary institutions in the country in the areas of technology, research and development (R&D) and human capacity development.

The company donated a bus, office furniture and laboratory equipment worth N60 million to the School of Technology, Yaba College of Technology for empowering of learning, skilled acquisition development and technology driven compliance.

This, according to FMN, is in line with its core belief that technology and education are the future of Nigeria and that there is need for higher

institutions in Nigeria to be well equipped with modern technology so as to create a conducive environment for learning practical that will make students self-employed in future by garnering the right skilled acquisition at schools.

Paul Gbededo, group managing director, FMN Plc, made these donations at the 2019 Annual Lecture/ Exhibition/Fund raising of the School of Technology, Yaba College of Technology in Yaba over the weekend, where he pledged the company’s unwavering support to contribute to the development of educational sector in the country by partnering with higher institutions in the areas of technology, research and development to boost www.businessday.ng

Nigeria’s industrialisation aspiration.

Gbededo, who was represented at the event by Adebayo Olalekan Adebekun, corporate services manager, FMN, explained that the company is doing a lot for the tertiary institutions in Nigeria because of its belief in technology and R&D in solving the country’s economic challenges, which is the key to the future of Nigeria’s industrialisation.

Gbededo stated that FMN has been supporting infrastructure development in many tertiary institutions in the country, including Yaba Tech, to ensure that the right education is given to the students, who are the leaders of tomorrow, to enable them prepare for the solution of the country’s problems

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with the right technology tools.

“Flour Mills believes so much in Nigerian education. It is not only in Yaba Tech that we support infrastructure and technology, we equally support some other higher institutions in Nigeria, to make learning conducive for the students because we know that technology and education is our future in Nigeria and FMN is happy to invest in this project by partnering with schools of learning. So, we are doing all that we can do by empowering technology, research and development in higher institutions just like what you have seen today at Yaba Tech, also, at the University of Ibadan and so many other institutions, where we are involved in. We @Businessdayng

believe so much in education. We believe so much in technology and we will do all that we can within our resources to support our educational sector,” Gbededo explained.

“Flour Mills today is donating a brand new Toyota Hiace bus costing us about N20 million. We are also donating some furniture to equip the classrooms, the staff offices and staff quarters. We are also equipping some of their Labs. We are also looking at how to boost some of their infrastructure because definitely the institution needs help and we will do all that we can within our resources.

So we should be looking at between N50 million to N60 million by the time we are through with it.”

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Monday 30 September 2019

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REAL SECTOR WATCH

Greenville banks on FG support to supply gas, power to industries, Nigerians ...Minister assures support to help Nigerians get power ODINAKA ANUDU

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reenville Liquefied Natural Gas (LNG) Limited is banking on the support of the Federal Government to supply gas to industries and provide LNG to Kaduna Power Plant.

Speaking during the visit of Jedy Agba, minister of state for power, at Greenville’s $500 million facility at Rumuji, Rivers State, weekend, Eddy Van Den Broeke, chairman of Greenville, said with Federal Government support, the company can supply gas to companies in Kano,Kaduna, Sokoto and other parts of the country.

“Everybody complains that there is no electricity.

But this facility can be replicated three times in different places,” he said.

He said the company was absolutely ready to supply LNG to Kaduna Power Plant, assuring that Train 1 would be available in November while Train 2 would be ready by end of January 2020.

Van Den Broeke, who has been in Nigeria for 25 years, said Greenville could help develop several industries across the country, especially those in the north, through its gas and power.

Greenville has invested hugely in its quest to pro-

Greenville LNG customer site at Dufil Prima Foods, Port Harcourt

vide gas-to-power solution to Nigerians. But the company needs patronage and is willing to supply LNG to Kaduna Power Plant. It also provides gas to firms to enable them stay afloat and reduce ballooning energy costs.

“Our relationship with the community where we operate is good,” the chairman said, when asked about Greenville’s relationship with the Rumuji community and its environs.

“Once we are in full speed, we will talk details with the community,” he assured.

Greenville’s $500 million plant at Rumuji, Rivers State, has the capacity to produce 2,250 tons every day and

750 million tons annually.

The oil & gas firm has an arrangement with the Federal Government since 2014 to supply LNG to Kaduna Power Plant.

While speaking, Jedy Agba, minister of state for power, said he was satisfied with what he saw at Greenville facility. He said what he saw was an impressive effort by a company to power Nigerians.

“I am sure the Federal Government will be interested,” he assured.

He said the plant was capable of supplying the needs of Kaduna Power Plant, stressing that it would

be a good business once Kaduna Power Plant deal with Greenville was done.

“The plan of the Federal Government is to make power available for every Nigerian,” he said.

“If it is within my power, I will facilitate gas to Kaduna Power Plant,” he said.

He assured investors that Greenville is a viable facility and has the capacity to supply the needs of Nigerians.

Ritu Sahajwalla, managing director, Greenville, said the company was humbled that the minister had chosen to visit the facility.

“We are humbled that someone is looking to see how this facility can supply

gas to industries. We are glad that the minister has seen this,” she said.

She pointed out that the company already had customers it supplied gas directly to, but stressed that the company was looking forward to Kaduna Power Plant.

So far, Greenville has taken LNG to manufacturers to cut their production costs and improve efficiency.

A number of Industries in Sagamu, Lagos and the northern Nigeria are already connected to Greenville’s environmentallyfriendly, clean and clear energy, with Dufil Prima Foods, makers of Indomie noodles, being the latest beneficiary.

“What we need in Nigeria is more industrialisation, more jobs and more s k i l l s, a n d n ow p ow e r will not be an issue when it comes to starting any company,” Sahajwalla said at the commissioning of Greenville customer location at Dufil Prima Foods in Port Harcourt.

“We have 2,250 tons of LNG and we will expand more to supply LNG to 250 megawatts (MW)-capacity Kaduna Power Plant in the north,” she further said.

“We have almost concluded. Kick-off depends on the completion of the power plant. We have everything

needed to start. Nigeria can have 250MW in six months,” she explained.

Nigerian manufacturers spend 40 percent of their expenditure on alternative energy sources. A number of them use Low-Pour Fuel Oil (LPFO), which is much expensive and environmentally-unfriendly.

According to a survey conducted by the Manufactiurers Association of Nigeria (MAN), expenditure on alternative energy sources totalled N93.1 billion in 2018, eating deep into the margins of the producers.

Sahajwalla had said that LNG was cost-effective and environmentally-friendly, stressing that it was the catalyst to Nigeria’s industrialisation and growth.

“One truck can produce five megawatts. That is why I said from now Nigeria can have more pipelines and more stable power plants.

This project comes very handy in terms of new industries and the strength of industries. From now to the next four or five years, industries are developing and the pipeline will be coming,” she said.

Industries are seeking ways of cutting production costs as they battle with multiple taxation, low consumer purchasing power and poor access to funding.

Unicane Industries to complete second phase of plant expansion by Q2 2020 HOPE MOSES-ASHIKE

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igeria will finally attain sufficiency in ethanol production as Unicane Industries Limited, Lokoja, announces the completion of plant expansion by the second quarter of next year.

Upon completion, Unicane, a subsidiary of the country’s pioneer and leading ethanol producer, Unikem Industries Limited, will produce 400,000 litres of Extra Neutral Alcohol (ENA) per day.

According to a statement by an executive director of Unicane Industries Limited, Uzor Kalu, the industrial group, whose presence in Nigeria exceeds nine decades, has continuously led and defined the ethanol industry,

by investing tens of billions of naira in plant and machinery, built capacity and evolved from import reprocessing to upstream integration of local sourcing of raw materials of cas-

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sava, cashew apples and sugar cane molasses.

The executive director said that in 2013, Unicane acquired an expanse of land in Jamata Village, an uncharted area of Lokoja

Local Government of Kogi State, to set up a state-ofthe-art local cassava fermentation-to-distillation plant with 400,000 litres per day capacity of ENA from 100 per cent local raw

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materials.

Kalu stated that this huge industrial development, which commenced its first phase of production in 2018, has quickly revolutionised cassava farming in Kogi State and its environs, turning cassava from a mere subsistence crop to a lucrative cash crop providing tremendous economic power to the farmers, a feat which resonates highly with the Federal Government’s policy drive to deepen the agricultural sector for improved national economic gains.

He listed other great benefits of the development to include import substitution, foreign exchange savings, thousands of direct and support employment opportunities @Businessdayng

and government revenue generation.

He stated that when Unicane’s ENA output of 400,000 litres per day are added in the Q2 of 2020, the group will achieve a combined daily ENA output of 700,000 litres, which will translate into an annual capacity of 210 million litres in bulk and packaged drums with a product quality that compares with the highest international standards.

Combined with the production of other locally based manufacturers, Kalu stated that total national ENA capacity will far exceed national consumption, eliminating the need for ethanol imports in Nigeria, and indeed feed exports to other African countries.w

Monday 30 September 2019

BUSINESS DAY

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Monday 30 September 2019

BUSINESS DAY Harvard Business Review

MONDAYMORNING

In association with

Why asking for advice is more effective than asking for feedback JAEWON YOON, HAYLEY BLUNDEN, ARIELLA KRISTAL AND ASHLEY WHILLANS

Y

ou just gave a great first pitch to a major client and landed an invitation to pitch to their senior leaders. Now you want a second opinion on your presentation to see if there’s anything you can improve.

Conventional wisdom says you should ask your colleagues for feedback.

However, research suggests that feedback often has no (or even a negative) impact on our performance. The feedback we receive is often too vague — it fails to highlight what we can improve

on, or how to improve.

Our latest research suggests a better approach. Across four experiments — including a field test conducted in

an executive education classroom — we found that people received more effective input when they asked for advice rather than feedback.

In one study, we asked 200 people to offer input on a job application letter for a tutoring position, written by one of their peers. Some people were

asked to provide this input in the form of “feedback,” while others were asked to provide “advice.” Those who provided feedback tended to give vague, generally praising comments.

In fact, compared with those asked to give feedback, those asked to provide “advice” suggested 34% more areas of improvement and 56% more ways to improve. As it turns out, feedback is often associated with evaluation. In contrast, when asked to provide advice, people focus less on evaluation and more on possible future actions.

Organizations are full of opportunities to learn from peers, colleagues and clients. Despite its preva-

lence, asking for feedback is often an ineffective strategy for promoting growth and learning. Our work suggests this is because when givers focus too much on evaluating past actions, they fail to provide tangible recommendations for future ones. How can we overcome this barrier? By asking our peers, clients, colleagues and bosses for advice instead.

(Jaewon Yoon and Hayley Blunden are doctoral students in the organizational behavior program at the Harvard Business School, where Ariella Kristal is a doctoral candidate and Ashley Whillans is an assistant professor.)

Yes, employers do value liberal arts degrees LYNN PASQUERELLA

I

t’s no secret that American higher education is under siege, with public confidence in the entire system in rapid decline.

However, it is not enough to decry the skeptics of higher education as misguided. Instead, those of us in academia need to respond to their overarching concerns that higher education is too expensive and too difficult to access, and doesn’t teach people 21st-century skills.

This call to action was part of the impetus behind the Association of American Colleges and Universities’ most recent round of employer research, “Fulfilling the American Dream: Liberal Education and the Future

of Work.”

The survey found that business executives and hiring managers expressed greater confidence in colleges and universities than the American public does.

Sixty-three percent not-

ed having either “a lot of confidence” or “a great deal of confidence” in American higher education. Business executives (82%) and hiring managers (75%) also agree upon the value of college, maintaining that it is an

essential and worthwhile investment of time and money. Both groups cited the benefits of the accumulation of knowledge, the development of critical and analytical skills and the ability to focus on a goal — in this case,

earning a degree — as being especially meaningful.

Employers overwhelmingly endorse broad learning and crosscutting skills as the best preparation for long-term career success. The college learning outcomes they rate as most important are oral communication, critical thinking, ethical judgment, working effectively in teams, written communication and the real-world application of skills and knowledge.

Internships and apprenticeships were deemed particularly valuable, with 93% of executives and 94% of hiring managers indicating that they would be more likely to hire a recent graduate who has held an internship or apprentice-

(C) (2017) Harvard Business Review. Distributed by New York Times Syndicate

Make this summer your best one ever With any of our FirstBank cards, you can enjoy a flexible summer in over 200 countries worldwide Visit any FirstBank branch for the issuance of your Summer Cards

ship with a company or organization.

A student’s undergraduate experience, and how well the experience advances critical learning outcomes (knowledge of human cultures and the physical and natural world, intellectual and practical skills, personal and social responsibility, integrative and applied learning), is what matters most, with 80% of employers agreeing that all students need a strong foundation in the liberal arts and sciences. Indeed, in the global knowledge economy, employer demand for graduates with a liberal education is growing.

(Lynn Pasquerella is president of the Association of American Colleges and Universities.)

Monday 30 September 2019

Harvard Business Review

BUSINESS DAY

MONDAYMORNING

39

In association with

Automation isn’t about to make truckers obsolete MAURY GITTLEMAN AND KRISTEN MONACO

H

ardly a day goes by without someone suggesting that technologies like AI, machine learning and robotics will transform the 21stcentury labor market. A prominent example of this has been in truck driving. But in looking at the data, we believe that, while the risk of job loss from automation is very real, the projections that often get touted are overstated. We argue that there are three key reasons why: TRUCK DRIVERS DO MORE THAN DRIVE TRUCKS. Truck drivers perform all kinds of tasks, from checking vehicles and securing cargo to maintaining logs and providing customer service. Many of these tasks are nowhere close to being automatable. And while some tasks are closer to automation — for example, checking for unbalanced loads, low tires and other safety problems can be performed by sensors — dealing with any issues still requires human intervention.

FULL AUTOMATION IS FAR INTO THE FUTURE. In our study, we based our employment projections on the introduction of level 4 automation, a high-automation environment that assumes the system controls driving and monitoring in some, but not all, operating conditions. Level 5 automation, which requires the system to perform all driving and monitoring activities in all conditions, is not currently be-

ing tested in practice, and level 3 automation, which requires human intervention as the system backup, does not really threaten drivers’ jobs.

Several companies are developing level 4 automation for autonomous trucks. Most of this development is focused on automating the long-haul/ interstate portion of a truck trip, not short haul or local truck moves. According to our computations, roughly one-quarter

of all heavy trucks are used in long hauls of 201 miles or more.

Given that truck automation is currently targeted at these longer hauls, we are looking at potential job losses for roughly one-quarter of heavy truck drivers, or about 450,000 drivers.

THERE AREN’T AS MANY TRUCK DRIVERS IN THE U.S. AS PEOPLE THINK. Though a number of articles assert that there are roughly 3 million truck drivers in the Unit-

ed States, in reality the number is smaller. There are also operational and regulatory obstacles that may get in the way of level 4 technology being implemented quickly. Another challenge is that interstate trucking is a complex affair involving multiple parties. What all of these factors make clear is that we’re not going to see losses of millions of heavy truck driving jobs anytime soon.

But while the numbers are not as dire as some headlines suggest, truck driving is already experiencing significant challenges, due to business cycle fluctuations, increasingly complex supply chains and changing workforce demographics.

This makes it all the more important for us to have an accurate understanding of the challenges facing the industry over the next decade, including those posed by automation.

(Maury Gittleman is a research economist at the Bureau of Labor Statistics, where Kristen Monaco is an associate commissioner.)

Quantifying the cost of Brexit uncertainty WALTER FRICK

nificant.)

These figures align with recent headlines.

It’s an important takeaway for both businesses and politicians. While pulling back from global trade can cause significant economic harm, including lower productivity and less immigration, the way this is carried out matters, too.

M

ore than three years after the referendum, businesses still don’t know what the outcome of Brexit negotiations will be, which means they’re bracing for an impossibly wide range of possibilities, on everything from terms of trade with Europe to immigration rules to domestic regulation.

Economic theory predicts that when firms face a highly uncertain future, they have an incentive to delay investment and hiring and put off other decisions. And two new studies suggest that this is exactly what’s been happening in the U.K. over the past three years, resulting in substantial harm to its economy.

(Walter Frick is the deputy editor of HBR.org.)

To measure the impact Brexit has had on the U.K. economy so far, economists from Stanford, the Bank of England, the University of Nottingham and the London School of Economics asked more than 7,000 U.K.based executives how Brexit has affected their companies.

Their most recent working

paper, published in August, links these survey answers to data on companies’ performance. The higher executives ranked Brexit as a source of uncertainty, the less their business had grown since the referendum.

“Anticipation of Brexit is estimated to have gradually

reduced investment by about 11% over the three years following the June 2016 vote,” the researchers write. They also estimate that productivity in the U.K. has decreased by between 2% and 5%. (They estimate that Brexit has had a negative effect on employment, too, but this effect was not statistically sig-

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Monday 30 September 2019

BUSINESS DAY

Access Bank Rateswatch Market Analysis and Outlook: September 27– October 4, 2019

KEY MACROECONOMIC INDICATORS GDP Growth (%)

1.94

Q2 2019 — lower by 0.16% compared to 2.10% in Q1 2019

Broad Money Supply (N’ trillion)

35.68

Increased by 1.88% in July’ 2019 from N35.02 trillion in Jun’ 2019

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

24.27 2.00

Decreased by 1.93% in July’ 2019 from N24.75 trillion in Jun’ 2019 Decreased by 0.55% in July’ 2019 from N2.01 trillion in Jun’ 2019

nflation rate (%) (y-o-y)

11.02

Decreased to 11.02% in August 2019 from 11.08% in July 2019

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

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

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

42.36 62.16 1.87

September 20, 2019 figure — a decrease of 2.31% from September start September 26, 2019 figure— a decrease of 4.25% from the previous wk August 2019 figure — a decrease of 4.8% from July 2019 figure

COMMODITIES MARKET

STOCK MARKET Indicators

Friday

Friday

Change(%)

27/09/19

20/09/19

NSE ASI Market Cap(N’tr)

27,675.04 13.47

27,698.69 13.48

(0.09) (0.09)

Volume (bn)

0.19

0.18

5.48

Value (N’bn)

2.13

5.92

(64.07)

MONEY MARKET NIBOR Tenor

Global Economy In the US, consumer confidence fell sharply in September, a likely indication that growing economic uncertainties are taking a toll on American households. The Conference Board, a business research group, said that its consumer confidence index fell to 125.1 in September from a revised August reading of 134.2. Consumers' assessments of both current economic conditions and expectations for the next six months slipped. Consumer spending, which accounts for about 70% of U.S. economic activity, has so far shielded the economy from some of the adverse effects of tariff and trade tensions. In a separate development, the government of India announced a fiscal stimulus package in an effort to spur investment and boost growth in the country's faltering economy. According to the Finance Minister, the corporate tax rate on domestic companies was cut to 22% from 30% in a bid to boost investment. New companies (formed after 1 October 2019) will pay only 15% tax.

However, the effect will be limited as the majority of small and medium enterprises in India do not pay tax in any event. Elsewhere, the Bank of England (BoE) kept the main interest unchanged and the extent of the asset purchasing programme as is. With continued Brexit uncertainty, the statement by the BoE was unclear on the future path of monetary policy, highlighting that “In the event of a no-deal Brexit the monetary policy response would not be automatic and could be in either direction”.

Friday Rate (%)

Friday Rate (%)

Change (Basis Point)

Indicators

27/09/19

1-week Change

YTD Change

Crude Oil $/bbl) Natural Gas ($/MMBtu) Agriculture Cocoa ($/MT) Coffee ($/lb.)

Cotton ($/lb.)

Sugar ($/lb.)

Wheat ($/bu.)

Metals Gold ($/t oz.)

Silver ($/t oz.)

Copper ($/lb.)

