BusinessDay 31 Dec 2018 by BusinessDay

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Five issues that shaped Nigeria’s economy in 2018

IHEANYI NWACHUKWU

or investors in the Nigerian stock market, it is a gloomy end to 2018 today as a late market rally failed to save them a nightmarish ending to their investments in stocks. At least 23 stocks have seen more than 50 percent of their market value wiped out by the stock rout, according to BusinessDay analysis. The losses have made Nigerian companies one of the cheapest priced in emerging markets but also investors have seen a significant part of their wealth wiped out leaving them exposed if the economy fails to pick up in 2019. Companies that have seen their values halved could also face difficulties raising new finance or attracting Continues on page 42

Market down N2.3trn All-share index falls 18.84%

Adeyeye Enitan Ogunwusi, Ooni of Ife (l); Ernest Azudialu-Obiejesi, founder, Obijackson Foundation (2nd r); Achukwu Promise Chidi, face of Okija (male) (2nd l), and Oluchi Blessing Nwizugbo, new Queen, at the Face of Okija Cultural Festival held in Okija, Anambra State.

LOLADE AKINMURELE hether it is the implosion of small lender, Skye Bank, or the naira’s surprise resilience amid an emerging market currency rout, there are five reasons, as subjective as they are, why 2018 will not be forgotten in a hurry in Africa’s largest economy. Goodbye Skye Bank, hello Polaris How Nigeria’s eight largest lender, Skye bank, went from acquirer to acquiree in the space of three years left many scratching their heads after the bank was handed over to a new suitor in Polaris Bank, by the Central bank in September. Skye’s collapse marked a dramatic turnaround for a Bank that Continues on page 42

Inside Why Nigeria should be careful about compromising business with political affiliations P. 2

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Monday 31 December 2018

Nigeria’s 2018 economic performance in 6 Charts OMOBOLA ADU

cent of imports into Nigeria.

he Nigerian economy started 2018 on a positive note having just exited the worst recession it had ever experienced over the last 27 years in Q2 2017 and being named Africa’s best performing stock market in 2017. With much exuberance, Nigerians and investors headed into 2018 with expectation of continuous growth. Here are five charts explaining the Nigerian economy in 2018. For the full details of how the Nigerian economy fare in 2019, look forward to BusinessDay Research and Intelligence Unit (BRIU) Economic Outlook in January. Economic Growth slows down in 2018 Economic growth measured by the percentage change in Gross domestic product (GDP) reflected that the economy was on the path of recovery in 2017 buoyed by two consecutive quarters of positive and increasing growth (Q3 and Q4 2017). However, the pattern did not continue in 2018 as growth started to trend downwards. Growth slowed down to 1.95 percent in Q1 and dropped to 1.50 percent in Q2, before rising to 1.81 percent in Q3 2018 according to data from National Bureau of Statistics (NBS).

Declining crude Oil production One major reason behind the slowing down of the economy in Q2 2018 was the fall in crude oil production. Data gathered from NBS showed that in Q1 2018, oil production dropped from 2.0 million barrels to 1.84 million barrelsinQ22018followingthetrendin GDP growth rate. Likewise, the uptick in the economy in Q3 coincided with an increase in oil production to 1.94 million barrels in Q3 2018.

Asian countries emerge as top trading partners with Nigeria in Q3 Total trade in Q3 rose by 30.7 percent to reach N9.025 trillion in 2018. The trade deals struck with China made the country the second largest trading partner with Nigeria in terms of imports behind South Korea that ranked top. In terms of exports, Nigeria’s largest trading partner was India in Q3 2018. South Korea and China combined accounted for 43.28 per-

The Nigerian stock market suffers in 2018 Year-to-Date analysis of the Nigerian All Share Index (ASI) shows that as at December 28, the Nigerian stock market was down by about 18.84 percent. Investors’ sentiments towards the Nigerian stock market have mostly been negative as uncertainties concerning the political direction of the economy in 2019 have weighed in on investment decisions.

Inflation trended downward for a historic 18 consecutive time July 2018 made it the 18th unprecedented and consecutive decline in the inflation rate in Nigeria. The Consumer Price Index (CPI) inflation had been decelerating since February 2017. As at January 2018, inflation had dropped to 15.13 percent and by July it had fallen further to 11.14 percent. In the following month, August, inflation then rose to 11.23 percent.

The Central Bank of Nigeria (CBN) leaves the Monetary Policy Rate (MPR) Unchanged in 2018 TheCBNmaintainedtheMPRat14 percent throughout 2018. The decision to leave the MPR unchanged centred on the belief that raising the rate could hamper the already slowing growth in the economy as domestic credit would become costlier inhibiting investment and leading to a fall in output. While the decision not to reduce the MPR rested on the notion that lowering the rate may not lead to lowering market lending rate on account of the high cost of doing business.

Why Nigeria should be careful about compromising business with political affiliations VINCENT NWAMMA

he announcement on Friday that President Muhammadu Buhari had appointed the duo of Aliko Dangote and Femi Otedola into his Presidential Campaign Council raised some dusts. But while the political community was yet to fully digest the import of the information, a contrary message came from the same source, presidential spokesman Femi Adesina: the two men were actually not members of the committee. Adesina explained that the billionaires could not have been mem-

bers of the campaign council since they were not card-carrying members of the ruling All Progressives Congress (APC). This made a lot of sense and must have brought some relief to those who were agitated by the announcement. The reasons are obvious. Dangote is Nigeria’s and Africa’s richest man, whose business tentacles extend to every nook and cranny of the Nigerian economy. Only recently, the National Bureau of Statistics told Nigerians that Dangote’s businesses directly and indirectly account for

Continues on page 42

L-R: Babatunde Fashola, minister of power, works and housing/keynote speaker; George Etomi, principal partner, GEPLAW; Hector Etomi, chairman of occasion, and Folake Etomi, chairman, conference organising committee, at the Etomi Leadership Conference 2018 with the theme, “If Not Us, Who? If Not Now, When?” in Lagos on Friday.

How NNPC’s losses add to Nigeria’s economic pains ... Three refineries operate deficit of N6.97bn DIPO OLADEHINDE

t is meant to be a cash cow with average oil price of $71.04 in August, but latest report from state oil company of Africa’s biggest producer showed the country is still bleeding money to wide range of old perennial problems. BusinessDay analysis of the September report of NNPC showed modest gains made by NNPCs upstream and gas processing subsidiaries such as the Nigerian Petroleum Development Company (NPDC), Retail and Nigerian Gas Processing Transportation Company Limited, were wiped off largely by Kaduna, Port Harcourt and Warri refinery

which all incurred a combined loss of N95 billion. NNPC report also showed other subsidiaries such as Nigeria Pipelines and Storage Company Limited (NPSC), Shipping, CHQ and Ventures incurred a combined deficit of N154.5 billion in August. This is beside the N70 billion on Under Recovery, Crude Losses, Product Losses, Pipeline Repairs and Management Cost. The report noted that in September 2018, there was no Crude processed by the country’s three domestic Refineries as against the 56,804 metric tons processed in the preceding month translating to zero combined yield efficiency as against the 80.74percent in August 2018.

“The lower operational performance recorded is attributable to the ongoing revamping of the refineries which is expected to further enhance capacity utilization once completed,” NNPC said in latest report. Despite having a combined processing capacity of 445,000 barrels per day, the combined value of output by the three refineries (at import parity price) for the month of September 2018 amounted to N1.44 billion while the associated Crude plus freight costs and operational expenses were zero and N8.41billion respectively resulting to an operating deficit of N6.97 billion by the refineries.

•Continues online at www.businessday.ng

How incessant strikes fuel graduate unemployment crisis – experts SEGUN ADAMS

tudents of Nigerian tertiary institutions -especially undergraduates of public universities - should be happy, looking forward to the future with excitement. But they are not. Rather, they feel jinxed. They have become casualties of never-ending strikes by the Academic Staff Union of Universities (ASUU), which put them at jeopardy in a competitive labour market. These strikes have undesirable effects on the labour statistics, as unnecessary delays and disruption in learning result in skill deficiency and over-qualification of a lot of fresh graduates for many entry- level job openings, education experts say. In its Q32018 Labour statistics report, National Bureau of Statistics (NBS) put the headline unemployment figure at 23.1%, an increase of 4.3 percentage points from 18.8% in the preceding quarter. Of the 9.7 million people that did absolutely nothing, 8.77 million or 90.1% were first time job seekers who have never worked before, NBS explained. What the statistics failed to capture however is the fact that many of these firs-time job seekers are roaming the streets of Nigeria not primarily as a result of the dearth of entry-level jobs, but majorly due to the age restriction on the available jobs for which they

have become over-qualified or inadequately skilled to handle. Incessant strikes would likely worsen the unemployment situation in Nigeria because they elongate the time spent in schools to acquire the necessary qualification for employment, making fresh graduates older than the age bracket required by most jobs,” says Jameelah Yaqub, an associate professor of Economics at Lagos State University (LASU). Strikes also lead to students losing out on quality education as they would subsequently have to be hurried out of the school system, Yaqub added. ‘’These strikes affect the quality of graduates of most public schools as semesters have to be shorten to cover up for periods lost to the strike.” Whilst not completely agreeing that fresh graduates are unable to secure jobs due to age restrictions on entrylevel roles, Emmanuel Noko, LEAD Researcher at Enugu-based M&C Research Institute, admits that strikes are a contributory factor to the deficiency of skills required in the corporate world. “When you look at the situation from a specific vantage, strikes distort academiccalendarandaffectstheability of lecturers to cover their syllabus, which consequentlytellsonthecompetenceof the graduates,’ he said by phone. Currently, the average age restriction for entry-level roles typically ranges from 24 to 26 years across

many sectors. For instance, in the banking sector for 2018, Access Bank entry-level training programme has a 24 years age restriction for Bachelor degree holders. Wema Bank and some others has an upper limit of 26 years, while at First Bank it is 27 years. For firms outside the banking sector like Dufil, KPMG and the likes, the average age for entry-level job is 26 years, with exception for Flourmill Nigeria, which allows applicants up to 27 years for its entry-level roles. There is therefore potentially a crisis at hand as the fresh graduate unemployment figure might likely go up if the current strike which started early in November persists. The Academic Staff Union of Universities has been at loggerheads with the federal government since November over the failure of the government to hold up its own end of a bargain as reached in 2009. They are also fighting for the implementation of a 2017 Memorandum of Action where issues bordering on Non-payment of salaries and earned academic allowances, funding of University staff school, release of operational license for the Nigeria University Pension Management Company, funding public universities and a host of other issues were addressed.

•Continues online at www.businessday.ng

Monday 31 December 2018

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BUSINESS DAY

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Nigeria joins tie with South Africa, score 94 in market transparency index HOPE MOSES-ASHIKE

n a joint tie with South Africa, Nigeria emerged first, scoring 94 index points, beating other African countries in the market transparency, tax and regulatory environment index. Absa Africa Financial Markets Index (AAFMI) produced by Official Monetary and Financial Institutions Forum (OMFIF) shows that Nigeria moved up in the 2018 index, from sixth place in 2017 to the fifth in 2018. “This is the first time South Africa has been beaten in any of the pillars for the index, and this shows some of Nigeria’s strength,” Jeff Gable, chief economist, Absa Group, told BusinessDay. In the index report, countries are assess around six pillars: market depth, access

to foreign exchange, tax and regulatory environment and market transparency, capacity of local investors, macroeconomic opportunity, and enforceability of financial contracts, collateral positions and insolvency framework. Nigeria scored 53 and was behind Kenya, which scored 93 and Ghana 58 in terms of access to foreign exchange. Africa’s biggest oil producer scored 66 in market depth, above Ethiopia with 10 scores, Egypt 42, Angola 29, Kenya 44 and Ghana 55. “Capital markets play a vital role in Africa’s future. The continent’s financial markets have remained resilient and innovative amid slowing worldwide growth after the synchronised upturn of 2017. However, they remain fragmented and shallow compared to their equivalents in Latin America

and Asia. “The second edition of the Absa AAFMI produced by OMFIF, draws attention to the considerable investment opportunities and untapped market potential of countries across the continent,” Akinwumi Adesina, president, African Development Bank, said. Nigeria had 59 scores under the macroeconomic opportunity and was behind Seychelles 61, South Africa 75 and above Rwanda 56 and Zambia, which scored 44 points. “For Nigeria to be behind the tiny economy of Seychelles and barely above Tanzania in the macroeconomic opportunity pillar, shows that there are lots of room to play for, part of which will come naturally as the economy starts to grow again but also better work to

make the data more transparent around the budget process, monetary policies and getting more economic data so investors have the ability to understand better what is going on in the economy and this will help in moving Nigeria further up the ranks,” Gable said. Under the capacity of local investors pillar, Nigeria scored 50 points and was behind South Africa with 95 scores, Morocco 65, Botswana 64, and Namibia 56 point. It was barely above Seychelles with 49 scores, Kenya 33, and Uganda 13, among others. The report also found that foreign exchange liquidity remains low in Africa, with just three countries including South Africa, Kenya and Ghana, recording interbank foreign exchange turnover above $20 billion.

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Monday 31 December 2018

Poise Nigeria re-launches PSENSE certification programme DIPO OLADEHINDE

hrough its transformational curriculum called Poise Graduate Finishing Academy (PGFA), Poise Nigeria, an etiquette training firm, has relaunched the PSENSE certification programme structured not only to make the Nigerian graduates employable in the labour market but also more globally competitive. Asher Adeniyi, chief marketing officer at Poise Nigeria, said the decision to relaunch the program was as a result of the firm desires to transfer knowledge that will not only enhance the soft skills of young executives but also improve their dexterity, knowledge and attitude to excel in the work place. Adeniyi explained that PSENSE advance certification would now be run for 10

Strategic policy reforms needed to revamp economy in 2019 - LCCI JOSHUA BASSEY

Scores of travellers at Tollgate Lagos - Ibadan Expressway getting set for New Year trip in Lagos, at the weekend. Pic by Olawale Amoo

NPA assures businesses of swift cargo evacuation, improved efficiency in 2019 AMAKA ANAGOR-EWUZIE

anaging director, Nigerian Ports Authority (NPA), Hadiza Bala Usman, has assured port users of the authority’s renewed efforts to ensure swift evacuation of cargo from the nation’s seaports to the hinterlands and land locked neighbouring countries in 2019. Usman also promised that her management was also determined to improve on port’s operational efficiency in the New Year, and also enhance the accomplishments recorded in the year ending 2018. According to a statement signed by Adams Jatto, general manager, corporate and strategic communications of the NPA, Usman assured terminal operators and port users that it would further en-

able all players to surmount various bottlenecks with a view to providing a healthy and smooth environment for all stakeholders. She recalled that with the Ease of Doing Business introduced by the Federal Government, the NPA had partnered the Federal Ministry of Works, Power and Housing and others to reconstruct dilapidated roads within the ports axis for efficient services. According to Usman, cargo owners need to take advantage of the recent regime of incentives including the review of storage free days from three to 21 days, for next four months, as well as demurrage free period on the return of the empty containers from five free days to 15 days. “Meanwhile, we assure all willing investors of a re-

newed determination towards attracting investments to the ports across the country through infrastructural development. There has been constant dredging of the channels to attain the expected draught level for incoming vessels at our ports. This is expected to lead an unprecedented revenue generation and with the expectation that this effort would further be surpassed in the New Year,” she said. Usman, who said her management would sustain and step up in the culture of efficiency and transparency, reiterated that it had put structures in place to drive this through the launch of the Revenue Income Management System (RIMS), which is a web based billing and revenue collection application fully automated for the entire billing circle of the NPA.