62.16 2.43

(%) (4.25) (4.71)

(%) (3.57) (20.48)

2484.00 101.75 59.73 12.67 487.50

0.77 2.57 (1.61) 5.15 (0.46)

28.31 (21.85) (22.93) (17.35) 12.46

1506.70 17.83 257.85

0.18 (0.34) (1.53)

14.36 3.72 (21.34)

27/09/19

20/09/19

OBB

9.29

6.43

286.0

NIGERIAN INTERBANK TREASURY BILLS TRUE YIELDS

O/N CALL 30 Days

8.43 9.19 13.16

7.57 14.20 13.30

86 (501.3) (13)

Tenor

90 Days

13.69

13.44

25.1

1 Mnth 3 Mnths 6 Mnths

12.37 12.67 12.96

12.28 12.24 13.12

10 43 (15)

9 Mnths 12 Mnths

14.39 15.15

14.53 15.30

(14) (16)

FOREIGN EXCHANGE MARKET Market

Friday

Friday

1 Month

(N/$)

(N/$)

Rate (N/$)

27/09/19

20/09/19

27/08/19

Official (N) Inter-Bank (N)

306.95 362.02

306.90 362.39

307.00 362.88

BDC (N) Parallel (N)

0.00 360.00

0.00 360.00

0.00 360.00

Friday

ACCESS BANK NIGERIAN GOV’T BOND INDEX

Indicators

Friday

AVERAGE YIELDS (%)

Friday (%)

Change (Basis Point)

27/09/19

20/09/19

3-Year 5-Year

0.00 14.38

0.00 14.46

0.0 (7.4)

7-Year 10-Year 20-Year

14.30 14.29 14.43

14.34 14.21 14.45

(4.2) 8.3 (2.2)

30-Year

14.57

14.45

12

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

(Basis Point)

20/09/19

Friday

(%)

Friday

Change

(%)

27/09/19

BOND MARKET Tenor

Friday

(%)

Change

(%)

(Basis Point)

27/09/19

20/09/19

Index

2968.12

2969.50

(0.05)

Mkt Cap Gross (N'tr) Mkt Cap Net (N'tr)

9.01 5.71

9.01 5.73

(0.04) (0.33)

YTD return (%) YTD return (%)(US $)

20.83 -34.98

20.89 -34.90

(0.06) (0.08)

TREASURY BILLS (MATURITIES) Tenor

Amount (N' million)

91 Day 182 Day

3,000.00 8,385.20

11.1 11.75

19-Sep-2019 19-Sep-2019

364 Day

168,361.35

13.3

19-Sep-2019

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

Rate(%)

Date

Domestic Economy Data by the National Bureau of Statistics (NBS), revealed that the Federation Accounts Allocation Committee (FAAC) disbursed the sum of N769.53 billion among Federal, States and Local Governments in August 2019 from the revenue generated in July 2019. The amount distributed was from the statutory account, value added tax (VAT) and exchange gain differences comprising of N607.37 billion, N94.16billion and N999.99 million respectively. A breakdown of the sum disbursed among the three tiers, revealed that the Federal Government received N299.80 billion, states received N190.38 billion and the local governments received N143.57 billion. The oil producing states received N51.63 billion as the 13% derivation fund. Revenue generating agencies such as Nigeria Customs Service (NCS), Federal Inland Revenue Service (FIRS) and Department of Petroleum Resources (DPR) received N5.70bn, N11.14bn and N5.02bn respectively as cost of revenue collections. In a separate development, the Manufacturing Purchasing Managers' Index (PMI) stood at 57.7 index points in September 2019. This indicates an expansion in the manufacturing sector for the twenty-ninth consecutive month. The index grew at a slightly lower pace when compared to the previous month (57.9 points). This was shown in the latest PMI report by the Central Bank of Nigeria. A PMI above 50 points indicates that the manufacturing sector is generally expanding, while a reading below 50 points indicates a contraction. Thirteen of the sub-sectors surveyed recorded growth during the month, while the paper products subsector recorded decline in the period under review. Elsewhere, businesses expressed optimism on Nigeria's macro economy in September 2019 according to the Central Bank of Nigeria (CBN) monthly Business Expectations Survey (BES). The macroeconomy index came in at 26.7 points for the month of September. The businesses outlook for September 2019 showed more confidence on the macro economy at 59.0 index points. The respondent firms were made up of small, medium and large organisations covering both import- and export-oriented businesses. The positive outlook by businesses in September 2019, according to the report, was driven by the opinion of respondents from the following sectors: services (14.2 points), industrial (9.7 points), wholesale/retail trade (2.1 points) and construction (0.6 points) sectors. The surveyed firms listed insufficient power supply, high interest rate, unfavourable economic climate, unclear economic laws, financial problems, insufficient demand and unfavourable political

climate as the major factors constraining business activity in the reference month.

Stock Market Bearish Sentiments prevailed again on the bourse last week as the all share index declined compared to the prior week. The All Share Index (ASI) shed 0.09% to 27,675.04 points from 27,698.69 points the preceding week. Similarly, market capitalization lost 0.09% to N13.47 trillion from N11.48 trillion the prior week. The negative performance seen in the gauges of market performance reflected intense sell pressure on bellwether counters. This week, we anticipate the equities market will sustain a negative outing as investors continue to tread cautiously.

Money Market Cost of borrowing went up slightly due to Retail Secondary Market Intervention Sales (SMIS) auction and Bond Auction debit. Short-dated placements such as Open Buy Back (OBB) and Over Night (O/N) rates climbed to 9.29% and 8.43% from 6.43% and 7.57% respectively the previous week. 90- day Nigeria Three Month Interbank Rate (Nibor) climbed to 13.69% from 13.44% the prior week. This week, rates are expected to trend lower due to Open Market Operation(OMO) and Primary Market Auction (PMA) maturity of N730 million.

Foreign Exchange Market The naira recorded mixed performance against the greenback at the different market segments last week. At the NAFEX window the local currency witnessed an appreciation of 37 kobo to close at N362.02/$. while, at the official market, naira depreciated to N306.95/$, a 5 kobo depreciation from the prior week. The parallel market remained unchanged at N360/$. The relative stability of the local currency continues to be supported by the intervention of the apex Bank across various market segments This week, we envisage the stability in the market would continue due to consistent FX liquidity injections by the CBN. Bond Market Yields in the bond market notched higher due to the bond auction that held last week. Yields on the ten-, twenty- and thirty-year debt papers closed higher at 14.29%, 14.43% and 14.57% from 14.21%, 14.35% and 14.45% respectively the previous week. The Access Bank Bond index declined by 1.38 points to finish at 2,968.12 points from 2,969.50 points the previous week. This week, we anticipate a pickup in demand as improved yields might force buying interest.

Commodities Oil prices dropped last week after U.S. crude inventories unexpectedly rose and on worries that demand could fall after U.S. President Donald Trump's comments about trade talks with China.

U.S. crude inventories unexpectedly rose 2.4 million barrels last week according to the Energy Information Administration. Bonny light, Nigeria's benchmark oil crude dipped $2.76, or 4.25%, to $64.92 a barrel. In contrast, precious metals prices edged up on global slowdown fears and tensions in the Middle East. Gold climbed to $1,506.70 an ounce, up 0.18% from the previous week's price, while the silver settled lower at $17.83 per ounce, compared to the preceding week's close of $17.89 per ounce. This week, oil prices might fall further as Saudi Arabia has agreed to a partial ceasefire in Yemen so the drone attack would be halted. For precious metals, safe-haven demand, underpinned by monetary policy easing in Advanced Economies' central banks, will sustain prices.

MONTHLY MACRO ECONOMIC FORECASTS Variables

Sept’19

Oct’19

363

362

363

Inflation Rate (%)

11.2

11.2

11.5

Crude Oil Price (US$/Barrel)

67

68

68

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

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Nov’19

Exchange Rate (Interbank) (N/$)

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Monday 30 September 2019

BUSINESS DAY

MARKETS INTELLIGENCE

41

Supported by Asset Management Corporation of Nigeria (AMCON)

Stocks

Currencies

Commodities

Rates + Bonds

Economics

Funds

Week Ahead

Watchlist

Once darling Nigeria consumer stocks turn sour as demand cools BALA AUGIE

O

ver a decade ago, consumer goods companies were the stock market bet as investors had forecast that the country’s rising middle class and young population would spur growth. But the consumption slowdown is robbing the sheen off these shares.

The NSE 10 consumer goods index, which comprise of the most capitalized and liquid firms- has fallen since the start of the year. And some of the biggest names have recorded sharp drop in earnings for the first time in 3 years.

Nigeria’s consumption engine is sputtering as the cash crunch caused by a floundering economy has hurt spending even as firms hiked the price of products in 2017 to compensate for rising costs. But it is difficult to shift such costs to already beleaguered consumers, who are not ready to open the purse spring.

Each sub sector of the industry has its own unique challenges. For instance, the beer makers are struggling with lower real income that weighted on spending on alcoholic beverages, while the new excise duties on alcohol introduced by the Federal Government in 2018 has compounded their woes.

Dangote Sugar said in a confer-

ence call last month that recurring menace of smuggled sugar remains a severe concern for the growth prospects of the producer of the sweetener. In addition, the Apapa gridlock continues to impact distribu-

tion network thus increasing the lead time for product deliveries.

Analysts at Chapel Hill Denham Limited don’t expect Unilever Nigeria to beat their full year 2019 estimate, and they reviewed their forecasts of

the company downwards.

Customers are not paying their debts on time, which means credit sales are mounting, while other receivables have continued to rise, hence undermining cash flows.

The cumulative operating cash flow from operations for the 10 largest firms quoted on the floor of the bourse fell by 26.27 pecent to N69.42 billion in June 2019 from N94.15 billion the previous year.

The industry high price to earnings ratio is problematic, which mean they are overvalued, and investing in them could be very risky.

The largest consumer goods firms are trading at a price to earnings ratio of 24.75 times, while Honeywell, Nigerian Breweries, and P z Cussons price to earnings ratio of 110.47 times, 28.89 times, and 27.84 times are above the industry benchmark.

Unilever, Guinness, Cadbury, and Nestle Nigeria are trading at price to earnings of 17.58, 13.77, and 10.21, respectively.

However, Dangote Sugar and Nascon Allied, bucked the trend as they have attractive valuations. The former trades at 6.39 times earnings while the latter, 9.68 times, an entry point for investors that crave for value stocks. Analysts say investors will only be attracted to a stock when the economic fundamentals are benign, but the Nigerian economy has been stuttering, as GDP expanded by 1.94 percent in the second quarter, lower than the 2.10 percent growth in the first quarter.

Dangote Flour, Cornerstone Insurance, Thomas Wyatt best stocks since January Ifeanyi John

A

s investors await the prospective acquisition by Olam, Dangote Flour, subsidiary of Dangote Industries Limited, leads the Nigerian equities market in returns as the manufacturing giant has tripled its market value over the last 9 months.

A Dangote Flour investor in January would have purchased a share at N6.85 at the beginning of the year and 9 months after, his investment would have appreciated by 224.09 percent as the company’s stock price closed at N22.2 on Friday.

Other than the Flour manufacturer, Cornerstone Insurance and Thomas Wyatt complete the top three companies with the highest return since January. Cornerstone Insurance has recorded a 130.00 percent as the share price has risen

from N0.2 in January to N0.42 at the end of Friday’s trading session to come in second to Dangote Flour.

Thomas Wyatt completes the top three with a 65.22 percent gain

year to date.

Obinna Uzoma, Chief Economist at EUA Intelligence explained that, “A market rise is expedient for CornerStone Insurance owing to

a vote of confidence by investors who anticipate a decent financial performance next year. The company’s willingness to maintain the recapitalization requirement has bolstered investor confidence and the market is appreciating of the fact.”

B.O.C Gases was the fourth best performer recording gains of 45.37 percent YTD, while MTN (39.39%), John Holt (38.64%), Caverton Offshore (25.00%), Union Bank (25.00%), Lafarge Wapco (20.48%), Trans-nationwide (18.46%) complete the top ten best performers.

The Nigerian stock market breadth of 0.24 since the beginning of the year reiterates the bearish perception towards Nigerian companies. Market breadth is used in technical analysis to gauge the general direction of the stock market based on all traded stocks.

Continues on page 42

P.E

SHORT TAKES 57.7 index points Manufacturing purchasing manager index (MPI) in the month of September 2019 stood at 57.7 index points, indicating expansion in the sector for the twenty-sixth consecutive months. 13 of the 14 sub-sectors including transportation equipment and electrical equipment reported growth in the review month. Production level, new orders, supplier delivery time, employment and raw material inventories PMIs printed at 58.5, 57.2, 58.4, 56.6 and 58.1 index points respectively.

2.9% The Organization for Economic Cooperation and Development said in its latest global outlook that the global economy risked entering a new, lasting low-growth phase if governments continue to dither over how to respond. The international agency said that the global economy will see its weakest growth since 2008-09 financial crises this year, slowing from 3.6% last year to 2.9% this year before a predicted 3% in 2020.

11.02% Nigeria’s measure of composite changes in the prices of consumer goods and services purchased by households slowed by 11.02 percent on a year-on-year basis in August 2019 from 11.08 percent in July, according to data released by the National Bureau of Statistics (NBS). The August headline inflation, which is the lowest since January 2016, was driven by sustained moderation in the sub-indices that track price changes of food items and all other items.

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

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

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Monday 30 September 2019

BUSINESS DAY

MARKETS INTELLIGENCE

Investors could be paying the same amount to acquire Oando or Seplat BALA AUGIE

T

he theoretical takeover value of the largest upstream oil and gas firms are nearly at par with each other.

The enterprise value of Seplat Petroleum Development Company Plc is N257.03 billion, while Oando Nigeria Plc’s theoretical value is N235.26 billion, but the amount could grate due to movement in share price and working capital.

The analysis should give shareholders an idea of their companies are worth on the face value, so as not to be bamboozled by valuers and stockbrokers.

The enterprise value of a company

est together, and then deducting the cash and cash equivalents obtained from the balance sheet.

Seplat’s market capitalization as at 27th of September was N282.51

can be ideally defined as an amount that represents the entire cost of the company in case some investor intends to acquire 100% of it.

The formula for enterprise value is computed by adding the company’s market capitalization, preferred stock, outstanding debt, and minority inter-

billion, based on a share price of N556.60, and its working capital (total debt minus cash and cash equivalentstood at (N25.48 billion). The addition of N282.51 billion and (N25.48 billion), will give us N257.03 billion.

Similarly, Oando’s market capitalization was N47.86 billion (trading at

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N5.56 per share) the same day, while its working capital stood at N187.40 billion.The addition of market cap and working capital will give us N235.26 billion.

Oando has more debt and cash and equivalent than Seplat, which is why it has a robust Enterprise value. What this means is that a knowledgeable willing buyer will pay more to acquire the cash and debt of Oando.

Investors shouldn’t fret about the ability of these firms to embark on new project because they have excellent liquidity.

Oando and Seplat have cash conversion ratio (CRR) of 4.91 and 2.80, respectively, as they continue to increase their capital expenditure spend with a view to drilling more oil and delivering a higher return to shareholders.

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The Cash Conversion Ratio (CCR), also known as cash conversion rate, is a financial management tool used to determine the ratio of the cash flows of a company to its net profit. In other words, it is a comparison of how much cash flow a company generates compared to its accounting profit.

The resulting ratio from this calculation can be either a positive value or a negative value. This can be summarized as: if the ratio is anything above 1, it means that the company possesses excellent liquidity, while anything below 1 implies it’s a weak CCR. Anything negative suggests the company is incurring losses.

The upstream oil and gas giants plan to magnify their investment especially in the area of gas.

Seplat plans to increase revenue from gas, as it will raise will raise $700 million for a joint gas project scheduled to start production next year as the government steps up plans to reduce the country’s reliance on oil.

The project, known as Assa NorthOhaji South, is one of seven to boost gas production and infrastructure development in the West African nation, the continent’s biggest producer of crude. ANOH Gas Processing Co., which is owned by Seplat and the Nigerian Gas Co., a unit of the Nigerian National Petroleum Corp., will develop, build and operate the plant in south eastern Imo State.

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Dangote Flour, Cornerstone Insurance, Thomas Wyatt best stocks...

Continued from Page 41 Only 24 stocks on the bourse has returned positive gains since January as against the 100 companies with negative returns while 40 had remained unchanged.

“Apart from the possible Santa rally in December, the equities market might continue its bearish trend, maintaining its low doubledigit negative trend well into the last month of the year.” Uzoma added.

The five worst performers since January are GlaxoSmithKline (-50.69%), Guinness (-52.15%), International Breweries (-58.69%), Resort Savings and Loans (-60.00%) and GoldLink Insurance (-62.26%). The stock market closed at 27,589.79 index points t of Friday. Year to date, the All Share Index is down 12.21 percent.

Monday 30 September 2019

BUSINESS DAY

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44 BUSINESS DAY

Monday 30 September 2019

NEWS

Manufacturer tasks FG to implement policies on local content KELECHI EWUZIE

S L-R: Yemi Adeola, former MD/CEO, Sterling Bank plc; Segun Ogunsanya, MD/CEO, Airtel Nigeria; Fola Adeola, founder, FATE Foundation, and Asue Ighodalo, founding partner, Banwo and Ighodalo, at an event tagged “An Evening with the Creative Investors and Regulators: Unlocking the Capital in the Creative Industry” organised by Banwo and Ighodalo, in Lagos. Pic by Olawale Amoo

World Bank outlines 4 corporate governance guides to spur growth in Nigeria …stakeholders recommend implementation by public, private institutions Endurance Okafor

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o achieve good performance in an economy that has continuously been in ‘slow motion’, the World Bank has recommend ‘4-ward’ corporate governance guides for Nigerian businesses.

The ‘4-ward’ corporate governance guide recommended for Nigerian businesses by the Washington-based lender are: Look Forward (Strategically), Look Backward (Retrospectively), Look Inward (Reflectively), and Look Outward (Engagingly).

The international financial institution said Thursday that overall, companies that are well governed have the tendency to excel.

Corporate governance is the system by which companies are directed and controlled. Boards of directors are responsible for the governance of their companies. The shareholders’ role in governance is to appoint the directors and the auditors and to satisfy them-

selves that an appropriate governance structure is in place to help yield good performance.

“Nigerian companies are lagging in implementation of corporate governance, and also the ability to align the codes with their business needs,” Chinyere Almona, Head, IFC (World Bank Group) Africa Corporate Governance Program (Advisory) said at the Institute of Internal Auditors Nigeria’s (IIA) conference in Lagos.

According to Chris Ogbechie, a professor in the Department of Strategy and Entrepreneurship, Lagos Business School (LBS), strong governance is part of a successful business strategy.

“Good governance can enhance an organisation’s competitive position, assist in retaining superior employees, attract top-notch directors, and contribute to long-term improved financial performance,” the professor said at the conference with the theme; Growing & Sustaining Governance in Public and Private Institutions.

The benchmark perfor-

mance indicator of the Nigerian equities market was in broad retreat on a companies’ poor half-year (H1) results.

Economic activities in Africa’s largest economy slowed to 1.94 percent in the third quarter, from a revised 2.01 percent reported in the second quarter of 2019, data from the National Bureau of Statistics show.

The consumer goods industry for example generated less cash from sales in mid-year 2019 amid a challenging operating environment. Analysis of the operating cash of ten players including Nestle, Cadbury and Nigerian Breweries, revealed that cash flow to revenue slumped to 6.4 percent in the first half of 2019 compared with 17.3 percent a year before.

Firms’ worsened cash efficiency was on the back of weaker cash receipts from operations which dipped some 19 percent to N92.4 billion from N114.8 billion last year.

Checks by BusinessDay revealed that since 2015, the Nigerian economy has been growing at a pace slower

FMDA to inaugurate new President at AGM

LAPO MfB awards scholarships to 134 clients’ children Hope Ashike-Moses

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APO Micro Finance Bank has reaffirmed its commitment to improving lives as it awards Scholarships to 134 qualified clients’ children this year.

The Chairperson, LAPO Scholarship Board, Christiana Okojie , commended LAPO for sustaining the programme and for its immense support to the less-privileged especially in the area of education.

Speaking at the ceremony in Benin City, MD/CEO of LAPO MfB, Godwin Ehigiamusoe, who was represented by Moses Ehigiamusoe, appealed for support from corporate organisations and development-focused individuals in the drive to provide indigent students with educational empowerment and scholarship.

The Edo State Commis-

sioner for Education, Jimoh Ijebai who was represented, appreciated LAPO for the initiative and pleaded for more support for such laudable projects.

Since 2007, about 3, 134 beneficiaries have so far accessed the LAPO Scholarship Funds in the Secondary and University Education categories. Beneficiaries of the awards are drawn through a ballot exercise from all states where LAPO Microfinance Bank operates.

While the Scholarship scheme addresses the needs of students in formal institutions, the Skills Acquisition Scheme empowers Clients’ children who desire to acquire vocational skills. Since its inception, the LAPO Skills Acquisition Scheme has trained 521 teenagers in skills such as tailoring, hairdressing, baking, ICT and others. This year 36 beneficiaries graduated under the scheme.

than the country’s population growth rate, meaning the country is producing more people than it can feed.

A recent report by the World Bank on emerging markets revealed that companies with better corporate governance attracted better average credit risk rating (CRR) by almost 1.50 points and they were also the companies that during investment period that achieved about 20 percent higher performance.

Meanwhile, the Financial Reporting Council (FRC) of Nigeria recently released the Nigerian Code of Corporate Governance (‘the Code”) on January 15, 2019 pursuant to Sections 11(c) and 41(c) of the Financial Reporting Council of Nigeria Act, 2011. The issuance of the Code stemmed from the suspension of the National Code of Corporate Governance 2016 (the “2016 Code”) by the Federal Government of Nigeria. The Code highlights key principles that seek to institutionalise corporate governance best practices in Nigerian companies.

SEGUN ADAMS

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he Financial Markets Association of Nigeria (FMDA) will on Monday September 30, hold its annual general meeting (AGM) in Lagos.

In a statement, FMDA says the AGM will be an opportunity to inaugurate its newly elected president, Adetoun Dosunmu, who was formerly the association’s Vice President. She succeeds Samuel Ocheho, whose tenure has ended.

T h e g ro u p a l s o a n nounced Ayokunle Ojo as the new Vice President while Ayodeji Abimbola, Dare Otitotju and Chuksnwabuisi Promise were named execu-

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tive members.

It says the new officers of the association will be sworn in at the FMDA Conference Hall, Moneymart Centre, Tiamiyu Savage Street, Victoria Island, Lagos, at an event to be attended by market leaders and key players in the financial sector.