weeks. “The first five weeks will be basically be targeted at developing soft skills program while the remaining five weeks will be use to develop other global skills that are targeted at employment such as ICT, sales and management, business development, business analysis and human resources which will significantly improve the performance of the young executive in the work place.” “All this sections will be facilitated through experiential learning exercise,” Adeniyi said at the event. Adeniyi noted that one of the root problems of Nigeria’s high unemployment rate is lack of technical skills. “Although an average young Nigeria graduates are willing to work, however they lack the required technical skills to excel in the work environment.”

agos Chamber of Commerce and Industry (LCCI) says the Federal Government will need to undertake strategic policy reforms to attain macroeconomic stability in 2019. LCCI, in 2019 economic outlook released by Muda Yusuf, its director-general, explained that such reforms should include a foreign exchange management framework that would reflect market fundamentals, acceleration of economic diversification agenda and normalisation of Lagos ports environment. According to Yusuf, oil and gas sector reforms, especially the Petroleum Industry Bill, will also need to be fast tracked in the com-

ing year, while reduction in the cost of governance at all levels and improvement in domestic revenue are imperative. Yusuf warned that the nation’s economy remained fragile with its continued dependence on oil for revenue and foreign exchange earnings, and this called for deliberate efforts to grow other sectors of the economy. “Although oil revenues increased with recovering oil prices in 2018, the impact on the economy was subdued by the huge foreign exchange commitments to petroleum product importations and the inherent subsidy. The high debt service obligations were also major constraints to the growth of the economy,” he said.

Strategic policy reforms needed to revamp economy in 2019 - LCCI JOSHUA BASSEY

Bill, will also need to be fast tracked in the coming year, while reduction in the cost of governance at all levels and improvement in domestic revenue are imperative. Yusuf warned that the nation’s economy remained fragile with its continued dependence on oil for revenue and foreign exchange earnings, and this called for deliberate efforts to grow other sectors of the economy. “Although oil revenues increased with recovering oil prices in 2018, the impact on the economy was subdued by the huge foreign exchange commitments to petroleum product importations and the inherent subsidy. The high debt service obligations were also major constraints to the growth of the econo-

my,” he said. He observed that with limited progress in the ongoing effort to diversify government revenue sources, performance of the oil and gas sector would remain a critical factor in the 2019 economic outlook. He quoted estimates from Capital Economics analysts saying that every $10-perbarrel fall in oil prices would cause a 3 to 5 percent decline of GDP in most of the Gulf economies. This development will also cause a slowdown of 1.5 to 2 percent of GDP in Russia and Nigeria on an annualised basis, he said, adding that growth will depend largely on development in the sector and the political will to undertake far-reaching reforms.

Monday 31 December 2018

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BUSINESS DAY

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Nigeria’s health care system, laggard among peers … as country ranks lower than peers on vital health indicators ISRAEL ODUBOLA

ompared to what obtains in even neighbouring African countries, Nigeria’s health care system is a laggard. And it will take deliberate government measures to lift the sector in the country. This sore state shows in virtually all relevant health care indicators. The 2018 Health access quality (HAQ) index, which measures the quality and accessibility of healthcare based on 32 causes of death which is preventable with effective medical care, ranked Nigeria 187 out of 195 countries, beneath Egypt (64th), Kenya (112th) South-Africa (119th) and Rwanda (173rd). Similarly, the 2018 World Health Organisation (WHO) data on life expectancy at birth (total years), which captures how long, on the average, a new-born baby is expected to live given constancy in death rate, ranked Nigeria 178 out of 192 countries. Total life expectancy in Nigeria, according to the data, stood at 55.2 years, below Rwanda (68years), South Africa (63.6 years), Kenya (66.7 years) and Egypt (70.5 years). Nigeria’s life expectancy is tangibly below

the average across the whole continent, which settled at 62.5 years. Nigeria also performs worse than most African countries on infant mortality rate. For instance, data from the World Bank show that in 2017, about 65 infants below the age of one died for every 1000 live births recorded in Nigeria, ahead of Kenya (33.6), Rwanda (28.9), South-Africa (28.8) and Egypt (18.8). Data on death rate, crude per 1000 people for 2016, published by the World Bank, which showed that Nigeria recorded the highest rate among peers at 12.5, followed by South Africa (9.8), Egypt (5.8), Rwanda (5.8) and Kenya (5.7). Nigeria’s health expenditure per capita, which stood at $215, is also significantly below South Africa’s ($1,086) and Egypt ($495), but higher than that of Rwanda ($143) and Kenya ($157). Budgetary allocation to health sector in Nigeria is a far cry from 15% recommendation of the World Health Organisation. The Federal Government plans to allocate N315.62 billion to health in 2019, which is just 3.6% of the budget. Two months ago, Isaac

Adewole, minister of health, announced that 60 million out of the country’s estimated population of about198 million suffer from mental illness, implying that about 30% of the country’s populace are mentally ill. Therefore, health, being a critical component of human capital development, needs to be given it pride of place, since only a healthy nation is a productive and progressive nation. The poor state of health care system in Nigeria is greatly attributable to the dearth of health personnel, migration of health staff to other countries, poor infrastructure and lack of effective coordination between Federal, State and Local Governments, says Doyin Odubanjo, a public health expert commented. “We are not getting the recommended funding. We also have leakages, which is a similar trend in other sectors. What we have is not enough and yet not effectively utilized. This is a double problem,” Odubanjo explained. This poor state of healthcare will linger poor as long as government remains negligent, says Odubanjo. “I am not optimistic,” he notes.

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Monday 31 December 2018

Oil is not going away soon as new discoveries peak at 9.2bn barrels in 2018 … Guyana, Russia, USA top list of major finds ISAAC ANYAOGU

lobal oil discovery is projected to peak at 9.2 billion oil equivalent (boe) at the end of 2018, the highest discovery since 2015 in a clear indication that the world is not done with oil, the world’s most important fuel, supplying 35 percent of all energy used. Rystad Energy, an independent energy research and business intelligence company, examined the biggest discoveries made this year and found discovered resources have already surpassed 8.8 billion barrels of oil equivalent (boe) for 2018 and the number is set to peak at 9.4 billion boe by year-end. “We at Rystad expect this discovery trend to continue into 2019 with many promising high-impact wells targeting vast potential,” says Palzor Shenga, senior analyst on Rystad Energy’s Upstream team. Offshore discoveries represent around 82% of total volumes. 2018 has also seen a significant uptick in the reserve replacement ratio to around 15% from 11% in 2017. “Global exploration activity

and discoveries have halted their year-after-year decline and look set to rise in the next year. This as an exciting recovery which runs contrary to a decline in global exploration spending from 2014 to 2017,” Shenga adds. Meanwhile there are still significant finds from previous years that are yet to be tapped. For example, in Nigeria projects Shell plans to 225,000 bpd Bonga South West/Aparo, 120,000bpd Zabazaba-Etan project; 140,000bpd Bosi project; 110,000bpd Uge project, 100,000bpd Nsiko deepwater project and the 1billion barrel Owowo field are waiting investment decisions. According to Rystad, the biggest discovery thus far has come from offshore Guyana where ExxonMobil registered its tenth discovery in the prolific Stabroek block, boosting its recoverable resources from the block to about 5 billion barrels of oil equivalent. Offshore Russia drilled by Novatek also yielded another huge discovery. The company drilled its first exploratory well in the North Obskoye block in the shallow waters of Ob Bay. “This is the largest discovery to date this year and is estimated to hold recoverable

resources of around 960 million barrels of oil equivalent,” says Rystad energy. In the US Gulf of Mexico, Chevron and Shell registered oil discoveries in the Ballymore and Dover prospects. Rystad Energy estimates combined recoverable resources of around 728 million boe from these two discoveries. Other relevant discoveries included Eni’s Calypso gas discovery offshore Cyprus, Petroleum Development Oman’s Mabrouk North East gas/condensate discovery in Oman and Quadrant Energy’s Dorado oil discovery in Australia. The Calypso discovery confirmed the extension of a play in the Cyprus Exclusive Economic Zone that resembles the giant Zohr field to the south in Egyptian waters, and Dorado was one of the largest discoveries ever in Australia’s North West Shelf. Rystad Energy estimates that these fields hold cumulative recoverable resources of around 1.6 billion boe. Rystad also found that exploration spending decreased by nearly 61% from 2014 to 2018. Exploration investments halted their fall in 2018 and are expected to rise in 2019.

Monday 31 December 2018

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BUSINESS DAY

8 BUSINESS DAY NEWS 2019: Erection of Isiaka, ADC’s billboards violated Ogun signage law - OGSAA www.businessday.ng

RAZAQ AYINLA, Abeokuta

gun State Signage and Advertisements Agency (OGSAA) has declared that the erection of campaign billboards belonging to Gboyega Nasir Isiaka, Ogun State governorship candidate of African Democratic Congress (ADC), was carried out illegally, hence, they were bound to be removed in accordance with the State Signage Law. The statement was made at the weekend by the general manager of OGSAA following the allegation credited to Gboyega Nasir Isiaka Campaign Organisation (GNICO) on Friday, alleging that the officials of OGSAA were hostile to Isiaka and the ADC, prompting the removal and destruction of their campaign billboards erected along major roads in Abeokuta, the state capital. Speaking at a press conference held in Abeokuta at the weekend, Akin Bandele, general manager of OGSAA, said due process was not followed while erecting Isiaka and ADC’s billboards, and

the agency was duty bound to regulate and remedy any actions that could violate the State Signage Law without necessarily witch hunting any parties or organisations, adding that compliance with the Signage Law automatically guaranteed approval to would-be applicants of such adverts placement. Bandele, who narrated the bad experience of one of his team in the hands of Gboyega Nasir Isiaka’s political boys when enforcement was made on the illegally erected campaign billboards of Isiaka and ADC in Abeokuta, said, “It is also pertinent to state categorically that as at today, GNICO, has not applied nor paid for a single “A”

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frame board currently being deployed illegally across the state and The maxim, “He who comes to equity must come with clean hands” is quite apt in this instance.” While explaining that he has no instruction from anybody not even the governor not to allow parties or candidates to erect billboards, posters or any form of political adverts in as much as they meet up with the prerequisites, stated “Our attention has been drawn to a press conference held on Friday 28th December 2018 by the Gboyega Nasir Isiaka Campaign Organisation (GNICO) wherein it was alleged that officials of Ogun State Signage.

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Nigeria’s 2019 budget assumptions in trouble as oil price slips 18 months low OLUSOLA BELLO with agency report

il prices fell weekend ahead of the New Year holiday, as global crude benchmarks moved back toward their lowest levels in more than a year. This is coming a few days after Nigeria decided to use $60 per barrel as her budget benchmark for the 2019 fiscal year and a 2.3 million barrels per day of crude oil production for the year. These two assumptions have been greatly criticised by industry operators who said it was wrong for the government to use them when the prices were tumbling down and the Nigerian operational environment presently cannot guarantee 2.3 millions barrels of crude oil per day. Bank-Anthony Okorafor, chairman, Petroleum and Technology Association of Nigeria (PETAN), while reacting to the budget assumption of 2.3 million barrels per day and $60 per barrel of oil, said, “But the reality today is $59 per barrel. Worldwide crude oil prices will average $61 a

barrel in 2019. That’s according to the Short-term Energy Outlook by the US Energy Information Administration. “The estimate is $11/b lower than the EIA prediction just a month ago. The forecast dropped after oil prices dipped below $50 a barrel in November. The average for the month was $65/b.” He said they believed higher US supplies would flood the market, and at the same time slowing global growth would cut into demand. Saudi Arabia and Russia had also produced oil at record levels. Also reacting to the budget assumptions, Seye Fadahunsi, a former executive director of Pillar Oil, described the budget as optimistic project. He said even though the Egina project was coming on stream with about 150,000 barrels of crude next year this was not enough reason why the government should be too optimistic about oil production. He said even though militancy had gone down, the situation in the Niger Delta was highly unpredictable as anything could come and the militants might decide

to blow the pipelines, which might cause the country great loss. Toyin Akinosho, publisher of Africa Oil and Gas Report, a magazine focusing on the petroleum sector, towed the same line of thought with the two other operators. In a situation where the country is being asked to cut production when it is producing less than 2 million barrels already by OPEC, it sounds funny that the country is projecting 2.3 million barrels per day in 2019 budget, he said. He said: “It is not true, the country cannot at this current situation produce 2 million barrels not to talk about 2019.” According to Akinosho, the country’s production at this moment is zigzag and highly unpredictable because of so many things happening in the Niger Delta. On the benchmark of $60 per barrel, he dismissed the action as lacking foresight. Shale producers are eager to pump as much crude oil as they can into the market, and this will consequently affect the price of crude oil, he said, saying “if I were the government, may be $50 per barrel would have been better.”

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BUSINESS DAY

BusinessDay wins NMMA Business Publication of the Year award MICHEAL ANI

usinessDay, Nigeria’s leading business and financial newspaper, has won the First Bank Prize for “Business Publication of the Year” at the 26th edition of the Nigerian Media Merit Awards (NMMA). The award ceremony, which took place at the Federal Palace Hotel in Lagos on Thursday night, saw the leading business paper as the only nominee among others newspapers in the country. This development has got thumbs up from analytical readers and business lovers, especially given the fact that BusinessDay was the only Nigerian print newspaper that was regarded “fit and suitable” of being nominated into that category. While the management and the entire BusinessDay family are indeed grateful for bagging this award of excellence, it is worthy of note that the business paper has consistently won the award in this category for a number of times. The paper recently clinched the Special Recognition and print media Partner award organized by the FMDQ OTC securities ex-

change, for its contributions to the growth of the Nigerian capital market. In its tradition, BusinessDay has also produced award-winning journalists, including Anthony OsaeBrown (editor), Patrick Atuanya, Odinaka Anudu, Iheanyi Nwachukwu, Isaac Anyaogu, Caleb Ojewale, Chuka Uroko, Obinna Emelike, Daniel Obi, Teliat Sule, Josephine Okojie, among many others. BusinessDay’s head of capital markets, Iheanyi Nwachukwu had won the “2018 Capital Market Journalist of the Year” award by The PEARL Awards Nigeria. According to the board of governors of PEARL awards Nigeria, Iheanyi clinched the award based on his “outstanding performance in the reportage and objective analysis of activities in the Nigerian Capital Market”. Similarly, Frank Eleanya, senior technology correspondent, was selected by APO after an intense competition to represent the African media at the Web Summit, in Lisbon, Portugal. The Web Summit 2018, which held in November, is the world’s largest technology conference with over 70,000 participants from all over the world. He was

also invited in December to moderate a high-level forum on artificial intelligence by UNESCO in the Kingdom of Morocco. Josephine Okojie won the Open Forum for Agricultural Biotechnology (OFAB), Nigeria chapter, 2018. Chinwe Agbeze, investigative correspondent, BDSUNDAY, was honoured at the 13th Wole Soyinka Awards for Investigative Reporting on December 9, 2018 where she emerged the first runner-up in the Print category for her undercover investigation titled ‘FG’s school feeding programme: The truths, half-truths and outright lies’. Agbeze was a finalist for the 2018 Free Press Awards (Newcomer of the Year category), and was crowned second runner-up at the 2018 PricewaterhouseCoopers Awards (Business and Economy reporting category). Issac Anyaogu, oil and gas analyst, came first at PWC Media Excellence Award for the small and medium Enterprises (SMEs) reporting category. In the same vein, Oladipo Oladehinde, was awarded Second best oil and gas reporter by Natural Resource Governance Institute (NRGI).