The FMDA has a vision to promote efficient market practices by encouraging high standards of conduct and professionalism.

The Association’s priority among others is to contribute to the growth and development of the financial markets as well as the protection of the interest of members in the exercise of their dealing/ trading activities including its value chain.

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takeholders in the manufacturing sector have called on the Federal Government to implement policies that would encourage manufacturers to thrive in the country.

They said that the Federal government had a significant role to play in promoting and encouraging manufacturers via the implementation of new policies that would enable companies to emerge profitable.

Uzo Nwaije, managing director, Finlab Nigeria, an indigenous manufacturer of laboratory furniture, says the federal government can do better by formulating policies to reduce dependence on importation, adding there was a need to raise the percentage of local content.

Nwaije while speaking on the topic titled “Strengthening Indigenous Manufacturing in Nigeria” in Lagos commended the government for its contribution towards the growth and development of manufacturers especially with the 40 percent local content policy.

Nwaije who admitted the tough challenges in the sector said he remained optimistic that indigenous practitioners would succeed in the long run provided government continue to support them.

“Manufacturing in Nigeria is not easy when you consider the ease of doing business, government policies, power and how it affects business. As you know, we produce laboratory fittings, equipment, glasswares, and plastic wares. Bringing raw materials of these products into

Nigeria can be very tough due to the cost of import duty on raw material and other charges,” Nwaije said.

He further said that with the signing of Africa Free Continent Trade Agreement signed

by Nigeria, the government would strive more to create an enabling environment for business to grow.

Nwaije urged the federal government to put the necessary structure in place to make the agreement work, noting that Nigerian products have greater chance of competing favourably in the market.

According to Nwaije, “More investment should be expended in the area of road infrastructure and power as doing so will make Nigerian products more competitive among other partners as well as globally”.

“I consider AFCTA has a good move that would help promote and improve business in Nigeria but I think we need to solve some of the major problems affecting the growth of our economy. If we want our goods to be competitive, power supply has to be improved, road infrastructure must be in good shape and security must be in place.

For me, I think we have what it takes to excel, all we need to do is to invest in our country. We have the population and we have the market,” he said.

While applauding indigenous manufacturers for their steadfastness amidst various challenges affecting their businesses, he tasked them to continue to raise the bar by ensuring that products manufactured are of quality standard and at par with what obtained in developed markets.

Police rescue 19 pregnant women from baby factory in Lagos JOSHUA BASSEY

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olice in Lagos State have uncovered a baby factory and rescued 19 pregnant women, some of them teenagers. Two suspects have also been arrested in connection with the crime.

Bala Elkana, spokesperson of the Lagos State Police Command, who confirmed the incident on Sunday, said detectives who carried out the action acted on information from a reliable source.

At 1600hrs, acting on the strength of information from a reliable source, detectives from Ishiri Osun police station led by the Divisional Police Officer (DPO), Chike Ibe, stormed a building at 14 Adisa Street, Ayanwale area of Ikotun Lagos, suspected to be used for child trafficking.

In the course of operation, 19 pregnant girls - ages between15 and 28 - were rescued. Four children were also rescued,” Elkana said, saying the victims were recovered from four different locations, including 32, Owosho Street, Governor Road, Ikotun; 29 Olugbeyohun Street, Olakunle bus stop, Abaranja.

According to Elkana, the pregnant women were brought from Rivers, Cross River, Akwa Ibom, Anambra, Abia and Imo @Businessdayng

states. He noted that two suspects - Happiness Ukwuoma, 40 years old and Sherifat Ipeya, 54 years old were arrested in connection with the case.

“The suspects did not receive formal medical training but operate as nurses. The suspects are natives of Imo and Epe, Lagos states, respectively,” he said.

The command has launched a manhunt for the principal suspect identified simply as Oluchi, a native of Mbano, Imo State.

The police said young women were mostly abducted by the suspects for the purpose of getting them pregnant and selling the babies to potential buyers.

“The girls were tricked with employment as domestic staff in Lagos. The babies are sold between N300,000 and N500,000, depending on the sex. Boys are sold for N500,000 and girls for N300,000,” the police spokesperson said.

The noted that the Commissioner of Police Lagos State, Zubairu Muazu, had visited the scene and ordered the State Criminal Investigation Department (SCID) to take over the case. The command is working with other agencies and stakeholders in rehabilitating and resettling the pregnant girls and the babies. While investigation is ongoing, the suspects will be charged to court,” he said.

Monday 30 September 2019

BUSINESS DAY

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news Multiple Customs’ units create bottlenecks, delay business at ports ...cargo dwells for 21 days, importers pay more AMAKA ANAGOR-EWUZIE

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L-R: Ajibade Laolu-Adewale, head, Alat commercial, Wema Bank plc; Temitope Ogundeji, head, liability products unit; Dotun Ifebogun, divisional head, retail bank, and Hakeem Mudashiru, head, retail cluster, during the 6th Educational Award Draws to Royal Kiddies Account Holders of the bank in Lagos.

Investigation

With broken infrastructure, abandoned road projects, South-East feels cut off from Nigerian economy ODINAKA ANUDU

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here were looks of abandonment on the faces of passersby along Aba-IkotEkpene road on September 19. The road links Abia in the South-East to Akwa Ibom and Cross River States in the oil-rich South-South region of Nigeria, and Cameroon in Central Africa.

In the 1990s, Aba shoe and textile makers ferried their products to Akwa Ibom through the road. But the road looked as forlorn as its passers-by when BusinessDay visited. The Aba section was overrun by dirty water.

The middle of the section bordering Umuokpo and Onicha Ngwa communities in Obingwa Local Government Area was covered by comfortably-sat green grass.

“They have abandoned us to our fate,” Nonso Obima, a shoemaker at Ariaria Market, who lives in Ogbor Hill area of the road, said.

“They have cut off the section through which we supply our shoes and textiles to neighbouring states and Cameroon,” he cried.

The road was awarded on December 13, 2012 to Arab Contractors OAO Nigeria Limited at the cost of N3.780 billion. Work was supposed to start from Ikot-Ekpene, criss-cross Aba and end in Owerri. The road was to be dualised, but much of Aba-Ikot-Ekpene axis was not. Those who live around confirmed that the project was started in 2012 but abandoned midway. Reliable sources said after a long period of abandonment, the contractor ran to the

Ministry of Works complaining that the contract was undervalued. The Federal Executive Council thereafter approved additional N6.17 billion in 2018, which is yet to be released.

Strangely, Lai Mohammed, minister of information and culture, listed this road as one of the 69 ongoing projects in the South-East in August 2018. When BusinessDay visited this road in 2018, work was not going on as it was discovered that the contractor merely parked vehicles at a private residence in-between the United Evangelical Church and Onyedika Industries, Alaoji Ntigha.

The long and short story is that the contract is yet to be completed seven years after being awarded.

Around 2011, this road had, among others, over

40 filling stations, 50 restaurants, seven hotels, six manufacturing firms, three farm settlements and tens of supermarkets, Ben Ihu, a resident of one of the towns along the axis, told BusinessDay. “But most of them have closed shop,” he said.

If you think that this is the whole story, then visit Amansea-Ebenebe-Umuna road, which borders Anambra and Enugu States. The road was supposed to cut across Aguobu Owa-Mgbagbu Owa-Ebenebe-AwahaOyoha and Oyofo Iwollo. It was also awarded on December 13, 2012 to Conduc Nigeria Limited at the cost of N3.035 billion ($19 million in 2012).

Some sections of Eb-

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Landmines dot Malami’s quest to force a review of PSC terms ISAAC ANYAOGU

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he Federal Government is in court to compel international oil companies to increase payments under the Production Sharing Contracts, but limitations in the law and the Federal Government’s unilateral, cavalier approach towards its partners could derail plans.

Section 16 of the Deep Offshore and Inland Basin Production Sharing Contracts Act provides that where the price of crude oil exceeds US$20 per barrel, the PSC Act will be reviewed to ensure higher revenue for the Federal Government. It also provides that the PSC Act may be reviewed after 15 years from its commencement and every five years thereafter.

Since 2003 when the Act became operational, Nigeria has been unable to activate these provisions. The Revenue Mobilisation, Allocation and Fiscal Commission says Nigeria lost $21 billion for failing to review the law, and four years of trying by the Muham-

madu Buhari presidency has not had an impact. Suasion, threats and even a Supreme Court ruling have not had an effect.

Legal analysts say the biggest challenge is that the PSC Act did not provide clear guidance on how to implement a review.

“The formula for crude oil share between the Federal Government (through the NNPC) and its PSC contractors is provided in the PSCs themselves, rather than in any provision of the PSC Act,” said analysts at Lagos-based Templars Law firm, led by Adewale Atake, partner & head, dispute resolution, in a commentary.

Therefore, the assumption, that the Federal Government could simply increase its share of crude oil revenues unilaterally, by amending the PSC Act to allocate higher quantities to itself, can hardly be said to be well thought-out, the analysts said.

The Act did not specify whether individual contracts or the Act will be amended, how often it will happen, and what will happen to fields with peculiar characteristics such as irregular production www.businessday.ng

volume or even due to crises.

The section does not also provide a specific sharing ratio to which a review of the PSC Act must conform.

To seek legal clarification, the attorneys-general of Akwa Ibom, Bayelsa and Rivers State approached the Supreme Court in 2016 to compel the Federal Government to review the PSC Act as stipulated in section 16 and to recover arrears of revenue which would have accrued to the FGN and by extension their states, based on the principle of derivation, for the years that the provisions of section 16 were supposedly not implemented.

However, the parties to the case reached an “out-ofcourt” settlement on April 5, 2018 and the Supreme Court adopted the terms of settlement of the parties and granted them consent judgment on October 17, 2018.

Analysts say this was ‘complicated intervention’. The Supreme Court ordered the attorney-general of the federation to set up a body along with the plaintiffs to draw up a way to achieving the review envisaged in section 16 of the PSC Act. Then the

body should recover previous revenues from August 2003 after oil prices passed $20 per barrel.

“By implication, an increase in the Federal Government’s share of revenue under PSCs should result in a reduction of IOCs’ share of revenue under PSCs,” said analysts at Andersen Tax. But the Federal Government has no contractual right under the PSCs to apply retroactively any revised sharing formula it may agree with the PSC contractor.

“As a matter of elementary principles of law, statutory impositions of pecuniary burden do not operate retroactively,” analysts at Templars said.

So, if the Federal Government without recourse to the partners unilaterally amend the PSC Act to compel payments by the PSC contractors based on a retroactive assessment of what the FGN’s take should have been from August 2003 or any date that precedes the amendment, the operators will challenge it in court.

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he existence of multiple units of Nigeria Customs Service (NCS) at the ports is creating bureaucratic bottlenecks leading to delays in the business of clearing imported cargoes, BusinessDay has learnt.

A visit to the Apapa and Tin-Can Island Ports in Lagos shows that Customs has about seven different units at the ports. These include Enforcement, Valuation, Customs Intelligent Unit (CIU), Residence, Taskforce, Strike Force and Abuja Alert. There is also the Federal Operations Unit that mounts checkpoint right at the port gate. These Customs units are involved in cargo clearance and importers and their agents must seek approval of their documentation from these units before the release of their cargoes.

The implication of this is that Nigeria has continued to fail in meeting the 48-hour cargo clearance target. Cargo dwells for a minimum of 20 days in the nation’s seaports with importers paying dearly as demurrage and storage charges

to shipping companies and terminal operators.

Tony Anakebe, managing director, Gold Link Investment Ltd, a Lagos-based clearing and forwarding company, said the clearing procedure has become very tough with Customs having about eight different units that must authorise the release of consignment. This, he said, was aside from other government agencies that must also authorise the cargo release before the importer would be allowed to take delivery of his consignment.

In the circumstance, Anakebe said, it takes a minimum of three weeks (21 days) to clear cargoes with genuine documents out from the ports due to the delays that come with passing the documents to multiple units of Customs and other agencies at ports.

“As far as the management of Customs continues to multiply the units of officers from the same agency, we will only continue to breed corruption in the ports. Imagine going through eight different Customs units before clearing one container!”

Anakebe said.

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Finance minister appoints Yunusa Abdullahi special adviser on media and communications Onyinye Nwachukwu, Abuja

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inister of finance, budget and national planning, Zainab Shamsuna Ahmed, has appointed Yunusa Tanko Abdullahi as her special adviser on media and communications.

Abdullahi, whose appointment took effect from September 1 2019, is a civil servant, journalist, and photographer with specialisation in media and communications management in both private and public sectors.

He is to report to the minister and also serve as a member of the senior management team in the ministry with the responsibility for, among others, strategically managing the ministry’s media and communications for both internal and external publics.

A graduate of English from Ahmadu Bello University, Zaria, Abdullahi holds a Master’s in English from the University of Lagos. He began his civil service career as producer on NTA-2 Ch 5, Lagos, producing NTA-2’s flagship programmes ‘Morning Ride’ and ‘Mastersports’. Abdullahi also produced the documentary that won Nigeria the right to host the All African Games in 2003 and the Lamido of Adamawa’s 50th anniversary on the throne.

Between 2004 and 2006,

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Abdullahi reported for Deustche Welle English service, Cologne Germany. He left NTA-2 Ch 5 in 2006 to head the Corporate Affairs Department of the National Film and Video Censors Board. He also served as the zonal coordinator, North West, of NFVCB, with office in Kano State, with the responsibility to expand the organisation’s profile in the North West of Nigeria.

He was appointed deputy director news and special assistant to the director-general of the Federal Radio Corporation of Nigeria (FRCN) in November 2013. He was later transferred to the Kaduna zonal office as head of News and Current Affairs in May 2017 Until his appointment, Abdullahi, who has more than 27 years of experience in project management, was director, academic planning at the National Broadcast Academy, FRCN Lagos.

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Monday 30 September 2019

BUSINESS DAY

news Life in Nigeria is getting harder, and Buhari...

Continued from page 1

pressure, and so is President Muhammadu Buhari.

S oa r i ng f o o d p r i c e s which have been fanned b y P re s i d e n t B u h a r i ’s abrupt border closure, falling disposable incomes – a symptom of three years of negative GDP per capita growth – rising insecurity in the north which has put a strain on agriculture output, and recordhigh unemployment and u n d e re m p l oy m e nt a re among the problems facing Africa’s most populous nation as it marks its 59th year since gaining independence from the British, October 1.

On the streets of Nigeria’s showcase capital Abuja, things may look fine, with wide boulevards and increased security, as Buhari is expected to preside over a military parade and deliver a speech celebrating Independence Day. But no matter how the government tries to paper over the cracks, the signs of pressure in Nigeria are there for all to see.

Consider this example.

Since Buhari’s indefinite border closure in late August, which the government says is aimed at curbing smuggling, the price of basic food items has soared, causing severe hardship for households.

The price of just about everything, from vegetables to rice that comes into the country legally or otherwise through its land borders, is up by an average of 50 percent.

B u s i n e s s D ay s u r v e y across various markets in Lagos shows that a bag of foreign rice now sells for N22,000 as against the N14,500 it sold for five weeks

ago before the border closure, indicating a 52 percent rise in price.

Meanwhile, Lake Rice, a brand of locally-grown parboiled rice which was sold for N13,500 five weeks ago, now sells for N16,500, a 22 percent rise in price.

Similarly, a carton of frozen turkey goes for N20,000, 54 percent more than it cost five weeks ago, while a kilo sells for N2,000 as against N1,300 before now.

A carton of frozen chicken (‘Orobo’) now sells for N19,000 as against N12,000 it sold five months ago.

Price of vegetable oil has also increased by 22 percent from N1,800 for a five-litre gallon to N2,200. The increase means most of these food items are increasingly going beyond the reach of many Nigerians.

“How do I afford buying a bag of rice for N22,000 when I earn only N30,000?” said a buyer at Mushin market who gave her name as Chukwu.

“What will I have left to feed my children and for our upkeep,” Chukwu said, highlighting the conundrum faced by Nigerians struggling to make ends meet. “We have been managing since but with the recent border closure which has led to increase in food items, things are worse for us.”

The reading for food inflation for the month of September is likely to capture the price growth triggered by the border closure when it is released early October.

Businesses are also reeling from the closure which has had a ripple effect across West Africa, with factories and traders struggling to import key raw materials and having to use alternative routes for their exports, according to the Lagos Chamber of Commerce and Industry, a private sector

advocacy group that draws membership across various sectors of the economy and works with some 2,000 local companies.

“The border closure is causing untold economic hardship and is threatening to put a lot of companies, particularly those that do cross-border trade, out of business,” Muda Yusuf, director general of the chamber, said.

“No one is certain when the borders will be reopened. This kind of selfinflicted pain is the last thing the country needs after three years of tepid economic activity,” Yusuf said in an interview with BusinessDay. He said LCCI is currently locked in discussions with the government to find a solution but it is lacking urgency from the government.

Th e b o rd e r c l o su re, which Buhari ordered to curb smuggling of rice and other commodities, is the latest tack by Nigeria to protect its foreign-currency reserves by curbing imports.

The central bank has restricted access to dollars for the import of more than 40 items it says can be sourced locally, while the country wants to become self-sufficient in the production of staples such as rice.

Economists say the government and central bank’s protectionist approach is unsustainable and advise instead that local manufacturers be aided to be more competitive by investing in infrastructure from power to roads and improving access to cheaper finance.

Other interviews this month with average Nigerians showed that life is also getting harder for parents with wards to fend for. The month coincides with when children went back to school after a two-month break. It’s a new session which implies fresh school fees in a country

L-R: Bisi Adeyemi, deputy president, Nigerian-British Chamber of Commerce (NBCC), presenting a membership certificate to Segun Akintemi, CEO, Page Financials, during the NBCC Members’ Evening and Induction ceremony held in Lagos.

where quality education is expensive.

Ade Bakare (not real name), a middle-aged sales manager at a consumer goods firm, paid around N1.5 million for his two children receiving secondary education in Lagos.

“That’s two times my monthly salary and a hefty 50 percent of my savings,” Bakare said.

He told Business Day that he was on the lookout for cheaper schooling alternatives for his children, as the next payment is not sustainable as it could swallow all he has left in savings when payment falls due in four months’ time.

Bakare is one of the privileged 1 percent with savings of over N1 million in a country where half of the population live below $2 a day and only around a quarter of bankable adults own a basic

bank savings account.

For most Nigerians who live from hand to mouth, which means they spend virtually everything they earn to sustain themselves on a daily basis, there’s little or no spare cash to tuck away in a savings account.

What’s worse is that some Nigerians are facing their many struggles without jobs.

There was a spike in unemployment to a record 23 percent in 2018, according to state data agency, the National Bureau of Statistics. That number may have grown worse on account of the forced closure of some companies who were driven out of business by rising costs of operation.

In the case of Ude Tochukwu, who was laid off his factory work in January after his employers shut down their manufacturing plant, he has struggled on

all fronts since then, whether it’s feeding his family or paying school fees.

“The priority is feeding.

I don’t have any money for school fees at this time,” Tochukwu said.

His firm is not the only one to have capitulated under the pressure of high cost of operations and sluggish sales growth.

The cumulative sales growth of the five largest consumer goods firms in Nigeria declined 5 percent in the first half of 2019, according to Business Day’s analysis of the companies’ financial data.

The companies include Nestle, Unilever, Flour Mills, Nigerian Breweries and PZ Cussons.

Four CEOs of leading consumer goods firms, who

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Nigeria’s weak economy invites entrepreneurs to innovate for poor customers STEPHEN ONYEKWELU

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ising unemployment, sluggish gross domestic product (GDP) growth and a shrinking market show that Nigeria’s budding and veteran entrepreneurs have an increasing flock of poor customers.

A 2018 report by The World Poverty Clock shows Nigeria has overtaken India as the country with the most people in extreme poverty. The struggle to lift more citizens out of extreme poverty is an indictment on successive Nigerian governments which have mismanaged the country’s vast oil riches through incompetence and corruption.

Only 2 percent of Nigerians own 90 percent of total deposits in Nigerian banks.

According to the Nigerian De-

posit Insurance Corporation (NDIC), 98 percent of Nigerians have less than N500,000 ($1,250) in their accounts, and the poorest Nigerians are unbanked.

Nigeria’s economy has not been doing well. According to the National Bureau of Statistics (NBS), the 2.10 percent (revised from 2.01 percent due to oil output revisions) reported for the first three months of 2019 declined to 1.94 in the three months ending in June of 2019, a decline of -0.16 percentage points.

The Q1 figure represents a -0.38 percent decline when compared to the three months ending in December 2018.

On average, nearly 60 percent of a Nigerian’s income is spent on food. But this average is spread across all segments including the rich.

What this implies is that most www.businessday.ng

Nigerians are spending between 80 percent and 90 percent of their income on food.

In a bid to penetrate the larger low-income market which has been hit by the harsh contraction breeze, Fast Moving Consumer Goods (FMCG) companies have since the 2016 recession been rolling out products in smaller packs, a survey by BusinessDay showed.

“Nestlé introduced singleserve packs as a strategy to ensure that consumers continue to have access to the nutritious food they need even in the current economic reality.”

This is in line with our purpose to enhance the quality of life and contribute to a healthier future,” Victoria Uwadoka, corporate communications and public affairs manager at Nestlé, told BusinessDay. Similarly, a Harvard Busi-

ness Review (HBR) identified that the first element when innovating for scale is a robust strategy. A body of literature on the matter shows that companies that innovate at scale have a deep understanding of their assets, capabilities and what makes them successful. They understand at a granular level where growth came from in the past and where it is likely to come from in future. Aspiring to double revenues by 2020 may be a terrific stretch goal, but it is not a strategy.

“I have taken time to understand Nigeria’s entrepreneurship ecosystem and market. My advice to every budding entrepreneur is that they should not have their friends in mind when they innovate. They need to model their gateman’s income,” said Ola Orekunrin, founder of Flying Doctors Nigeria, West

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Africa’s first Air Ambulance Service.

“It is not accidental that Dangote’s conglomerate which essentially tackles the basic needs of life such as food and shelter is one of the biggest indigenous listed companies. This is different from America where the biggest companies are technology companies such as Google, Apple and Facebook,” Orekunrin said.

“Entrepreneurs really need to understand the various market segments in Nigeria. The high-end market wants luxury but the middle and low-income market is highly price-sensitive and cares little about brand loyalty,” Gbolahan Ologunro, research analyst at Lagosbased CSL Stockbrokers, said.

“A consumer can choose one brand over another for as little @Businessdayng

as a N20 difference in price.”

The biggest company on the Nigerian Stock Exchange sells salt, sugar, pasta and cement. Next year, Aliko Dangote, the owner of this conglomerate, will be launching a petroleum refinery – not artificially intelligent petrol, not 3D printed petrol. This is the ordinary type that J. D. Rockefeller was selling 100 years ago in the United States of America. There seems to be a marked difference in terms of market needs and what people will pay for. Dangote understands the market and therefore continues to win, analysts said.

Tech companies that have scaled successfully in Nigeria to $1 billion include MTN (a cell phone company) and Interswitch (a payments provider).

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hunger and high cost of food products across the country.

“The number of farmers going to their farms has reduced in the northeast states surrounding Gombe. They do not want to take that risk of being cut off or kidnapped,” said African Farmer Mogaji, head of agriculture and agroallied group, LCCI, in a response to questions.

“Also, in the Southwest region, the number of famers is also reducing and the number of private investors too because they are scared of going to the farmlands,” Mogaji said.

He said that a lot of farmers are not planting because of the high rate of kidnapping happening in the environment where their farmlands are located.

Agricultural output has

suffered as a result of this violence.

The sector recorded slower growth in the second quarter of the year following a 1.7 percent expansion compared to 3.1 percent in the first quarter, according to Gross Domestic Product (GDP) data published by the National Bureau of Statistics (NBS). “This stemmed from disruptions to farming activities in April and May by armed bandits in the North which invariably led to shortage of crops and increased food prices in both months as evidenced in inflation numbers,” analysts at Lagos-based financial advisory firm, ARM Securities, said.

These many problems should worry President Buhari who secured a second

term this year.

“The solutions to these problems are well documented. All that the country requires is a leader with the political will to implement bold reforms,” an economist who did not want to be named said.

Nigerians turn to betting to ease income pressure The consequence of a relentless rise in unemployment coupled with cost of feeding, clothing, housing, healthcare, transportation, communication and essential furnishings is that it is killing the hope of a better nation in many Nigerians, especially those with low incomes. At a betting centre sitting in the heart of Mushin market in Lagos mainland, several youths throng in as early as 8am, surfing the next opportunity to hit a jackpot.

From bus conductors to apprentices, artisans, undergraduates or even bankers, people are aggressively seeking means to make extra cash, to augment the paltry revenue from their routine jobs, Victor Olawoore, 28-year-old undergraduate student of the University of Lagos, told Businessday on a visit.

Their constant cry is that they can’t make enough.

The experience of Olawoore who runs the betting centre along two others shows that some customers would rather go hungry or owe, just for a chance to bet.

Olawoore himself relies on forecasting for customers and the goodwill of winners to sustain his schooling needs.

“Some people come here with their last money. And at the end of the day, most of

million, is not technically a bridge. It is not ongoing and the road links it to nowhere.

Federal Government projects or roads connect states, but this purported bridge does not connect any other state.

In fact, BusinessDay saw no bridge anywhere.

“We are not serious in Nigeria. We give out a contract and allow a contractor to run away,” Sam Ifionu, a native of Nkporo in Abia State, said in respect of Nkporo-AbiribaOhafia road, which has been abandoned by the contractor.

Drivers now avoid the Nkporo-Ohafia road to avoid falling into ditches as they now take an easier and better Abiriba road. Even at that, a section of Abiriba road is threatened by erosion.

However, work was ongoing on some sections of Abiriba-Arochukwu-Ohafia, a different road project, as of September 22.

Contrary to claims by Lai Mohammed in 2018, the Olokoro-Isiala-OboroNnono road, awarded to Bok Company Nigeria in 2010 at N515.315 million, was not ongoing as of September 20 when BusinessDay visited.

Neither was work ongoing on the Olokoro-Alaukwu-Itaja-

Okwu-Obuohia-Ikwuano road, contracted to Abia Rhas in 2010 at the cost of N990.673 million.

In Nigeria, contractors handle projects haphazardly owing to lack of financial mobilisation, poor supervision by the Ministry of Works or related ministries, and corruption, analysts say.

There is something about Amanwaozuzu-UzoagbaEziama Orie-Amakohia road in Imo State, awarded to Imo Vic Phranc Nigeria Limited on November 23, 2013, at N1.275 billion. It was supposed to be a rehabilitation, but BusinessDay observed that the road was broken, which natives believe is attributed to poor quality of work by the contractor. A greater section of Uzoagba was not repaired, and one village called Umueze, which links Uzoagba and Amakohia, was not done at all, villagers said.

In 2018, Lai Mohammed claimed this road was being repaired, but this is far from the truth, on-the-spot pictures and videos taken by BusinessDay show.

Those who have any form of health crisis cannot ply Okigwe-Anara-Amaraku-Atta-Owerri road. Commuters

make conscientious efforts to avoid this road for fear of hurting their waists. Only drainages are constructed at Amaraku. The road from Amaraku to Okigwe is bad and shoddy.

The Federal Ministry of Works was not found anywhere on this road. Only the Amaraku-Attah-Iho repairs were done by Iyke Jordan Limited for Niger Delta Development Commission (NDDC).

“The quality of work done sometimes leaves much to be desired,” said Ike Ibeabuchi, an Enugu-based manufacturer.

“Some individual contractors do not have the capacity too,” he said.

A civil engineer who works in one of the biggest construction firms in Nigeria attributed abandonment of contracts to poor funding.

“Yes, corruption may be involved, but when you start, government pays you mobilisation. But you work on the basis of milestones. When you finish a milestone, you are expected to start the next milestone and when you are not paid, you pull out,” the engineer said.

“Mind you, contractors work with bank overdrafts and when they are not paid,

L-R: Bisi Kazeem, corps public education officer, Federal Road Safety Corps (FRSC); Baker Magunda, MD/CEO, Guinness Nigeria plc; Jordi Borut Bel, MD/CEO, Nigeria Breweries/chairman, Beer Sectoral Group (BSG); Boboye Oyeyemi, corps marshal, FRSC, and Michael Daramola, corporate affairs director, International Breweries plc, during the Beer Sectoral Group official launch of ‘Don’t Drink and Drive Campaign’ and presentation of Breathalyzers to FRSC in Lagos.

Pic by Olawale Amoo

Life in Nigeria is getting harder, and Buhari...

Continued from page 46

sat for an interview with BusinessDay this month, bemoaned the impact of weak consumer demand on their companies’ profitability.

They said the economy faces the risk of a real sectorinduced economic recession if sales growth continues to print lower than inflation.

“The handwriting is on the wall as far as weak purchasing power is concerned and the government is even now compounding that pressure with the border closure and other anti-market policies,” said one of the CEOs who did not want to be identified criticising the government.

“We have laid off many of our staff to balance ris-

ing costs with falling revenues and I can say same for most of our peers,” the CEO said. “This is a risky trend as it could cause a real sector-induced recession that takes longer to heal than one caused by commodity price cycles.”

Up north, the biggest problem for Nigerians, predominantly farmers, is insecurity. Nigeria’s food insecurity fears have heightened in recent months owing to spate of insurgency in wartorn northeastern state of Borno and kidnapping that has forced many farmers to abandon their farmlands.

The situation has further led to decline in food production which has translated to

With broken infrastructure, abandoned...

Continued from page 45 enebe ax is are in good shape, but the EbenebeUmuna section is nothing to write home about.

Minor repairs were done in the Enugu State axis in December 2018, but the general impression by natives is that the contractor did a shoddy job.

The road is estimated by Google map as 26-30km. This project cost Nigeria $633,333 for 1km in 2012. Within this period in Ghana, 1km of road cost GHS135,000 ($57,349).

Furthermore, the Umulungbe-Umuoka-AmokwuIkedimkpe Egede-OjieyiAwhu road was awarded on June 18, 2018 by the present administration. A company known as Enugu IDC Construction got the contract at the cost of N6.245 billion. No work was on-going on the road on September 23 when our correspondent plied it.

Only the equipment of Arab Contractors was surprisingly parked along this axis.

“The road is a nightmare whenever it rains,” John Ezechukwu, a commercial vehicle driver who plies this road

every day from Enugu, said.

Sections of Onitsha-Enugu Expressway are currently being constructed by RCC, but this road has been in a state of disrepair for over a decade.

Every now and then, a lot of people plying the road suffer avoidable accidents because the work is slow.

Onitsha to Umunya has recently been built, but Amansea to Ugwuoba is bad, with construction going on in fits and starts. Vehicles now divert to Old Enugu-Onitsha Road, but this road itself is becoming dilapidated owing to pressure.

“We manufacturers using this road spend a lot of money to move our goods to Enugu,” Chukwubuike Nnoli, CEO of Zubnol Limited, an Awka-based pillow and duvets manufacturer, said.

“If you leave by 2pm to Enugu, rest assured that you can’t return because you could face insecurity along this axis,” he said.

Again, what is being classified by the Federal Government as Oseakwa Bridge at Ihiala town in Anambra State, which was handled by Horizon Construction Limited at the cost of N896.863 www.businessday.ng

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them lose their money. But they still believe it is a good way make money. And it is when they win, they able to compensate me with cuts.

Once in a while, I also play N100 or N200 for real sports. I won’t deny that things are very hard in the country,” he said.

The highest Abayomi, a former graphic designer, has made in his betting history is N29,000, an amount higher than his monthly salary as a cashier at a local store.

Akeem Ahmed, on the hand, has had to abandon his furniture business for commercial motorcycling.

The N1,000 he makes daily from articulating furniture pieces could no longer suffice to raise his five children who are all in nursery and primary level, as well as feed his wife and himself.

With a hire purchase debt of N370,000 to settle, N80,000 naira on his children’s academic expenses, Ahmed struggles fiercely to ensure his takehome grosses about N4,000.

And on bad days when he’s trapped in the net of extortive police officers, he could lose an amount that could have taken a week of hard labour to gather.

“The government has to see how employment opportunities can increase for the youths. To work in a day, we have to purchase compulsory permit of N700. In the evening you will pay another N100 for working on the road. There is threat for us on all sides and it is overwhelming,” he said. “And when you are idle, you might begin to nurse a terrible idea. That’s why we have to get out and search for legitimate things that can fetch money.” the interest rate accumulates,” he said.

While the blame for the federal roads goes to past and present governments, those who spoke with BusinessDay said state governors must be able to address poor road network in the South-East.

In Imo State, Naze-NekedeIheagwa road has become a bad advertisement for Imo State. Students pay N150 instead of N100 to go to school from Owerri town as buses break down in muddy waters.

Osisioma is also a bad advertisement for Abia State, with the road dirty and broken.

“Abia State must embark on urban renewal,” a shoemaker in the state recommended.

Nigeria requires to spend 3-5 percent of its annual budget to bridge infrastructure gap. A minimum of $3 trillion will be needed to bridge huge infrastructure gap in the country, according to the Bureau for Public Enterprises. Cash-strapped states in Nigeria are struggling to pay workers’ wages. But analysts say corruption and wastages are holding the country back.

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abujacitybusiness Comprehensive coverage of Nation’s capital

We will develop a blueprint to make Nasarawa more economically viable - Ajayi Kenyisola Ajayi, a Professor and Senior Advocate of Nigeria (SAN) is the Chairman of a 13-man Investment and Economic Advisory Council recently constituted by Governor Abdullahi Sule of Nasarawa State. In this interview with Solomon Attah, Ajayi said the Council will come up with a blueprint that will better the lives of the people and make the state more economic viable. Excerpts:

J L-R: Ralph Ndigwe, director Capital Resource Development and Document Centre (CIRDDO), David Ugolor, executive director ANEEJ and Maryam Garba, executive director Fahimta Women Youth Development Initiative (FAWOYDI) during a training of the trainers on monitoring the use of $322.5M recovered Abacha loot in Abuja. picture by TUNDE ADENIYI.

FCTA partners Water Resources Ministry to end open defecation in FCT by 2025 James Kwen, Abuja

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he Federal Capi t a l Te r r i t o r y Administration (FCTA) ha indicated interest to partner effectively with the Federal Ministry of Water Resources to end open defecation in the nation’s capital by 2025.

Muhammad Bello, FCT Minister gave this indication when he received a delegation from the Ministry of Water Resources led by its Minister, Sulaiman Adamu on an advocacy visit to end open defecation in the country.

The Minister who assured his Water Resources

counterpart that FCTA will give all the necessary support to ensure that the goal of completely eradicating open defecation in the country is achieved, said already FCTA was partnering with the private sector for solar powered public toilets in the FCT. Bello said he has directed the Minister of State of the FCT, Ramatu Tijjani-Aliyu to coordinate activities for the success of the project in the FCT and ensure that FCT becomes a model worthy of emulation.

Bello informed that the FCTA has six major water tanks under construction to aid in the distribution of water to newly opened

districts in the territory, explaining that water was not a problem in the FCT as the Lower Usuma Dam was providing adequate water to service the Capital city.

Earlier, the Minister of Water Resources said that the visit was to kick- start the “Clean Nigeria: Use the Toilet” campaign aimed at making Nigeria opendefecation-free by 2025.

He stressed the need to mobilize for an increase in sanitation budget line to ensure that the Water SushoSanitation and Hygiene (WASH) Action Plan of the Federal Government, to improve the sector, was achieved.

Institutionalization of rewards system in treasury promotes accountability, productivity in governance -AGF Cynthia Egboboh, Abuja

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he AccountantGeneral of the Federation (AGF), Ahmed Idris on said institutionalization of the rewards and recognition system in the treasury remains a critical tool in ensuring accountability and productivity of officers in governance.

Idr is in a statement signed by Henshaw Ogubike, Deputy Director of Press, OAGF, stressed that reward inspires and encourage members of staff to exhibit high sense of discipline and conduct.

He said “I believe that the institutionalization of the Rewards and Recognition system in the Treasur y will establish a well-motivated, disci-

plined, skilled and accountable officers leading to improved staff morale, efficient service delivery, improved productivity and ultimately good governance”.

Idris who honoured the staff of the OAGF who has demonstrated strong commitment and dedication to their duties and responsibilities, urged all staff of the Treasury to take full leverage of the novel opportunity geared towards attainment of visions and missions of the Treasury House and entrench the goals of good governance of his administration.

Zainab Ahmed, Minister of Finance, represented by Permanent Secretary, of the Ministry, Mo ha m m e d Isa - Du t s e said the award was the www.businessday.ng

best incentive and motivational tools of appreciation of staff that have distinguished themselves in the discharge of their duties.

Nnenna Akajemeli, the National Coordinator of SERVICOM, stated that the Service Charter is a strategic document that communicates promises and commitments of services provided by an organization to its customers.

The Nodal Officer of SERVICOM in the Office of the OAGF, Irene Ijoma reiterated that the implementation of the reward and recognition system in the Treasur y House is expected to improve productivity as well as attract, nurture, develop and retain the best staff in the Treasury House.

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NES decries non inclusion of economists in governance Godsgift Onyedinefu, Abuja

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he Nigerian Economic Society (NES) has frowned at the non inclusion of economists in the president Muhammadu Buhari administration saying Nigeria cannot attain the economic development and growth it seeks without the active contribution of Nigerian ecomists.

The NES president, Tamunopriye Agiobenebo said Nigeria is driving an economy that doesn’t have economists in the economic management team or appointed in key agencies and ministries which according to him has been the case for many years.

The president, represented

by Sarah Anyamu, said, “ how do you move the country forward in terms of economic growth, this does not argur well for the country. We need to have an economist in the team to direct the affairs of the country in terms of economic growth and development. A ministry like planning is supposed to have an economist as the Minister.”

Agiobenebo lamented that Nigeria is experiencing a high and disturbingly rising incidence of poverty which averaged about 77.6 per cent between 2010 and 2017, adding that burgeoning rate of unemployment all largely serve to corroborate the argument of an existence of a huge and significant disconnect between growth rate of GDP per capita and the quality of life indicators.

He announced that NES is set to hold its 60th Annual Conference with the theme “Economic Policies And The Quality Of Life In Africa” from16th through 18th September with the broad objective of the to shed some new insights into the use of Quality of Life as indicators of socio-economic development.

ust recently, you have been inaugurated as Chairman Nasarawa state Economy Advisory Council. How do you feel being the Chairman and what do you intend to deliver?

I think it is a great privilege to be nominated by the Governor to chair Nasarawa economy council. It is a privilege because, as you can hear from my name I am not even from Nasarawa State, I was not born in Nasarawa State. And I am from far away Ogun state, I work in Lagos and Abuja. For the Governor to single me out and other members of the committee to foster the economy development of the state is a great privilege.

As I mentioned earlier on, it shows that the Governor is one of those people that really live by the pledge, the national pledge of one country of diverse people. It is one nation that we all seek our common prosperity, peace and security. And we should be able to contribute our quota to any part of the federation to make sure we move forward.

What the council wants to achieve is to let the world know that there is a place called Nasarawa. A state that is indeed one of the rich states in the country in terms of natural endowment. It gets the best cooking coal in the country, large deposit of barite which is highly needed minerals in the oil industry, they have salt, zinc, gold, limestone and so on and so forth.

It has 2.7 million hectares of land. 1million hectares of the land is arable and is ready to be exploited. This tells that you this is a state of great potentials in terms of feeding the nation and in terms of export and in terms of natural resources, one of the greatest falls in the world is described as Victoria Falls. But the falls they have in Nasarawa State is even more spectacular and more beautiful than that of Victoria Falls, where no many Nigerians know this.

You mentioned in your statement that you have not been here before in terms of situating your plans in consonant to the Nasarawa communities. How does

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that pose a challenge to you and other members of the Council?

The challenge is what we put back to the Governor.

Which is everything that does and everything that we do must impact the people.

Everything must be about the people. If we do anything that does not touch the lives of the people of Nasarawa State, it is totally meaningless.

Take for instance, in terms of agriculture, grand vision is to go into commercial agriculture. But more importantly we should look at the rural farmers, the small scale farmers to see how we can improve their yield. What they are doing today, they get ten times what they have been getting.

In mining there is a lot of artisanal mining. How can we organize all these people that are in these economic activities, but how can we work with them in a manner that will increase their own efficiency, increases employment, make the state more economic viable and make the people healthier, more prosperous and enjoy peaceful life.

You quite made mention of exploitation of natural resources...?

Well we must not forget that all the lands in the state belongs to the state government. The mineral below the land belongs to the government so there is no one that has a mining base that can escape dealing with the government.

There are many ways in which government can begin to also get benefit from this natural resource.

After all those that come to explore the resource will use the road constructed by the government, use electricity in the state, use water, and also buy food which is being produced in the state.

So, there is relationship between these activities and the internally generated revenue.

The state government will hope to use these resources to make the state a better business destination.

And therefore, they will make proper regulations, not regulations that will tax people.

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Strict adherence to OPEC’s production cut may threaten Nigeria’s oil revenue DIPO OLADEHINDE & GBEMI FAMINU

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h e d e c i s i o n by the Organization of Petroleum Exporting Countries (OPEC) to enforce full compliance by members on its production quota, is an indication that Nigeria’s economic situation will bite harder on the people in 2020 fiscal year as the federal government adjusts to the realities of dwindling oil revenue.

After the attack on Saudi’s oil facility, OPEC agreed to trim oil output by asking overproducing members like Iraq and Nigeria to bring production in line with their targets as the group strives to prevent a glut amid soaring United States production and a slowing global economy.

“A capping or reduction in Nigeria’s crude oil output is likely going to happen soon and this will impact the economy adversely considering the economic significance of the commodity,” Charles Akinbobola, energy analyst at Lagos-based Sofidam Capital, said.

OPEC and its allies have

over complied on average with its agreed cut of 1.2 million barrels per day (bpd) as Iranian and Venezuelan exports collapsed due to sanctions.