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XKPMG (In English, Latin and Greek) Bashorun J.K Randle Randle is Chairman/Chief ExecutiveJK Randle Professional Services Chartered Accountants

rrangements had been concluded for the petition (signed by all the retired partners of KPMG who are still awaiting their gratuity and pension) to be tabled before the United Nations General Assembly which was held in New York, United States of America from 18 September to 5 October 2018, when the highly respected Secretary-General of the U.N., Mr. António Guterres pressed the pause button. He was responding to the tremendous pressure from various Heads of State (particularly Kim Jong-Un from North Korea; Robert Mugabe who insists he is still the ruler of Zimbabwe for life and General Idi Amin who declared on CNN that not only is he still very much alive, but had recently acquired two new wives – one Christian and the other Moslem, although he cannot remember their names!). The pressure group managed to swing matters in favour of deferring discussion of allegations of “pensioncide” (deprivation of pension) to the World Bank/IMF meeting which was scheduled to hold in Bali,Indonesia from October 12 to October 14 2018. In the intervening period, we solicited the support of the 100 most powerful men and women in the world. The response was overwhelming. All

of them, without exception, pledged their full support – this is definitely a matter for the United Nations. Peace is not the absence of war but the full payment of gratuity and pension. However, the most intriguing response was that of Prince Charles who sent a cryptic message: “As I Get Older All I Want To Do Is Plant Trees” (No Gratuity; No Pension) Prince Charles says that planting trees is all he longs to do as he gets older and has created an entire wood for his grandson. He discusses his passion for arboriculture for a new BBC documentary, in which he is filmed touring the wood planted for Prince George at his home in Birkhall, Aberdeenshire. The Prince of Wales, 69, planted dozens of trees of different varieties in a paddock adjoining the house’s garden to mark George’s birth in July 2013. “As I get older all I really long for is to plant trees”, the prince tells John Bridcut, the filmmaker. “I hope it will be quite amusing for George, as they grow up, and he grows up.” The prince is a keen gardener and has previously spoken of how he had help from George to plant trees at his Highgrove estate in Gloucestershire. “Prince, Son and Heir: Charles at 70, which airs on Thursday 8thNovember on BBC One ahead of his birthday on November 14, obtained exclusive access to the prince, the Duchess of Cornwall and his sons over a period of a year. The BBC described it as a “revealing and intimate portrait” of the longestserving-heir to the throne, who still feels he has a lot more to do. The prince was filmed inspecting his Birkhall arboretum during the dry summer and worrying about the lack

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If it’s meddling to worry about the inner cities as I did 40 years ago and what was happening or not happening there, the conditions in which people were living – if that’s meddling I’m very proud about it,” he says

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of water. “He does rain dances most of the day, to try and get some more,” the duchess jokes. During the documentary the prince defends his reputation for meddling after high-profile public interventions on subjects as diverse as climate change, architecture, red squirrels and Islam. “If it’s meddling to worry about the inner cities as I did 40 years ago and what was happening or not happening there, the conditions in which people were living – if that’s meddling I’m very proud about it,” he says. The Duke of Sussex also pays tribute to his father’s campaigning. “The man never stops,” he says/ “Whether its dinner or tea or whatever and we sit there and speak to him, he gets so frustrated. You can understand why, when he cares that much and he’s been banging the drum for this long.” Equally fascinating was the response from Justin Welby, Archbishop of Canterbury who chose to deliver his verdict not from the pulpit but as

“BREAKING NEWS” on CNN when he declared: “The Almighty is not male or female”. As confirmation that he was deadly serious, the Holy Father sent us the following report by Caroline Wheeler. Headline: “Let Elderly Make Love, Not Cocoa, Care Homes Told” (Residents must be able to spice up their sex lives, new guidelines say). “Help the aged has taken on a whole new meaning, with the country’s biggest nursing union issuing guidelines to care home staff on how to enable residents to enjoy an active sex life. While the passing of time makes it difficult for some OAPs to raise anything more than a smile, the Royal College of Nursing (RCN) has told its members how to provide the right environment for residents to get amorous. This includes ensuring there is a private area, with double beds available, and allowing residents access to pornography, Viagra and even sex toys — and “do not disturb” signs. The RCN’s document, Older People in Care Homes: Sex, Sexuality and Intimate Relationships, warns staff that advancing age “in no way prevents older individuals and couples enjoying sexual activity, sexual intimacy or coitus”. The document suggests that, far from shuffling gloomily towards encroaching infirmity, many care home residents are still driven by vigorous sexual urges, and may be having better sex than the rest of us. “With less time pressure than in the earlier times of their lives, some older people report that sexual activity can be more leisurely, lasting over an entire afternoon or an entire day, the RCN adds.

Older people often speak of the wish to maintain their usual sexual practices which might include crossdressing, sadomasochism etc. Many older people report that they enjoy trying new positions and incorporating sex toys into their sex life.” A study by the University of Manchester of more than 7,000 people aged 5O and over found that at least a quarter of men and one in 10 women over 85 were sexually active. Given that women tend to heavily outnumber men at that age, some nursing homes have reported fierce competition for sexually active males. Care home providers have long been nervous about the ethical, moral and legal implications of catering to sexual needs, especially where residents with dementia are concerned, or where mutual consent might be a problem. Some residents have asked for prostitutes to be brought to their rooms, potentially exposing managers to prosecution if they permit the use of sex workers on their premises. “Care providers should always take their own legal advice on any action they propose to take in relation to a resident as it may have implications under human rights law or other legislation,” the document warns. Abuse remains a major concern, with care homes liable to prosecution if they fail to protect vulnerable patients. In Australia last week a 102-year old man pleaded guilty to a charge of aggravated indecent assault on a 92-year-old woman at their old people’s home in Sydney. The man was unconditionally discharged on mental health grounds.

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New architectural drawings of the Bretton Woods duo

Gregory Kronsten Gregory Kronsten Head, Macroeconomic & Fixed Income Research FBNQuest

here are some potentially major changes afoot in what has grandly been called the international financial architecture. (The expression was popular with Gordon Brown, the former UK chancellor of the exchequer, and prime minister.) The driver of the changes, not for the first time, has been the Trump administration. This month David Malpass, the US undersecretary for international affairs in the Treasury, told Congress that the administration was opposed to an increase in the permanent reserves of the IMF through changes to its quotas. He argued that the Fund already had the resources to fulfil its remit, adding that it has access to other funding mechanisms such as the temporary pooling of members’ contributions.

Rather more pointedly, Malpass also told Congress that the administration was uncomfortable with the growing influence of China in the World Bank. He suggested that large scale regional infrastructure projects such as the Belt and Road Initiative (BRI) should not be backed by multilateral development banks (MDBs) because they serve a Chinese agenda. Malpass also quoted the Bank’s president, a US national, in an unfavourable light. Less subtly, the US national security advisor, John Bolton, subsequently criticized China’s “strategic use of debt” for its geopolitical ends. The World Bank’s shareholders approved a US$13bn increase in its paid-up capital this April. In time, this will leave the US and China with 16.8 per cent and 6.1 per cent shareholdings respectively. The broader point is that the Trump administration has misgivings about multilateral bodies, notably the Bretton Woods duo of the Fund and the Bank, and strong views on Chinese influence. Those views have strengthened but are not new. The Obama administration sought unsuccessfully to discourage its Western allies from taking up mem-

bership of the Beijing-based Asian Infrastructure Investment Bank (AIIB), which began operations in January 2016. Its focus has broadened from solely Asia and Oceania to cover Africa and Latin America. Its membership has therefore expanded to more than 90 states. Its head is Chinese and its largest shareholders are China (30.3 per cent), India and Russia. The AIIB is not a rival to the World Bank, disbursing US$2.7bn in 2017. However, its establishment poses a challenge to the Asian Development Bank and other regional MDBs. We can say that the roles are different and that the two bodies can complement each other but then we could also ask why the earlier-formed bank could not have been reformed from within. The AIIB has signed MoUs with the African and Inter-American development banks, and co-financed a project in Egypt with the World Bank Group’s private-sector lending and investment arm. There is therefore already a blurring of roles between “Western” and “nonWestern” development institutions for the Trump administration to confront. For most users (borrowers), the agenda will surely be to extract the maximum benefit from both. We do not see that they will have to choose between the two.

Not all the Chinese-built infrastructural mega-projects that drew the criticism of Malpass in Congress serve a narrow Chinese gameplan. Chinese business has invested heavily in the industrial free zones in Ethiopia and in Kenya but this did not warrant the building of the Mombasa-Nairobi and Djibouti-Addis railways, completed last year by Chinese companies last year at a joint cost of US$8bn. The international media has reported that the patronage of the two lines has not gathered momentum as rapidly as expected, leading to a 20-year extension of the repayment period by the Ethiopian government on the loan for the Djibouti-Addis line. White elephants can eventually become viable projects. We should point out that China has sometimes “got the job done” where Western interests have talked at length, a fine example being the Benguela railway constructed in the colonial era from the Angolan coast across the Congolese border. The line was destroyed in places during the Angolan civil war. Its rebuilding was discussed at many development fora over two decades, and carried out by the Chinese in about two years.

Within the international financial architecture, there is another area of actual and potential tension between Western and Chinese interests. Unlike Russia, China is not a member of the Paris Club of sovereign lenders. It is not included in the club’s debt reschedulings and reaches its own private agreements with struggling borrowers. Because these agreements are private, media coverage can be highly critical. Talk of opacity is common. The Chinese embassy in the UK wrote to the Financial Times in October to complain of the newspaper’s coverage of its lending in Ghana and Zambia. Because they are private, we obviously do not have access to them. We can, however, extract data on external borrowing costs from Nigeria’s Debt Management Office. We have excluded principal repayments but included all fees as well as interest for the 12 months to June 2018. Taking end2017 as the mid-point, we find that these costs represent 2.9 per cent of the FGN’s external debt stock, 2.6 per cent of its loans from China and 0.9 per cent of its obligations to the World Bank Group.

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Prepare for a rough economic ride in 2019

Anthony Osae-Brown For feedback, send Whatsapp message to 08152060502

s at 1.19 pm when I started writing this article for Monday publication, Brent Crude oil was trading at US$53.07 per barrel. A few seconds later, it dropped to US$52.99 and rebounded almost immediately to US$53.02. That is how volatile crude oil prices looks set to play in 2019 after falling almost 40 percent from an October high of over US$80 per barrel. This volatility is not good news when you consider that the 2019 budget has been pegged on a benchmark oil price of US$60 per barrel. It is looking increasingly likely that the price would not be achievable in 2019. The biggest risk against a higher oil price is fear of the United States falling into a recession. Years of consistent post-financial crisis economic growth looks to be slowing down. The stock market is almost trading in a bearish territory after what has been described as one of the longest bullish runs in US history. But even if the US does not fall into a recession, high oil production from the US is another reason while oil prices could fall far below our budget expectations in 2019. US production has risen above the 11 million barrels per day mark, making it the highest oil producing country in the world. Shale producers in the US are said to be able to

GrowthView with

Christina Wehbe Wehbe is passionate about helping others and fighting poverty & injustice. She is the founder of GrowthView. She writes from Zurich, Switzerland, via christina. wehbe@gmail.com E: christina.wehbe@urbanemerge. com Cell: +41 79 950 4760 https://www.urbanemerge.com/ people https://www.qeh.ox.ac.uk/alumni/ christina-wehbe

hat are the values not taught in the game of Monopoly? How can a common language solve the collaboration barrier for Corporates? We all talk about Sustainable Development Goals (SDG’s), Impact Investment (II) and Social Impact. The reality is that people, our values for a better world and social behavior we have towards sharing information is changing the rules of the gamefor

remain profitable with oil price at US$50 per barrel, whereas OPEC nations like Saudi Arabia need oil prices to be as high as US$90 to break oven on their budget. US, whose Shale crude could easily substitute Nigeria’s light crude grades, can therefore afford to undercut the oil market on price. It also has the volumes to do so. The outlook for oil prices is therefore not looking good and Nigeria risks seeing crude oil prices trading below its budget benchmark of US$60 for most of 2019. But besides the price, Nigeria’s projected volumes are also at risk in 2019. Based on the December OPEC meeting which agreed to cut oil production by about 800,000 barrels per day, Nigeria production has been pegged at about 1.7 million barrels per day, which is already 600,000 barrels per day below the 2019 budget benchmark of 2.3 million barrels per day. This raises the real prospect that the country could be faced with lower production and lower oil prices in 2019. The federal government is projecting to rake in on oil revenues of N3.7 trillion in 2019, which would account for approximately 53 percent of the total revenues of N6.97 trillion expected to fund the 2018 budget of N8.8 trillion. With oil prices and oil production expected to underperform, the oil revenues target is going to be off the mark by a wide margin, like it has always been in the past three years. If oil prices remain below US$60 per barrel, the federal government would be lucky to hit N2 trillion in oil revenues in 2019. This would largely be in line with the way the government’s oil revenues performed in 2018. As at the end of September 2018, the federal government’s oil revenues stood at N1.51 trillion, 101 percent higher when compared to the comparable period of 2017 but just about half of the projected N2.9 trillion oil

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The outlook for oil prices is therefore not looking good and Nigeria risks seeing crude oil prices trading below its budget benchmark of US$60 for most of 2019

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revenue target for 2018. The expectation is that oil revenues would record almost a trillion-naira shortfall in 2018. As at September, the total federal government revenues of N2.84 trillion was 40 percent higher when compared with the same period of 2018 but 53 percent below its target revenues for the period. This is despite the fact that oil prices have largely been above US$60 per barrel for most of 2018. In the third quarter of 2018, average oil price was US$74, a price which now looks very unlikely in 2019. Non-oil revenues will not fill any hole left by oil revenues falling below expectations. Growth in non-oil revenues have remained slow despite government’s efforts. In 2018, the highest growth in non-oil revenues was in company income tax, which went up 23 percent to N500.37 billion as at third quarter. Customs collections was up only 11 percent and Value Added Tax by only five percent. In an economy struggling with growth, slow growth in non-oil revenues is only expected. Simply put, the federal government revenue projection of N6.9 trillion is not going to be met in 2019.

Revenues are likely to be anywhere between N3.0 trillion and N4.0 trillion, which is not much different from where the government revenues have been in the last three years. Best case revenue projection for 2018 is N3.5 trillion, with the government likely to incur a potential deficit of N2.5 trillion, assuming it is able to curtail expenditure to N6 trillion instead of the N9.1 trillion approved expenditure plan for 2018. Faced with a significant revenue challenge, I expect that the government will continue to cut back on planned expenditure approved in the 2018 budget with capital expenditure most likely to take the hit. But in 2019, the federal government is likely to have less flexibility in cutting back on its planned expenditure. The planned minimum wage increase will push the federal government’s non-debt recurrent expenditure to N4.7 trillion, almost N1.7 trillion less than the best case revenue projection scenario. This means that the federal government will have to increase borrowing to part-pay salaries and overheads, as well as cover interest payments on its rising debt profile and capital expenditure with 100 percent borrowed money. The increased borrowing from the federal government would push up interest rates, make banks richer and businesses poorer. Faced with a potential rise in the debt burden, I expect the government to push for the reforms that it has been reluctant to push for in the past. Price modulation for petroleum prices will likely come back into play leading to an increase in the cost of petrol. The long delayed tariff increase in power sector will also be allowed to come into effect in a bid to open up the power sector to new investments and improve supply and reduce the dependence of businesses on alternative power supplies. The federal

government may also finally tinker with VAT and adopt a staggered rate that will see VAT on certain goods go up in 2019 or in early 2020. Cost of living is about going up in 2019. Still in a bid to boost revenues, the federal government will also get serious about privatisation and concessioning of some of its assets and finally move to sell part of its stakes in the JVs, a proposal that has been on the drawing board in the last three years. The federal government would also be more open to the concessioning or outright sale of the refineries, which may come too late since the Dangote refinery would already be coming on stream. But perhaps, what would hit Nigerians is a potential devaluation of the Naira, a risk with a high probability in 2019. Even though external reserves look healthy at US$43.3 billion as at December 24, 2018, if oil prices remain where they are now for a longer period, pressure could come on the external reserves as the 2019 elections approaches and the naira could give way. The extent of a potential naira devaluation will largely depend on how fast portfolio investors return to the Nigerian economy after the 2019 national elections, which will also largely depend on how quickly any government that emerges set out its economic agenda. If a clear economic agenda is set quickly after the elections, it could actually boost the value of the naira but if uncertainty drags post elections, then the naira could suffer. Happy New Year! NB. This is my last article as editor of BusinessDay. While I am moving on to a new challenge, BusinessDay will remain a great source of intelligence and insightful analysis.