But some members, such as Iraq and Nigeria, have been producing above their quota.

Iraq has been pumping 4.8 million bpd in recent months instead of its target of 4.512 million bpd. Based on direct communication, Nigeria produced 1.91m bpd in August versus its target of 1.685 million bpd.

“I have had a series of meetings with the leadership of Nigeria and Iraq and they have assured me they will be faithful to their obligation,” Mohammed Barkindo, Secretary-General of OPEC, told Bloomberg TV. “There is no unilateral action that will be taken by both Nigeria and Iraq; I have been in contact with the countries.”

The OPEC’s ministers’ position was buttressed by Mele Kolo Kyari, group managing director of the Nigerian National Petroleum Corporation (NNPC), who said that “The current situation in OPEC is about market balancing”.

According to Kyari, to

achieve market stability, every OPEC country has to play a contributory role which will be beneficial to all members and this can happen through production cuts. This he described as necessary in order to avoid high production volumes and low value in returns.

Higher oil prices have often meant Nigeria, Africa’s biggest oil producer, can earn more in foreign exchange and fund its budget deficit. This is because oil accounts for 90 percent of Nigeria’s foreign exchange and 85.6 per cent of Nigeria’s total export.

In the 2019 budget, the projected revenue expected from the oil sector is about 52 per cent of the total revenue profile of the budget with federal government projecting about N3.73 trillion as oil revenues while N710 billion is expected from earnings in government equity investment in Joint Ventures.

Nigeria’s government is struggling to generate more revenue to finance its growing budget amid unreliable oil revenue. The country’s debt has grown more than

160 percent to N24 trillion in the last five years. Tax to GDP remains low at 6 percent, one of the lowest globally.

After a few years of massive spending to boost the economy following a 2016 contraction, Nigeria’s Senate approved a reduced budget for 2019 as the government struggles to meet revenue targets. The central bank has now stepped in to help support expansion, first with an interest-rate cut in March and thereafter by forcing leaders through regulations and penalties to give out more credit in an attempt to stimulate growth.

Despite averaging more than 7percent in the first 14 years of this century, annual growth in Nigeria’s economy, which vies with South Africa as the continent’s largest, hasn’t managed to top 3percent for the past four years.

President Muhammadu Buhari, who was re-elected in February, pledged to diversify his country’s economy, which depends on oil for 90percent of its foreign exchange, making it vulnerable to global price movements.

L-R: Brenda Nwagwu, president of AIESEC Alumni Association; Olakunle Alake, group managing director, Dangote Industries Limited/guest lecturer; Olukunle Iyanda, president, Nigeria Institute of Management, and Michael Omolayole, first Nigerian chairman/managing director, Lever Brothers Nigeria plc (now Unilever Nigeria plc), at the 35th Annual Omolayole Management Lecture themed ‘Corporate Governance and Succession Planning’ in Lagos.

FG blocks over 2m improperly registered lines on security concerns Stella Enenche, Abuja

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he Nigerian Communications Commission (NCC), has announced that a total of 2,277,311 improperly registered lines have been blocked.

It said the action followed an earlier directive by the minister of communication, Isa Pantami, that effective last Wednesday, no unregistered/improperly registered SIM card must remain active.

The disclosure was made in a statement on Saturday by the Head of Information and public relations unit, ministry of communication, Philomena Oshodin.

“In line with the directives of the Honourable Min-

ister of Communications, Dr Isa Ali Ibrahim Pantami, the Nigeria Communications Commission (NCC ) has ensured that all improperly registered mobile SIM cards have been blocked.

“This is as a result of Dr Pantami’s directives that no improperly registered SIM card should remain active beyond 11:59pm of Wednesday, 25th of September, 2019.

“Subsequently, according to the report submitted by the Executive Vice Chairman of NCC on Thursday, 26th September, a total of 2,277,311 improperly registered lines have been blocked”, Oshodin said.

A c c o r d i n g t o h e r, 6,830,249 lines had been revalidated since the directive was given, even as she

said all improperly registered SIM cards will remain blocked until they were properly registered.

This was even as the Federal Ministry of Communications said that it was collaborating with the relevant parastatals and security agencies, to guarantee the security of lives and property in the country.

The Ministry vowed to frustrate attempts by criminal elements to exploit SIM card numbers, to commit crimes.

Meanwhile, the minister has applauded the Regulator and Telecom Operators for working hard to carry out the directive in record time, even as he urged them to redouble their efforts at ensuring that the momentum was sustained.

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Sylva, Kyari embark on peace mission to Niger Delta HARRISON EDEH, Abuja

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he Minister of State for Petroleum Resources, Timipre Sylva and the Group Managing Director of the Nigerian National Petroleum Corporation (NNPC), Mele Kyari, have said the Federal Government would spare no efforts to bring about lasting peace and security in the nation’s oil-producing host communities and the entire Niger Delta region.

Both high-ranking government officials stated this during their Stakeholders’ Visit to host communities and facilities of Oil Mining Lease (OML) 25 in Kula Kingdom of Asari-Toru Local Government of Rivers State, Saturday.

Samson Makoji, NNPC Acting Group General Manager, Group Public Affairs, who confirmed this development in a statement on Sunday said the visit was in furtherance of the peace deal brokered by the GMD, NNPC, under the supervision of the Minister, concerning the disputed mining lease between NNPC’s Joint Venture partner, Shell Petroleum Development Company (SPDC) and Belema Oil, held in Abuja, a fortnight ago.

In their separate addresses on the occasion, the duo assured indigenes and traditional rulers in the communities that the Federal Government was keen on attracting investments to the area and create jobs for the teeming youths.

Sylva told residents of the host communities that for investments to thrive in the area, there was the need for the people to live in peace and harmony with oil companies as well as cooperate with one another.

“We need unity in our land today. We have fought to this point and the Federal Government has started looking our way. It is time for us to change strategy and ensure that we bring the benefits of investments to our various communities. If we don’t make our communities peaceful, investments cannot come. The investors are ready to come

here, unfortunately in some cases there is no peace,” Sylva noted.

He observed that it was the responsibility of the locals to work with the Federal Government to bring peace to the communities so that investors can come and create jobs for the youths in the area.

Speaking during the visit, Kyari, said the NNPC had the mandate of President Buhari to work with various stakeholders towards bringing lasting peace to the oil-producing host communities and by extension the entire Niger Delta region.

“Our immediate priority is the restoration of peace to the host communities and not just to restore production. This is because once peace comes, oil production (which is about 35,000 barrels per day here) will ultimately return,” Kyari stated.

The GMD said following two years of dispute around OML 25 which led to the shutdown of the Belema Flow Station and loss of about 35,000 barrels of oil per day, NNPC had no option but to engage the communities towards ensuring lasting peace and restoring production.

“What we have done today is to ensure that normal life returns to this community so that after two years of dispute, we would have found a lasting solution which would enable people to go back to their work.

Jobs will be created and the social services that ought to come with these activities will be restored,” Kyari added.

Kyari said the next stage was that a re-entry process would commence and that an evaluation of the extent of the damage done on the facility would be carried out and within the shortest possible time, the JV partner (SPDC) would come up with a plan for restoring production in the oil mining lease.

Speaking on behalf of traditional rulers in the Kula Kingdom, King Kroma Amabibi Eleki, expressed delight with the peace deal and their readiness to work with government towards bringing developmental projects to the people.

Nigeria teacher to bestow best performing governor on Obaseki IDRIS UMAR MOMOH, Benin

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he National leadership of the Nigeria Union of Teacher (NUT) has nominated Edo State Governor, Godwin Obaseki, as the best-performing governor in Nigeria.

The letter nominating the governor as the best performing governor award for 2019 was signed by Mike Ike Ene, Secretary General of the union and made available to newsmen in Benin City.

Ene said the governor was nominated for the award based on his achievements in the education sector within the three years of his administration in the state.

According to him, Your Excellency, would recall our let-

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ter of commendation and appreciation to yourself with Ref. No. NUT/HQS/EDSW/6/178 dated 9th September, 2019 based on your roles in improving Basic Education and Teachers’ Welfare in Edo State.

“As well as the very favourable written recommendations made by Edo State Wing of the union on your achievements in the education sector in your state within the three years of your administration’s assumption of office.

“As World Teachers’ Day is fast approaching, the National leadership of our great union, NUT, has found you worthy to be bestowed with the BEST PERFORMING GOVERNOR AWARD for year 2019 and the Award shall be presented to your Excellency @Businessdayng

on 5th October, 2019 at Eagle Square, Abuja.

“Such an award is unique as all Nigerian teachers are jointly presenting your Excellency this award,” he said. on with officials of the donor agencies held on Friday in Abuja.

Usman raised concerns at the meeting stating that while the transmission network infrastructure was being expanded through the “Transmission Expansion Programme’ by the TCN, which seeks to expand transmission of power across the country, the Distribution companies were not making commensurate investment that would see to the sustainability of the networks across the country.

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news

Depositor asks CBN to liquidate Aso Savings Dangote Group boss hinges survival of N74.4m debt indigenous firms on sound corporate governance and Loans over alleged and appoint the Nigerian De- and Aso Savings and Loans GBEMI FAMINU

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roup managing director of Dangote Industries Limited, Olakunle Alake, has identified absence of sound corporate governance structures and proper succession planning as reasons indigenous companies hardly outlive their founders.

Delivering a paper titled ‘Corporate Governance and Succession Planning’ at the 35th Omolayole Management Lecture series in Lagos, Alake said many great indigenous businesses collapsed partly because effective corporate governance structures and succession processes were not put in place to ensure that these businesses were sustained.

“For businesses with poor corporate governance structures, the founder was often the chairman and the chief executive and made all decisions. They believe in owning all without a thought for tomorrow. He alone had the vision, energy, strategy and ran the business. When the man died, the business died,” Alake said.

He pointed out that with a good board, sound corporate governance structures and proper succession planning, the founder can retire without looking back and the company will continue to thrive because there would be transferred vision and goals.

“There would be effective

corporate governance and shared operational sustainability. These are fundamental reasons why a business must have a proper and effective board,” he said.

Alake recalled that in the period of the early 70s and late 90s, several Nigerians held sway at the top of many blue-chip companies and they adopted sound corporate governance practices and implemented credible succession plans, which is why many of them are still in existence till date.

Drawing inference, Alake cited Michael Omolayole and Felix Ohiwerei, among others, who oversaw board with sound corporate governance.

“Dr. Michael Olawole Omolayole joined Lever Brothers Nigeria Limited (now Unilever Nig. plc) as a training manager. Dr. Omolayole proved his outstanding qualities and within seven years, he rose to the post of a personnel director in Unilever. He became vice chairman of the company in 1971, a post he held until 1975 when he was appointed the first Nigerian chairman and managing director,” he said.

“As chairman/managing director of Unilever plc, he initiated a succession system that groomed and trained Nigerians for top positions. He was a stickler for sound and strong corporate governance, which to him is of more importance than immediate gratification. Today, he is rewarded for his tenacity with

the longest annual running lecture series in management being held in his honour,” he further said.

Alake also spoke in glowing words of Ohiwerei, whom he said stands out as a promoter of corporate governance.

Citing Dangote Group as a multinational with corporate governance and succession plan in place, he said a lot of people wrongly assumed that the Dangote Group business is a family business and therefore operates completely as such.

Contrary to such view, however, Alake explained that Dangote Group is a wellstructured business with a lot of professionals responsible and accountable for key aspects of the business and who have no family relationship with the founder.

“This is pertinent given that there are several family businesses who have failed to go beyond the second generation. To build an organisation for the future and one which outlives its owner, you must have the right structure and system in place and resource your organisation with people with the right skills, capabilities and experience and not based on nepotism,” Alake said.

“As an ambitious business, good corporate governance system as well as succession planning has remained at the heart of our strategy in our journey to deliver our longterm and business transformation plans,” he said.

Felix Omohomhion, Abuja

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depositor, Danjuma Ejiga, has petitioned the Central Bank of Nigeria (CBN) governor, Godwin Emefele, over the refusal of Aso Savings and Loans to offset a N74.4m debt, which was owed him by Union Homes and Loans Plc before its acquisition by Aso. In the petition, through his counsel, Chukwuma-machukwu Ume (SAN), Ejiga wants the apex bank to revoke the operating licences of Union Homes Savings and Loans Plc and Aso Savings and Loans Plc over the refusal to pay his outstanding credit balance of N74.4m on demand.

The petitioner also asked CBN to cancel the takeover and revoke the respective licences of the two financial institutions

posit Insurance Corporation (NDIC), liquidator within one week or face legal action.

The petition is dated September 12, 2019.

CBN in 2013 granted approval to Aso Savings and Loans to acquire Union Homes and Loans Plc. In the petition, the lawyer said that despite repeated demand letters to the banks asking them to pay the balance, the firms have refused to pay.

The letter also accused Aso Savings and Loans of engaging in assets stripping on the properties/assets of Union Homes and Loans Plc which is against the provisions of section 159 of the Companies and Allied Matters Act 2004.

“In view of the foregoing, we hereby demand for revocation of the licence of Union Homes Savings and Loans Plc

RED co-founders become pioneer recipients of the YouWIN! Connect Award of Excellence

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o-founders of R E D | Fo r A f r i c a , Chude Jideonwo and Adebola Williams became the pioneer recipients of the YouWIN! Connect Award of Excellence September 26, 2019, at its Enterprise Education Book and Awards event held at the International Conference Centre, Abuja.

YouWIN! Connect is a multimedia programme of the Federal Government, implemented by its Ministry of Finance, Budget and National Planning, to fund young entrepreneurs to become business owners by

using training materials and tools to improve their skillset.

The founders are celebrated for their outstanding work in improving Micro, Small Medium Enterprises (MSMEs) segment, for transforming the country and the lives of young Nigerians through the establishment and operation of a successful business.

Speaking after the event, the CEO of RED, Adebola Williams, said the award was a recognition of the company’s efforts in consistently working across countries, organisations, brands and communi-

FAAN commences rehabilitation of Enugu airport runway IFEOMA OKEKE with Agency report

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he Federal Airports Authority of Nigeria (FAAN) has commenced the rehabilitation of the runway at the Akanu Ibiam International Airport, Enugu.

Henrietta Yakubu, General Manager, Corporate Affairs at FAAN, confirmed the development to News Agency

of Nigeria in Lagos State on Sunday.

FAAN on August 24 announced the closure of the airport, which is the only international airport in the South East region, for the reconstruction of its runway.

Yakubu told NAN that work had finally begun at the airport ahead of the December 2019 deadline set for the completion of the runway

repairs and other renovation works.

NAN reported that following the closure of the airport, international flights

by Ethiopian Airlines have been diverted to the Port Harcourt International Airport in Rivers Similarly, domestic flights were diverted to the Sam Mbwkwe Airport, Owerri, the Port Harcourt Airport and the Asaba Airport in Delta.

Ogelle, Bamenya Series Group reach content creation, sharing agreement VICTORY IZUCHUKWU

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gelle.com, Africa’s first user generated content platform with 100 percent focus on African content, has announced that it has entered into a content creation and sharing agreement with Bamenya Series Group.

Bamenya Series is one of the most-watched online comedy series from East Africa with 17.3 million views in less than one year.

Osita Oparaugo, CEO, Reddot Television Network, the parent company of Ogelle, said the agreement would ensure that Swahili- and Kinyarwanda-speaking people all over the world find their home on Ogelle.

“As a resource and entertainment platform focusing 100 percent on African content, it’s important that there’s diversity in content creation in terms of culture and language,” Oparaugo said.

“Entertainment content creators in Africa, no matter the language they speak, must embrace the fact that we are major players in content creation and have a voice that must be heard on global digital scale, hence we developed Ogelle,” he said.

Ogelle was launched in Lagos in April 2019 and has recorded impressive acceptance since then, not just from users in Nigeria but all over Africa and globally. There were over 4,000 videos on Ogelle and over 1,000 films from all over Africa

Plc for engaging in unprecedented assets stripping.

“You are hereby given notice that if you do not within one week after receiving this letter, exercise your powers provided in section 34(f) and 35 of the Banks and other Financial Institutions Acts Laws of the Federation of Nigeria 2004 to cancel the takeover and revoke their respective licences and appoint the Nigerian Deposit Insurance Corporation liquidator else we file originating summons asking court to order the Central Bank of Nigeria to do as above.

“We are already presenting a petition for the winding up of the two companies for its failure to fulfill its obligation to our client as required by law section 408 (d) and section 409 (a) of the Companies and Allied Matters Act 2004.”

on the platform as at August, Oparaugo told journalists.

It was to further deepen its footprint across Africa and globally that Reddot Television Network went on locations across Lagos to produce its flagship movie.

Entitled ‘Aluko’s Residence’, the movie, an approximately 30-minute-weekly comedy series designed for the entertainment of the general web audience, will run every Friday in three different languages on Ogelle.com beginning early November, Oparaugo said.

“As we work towards being the highest aggregator of African content by 2025, we want to have quality and original content in all popular languages that make us unique as Africans,” he said. https://www.facebook.com/businessdayng

@Businessdayng

ties to support young Nigerians in order to contribute to national development.

“The most rewarding factor in entrepreneurship is investing in a product or project that can be sustained, and can be developed through passion and supported by the efforts and beliefs of people and communities that exist even beyond the entrepreneur. Over the years, we have delivered on our vision to inspire young Africans to take action, among many other things, but none could have been achieved without those who have been part of our story,” said Williams.

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NEWS

CBN licenses 26 MMOs, 10 super agents, 21 each of PTSP, PSSP, others HOPE MOSES-ASHIKE

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he Central Bank of Nigeria (CBN) has licensed some entities that would smoothen the implementation of the Cashless Policy across the Payments System.

The licensed entities included 26 Mobile Money Operators (MMOs), 10 Super Agents, 21 Payment Terminal Service Providers (PTSP), 21 Payment Solution Service Providers (PSSP), 4 Third Party Processors, 9 Switches and 5 Non-Bank Acquirers.

This is coming as the CBN braces itself for the new Cashless regime in the six States and the Federal Capital Territory (FCT).

Sam Okojere, director, payments system management department/Chairman of NeFF disclosed this on the second 2019 general meeting of the Nigeria Electronic Fraud Forum held in Lagos at the weekend.

As evidenced by the NIBSS second-quarter fraud report of 2019, he said attempted fraud volume decreased by 47.28 percent from first-quarter figures, while Web, ATM and Mobile remain the usual suspects to be used by fraudsters.

He noted the growth in the volume of transactions that occurred in 2012 against 2018, following the Cashless Policy re-introduction and increase in usage of electronic transactions.

Consequently, transactions on instant payments grew from 4 million in 2012 to 729m in 2018, transactions on PoS from 2.5 million in 2012 to 285 million in 2018, and transactions on Mobile Inter-Scheme grew from 2,200 in 2012 to 15 million in 2018.

Okojere said there was a likelihood of continued increase in electronic transactions and corresponding potential upsurge in electronic fraud, in spite of concerted and collective efforts to check fraud in the country.

“It is necessary to review and strengthen the existing rules and enact new regulations to mitigate fraud risks in the Payment system. Taming fraud will continue to be a focus for the Forum, as we know the impact fraud has in diminishing trust which is an essential ingredient in building an internationally recognized and nationally utilized payments system.

“We remain committed in ensuring that the Nigerian Payment System is not only easy to use, but also reliable and trustworthy,” he said.

He said Payment System stakeholders need more than ever to walk the very fine line of doing everything in their power to help prevent fraudulent transactions and protect their customers, while not being overly cautious, leading to declining legitimate transactions, through false positives.

Kyari decries 35000bpd lost to A new Nigeria is possible if... – Osinbajo there is hope for Nigeria to emerge shutdown of OML 25 for 2 years … among greatest nations - Sanwo-Olu HARRISON EDEH, Abuja

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he Group Managing Director of Nigerian National Petroleum Corporation (NNPC) Mele Kyari has decried the daily loss of 35 000 barrels per day due to the shutdown of OML 25 for 2 years, arising from the disputed mining lease between NNPC’s Joint Venture partner, Shell Petroleum Development Company (SPDC) and Belema Oil. Kyari gave this information during a visit of stakeholders to OML 25 communities and its facilities in Kula Kingdom of Akuku-Toru Local Government Area of Rivers State.

Kyari who paid the visit alongside the Minister of state for Petroleum resource Timipre Sylva, assured that the Federal Government would do everything possible in its efforts to bring about a lasting peace and security in the nation’s oil producing host communities and the entire Niger Delta region.

Samson Makoji, NNPC Acting Group General Manager, Group Public Affairs, who confirmed this development in a statement on Sunday said the visit was in furtherance of the peace deal brokered by the GMD, NNPC, under the supervision of the Minister, concerning the disputed mining lease between

NNPC’s Joint Venture partner, Shell Petroleum Development Company (SPDC) and Belema Oil, held in Abuja, a fortnight ago.

In their separate addresses on the occasion, the duo assured indigenes and traditional rulers in the communities that the Federal Government was keen on attracting investments to the area and create jobs for the teeming youths.

Sylva told residents of the host communities that for investments to thrive in the area, there was the need for the people to live in peace and harmony with oil companies as well as cooperate with one another.