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Economic benefit of collaboration - A value not shared in the game of Monopoly businesses – and gladly so, for poor and disadvantaged communities. Being sustainable and corporates aligning to SDGs and looking to have positive impact on the poor - what does this really mean and where has this arisen from? Do they know what these values are and who are the players? It is a complex global system which is driven by intelligent individuals and strong values emerging. GrowthViewtransposes the board game of Monopoly, which many of us have played as kids, to our global economy. This helps demonstrate what is fundamentally missing in our way of thinking and inherent societal values on development. Values and people are coming together - this is the driver to prosperity and impact. The only missing part to the puzzle is that we haven’t inheritably learned how to collaborate. Remember playing monopoly? Did you ever speak to your neighbours or think about prosperity for all players or did try to avoid the ‘Jail cell’ or cash-in the ‘Free Parking’ jackpot money from all players? The global landscape is changing as each person has strong values and are now speaking to one another. These are the drivers of prosperity. Also, the UN is asking for evidence from their partners towards the 17 SDGs and particularly corporates.

This scary for all those players who follow the age-old rules of “game of monopoly” and forgot the notion of equitable collaboration and willingness to be transparent? Trust is not something easily facilitated and can’t be created. So, what is the solution? Pareto Efficiency is the new economy with people collaborating and values being the common denominator across industries and countries. Measurements and communicationenable increased profits and gains for all. Prosperity and Collaboration are shaping the new economic game theory that will enable our values and use people to drive sustainable growth and help the poorest countries around the world. Food for thought: » Impact Investment: How can corporates be incentivised to collaborate when they are a market leader such as a Forbes100? » Sustainability and the UN SDG’s: Do we understand what sustainability, impact, prosperity means and do we all speak the same ‘language’ to align and deliveron it? Value-driven language is being blurred when leaders compete on terms such as“corporate social responsibility” (CSR), “impact investment”, “social purpose”, “sustainable sourcing”, “fair-trade”, “purpose-driven initiatives” when in reality these are all the same and are linked to

prosperity. • To deliver on the impact goals, it starts with the language we use. • To build a robust business model, it starts with the CEO and CIO definitions used. CEO and CIO’s need to adapt to the language and new “game board” of tomorrow that incorporates prosperity and values cohesively in their business model strategy, investment decisions, data analysis and product development (R&D). I. What is the common crossindustry language? Tech and multi-national manufacturing (i.e., automobile) firms are stuck in the sustainability dilemma not only with e-waste but customer’s knowledge of ‘built-in obsolescence’. Is planned obsolescence sustainable both for the world and corporate business models? This strategy has strong business advantages as it secures investor funding and reliable revenue forecasts. However, it does the anticipated return calculation incorporate the variable of people’s values and the weight of information and knowledge being shared; namely, how product hardware is built to ‘die’ or ‘expire’. Shifts in values are not shifts in behaviors—these are harder to measure and index. II. Why should a corporate adapt to a value-driven language?

I don’t want to sound like a cynic but what does aligning to development goals really mean for a business? Companies’ end goal is to increase revenue. That is the bottom line. GrowthView replies to the challenger question of “Why collaborate and build a business model on values when I am already the market leader, listed on Forbes100 or a global Fortune500 company?” 1. People (and consumers) are voicing their values. 2. People value humanity, prosperity and peace. 3. People are behind every business and every purchase. 4. The UN is asking businesses and governments to show evidence. 5. This is your chance to grow and lead the impact ecosystem. Let’s face it, new soft-power rules are emerging for corporates in the game of Monopoly. Communication between players and having a common value-driven language is the global denominator and the solution that drives future opportunities.

Note: the rest of this article continues in the online edition of Business Day @https://businessdayonline.com/ Send reactions to: comment@businessdayonline.com

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

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GM, BUSINESS DEVELOPMENT (South) Ignatius Chukwu

Monday 31 December 2018

Giving hostages to fortunes: Hawking the 2023 presidency

igeria’s electoral law expressly prohibits a candidate or his agents from engaging in campaigns along religious, tribal or sectional lines. Equally, all presidential candidates in next year’s general elections recently signed a peace pact in Abuja pledging to refrain from campaigns along ethnic lines both by themselves and by all agents acting on their behalf. But in desperation to win next year’s presidential election, president Buhari and his agents have decided on a dangerous and divisive strategy of pitting the two largest ethnic groups in the South against each other by promising both of them the presidency in 2023 in exchange for their support in 2019. Although the president doesn’t say much, he relies on his aides and agents to do most of the talking and campaigning for him, like in 2015. Perhaps the reason is to give him room for deniability in future when the move backfires. As far back as April 2018, the Secretary to the Government of the Federation, SGF, Boss Mustapha, while receiving the Ebonyi state chapter

of the All Progressives Congress (APC) at his office, pointedly told them the Southeast will have a better chance of producing a president in 2023 if they give their support to the second term ambition of President Buhari. “Preach it to the other south-east states that the shortest way to Igbo presidency is to support Buhari in 2019,” Mustapha told the delegation. “The dynamics of politics can change and people that you perceive today are not with you, will be with you tomorrow”, Mustapha said warning that “the region must support the party this time around in its own interest.” In November, Mustapha, again, speaking on behalf of his boss after the president met with South East governors at the presidential Vila in Abuja minced no words when he reminded them that the region’s investment in the re-election of President Buhari in next year’s election will determine their fate in 2023 “You remember there was a programme in the South-East where Mr. President asked me to represent him and I threw the kite by telling the south-eastern states that their quickest and easiest means to the presidency

is to support President Muhammadu Buhari’s second term. Meaning that they can short circuit the period in terms of only having him there for another four years and whatever they do in 2019 will determine what will happen thereafter, because politics is a game of numbers and it is like a cooperative society,” Mustapha stated matters of fact. But while Mustapha is busy promising the South East the presidential ticket on behalf of the president, another powerful minister in his cabinet, Babatunde Raji Fashola – who holds the triple portfolio of minister of power, works and housing, is busy campaigning in his native SouthWest region also encouraging the people of the region to vote for Buhari in 2019 to guarantee a return of power to the region in 2023. Speaking in his native Yoruba, Fashola asked the audience whether they knew that “power is rotating to the South-West after the completion of Buhari’s tenure” if the vote for him in 2019? Using a local proverb, he drove the point home: “Your child cannot surrender her waist for edifying beads and you will use the bead to decorate another child’s waist”. A vote for Buhari means a return of power

to the SouthWest in 2023.” He concluded by admonishing the people to do what is necessary to ensure a return of power to their region. “I am sure you will vote wisely,” he said. To show the level of desperation, even the vice president Yemi Osinbajo, has joined the fray. Few days ago, he also spoke in the same line as Fashola, in a house to house campaign in Oyo, charging the Yoruba nation to vote for President Buhari for a return of power to the South West geopolitical zone in 2023. This is immoral and disgraceful. What happens if both regions mobilise their people and vote for the president in the hope of gaining power in 2023? In desperation for re-election, the president and his team are giving hostages to fortunes, deliberately contravening the electoral law by engaging in ethnic and clannish campaigns, endangering the peace and unity of the country and preparing the ground for ethnic tensions and recriminations in the future. This is not the behaviour of a statesman or one who has the interest of the country at heart. But how do they care; their main goal is to win the 2019 elections. Thereafter, the country can go to flames for all they care!