“We need unity in our land today. We have fought to this point and the Federal Government has started looking our way. It is time for us to change strategy and ensure that we bring the benefits of investments to our various communities. If we don’t make our communities peaceful, investments cannot come. The investors are ready to come here, unfortunately in some cases there is no peace,” Sylva noted.

He observed that it was the responsibility of the locals to work with the Federal Government to bring peace to the communities so that investors can come and create jobs for the youths in the area.

Tony Ailemen, Abuja

V

ice President Yemi Osinbajo on Sunday assured Nigerians that the country would be better if the citizens had faith in the current efforts by the government to transform the country.

Osinbajo, speaking at the interdenominational church service as part of events marking Nigeria’s 59 Independence anniversary, described the current “ turbulence” in the country as “mere bread.”

Drawing strong analogies from the experience of the children of Israel on the way to the “promise land,” Osinbajo said, “God has promised through the mouth of his trusted prophet that he is giving us a new Nigeria.”

According to Osinbajo, “God has also promised us a new peaceful, prosperous Nigeria, a Nigeria where justice, equity and fairness shall prevail, a United Nigeria, where the different tribes and tongues are not the reason for separation, but a joyful textures of our togetherness. God is ready to fulfil his promise.”

The Vice President, who noted that Nigerians were already standing outside “the new city, a promised land a new Nigeria,” said, “Like the spies sent by Moses, some are saying it is impossible, Nigeria cannot change, the ethnic and religious divisions are too deep, corruption cannot end, politicians are too selfish,

too mischievous.

“Yet, like Caleb and Joshua, if we, declare that these problems are merely bread for us, a new Nigeria is here.”

He assured that every Nigerian would eat the fruits of the land, saying, “God Almighty has taken away the protection of the enemies of this nation, he has taken away their powers, the noise we hear, the turbulence that we experience, are the last gasps of the defeated foes. “The days of freedom are at the door. We reach for the new Nigeria, which its builder and maker is God. As we wait as it is declared in Psalms 46:11, the Lord of host is with us.” In a related development, Lagos State Governor Babajide SanwoOlu on Sunday urged Nigerians not to lose hope in the ability of the country to emerge among the world’s greatest nations, but rather team up with government to bring about positive changes that would ensure progress and development.

Speaking at a special thanksgiving service organised by the state government to commemorate Nigeria’s 59th Independence Day Celebration held at Chapel of Christ The Light, Alausa, Ikeja, Governor SanwoOlu said there was a strong need for Nigerians to cohabit in love and be extremely tolerant of others to pave the way for the peace of God to reign which in turn would ensure transformation of the country.

80th Birthday ceremony of Professor Albert Alos in Lagos.

L-R: Sam Obaze; Paul Edor Obi, chairman/CEO, Pauliza Limited; Elias Igbinakenzua, MD/CEO, Globus Bank; Albert Alos, celebrant; Chuka Agbu, and Ebi Pinnica.

Fabian Ajogwu (l), and Albert Alos, celebrant.

Victoria Pinnica, (L) and Professor Juan M. Elegido.

Cross-section of the guest. www.businessday.ng

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Pictures by Pius Okeosisi.

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BD Money

Monday 30 September 2019

BUSINESS DAY

FIXED INCOME

cover

Commodities

INVESTING

Inter-bank rate to moderate amid maturing N472.37bn T-bills this week

What you can do with an underperforming equity portfolio

Agric offers with over 20% profit margin in October

Timeless lessons from the ‘investment guru’, Warren Buffet

The Nigeria Inter-Bank Offered Rates (NIBOR) are expected to moderate following the maturing Treasury Bills (NTB) worth N472.37 billion in the secondary market this week.

If you are an investor in Nigerian stocks with a portfolio that has gained since the start of 2019, you are among the lucky few, unlike Sharon, 26, a pharmacist whose equity investment has lost more than a quarter of its value year-long.

Page 61

From maize to beef processing and poultry farming, September was stuffed with agricultural investment offers on various platforms, which in the least had a profit margin of 14 percent. Maize farming in Nassarawa state had the highest return with 22 percent per unit of N60, 000 investment.

Page 62 www.businessday.ng

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This article on 7 investment quotes/ rules from the world’s most successful investment guru Warren Buffet, CEO of Berkshire Hathaway shows you timeless principles of wealth and investing especially if you are an equity investor.

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BD Weekly Tenders Wrap-up Tenders Wrap-up

Market Review

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total turnover of 1.097 billion shares worth N16.693 billion in 14,717 deals were traded last week by investors on the floor of the Exchange in contrast to a total of 1.272 billion shares valued at N18.750 billion that exchanged hands last week in 19,482 deals.

The Financial Services industry (measured by volume) led the activity chart with 751.568 million shares valued at N6.414 billion traded in 8,086 deals; thus contributing 68.53 percent and 38.43 percent to the total equity turnover volume and value respectively. The Consumer

Goods industry followed with 141.469 million shares worth N8.531 billion in 2,427 deals.

The third place was Conglomerates Industry with a turnover of 101.787 million shares worth N203.242 million in 956 deals. Trading in the Top Three Equities namely, Access

Bank Plc, Nigerian Breweries Plc and Custodian Investment Plc (measured by volume) accounted for 494.681 million shares worth N8.954 billion in 2,137 deals, contributing 45.11 percent and 53.64 percent to the total equity turnover volume and value respectively.

Top 10 price Losers

About BD Money: This finance supplement is targeted at investors and other readers keen to make their money work harder.

Team Members: Lolade Akinmurele (Lead); Hope Moses Ashike; Segun Adams; Oluwasegun Olakoyenikan; Temitayo Ayetoto; Israel Odubola; Olufikayo Owoeye; David Ibidapo; Graphics: Fifen - Famous www.businessday.ng

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Monday 30 September 2019

BUSINESS DAY

Fixed Income Inter-bank rate to moderate amid maturing N472.37bn T-bills this week

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HOPE MOSES-ASHIKE

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he Nigeria Inter-Bank Offered Rates (NIBOR) are expected to moderate following the maturing Treasury Bills (NTB) worth N472.37 billion in the secondary market this week.

The interbank rate is the rate of interest charged on short-term loans in the financial market. Nigeria’s overnight inter-bank rate, which is the rate at which Deposit Money Banks (DMBs) borrow and lend to each other, rose by 1.86 percentage point to 9.29 percent on Friday from 7.43 percent on Thursday last week.

Also, the Open Buy-Back (OBB), the money market instrument used to raise short term capital, increased from 6.43 percent on Thursday by 2.00 percentage point to 8.43 percent on Friday, data from FMDQ revealed.

The CBN will rollover T-bills worth N133.97 billion, consisting of 91-day bills worth N10.00 billion, 182-day bills worth N17.60 billion and 364-day bills worth N106.37 billion.

“We expect their stop rates to increase marginally particularly across the 182-day and 364-day tenure buckets amid economic uncertainty,” analysts at Cowry Asset Management Limited said.

Last week, the CBN sold treasury bills worth N302.42 billion through Open Market Operation (OMO), which partly offset the matured T-bills worth N422.05 billion.

Hence, the liquidity impact of net inflows worth N119.63 billion as well as the recently distributed N720.88 billion by the Federation Account Allocation Committee (FACC) accounted for the ease in the financial system liquidity.

Consequently, NIBOR for overnight funds, 1 month and 6 months tenure buckets moderated to 9.19 percent (from 14.20%), 13.16 percent (from 13.29%) and 13.95 percent (from 14.31%) respectively.

However, NIBOR for 3 months tenure bucket increased to 13.69 percent (from 13.44%).

Meanwhile, NITTY dipped for most maturities tracked as investors’ demand for treasury bills in the seconday market

“

We expect their stop rates to increase marginally particularly across the 182day and 364-day tenure buckets amid economic uncertainty

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increased – yields on 1 month, 6 months and 12 months dwindled to 12.33 percent (from 12.49%), 12.88 percent (from 13.29%) and 15.10 percent (from 15.21%) respectively; however, yield on 3 months maturity increased to 12.61 percent (from 12.03%).

At the foreign exchange market, the analysts expect appreciation of the Naira against the USD across the market segements as seemingly renewed interest by foreign portfolio investors in local financial assets is further felt amid rate cut in US. Last week, the naira/dollar exchange rate appreciated at the Investors and Exporters forex window (I&E FXW) by 0.10 percent to close at N362.02/USD. However, the NGN/USD exchange rate was flattish at the Bureau De

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Change as well as the parallel markets, closing at N358.00/USD and N360.00 respectively.

The CBN last week injected USD210 into the foreign exchange market the Secondary Market Intervention Sales (SMIS), of which: USD100 million was allocated to Wholesale SMIS, USD55 million was allocated to Small and Medium Scale Enterprises and USD55 million was sold for invisibles. Meanwhile, the Naira/USD exchange rate appreciated for most of the foreign exchange forward contracts – 1 month, 2 months, 3 months, 6 months and 12 months rates fell by 0.11 percent, 0.09 percent, 0.03 percent, 0.26 percent and 0.42 percent to close at N365.31/USD, N368.73/USD, N372.28/USD, N382.97/ USD and N409.45/USD respectively. However, spot rate was flattish at N306.95/USD

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Commodities Agric offers with over 20% profit margin in October Temitayo Ayetoto

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What you can do with an underperforming equity portfolio SEGUN ADAMS

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f you are an investor in Nigerian stocks with a portfolio that has gained since the start of 2019, you are among the lucky few, unlike Sharon, 26, a pharmacist whose equity investment has lost more than a quarter of its value year-long.

With the broad market return still at a negative rate only three months till 2020, Sharon, like many investors, know selling her holdings would be at a significant capital loss yet, is unsure when the market would bottom-out and end a bearish run which started in 2018.

There are several steps you can to ensure you minimise risk and maximize returns in the remainder of 2019.

Reassess your investment horizon and risk tolerance level: While it is normal to be worried about losing money, anxiously tracking the per-

formance of your portfolio or losing sleep might be the clearest sign you have not decided on your investment horizon.

Not all long-term investors have a zen-like calm amid the stormy equity market, but fidgeting means you had expected to make more returns by this time or you don’t think the market would get better soon.

If this is true, it is time to cut your losses and move whatever you have to other asset classes that are less risky and offer you peace of mind.

Find out what stocks are underperforming and what analysts say: Don’t throw the baby out with the bathwater!

If you are a new investor especially it might be tempting to jettison stocks return to old fashioned piggy banks. Look into your portfolio, find out which stocks are dragging your investment and what analysts think.

A hypothetical investor, for instance, has four stocks in a portfolio worth N600,000.

Stock A makes up 40 percent of the entire portfolio and is down 20 percent, Stock B has a weight of 10 percent and is up 13 percent. Stock www.businessday.ng

C and D make up 25 percent each and while the former is up 15 percent, the latter is down seven percent.

The argument could be to jettison Stock A but if most analysts across investment houses believe the stock has prospects while stock B on account of a corporate disclosure would plunge in the long-term then the argument is faulted.

This example underscores the importance of good research before you decide your next step regarding your portfolio.

It is also a good measure to read reports sent by your broker and weigh it against those of other brokers.

Double Down! But pick quality, dividend attractive stocks and wait There is a quote about stars shining brighter on darker nights. The downturn of the market has seen fundamentally sound stocks at record lows-buy these stocks!

“Look for stocks of businesses that are not cyclical,” one equity analyst told BusinessDay. “These stocks would perform well even in an economic downturn” The analyst explained that sectors like tele-

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communications and the oil-palm segment of agri-businesses can weather weak economic cycles.

“Many others especially the big banks are very cheap and have a good dividend yield,” the analyst said.

Diversify your investment portfolio You should not put your eggs in one basket so that you balance risk across sectors you are exposed to.

For instance, splitting your investment between equity and fixed income instruments and even diversifying equity holdings across sectors so you do not suffer significantly when a sector you are exposed to suffers a setback.

Exchange-Traded Funds (ETFs), Mutual Funds are also products that can help balance risk.

Disclaimer: BusinessDay is not recommending any investment class or platform.

Information provided should be discussed with your professional financial adviser to understand the implication of such a decision.

rom maize to beef processing and poultry farming, September was stuffed with agricultural investment offers on various platforms, which in the least had a profit margin of 14 percent. Maize farming in Nassarawa state had the highest return with 22 percent per unit of N60, 000 investment.

But October is poised for much more, presenting an opportunity more than double of September’s. Sponsorship opportunities for snail farming, yam trading, poultry, ginger, soybeans farming and a vegetable greenhouse cluster project will be open on Farm Konnect, Farmcrowdy and ThriveAgric.

Working in partnership with Touchstone Snails Technology Limited, Lanarca, Cyprus, Farmconnect has developed an expansive snail facility tagged Igbeja Snail Village. The first phase of the project will house 100 units of snail breeding facility and will produce a minimum of 2,600 metric tons of snails per annum, with a return on investment above 50 percent yearly.

“We believe that the project should not just be about farming, we should also add glamour to our work, so we will put a touch of tourism and world-class

“

We believe that the

project should not just be about farming, we should also add glamour to our work, so we will put a touch of tourism and world-class hospitality

hospitality,” Azeez Oluwole, the founder Farm Konnect said.

“It is open to investors as per phase. All snails produced are for the export market. There is also a future consideration towards local processing for slime, meat, and caviar.”

On Crowdyvest, an arm of FarmCrowdy, yam trading will be open for sponsorship in Lagos but the rate of return is yet to be disclosed. Also, poultry farming will be open in Oyo; a stage three

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ginger farming opportunity will be available in Kaduna, while Moringa farming will be open in Jigawa. All of them have a gestation period of 6 months.

But from Businessday monitoring, Ginger is likely to yield the highest return.

When Farmcrowdy placed stage-one ginger farming on offer in the same in March, it promised 27 percent return for a price per unit of N60, 000. The farm cycle covered insurance, tractor operations for land clearing and preparation, plough-

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ing, harrowing, distribution of certified seeds and seed treatments to farmers. It also included monitoring and cultivation by technical field specialist.

Meanwhile, Nigeria was the secondlargest producer of ginger as of 2016, according to the Food and Agricultural Organisation. Ginger is used for multiple purposes such as herb for medicine, preservative, spice, tea and coffee.

On ThriveAgric, 895 units of soybeans offer Kebbi and Niger are left from September and will likely roll into October.

The offer has 20 percent returns, duration of nine months and price per unit of N47, 600.

Farm Konnect is another project to watch into. The firm is currently setting up vegetable farms using greenhouse technology and plans to produce leafy and fruit vegetables with output in excess of 130,000 metric tons yearly.

The first phase of the project includes the use of low-tech greenhouses for the production of fruit vegetables, such as tomatoes, habanero and bell peppers among others. In the cluster, individuals can own as many greenhouses as can be afforded. Interestingly, owners of the greenhouse do not need to be on-farm, the facilities will be completely managed

by FarmKonnect on behalf of the owners.

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Investing

Timeless lessons from the ‘investment guru’, Warren Buffet David Ibidapo

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his article on 7 investment quotes/rules from the world’s most successful investment guru Warren Buffet, CEO of Berkshire Hathaway shows you timeless principles of wealth and investing especially if you are an equity investor.

Buffett said, the stock market doesn’t have to be a big gamble only if you follow some important investment rules. “The key to building lasting wealth is to take your time and invest with intelligence,” says Phil Town, is an American investor, motivational speaker, and author of two books on financial investment that were New York Times best-sellers.

Never lose money The drive for investment is to forego current consumption in other to create desired wealth for the future, hence, it is rational if one could ensure never to lose money since of course your initial objective for investing is to make more money and not to lose what you currently have.

Therefore, you need to be careful when making investment decisions. Warren Buffet has always been driven by this rule of investment – never to lose money – hence, his investment strategy revolves round minimizing risk and maximizing reward.

Price is what you pay for, value is what you get The Nigerian stock market as a case study as seen a lot of stocks on the market bleed in value – no exception for the bellwethers – owing to the prevalent general negative market sentiment which has caused the All share index – a measurement for the performance of all stocks – nosedive in market value by -11.95 percent.

You as an investor may just get it all wrong if you focus only price movements of stock and neglect the underlying value of your investment. “The market can price things wrong,” Phil Town says, hence, don’t focus on short term swings in price.

Hear what warren buffet has to say to this, “beware the investment activities that produces applause, the great moves are usually greeted by yawns.”

Risk comes from not knowing what you are doing Buffett says, “Never invest in a busi-

“

Only buy something that you’d be perfectly happy to hold if the market shut down for 10 years,” Buffet says, “our favourite holding period is forever

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ness you cannot understand.” It is a normal philosophy of life that you excel at what you are good at and not what you do “guesswork” on. Good understanding of the industry, company, market you are putting your money/fund is key to predicting almost accurately the behaviour of your investments, be it stocks, bond and the likes.

The advice here is obvious but often forgotten, particularly after investors have had some success. The temptation to believe that success in one area you know well allows you to easily analyse another is much greater once you’ve had some good returns, but should be resisted with vigour.

Buffett himself has kept out of the technology sector for the most part, given his lack of knowledge of the sector. This is coming from a man who has successfully beaten the market at different points.

It is far better to buy a wonderful company at a fair price than a fair company at a wonderful price This quote is very interesting, as frequently, “value investors” will pass on anything that they cannot get for a deep-

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ly discounted price. Berkshire Hathaway has taken a different approach and instead focused on investing in the right companies.

“Only buy something that you’d be perfectly happy to hold if the market shut down for 10 years,” Buffet says, “our favourite holding period is forever.”

Analysis has proven that in the Nigerian stock market, investors get value for their holding 3 to 4 years after investment is made. Investors with long term view tend to get better returns for their investment against short term investors.

Forecasts may tell you a great deal about the forecaster; they tell you nothing about the future Opportunities come infrequently.

When it rains gold, put out the bucket, not the thimble Diversification is protection against ignorance. It makes little sense if you know what you are doing. If past history was all that is needed to play the game of money, the richest people would be librarians.

These are few amongst the 16-investment rules of Warren Buffet.

@Businessdayng

Monday 30 September 2019

BUSINESS DAY

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Data

Federal government Eurobond Yields on Eurobonds rose 0.12 percent point week on week from an average of 6.23 percent when the market closed last week to 6.35 percent following selloff in Nigeria’s Sovereign Eurobonds.

Corporate Eurobond Yields on corporate Eurobonds saw dipped of 0.04 percent points across all tickers week-on-week with average yield rose slightly from 5.457 percent last week to 5.42 percent.

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Monday 30 September 2019

BUSINESS DAY

Economics Global outlook in horse race between weak manufacturing, solid services Israel Odubola

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lobal growth fears have been pronounced recently, fuelled by weak manufacturing data that look especially ominous against the backdrop of elevated trade tension.

Manufacturing activities in most advanced economies have slowed in recent times but this does not perhaps answer a bigger question which is whether the manufacturing recession has started spilling over into the services economy.

Analysts at the Washingtonbased Institute of International Finance (IIF) have helped solve this puzzle. Findings from their research showed there seems to be little spill over from weak manufacturing sector to the services economy albeit does not preclude adverse spill over into the economy.

For instance, in world’s fourth biggest economy with a market size about $4 trillion, Germany, where manufacturing recession is severe and something of a global outlier,

spill over into services are modest.

This bodes well for economies including United States where manufacturing accounts for little share of the overall economy.

“We continue to have a relatively upbeat view on global activity, with weak manufacturing the usual up and down resulting from inventory cycles, rather than supply chain disruptions from trade tensions,” IIF’s analysts said in a note to clients.

The global economy has be-

come increasingly fragile and uncertain, with growth slowing and downsides risks continue to mount.

Economic prospects are weakening in developed and emerging markets, and global growth could get stuck at persistently low levels without sharp policy response from government.

Escalating trade tensions continues to hurt investor confidence, adding to policy uncertainty, rising risks in global financial markets, engendering already weak growth

Week Ahead (Monday, September 30 – October 4, 2019) Week Ahead Week Ahead (Monday, 8th April – Friday, 12th April, 2019)

Commodity Oil: Brent prices traded a little above $60 per barrel in the previous week. Earlier this month, oil futures hit a 16-month high of $69.02 per barrel after drone strikes on two oil facilities in Saudi Arabia disrupted roughly 50% of kingdom’s production capacity or 5% of global crude supply. Going forward, given the current market fundamentals, oil prices are expected to stay a little above $60 per barrel in coming weeks. Also Iran’s foreign minister has warned that any attack on his country over drone and missiles strikes in Saudi Arabia’s oil industry will result “all-out war”. If this happen, oil prices could cross the $70 threshold.

Currency The exchange rate was relatively stable across all market segments. It traded flat at N360/$ at the parallel market. At the interbank market, the currency hovered N306 to a dollar, and traded between N361/$ - N362/$ on the Investor and Exporter window. Going forward, the naira is expected maintain stability across all windows given CBN’s continuous intervention in the currency market.

Data Release The National Bureau of Statistics is yet to release Banking sector report and Nigeria’s debt statistics for the second quarter of 2019. The state agency might possibly release both reports this week.

Fixed Income The Federal Government bond market remained sluggish as market participants focused more on the outcome of the bond auction. Analysts noticed improved offers across the FGN bond curve as bids drifted wider in anticipation of a slight uptick in yields at the FGN bond auction. At the primary market auction, the DMO raised a total of N100bn across the three tenors on offer. Going forward, analysts expect the local bond market to trade with slight bullish bias

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prospects.

This may be why the Organization for Economic Co-operation and Development (OECD) put global growth projection at paltry 2.9 percent by 2019 in its most recent outlook, the weakest since the global economic meltdown of 2008.

According to IIF’s findings from data compiled on United States’ manufacturing and services purchasing managers’ index (PMIs), as well as GDP growth for the last 19 years, activities in the US moves much more closely with non-manufacturing PMI. This raises indications that manufacturing weakness has spilled over modestly into the services sector which is consistent given the relatively small weight of manufacturing (11%) in the US economy.

The same trend according to IIF was observed for Germany where manufacturing activities account for 21 percent of the economy and downturn in the data was severe, yet there are little evidence of any tangible spill over into services.

Extending the analysis to UK and France, manufacturing and

services PMIs have fallen in tandem, while there has been a meaningful rebound in France, UK saw decline in both variables potentially due to Brexit uncertainty.

The assertion doesn’t really hold water in Nigeria’s case.

Both manufacturing activities and services sector are expanding at slower pace in Nigeria whose economy hasn’t recovered fully from a recent contraction in 2016.

While the manufacturing sector continues to face myriads of headwinds including tough business environment and policy uncertainty, the services sector has showed resilience in surmounting challenges Looking across emerging markets, Turkey and Argentina stand out for violent dis-investment cycles that approach 2008/09 in severity. But adverse spill over into dis-investment does not look to be a broader phenomenon, with the growth contribution from investment remaining positive and large in key countries.

According to IIF, combining this relatively benign picture with material easing from the world’s key central banks, it paints a picture that is supportive of risk assets, including EM currencies.

Chart of the week

Oil Index rallies the most since 2015 as bargain hunting push stocks on Friday

Shares of major oil companies were heavily sought after on the nation’s bourse as bargain hunters take advantage of the relatively low prices of these stocks to increase their stake in the currently undervalued stocks for future growth and dividend.

The oil & gas index, an index that comprises the most capitalized and liquid companies in oil and gas marketing gained 6.43percent the highest recorded since April 2015.

Shares of Seplat, the most capitalised company in the oil & gas index recorded a 10percent gain (the highest possible gain in daily trading) two days in a row last week to close trading at N556.60 on Friday.

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Monday 30 September 2019

FT

BUSINESS DAY

67

FINANCIAL TIMES

World Business Newspaper

LIONEL BARBER AND CLAIRE JONES IN FRANKFURT

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uropean Central Bank president Mario Draghi has thrown his weight behind French president Emmanuel Macron’s call for fiscal transfers between eurozone member states to bolster the long-term future of the single currency.

In an interview with the FT, Mr Draghi said higher government spending was “more urgent than before” to counter the global slowdown. He also said that a long-term commitment to fiscal union was essential for the eurozone to compete with other global powers.

“Given the inherent weakness of national states in a globalised world, what matters is to make the union stronger. In some areas, further integration achieves this goal,” Mr Draghi said, later adding: “To have a stronger EMU [economic and monetary union], we need a common eurozone budget.

Clearly the political debate on that still has a long way to go. But I am optimistic.”

Mr Draghi’s intervention — as he prepares to step down after eight years as ECB president at the end of October — is likely to arouse further controversy in Germany and fiscally conservative member states.

The Italian is already facing a backlash after the ECB’s latest monetary stimulus. Nine out of 25 members of his governing council voiced reservations about a re-

Draghi backs calls for fiscal union to bolster eurozone

Outgoing ECB president ‘optimistic’ that the political debate is shifting

Mario Draghi: ‘To have a stronger EMU, we need a common eurozone budget.’ © Martin Leissl/FT

vival of asset purchases under the ECB’s €2.6tn quantitative easing programme and fresh rate cuts — easy-money measures they think will have the dangerous side effect of inflating asset prices.

Mr Draghi said the positive

consequences of the stimulus package still outweighed negative consequences such as penalising savers and inflated asset prices in, say, commercial real estate.

But more government support “could greatly help” lower

the burden on the central bank.

“The extraordinary [monetary] stimulus may have to last a long time if there is no support from fiscal policy.”

European finance ministers agreed to create a common euro-

zone budget in the spring, but the plans are a much less ambitious version of the fiscal stabilisation tool that Mr Macron had initially pushed.

Business leaders and economists want more stimulus to come from Berlin, but the German government so far remains reluctant to boost spending despite signs that the eurozone’s largest economy is now in recession.

A lack of fiscal spending and regional stabilisation mechanisms have hamstrung the eurozone’s recovery from the 2008 global financial crisis, which was followed by its own sovereign debt crisis.

Several member states in southern Europe and Ireland had to slash costs under a severe austerity drive and, with more prosperous economies such as Germany providing little aid, much of the burden to boost growth fell on the ECB. The ECB president, who will be succeeded by IMF managing director Christine Lagarde, played down political divisions, saying: “Disagreements about policy happen everywhere, not just in Europe.”

White House accused of restricting Boris Johnson defiant on EU departure date access to Putin transcript Prime minister hints he could encourage another member state to block Article 50 extension

US media report Trump’s phone calls with Russian president and Saudis were confined DEMETRI SEVASTOPULO AND LAUREN FEDOR IN WASHINGTON

T

he White House restricted access to the transcripts of telephone calls Donald Trump held with the leaders of Russia and Saudi Arabia, providing an expanded list of targets for Congressional investigators pursuing an impeachment inquiry into the president.

The New York Times and CNN on Friday evening reported that White House officials had severely restricted access to calls with Russian president Vladimir Putin and members of the Saudi royal family, including Crown Prince Mohammed bin Salman.

The allegations come a day after the release of a whistleblower report in which a CIA officer says White House officials “locked down” the transcript of a call between Mr Trump and Ukrainian president Volodymyr Zelensky because the US president had tried to pressure his counterpart to investigate former vice-president Joe Biden.

The White House did not answer a request for comment. The

revelation comes three days after Nancy Pelosi, the Democratic Speaker of the House of Representatives, opened an impeachment inquiry into Mr Trump, setting the stage for a bruising battle on Capitol Hill as Democrats and Republicans prepare for the 2020 presidential race.

Mrs Pelosi said on Saturday that the House intelligence committee would continue to pursue fresh lines in their investigation.

“There is a pattern of behaviour that leads people to ask these further questions . . . Right now, I think there is a cover up of the cover up.”

Democratic-controlled committees in the House, including the intelligence panel, have moved quickly to start an investigation that could lead to articles of impeachment being brought against Mr Trump.

Earlier on Friday, the chairs of three House committees instructed Mike Pompeo, the US secretary of state, to hand over documents that could help shed light on whether Mr Trump improperly pressured his Ukrainian counterpart to help his 2020 re-election campaign. Mr Pompeo was told to hand over the material by October 4. www.businessday.ng

SEBASTIAN PAYNE IN MANCHESTER AND SAM FLEMING IN BRUSSELS

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oris Johnson has remained defiant he will not delay the UK’s departure from the EU, giving his strongest hint to date that he might provoke another EU member state into blocking a further Brexit delay.

As the Conservative party gathered for its annual conference on Sunday, the prime minister indicated that if he was forced by MPs to request another Brexit extension through the Benn Act — legislation that would force him to avoid a nodeal — other EU members might seek to expel the UK if it became unco-operative.

“It is certainly true that other EU countries also don’t want this thing to keep dragging on. They don’t want the UK to remain in the EU truculent and mutinous and in a limbo and not wishing to co-operate in a way they would like,” he told the BBC. As the clock ticks towards October 31, EU leaders are becoming increasingly bleak about the

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possibility of a new Brexit deal being struck.

Antti Rinne, prime minister of Finland, which holds the EU’s rotating presidency, described the UK’s political situation as a “mess” in which the divisions ran not only between parties but within them.

“It seems to me that there is not leadership,” said Mr Rinne in an interview with the Financial Times following meetings with EU Brexit negotiator Michel Barnier on Friday.

As such, it was unclear how a new deal would clinch parliamentary support — even if one could be agreed between Mr Johnson and the other 27 EU member states.

“We need a written proposal, not just soft talk. I know there were some non-papers from the UK side, but they are not yet a solution,” he added, referring to proposals sent by Britain that EU diplomats see as inadequate.

Mr Johnson on Sunday refused to comment on the details of any talks he had held with other EU heads of state because they were “interesting but also delicate”. But the prime minister @Businessdayng

did not rule out asking another EU nation to block an extension, if he were forced into a request by parliament or the courts. He also firmly stated he would not be resigning.

The Benn Act, named after Labour MP Hilary Benn, which was passed by opposition MPs this month, compels the prime minister to seek a three-month extension to Article 50 if he cannot get a Brexit deal agreed by the end of the European Council meeting on October 19.

Ministers have said Mr Johnson will not break the law but will seek to find ways around it.

Mr Johnson has labelled the Benn legislation the “Surrender Act”, arguing that it hands power over the timetable of the UK’s departure to the EU. His use of this term has been widely criticised by opposition MPs, who blame the prime minister’s tough rhetoric for heightening tensions and adding to the toxic atmosphere in Westminster.

But he defended his use of “surrender”, arguing that politicians should not be prevented from using straightforward language.

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NATIONAL NEWS

Italian delicacies consumed by Trump’s tariffs war Imported staples of the US diet could become pricier as result of Airbus case JAMES POLITI IN WASHINGTON AND MILES JOHNSON IN ROME

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he pitted olives imported from Sicily are flying off the shelves at an Italian deli on the west side of Scranton, the industrial city in north-eastern Pennsylvania. But Paul Catalano, the outspoken 76-year old owner of the family business, which has operated in the neighbourhood for nearly a century, cannot rest easy.

If the Trump administration imposes threatened tariffs on EU goods in retaliation for subsidies granted to Airbus, the European aerospace company, Italian food products ranging from those olives to cheese and pasta that account for 40 per cent of Mr Catalano’s store would become more expensive.

“Once you start raising prices you start losing business,” Mr Catalano said. “That would put a crimp in our sales”.

Earlier this year, the WTO issued a final ruling authorising the US to impose the tariffs on the EU in the long-running Airbus case. This week arbitrators at the Geneva-based body will set the value of allowed retaliation at up to $8bn — the final hurdle before Washington can press ahead with the punitive measures.

Although such levies would be fully compliant with WTO rules — as opposed to many of the other tariffs imposed by Mr Trump since taking office — they are nonetheless bound to further increase trade tensions between the US and the EU at a time when they are already severely strained.

A tit-for-tat escalation is likely, as a parallel case brought by the EU against the US’s subsidisation of Boeing is also in its final stage, and officials in both Washington and Brussels have failed to find an amicable resolution.

Apart from Italian food, many other delicacies from across the continent — such as French Roquefort and champagne, Irish whiskey and German pork sausages — are also in the line of fire along with manufactured products such as table knives, ceramics, sweaters and suits. Aircraft and helicopters, as well as certain aerospace parts directly related to the Airbus case — are also on the roster.

But Italian officials and executives as well as Italian-American importers believe they are being unfairly attacked, since Italy is not part of the Airbus consortium, which is composed of France, Germany, Spain and the UK. “I agree with this president’s tariffs. The bad actors who illegally subsidise Airbus should be punished. But Italy was not one of them,” said Lou Barletta, a former Republican congressman from Pennsylvania and the head of the American Italian Food Coalition, a lobby group formed to fend off the levies.

Italian ministers and industry associations are mounting their own campaigns against the tariffs ahead of a visit by Mike Pompeo, the US secretary of state, to Rome this week to meet with Prime Minister Giuseppe Conte. Stefano Berni, the director-general of the Consorzio Grana Padano, the trade body representing manufacturers of the cheese, said his members were ready to protest in front of US military bases in Italy, including Aviano, in north-eastern Italy.

Nicola Bertinelli, president of Consorzio Parmigiano Reggiano, which represents producers of the well-known cheese, warned that consumption could fall sharply in the US, the second largest importer of Parmigiano in the world after France. This would then have devastating consequences across Europe as the excess supply of cheese flooded the market. “Why should Italy suffer these consequences when it has always been a reliable partner of the United States? Why should we have to pay this unjust tax?” He asked.

Mr Bertinelli’s group recently met with the Italian ambassador to the US and the US Chamber of Commerce to discuss the tariff threat. While it is unclear how the US will implement the tariffs, the Parmigiano producers said they could be rotated among different products.

The blowback from the US tariffs on Italian cheese could also have domestic political ramifications in a country where angry milk farmers have long been courted by the anti-migrant leader of the League party, Matteo Salvini, who recently left government and is now in opposition.

Earlier this year, low milk prices prompted protests in Sardinia by farmers who poured gallons of milk on to roads instead of selling it at a price they said was not financially viable.

Teresa Bellanova, Italy’s agriculture minister, said that the tariffs “would endanger jobs, businesses, families, entire areas”.

“The United States is the most important market for our wines and quality production,” she said.

“It is necessary and urgent to strengthen our dialogue with the US administration to avert such a huge risk”.

Back in Pennsylvania, Mr Barletta’s concern was that the levies would be “hurting Americans”, rather than Italians. “We all have our favourite Italian restaurants, and mom-and-pop businesses — they are part of our communities.

Italian food has become part of American culture. What’s America without pasta?”

Mr Catalano, who sympathises politically with Mr Trump, hopes they can be avoided at the last minute. “If the tariff goes on it will hurt Trump and everybody concerned,” he said. “I think they are smart enough and once they realise that Italy had nothing to do with it they will reconsider.” www.businessday.ng

Sebastian Kurz, leader of the Austrian People’s Party, and his girlfriend Susanne Thier leave a polling station in Vienna on Sunday © Christian Bruna/EPA

Austria exit polls show Sebastian Kurz set to return as chancellor

Far-right Freedom party on track to suffer big drop in support SAM JONES IN VIENNA

S

ebastian Kur z is on course to return to the Austrian chancellorship with a significantly strengthened mandate at the expense of his former partners, the far-right Freedom Party.

Official polling projections, released after voting closed in Sunday’s general election, showed Mr Kurz’s moderate conservative Austrian People’s Party (ÖVP) increasing its share to 37.2 per cent, compared with 31.5 in 2017. The Freedom Party (FPÖ), which had been expecting a comfortable result, slipped to 16 per cent from 26 per cent in a blow likely to plunge the party into crisis.

The results, predicted by state broadcaster ORF, are much better than expected for Mr Kurz, and if echoed by the final result are likely to be read as a significant victory for the 33-year-old’s pragmatic politics of reform tempered by

hardline positioning on immigration. The election followed a summer of intense campaigning that has repeatedly called into question decisions made during his first term in office.

The ORF projection has in past elections been an extremely accurate predictor of outcome.

By the time of its release, around one-third of all votes had already been counted.

“These numbers indicate a huge victory for Sebastian Kurz and a huge loss for the Freedom Party and also the Social Democrats,” said Austrian political analyst Thomas Hofer. “There has been a big swing in the last few days.”

The Social Democrats, while holding onto second place, are likely to see their share of the vote slip 5 percentage points to just 22 per cent, according to the projections. If confirmed, the results would be the party’s worst result.

Mr Kurz was ousted from the

premiership in May after a political scandal brought his alliance with the far-right FPÖ to an abrupt end. Mr Kurz was forced to eject FPÖ ministers from government following the so-called “Ibizaaffair” in which Heinz-Christian Strache, FPÖ leader and Austria’s then vice-chancellor, was secretly filmed soliciting covert political support from Russia in exchange for promises of lucrative government contracts.

Mr Kurz’s return to the Ballhausplatz was never in doubt.

The former chancellor enjoyed an initial surge in public support following the scandal as conservative swing voters backed him in what they saw as an untimely end to his premiership. Momentum for the ÖVP has gradually slackened over the summer, however, leaving many wondering just how well Mr Kurz would fare in Sunday’s election. Polls in recent weeks have put support for the ÖVP at between 34 and 35 per cent.

HK protesters clash with police ahead of national day Brutal weekend of violence as Beijing prepares for 70th anniversary of communist rule NICOLLE LIU IN HONG KONG

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ro-democracy protesters in Hong Kong clashed with police for the third day running on Sunday as they gear up for what are expected to be mass demonstrations to mark the 70th anniversary of communist rule in China on October 1.

The brutal scenes — in which police at one point fired a warning shot with live ammunition, according to a witness — came as supporters of Hong Kong’s prodemocracy movement rallied in other cities around the world over the weekend, including Sydney, Berlin and London.

Protesters in the Asian financial hub on Sunday threw Molotov cocktails and vandalised govern-

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ment buildings and underground railway stations. Some also burned banners put up to mark the forthcoming national day of the People’s Republic of China. Police responded with tear gas, pepper spray and water cannons.

“Just as Mao Zedong said, when there is suppression, there will be resistance,” said a protester who identified himself only as Ken. He was standing with a group of about 70 people waving the flags of various countries. “We are here to tell the world we have to fight against authoritarian rule.”

The Communist party is planning to mark the 70th anniversary of its regime with its biggest ever military parade to show its citizens and the rest of the world China’s growing military prowess. @Businessdayng

But even as the power of China’s President Xi Jinping reaches its zenith, the Hong Kong protests are emerging as the biggest prodemocracy rebellion on Chinese soil since the 1989 Tiananmen Square demonstrations.

The protests started as opposition to an extradition bill that would have allowed suspects to be sent to China for trial but have grown to include demands for universal suffrage for the city.

Carrie Lam, Hong Kong’s chief executive, who will lead an elite government delegation from the territory to join in the national day celebrations in Beijing, has withdrawn the bill and tried to start a dialogue with pro-democracy activists. But this has failed to satisfy protesters.

Monday 30 September 2019

BUSINESS DAY

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FINANCIAL TIMES

COMPANIES & MARKETS

@ FINANCIAL TIMES LIMITED

Hungary optimistic over swift end to ‘absurd’ EU rule-of-law row Member states are tiring of proceedings against Budapest, minister believes VALERIE HOPKINS IN BUDAPEST

H

ungary believes it can end an acrimonious EU disciplinary dispute by the end of the year, insisting other member states are tiring of a stand-off that is driving a wedge between eastern Europe and the rest of the bloc.

Judit Varga, the Hungarian justice minister, told the Financial Times in an interview that the socalled Article 7 proceedings against Budapest were “absurd” and that a resolution of the case within months would be “timely”.

“At the end of the day, I think member states are also getting tired of this ongoing procedure,” she said.

Ms Varga also suggested the case against Hungary was solidifying domestic support for Viktor Orban’s government.

“In Hungary [Article 7] has such a big, emotional unification power not only for the country, but also for our region . . . we all know why this witch-hunt is going on,” she said.

At a congress of Mr Orban’s ruling Fidesz party on Sunday, the prime minister said: “This is our country, our home and our life and no one else but Hungarians can decide about that.”

Hungary was hit with the Article 7 case last year after the government introduced new laws on the judiciary, media and foreign universities. It became the second nation from eastern Europe to face sanctions because of concern in Brussels over abuse of the rule of law, a fundamental EU tenet. A case against Poland has been running since 2017.

The ultimate sanction against either Budapest or Warsaw would be a

suspension of their voting rights. But this would require unanimous agreement among EU states, and Hungary and Poland have said they would veto such a move against the other.

The Hungary case will be a test of member states’ appetites to spend time and risk internal clashes by pursuing the Article 7 procedure aggressively, especially if Budapest is keen to close the matter and is willing to make limited concessions.

The Hungary matter also has added potential for political disputes. Unlike the Poland case, which was started by the European Commission, it was launched by the European Parliament and is founded on a report written by a Green MEP, rather than research by the EU executive.

Ms Varga insisted that the parliament had “unfairly” pursued Hungary “because we are against the mainstream in migration”.

Closing Article 7 would be a “huge symbolic victory for the Hungarian government”, and a blow for Hungary’s political and civic opposition forces, said Daniel Hegedus, a fellow at the German Marshall Fund in Berlin.

“It would be recognition that what happened in Hungary since 2010 [when Viktor Orban began his second term as premier] was all right and perfect.”

Ms Varga also hit out at proposals being debated in Brussels to link EU funding in the next budget cycle to rule-of-law benchmarks, saying they would mean “a lot of dividing lines in member states”.

She said proposed criteria defining when a member state could lose funding were too vague and would contribute to “big legal uncertainty for the whole EU”.

Moscow rally demands release of anti-government protesters Demostration follows wave of summer unrest over living conditions under Vladimir Putin MAX SEDDON IN MOSCOW

M

ore than 20,000 people took part in a rally in Moscow on Sunday in support of people facing criminal charges for protesting against the government.

Russia’s opposition hopes the demonstration, the first since a summer wave that channelled simmering discontent with President Vladimir Putin’s rule, will sustain pressure on the Kremlin to release more protesters.

Five people have already been sentenced to prison for crimes such as “mass disturbances” during the protests, while a further 12 are still facing charges.

Opposition leaders say the Kremlin is using violence — provoked almost unilaterally by riot police — to scare people away from attending.

Investigators also recently opened a money-laundering investigation against opposition leader Alexei Navalny’s Anti-Corruption Foundation, which helped organise the protests.

Just over 25,000 people attended

the rally, which city authorities had approved in advance, on Moscow’s central Sakharov Avenue, according to the White Counter, an independent monitoring group. Police put numbers at 20,000, Interfax reported.

“They let a few people out, but many more are still in jail,” Mr Navalny said in a speech at the rally.

“Why did they let out the people they let out? Because they have a conscience? Because they’re ashamed?

Because they have children? They let them out because they’re worried their ratings will fall.”

Moscow saw the biggest pro-democracy protests in years throughout this summer after election authorities barred several opposition candidates from running for the city council.

The protests channelled broad dissatisfaction with poor living standards under Mr Putin, then snowballed amid revulsion at the violent police tactics used to break them up, when thousands of peaceful protesters were arrested. More than 60,000 people attended the largest rally in August. www.businessday.ng

Tidjane Thiam had an acrimonious relationship with its outgoing head of wealth management, Iqbal Khan, in part because of a string of neighbourly disputes concerning residences they each own in Zurich © Bloomberg

Credit Suisse board set to back Tidjane Thiam over spying affair Directors assured by support from top shareholders including Harris Associates DAVID CROW IN LONDON AND SAM JONES IN VIENNA

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irectors at Credit Suisse are closing ranks around chief executive Tidjane Thiam as the Swiss bank attempts to draw a line under a corporate espionage scandal.

The Zurich-based lender is battling its worst reputational crisis in years after it engaged a private investigator to track its outgoing head of wealth management, Iqbal Khan.

The bank ordered the surveillance because of fears that Mr Khan was preparing to poach bankers and clients to bolster the fortunes of arch rival UBS, where he is due to start in a similar role on Tuesday.

The corporate spying effort descended into farce this month after Mr Khan confronted private investigators who were following him, leading to an angry altercation in downtown Zurich.

The unedifying episode has

raised questions over the judgment of Mr Thiam, who had an acrimonious relationship with Mr Khan, in part because of a string of neighbourly disputes concerning residences they each own in Zurich.

Credit Suisse’s board is united in its belief that Mr Thiam should remain as chief executive and that the bank was within its rights to try to ascertain whether Mr Khan planned to pick off its bankers and clients, according to two people briefed on their thinking.

One of the people cautioned that the board had not yet digested the final version of an inquiry into the events, which is being led by an external law firm and supervised by John Tiner, a director who chairs the bank’s audit committee. A final decision is expected to be made within the next couple of days.

The person said the report would probably focus on the culpability of executives beneath Mr Thiam and whether Investigo, the private investigation company, had overstepped its remit.

Credit Suisse did not respond to a request for comment.

The board’s determination to back Mr Thiam has been bolstered by the support of some large investors, including Chicago-based Harris Associates. Harris is the company’s largest shareholder, with about 8.1 per cent.

In an interview with the Financial Times, David Herro, deputy chairman of Harris Associates, said he did not think the bank should fire any executives over the incident.

“These are humans; people aren’t flawless,” he said. “They don’t make perfect decisions every time. And this is why, unless laws have been broken, this doesn’t seem like a case for anyone losing their job.”

Mr Herro said that depending on the final conclusions of the inquiry, “perhaps . . . some poor judgment was shown in the way to best protect the stakeholders from a departing executive. I think at this point this is the worst that can be said.”

Trump administration considers ban on Chinese listings in US Measure is one option as advisers debate expanding trade war into capital markets JAMES POLITI IN WASHINGTON AND PETER WELLS AND COLBY SMITH IN NEW YORK

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he White House is weighing a plan to stop Chinese companies listing on US exchanges in a move that would take its trade war with China to Wall Street.

President Donald Trump’s advisers are exploring steps to limit financial investments between the US and China, according to people briefed on the plans. Other options include curbing the ability of US government pension funds to buy Chinese equities.

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Beijing is preparing to mark the 70th anniversary of the founding of the People’s Republic of China with a national celebration next week and is due to have new trade talks with the US in October.

A widening of the US-China economic conflict into the arena of capital markets has long been pushed by hawks in Washington, particularly Marco Rubio, the Republican senator from Florida, and like-minded officials within the administration. But it has been resisted by other Trump advisers who fear that it could deal a fresh blow to markets and undermine investor confidence.

Over a day after news of the @Businessdayng

discussions were first reported by Bloomberg, Treasury spokeswoman Monica Crowley released a statement saying: “The administration is not contemplating blocking Chinese companies from listing shares on US stock exchanges at this time.”

The idea prompted a pointed response from one of the largest US stock markets, Nasdaq, which said in a statement: “One critical quality of our capital markets is that we provide non-discriminatory and fair access to all eligible companies. The statutory obligation of all US equity exchanges to do so creates a vibrant market that provides diverse investment opportunities for US investors.”

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Monday 30 September 2019

BUSINESS DAY

FT

ANALYSIS

Splits at the ECB top table over Mario Draghi’s last big stimulus How the governing council lines up as Christine Lagarde prepares to take over MARTIN ARNOLD IN FRANKFURT

M

ario Draghi made a special plea to the other members of the European Central Bank’s governing council, seated around a ring-shaped table on the 41st floor of its Frankfurt headquarters, as he wrapped up his penultimate meeting as its president.

The 72-year-old Italian urged them not to give off-the-record briefings to the media criticising the ambitious monetary stimulus package they had just decided upon.

“Don’t worry,” Dutch central bank boss Klaas Knot shot back, according to several people present that day, “I will go on the record.”

What followed was one of the fiercest backlashes by council members against any policy rolled out by Mr Draghi in his eight years at the helm of the ECB — only weeks before he is due to hand over to Christine Lagarde.

In the two weeks since the meeting the heads of the German, French, Dutch and Austrian central banks have publicly opposed the ECB’s latest measures, including cutting interest rates to a record low of minus 0.5 per cent and restarting its quantitative easing programme of bond purchases.

This week, Sabine Lautenschläger, Germany’s representa-

tive on the ECB’s executive board, became a focal point for the split by quitting two years before her mandate is due to expire. She recently stated her opposition to ECB policy.

Together, the four countries whose central banking bosses have publicly stated their opposition account for more than half of eurozone gross domestic product, raising potential questions over the legitimacy of the ECB’s decision.

This counts for little in the ECB governing council, where members sit as individuals and not as national representatives, and formal votes are rare.

Mr Draghi, who kept a note using black and red pens of the different views on the council that he still keeps close at hand, told the media afterwards that there was enough of a “clear majority” in favour of the decision not to require a vote.

People who took part in the council meeting say as many as nine out of 25 members expressed reservations on elements of the package and seven of them clearly stated their opposition.

The deep divisions within the top echelons of the ECB raise important questions. Does the split make further monetary easing more difficult? Can Ms Lagarde, who has signalled she supports Mr Draghi’s strategy, heal the divisions? Or will she be forced to change course?

Xenophobia threatens African economies as well as their moral standing In South Africa, a magnet for immigrants from across the continent, foreigners have been targeted DAVID PILLING

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hen African states started gaining independence in the late 1950s, their antidote to the destructive Balkanisation of their continent under colonialism was pan-Africanism. Championed by leaders such as Ghana’s Kwame Nkrumah and Tanzania’s Julius Nyerere, pan-Africanism proclaimed that Africans had a common history and that their destiny belonged together.

The concept gained a new burst of life in the first decade of this century when Thabo Mbeki was president of South Africa, a nation that had overcome the poisonous doctrine of apartheid, or “apartness”. Leaders of Africa’s more than 50 countries, he advised, should shun the “atomistic nation-state” and “zero-sum sovereignty” in favour of interdependence.

Put simply, strength lay in unity.

Now there is a new force abroad in Africa: xenophobia. In South Africa, a magnet for immigrants from all over the continent, foreigners have been targeted in a wave of what many have characterised as xenophobic attacks. In Johannesburg, Pretoria and elsewhere this month, 12 people were killed as foreign-owned shops and businesses were ransacked. In Cape Town, several haulage trucks —

associated with non-unionised foreign labour — were petrol bombed.

Hate speech circulated on social media threatening to burn to death all foreigners who did not leave the country immediately.

This anti-foreign unrest has met an anti-South African backlash across the continent. South African trucks have been attacked in Mozambique. The radio station Hot FM Zambia banned South African music. And Cyril Ramaphosa, South Africa’s president, was booed at Robert Mugabe’s funeral in Harare until he apologised for his countrymen’s actions.

The biggest reaction has come in Nigeria, which fancies itself the continent’s economic and political heavyweight and more than a match for South Africa. Nigerian politicians have reacted with fury to the violence, some of which has specifically targeted Nigerians living in South Africa. Muhammadu Buhari, Nigeria’s president, withdrew his high commissioner from Pretoria in protest and said he stood ready to evacuate Nigerians who wanted to leave. Bisi Adeleye-Fayemi, British-Nigerian co-founder of the African Women’s Development Fund, condemned “Afrophobia”, telling a conference in Stellenbosch this month that it threatened to tarnish South Africa’s liberal credentials. www.businessday.ng

My night as the Wolf of Wall Street Henry Mance draws lessons for today’s workplace by revisiting the toxic excesses of the Jordan Belfort era HENRY MANCE

“E

xcuse me, sir. Will you take off your clothes?” There are times when I think that the FT does not pay me enough. A few minutes later, it’s suggested that the great Jordan Belfort wants to sleep with me. There are times when I know that the FT does not pay me enough.

Being paid enough — hey, more than enough — is at the heart of The Wolf of Wall Street. If you haven’t seen the Hollywood film starring Leonardo DiCaprio, it is the relatively true story of how one man manipulates the market, while devouring most of the drugs in Long Island. It’s basically Hunter S Thompson does stock fraud. Belfort earned tens of millions of dollars, and 22 months in jail.

“I’ve been a rich man and I’ve been a poor man, and I choose rich every f***ing time!” the antihero tells the stockbrokers at his corrupt firm Stratton Oakmont during the film’s crescendo. “At least as a rich man, when I have to face my problems, I show up in the back of a limo wearing a $2,000 suit and $40,000 gold f***ing watch!”

The Wolf is now in London as an immersive theatre show, offering us all the chance to “become a Master of the Universe with the brokers who broke Wall Street”. And this is how I ended up in Moorgate, being told to take my clothes off and to prepare for an intimate encounter with the boss. (Key lesson: if you smile gormlessly, such bad things go away eventually.)

The venue is a row of disused townhouses — fitted out with bars on the ground floor, a nightclubstyle basement and a maze of upstairs rooms. It’s hastily assembled, with plyboard, jagged brickwork and loose wiring. Never mind the FBI, I’d worry about a raid by the Health and Safety Executive.

The real curiosity about the immersive Wolf is not the plot or even the setting — it’s the cultural context.

Even in 2013, when the film debuted, the story was a throwback to inexcusable excesses. Since then, we’ve

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had #MeToo, increased gender pay fights and even rules banning gender stereotyping in British TV adverts.

The Wolf’s super-alpha-male behaviour has fallen out of fashion quicker than a fur coat made of rescue kittens. There is barely one scene that complies with the FT’s full list of company values, and I can say that confidently even without knowing what the FT’s full list of company values is.

We know that male chauvinists have hunted happily in the office environment. But they now face apex predators — HR, compliance, diversity campaigns. At least in my experience, the office is generally now not where men go to misbehave. For all the scandals, men are more likely to be offensive in pubs, football grounds or public transport.

If you think free speech is curtailed in universities, try making a tasteless joke at the office.

At work the consequences of misconduct are clear and the chances of anonymity are zero. The most “colourful” characters — such as Margaret Thatcher’s public relations guru Tim Bell, who died last month — found themselves out of step. Many of those accused of misconduct — Harvey Weinstein, Philip Green — didn’t operate in conventional corporate settings.

The Wolf therefore falls into a category with Fight Club, white-collar boxing and the YouTube videos of psychologist Jordan D Peterson — attempts to salvage red-blooded machismo for the age of routine office jobs. There are men who crave something but struggle to identify what it legitimately can be.

Can you nod vigorously about diversity during the day then celebrate Jordan Belfort by night? Or, as Sigmund Freud argued, is there no such thing as a joke? My wife, it seems, leans towards Freud. She barely tolerated the endless scenes of prostitutes in the film. When I suggest coming to the immersive version, she discovers she has other plans. This left me alone to find out whether I could be a Wolf of Wall Street, and whether I even wanted to be.

The masters of immersive Wolf @Businessdayng

have organised a press night, but it’s not until October. As the brokers tell dumb stock investors in the Wolf film, “by the time you read about it in the Wall Street Journal, it’s already too late”. I needed to get in on the metaphorical ground floor.

So I went on the opening night, and found myself on the literal ground floor, what seemed like a construction site with several bouncers. By coincidence, this was the same day that Justin Trudeau was apologising for dressing up in blackface. Finally, something that makes the Wolf look progressive.

Before I even arrived, however, I knew that this would not be fullthrottle Wolf. The immersive Wolf is an inclusive experience: out go the dwarf-throwing and goldfishswallowing; in come gender-diverse toilets and vegan and gluten-free meal options.

In the film Belfort recounts the various strengths of his drug stupors — including the “tingle phase”, the “slur phase” and the “drool phase”.

In the theatre, “any patron found in the possession of any illegal substances will be removed and banned from the premises”.

At least we’ll be able to unfurl wads of $100 bills like true Stratton Oakmont brokers, right? “Please note,” says the show’s website, “the bar is CARD ONLY.” Have these guys even seen the film, I start asking.

There’s a sign warning us of simulated sex scenes. A staff member’s T-shirt says: “Consent is Essential”. The loudspeaker warns us early on that we may be “triggered”, and there is a “safe space” located in the building. These things are only funny because they are so off-brand — like a Formula One racecourse with a cycle rack.

But if the act has changed, then the audience hasn’t necessarily. I surveyed my fellow wannabe Masters of the Universe. I did not find out what their actual jobs were. But I can tell you that one man looked at a blurred selfie of himself and two friends and concluded aloud, “God, I look good”. I discovered that the men who go to immersive Wolf are the type who put one hand against the wall when they use a urinal.

Monday 30 September 2019

BUSINESS DAY

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Company IN FOCUS

BUSINESS DAY Monday 30 September 2019 www.businessday.ng

Inside Standard Chartered Bank’s ambition to expand retail banking David Ibidapo & Segun Adams

S

tandard Chartered Bank Nigeria recently announced plans to grow its retail customers by five folds to 500,000 and increase its Retail Banking revenue from six percent to 15 percent, over the next two years.

The move is in a bid to increase focus on retail banking in Africa’s most populous country, Nigeria, where it had majorly been corporate banking focused.

The lender in an interview said more retail customers would offer an opportunity for exponential growth.

“It’s just a logical expansion of our portfolio so the company can be diversified should there be a downturn in other parts of the business,” said Lamin Manjang, the chief executive officer for Standard Chartered’s Nigerian unit.

“Within our retail portfolio, we have a segment called business banking…we believe the scale of that business is small relative to opportunities we see in that market,” Manjang added.

The bank headquartered in London is making the move as lenders in the country are exploiting an increase in the digitalisation of Nigerians to offer loan products that would help secure more retail customers.

In the last few years banks have begun to put the spotlight on the consumer banking market, a segment that fintech companies have played a major role in offering small credit and loan product for many financially excluded Nigerians and salary earners in the country.

Standard Chartered Bank Nigeria, said it is “going to spend a lot on digital”, and this would increase opportunities for Nigerians who have recently seen a change in tide with banks luring them with new loan products.

Standard Chartered said it is looking for 5%-10% growth in its overall loan book this year and in personal loans, it has doubled the size of the facility it offers to 20 million naira ($55,300).

In addition, the bank plans to offer a service that will allow customers to buy mutual funds within or outside the country using their mobile phones.

The bank’s Chief Executive Officer, Bill Winters says it is dedicated to invest in digital capabilities to drive transformation in profitability, opportunities and financial inclusion in the retail mass market.

According to Bill Winters,, “We are combining world-class

expertise with local knowledge to be nimble and disruptive.”

As part of its strategy to boost trade and investment, the bank’s strategic priorities include reinforcing its efforts to support China’s opening and Africa’s development.

As one of the largest international banks in China, and the only global bank present in scale across Africa, “we are ideally positioned to help facilitate cross-border trade and investment into and out of both regions,” Winters explained.

“As one of the leading trade banks in the world, we are investing and innovating in the way global trade finance operates to improve our customers’ experiences.

In addition to working with blockchain platforms like Ripple for real-time cross-border currency settlement and supply chain financing, we are collaborating with Siemens Financial Services and TradeIX to create the industry’s first blockchainbased smart guarantees, digitising the end-to-end process in trade finance,” Winters added.

Group’s Financial performance The first half of the year 2019 saw Standard chartered Group record an increase of 4 percent in income and 13 percent in profit at constant currency – while stripping out the effects of exchange rate fluctuations.

Operating income stood at $7.7 billion against $7.6 billion, representing a year on year growth of 1 percent, while profit before tax settled at $2.2 billion, an 11 percent y/y growth from $2.4 billion in H1 2018.

According to the bank’s investors financial presentation in H1 2019, Winters noted that

the bank’s focus on clients and strategic priorities is paying off while still on track to achieve their financial targets.

The half-year 2019 growth was driven by transaction banking and financial markets, partially offset by treasury.

Highlighting a few of the bank’s financial performance during the period, operating expenses were 3 percent lower y/y while remained flat constant currency. Statutory EPS was down 7 percent due to provisions and higher tax. Return on

”

It’s just a logical expansion of our portfolio so the company can be diversified should there be a downturn in other parts of the business

tangible equity grew by 88basis points to 8.4 percent from 7.5 percent.

“We have made tremendous progress securing the foundations of the business since 2015, resulting in a third successive year of underlying profit growth.

Our refreshed priorities announced today will help realise the true value of the franchise.

We will measure this not only in monetary terms with doubledigit equity returns and significant shareholder distributions targeted by 2021 but also in the positive impact to our clients, stakeholders and communities,” Winters stated in 2018.

A five-year analysis of Standard Chartered bank shows that operating profit has nosedived at a cumulative annual growth rate of c.19 percent from $7.2 billion in 2014 to $3.14 billion in 2018.

In the same vein, the bank’s net income declined faster in the last 5 years at a CAGR of -20 percent to $1.05 billion in 2018 against $2.61 billion in 2014. Net income reversed in 2018 after the bank exited a loss position which lingered in 2015 and 2016 respectively. Year on year, profit attributed to shareholders dipped 13 percent in 2018.

However, on a positive side, the bank has seen a significant improvement in its impairment loss position. Impairment losses on loans and advances and other credit risk provisions stood at $653 million in 2018, 52 percent below $1.3 billion in 2017. Impairment losses of the bank resumed a declining trend since 2016 and have declined at a CAGR of 26 percent since then.

Corporate History of Nigerian Outlet Standard Chartered Bank

Nigeria’s history can be traced to as early as 1965 when the Standard Bank of South Africa merged with the Bank of West Africa acquiring businesses including a banking operation in Nigeria, which dated back to 1894.

The entity was renamed Standard Bank of West Africa and four years after the merger, Standard Bank Nigeria was incorporated locally to take over the business in Nigeria.

In 1971, 13 percent of the share capital was placed with Nigerian investors and following the end of the civil war, the military government’s bid to increase local control of the retail-banking sector reduced the Bank’s investment in Standard Bank Nigeria (renamed First Bank of Nigeria in 1979) to 38 percent.

Standard Chartered remained a shareholder of First Bank of Nigeria until 1996 but re-entered Nigeria three years after, and opened to customers on 15 September 1999 as a wholly-owned subsidiary of Standard Chartered Bank Plc, headquartered in the United Kingdom.

Today, the Bank offers a wide range of products and services in Retail; Wealth Management; Commercial; Corporate and Institutional; Private, Digital and Transaction Banking business.

Standard Chartered employs over 900 staff and sees Nigeria as a growth centre.

There are about 22 branches, with ATMs in each branch, located in Lagos, Port Harcourt and Abuja. The new ultra-modern Nigeria Head Office was opened in 2014.

Standard Chartered Bank in Nigeria is a recipient of multiple awards including the 2018 Best Wealth Management in Nigeria

by The Asian Banker Excellence in Retail Financial Ser vices Awards for West Africa, Best Consumer Digital Bank and Best Consumer Digital Bank in 2018

by Global Finance, among others, information on the lender’s website show.

Corporate Governance Standard Chartered Bank is led by Lamin Manjang, the Managing Director/ Chief Executive Officer while Dayo Omolokun serves as the bank’s Chief Finance Officer.

The bank’s board comprises 11 members including three Executive Directors and five NonExecutive Directors of which two are independent.

Adesola O. Adepetu is Chairman of the Board and Sola Mabadeje is the company secretary.

Standard Chartered Bank Nigeria boasts of a strong reputation for delivering the highest standards of international governance.

The bank is currently Sovereign Ratings Advisor to the Federal Government through the Ministry of Finance, according to information on its website.

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