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Solar eclipsed Bruised, not broken

Masayoshi Son floats part of SoftBank to help pay for his huge tech bets Don’t call us a telephone company

E N T I O N S O F TBANK and most Japanese people, understandably, think of telecoms— it is Japan’s third-largest wireless carrier. The company hopes to weaken that association. SoftBank is listing its telecoms arm; shares in the unit were due to begin trading on December 19th, after The Economist had gone to press. SoftBank Group was expected to raise ¥2.6trn ($23.4bn) by selling off just over a third of the company. It is selling 1.76bn shares for ¥1,500 each, making it Japan’s biggest-ever initial public offering and only just shy of the record set by Alibaba, a Chinese e-commerce titan in which SoftBank Group owns a stake of about 29%, in 2014. That is good going for a firm whose earnings have been lacklustre and which faces big challenges. Providing mobile services is a lucrative affair in Japan—prices are far higher than in other developed countries. But it is also a mature business and the population is shrinking. SoftBank has a quarter of the market, trailing NTT DoCoMo and au. NTT DoCoMo has already said it will slash prices after pressure from the government to lower costs; the other two are likely to have to follow suit. Next year the trio will face new competition from Rakuten, a Japanese e-commerce giant that is about to become the nation’s fourth mobile-network operator. Other problems are more particular to SoftBank. A service outage lasting over four hours, affecting 34m customers mainly in Tokyo and Osaka, sent its shares down by as much as 6% in trading on December 6th. And the firm has said it may have to spend money replacing all the hardware in its 4G and 5G networks that it gets from Huawei, one of its main suppliers, after Japan became the latest country to air security concerns about the Chinese firm. Even so, the Japanese public, bombarded by TV advertisements for the listing, has flocked to buy shares. SoftBank benefits both from domestic investors’ lack of options and its own strong brand. For them,

Monday 31 December 2018

Rooftop solar remains marginal in America Blame a patchwork of regulation, utilities and an immature business model

MERICANS LOVE the concept of rooftop solar, according to opinion polls. Well they might. Large solar farms may be the most cost-efficient way to harvest energy from the sun, but the case for homeowners to put panels on their roofs looks compelling. Panels do not belch carbon dioxide. Electricity is generated where it is consumed, easing the strain on transmission lines and power plants. President Donald Trump may have slapped tariffs on imported solar panels earlier this year, but the average price of a residential solar-power system is less than half its level in 2010. This combination of greenness and cheapness has allure. Paul Mc-

putting in ¥1,500 and receiving a relatively high dividend payout, of around 5%, with no currency risk is an attractive proposition. “Mrs Watanabe is looking at yield, not the fundamentals in the long term,” says Chris Lane, an analyst at Sanford C. Bernstein, a research firm, referring to the proverbial Japanese retail investor. The IPO’s attractions are equally clear for Masayoshi Son, SoftBank’s founder, who is shifting his firm away from telecoms towards investing in tech entrepreneurs around the world. Through his Vision Fund, an investment vehicle financed in large part by Saudi Arabia’s sovereign-wealth fund, he has bought stakes in companies such as Uber, WeWork and Arm (a British chip firm). The IPO is a way to take some cash out of a part of SoftBank that is not growing as swiftly and to put it into racier bets, while retaining control. Mr Son also hopes the sale may solve his main frustration since he veered away from telecoms to backing tech founders: that investors do not properly appreciate SoftBank’s transformation and that they therefore undervalue it. The company’s shares have been trading at a hefty discount, of around 40%, to the value of its assets (see chart). This

discount arises in part because many telecoms-focused investors in the group are not thrilled to see their cash being funnelled into risky and opaque tech investments at high prices. Now these investors will be able to buy shares in a more predictable phone company while those with a higher risk appetite can stay with SoftBank. Closing the discount depends on a number of factors, however. What happens to the group’s high level of debt will be critical. SoftBank has around ¥18trn of interest-bearing debt, or over six times its operating earnings, thanks partly to its acquisition of Sprint, an American telecoms firm, for $20bn in 2012. The risk the debt mountain poses is the concern most often cited by investors, says Mr Lane. Some of this debt will go to the separately listed mobile unit and may be “non-recourse”, meaning that SoftBank may no longer be liable for it if the subsidiary defaults. For now, Japan’s negative interest rates, adopted by the Bank of Japan in 2016 as part of its quantitativeeasing programme, allow firms to borrow without worrying too much; they should remain for at least a year. Critics complain, too, that Mr Son’s plans are wildly ambitious

but unclear; and that “key man” risk around him remains too high. That suggests hopes for a re-rating of the parent’s shares may go unanswered. Investors in the mobile arm might face an additional governance risk, if the subsidiary tries to please its parent and majority stakeholder rather than ensure returns for minority shareholders. As for the Vision Fund itself, Mr Son was criticised for failing to distance himself from Saudi Arabia when its crown prince, Mohammed bin Salman, was linked to the killing of a Saudi journalist in its embassy in Turkey in October. Startups might be more reluctant to accept Mr Son’s cash as a result, some rival tech investors say. Early divestments from the fund seem to have worked well, however. When Walmart bought SoftBank’s stake in Flipkart, an Indian e-commerce firm, in May, it reportedly paid almost double what SoftBank did less than a year earlier. SoftBank invested in Uber at a valuation of around $48bn; reports suggest its valuation will be north of $100bn when it lists on the stockmarket, possibly in the first quarter of 2019. Next to that kind of money, the telecoms business, expected to make ¥700bn of operating profit this year, looks like small fry.

Master, a homeowner in Florida, has leased solar panels from a company called Sunrun since the summer. In August Mr McMaster’s electricity bill was about $100. By October it was $15. In 2017 rooftop solar installations in America, measured by gigawatts of capacity, were nearly ten times what they were in 2010. Nevertheless, Mr McMaster remains unusual. Home solar panels still generate less than 1% of America’s total electricity. Although nearly 2m homes now have panels on top, recent growth has been anaemic. Wood Mackenzie Power and Renewables, an energy consultancy, expects rooftop-solar installations to be flat in 2018. Installations will rise in only two of America’s biggest ten solar markets. That would still be progress, in relative terms, for in 2017 volumes sank by 15% (see chart). Supporters of rooftop solar are well-accustomed to ups and downs. President Jimmy Carter, keen to promote alternative energy after the Arab oil embargo, installed solar panels on the White House in 1979. His successor, Ronald Reagan, removed Continues on page 15

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Peace offering

China scrambles to sustain its trade truce with America By cutting tariffs and downplaying industrial policy, China tries to win over Donald Trump

HEIR WORDS were guarded, their tone sober. At a Politburo meeting to discuss economic plans for 2019, China’s top leaders agreed that they should be ready for problems and must, above all, maintain domestic stability. It was a striking contrast with the same meeting a year earlier. Then the Politburo oozed confidence, concluding that China was the world’s economic engine, with a new level of power. This nervous, inward turn explains why, after a year of eyefor-eye fighting with America, China is determined to bring the trade war to an end. The view, once commonly heard in Beijing, that it could outlast America in a grinding tariff battle has given way to the realisation that, as the country with the huge trade surplus, China has more to lose upfront. Optimism that the government could fight on two fronts—taming its heavy debt burden at the same time as taking on America—has also cracked. The economic outlook has darkened. Analysts are debating whether the government will, once again, deploy a big fiscal stimulus to prop up growth. So the swagger from a year ago is being replaced by more conciliatory messages. At a recent forum Ma Jiantang, vicepresident of a think-tank under the cabinet, emphasised the deep ties between China’s and America’s economies. “We are inseparable,” he said. The immediate goal for Chinese officials is to sustain the trade truce that Presidents Donald Trump and Xi Jinping agreed to after the recent G20 summit in Argentina. They have until March 1st to reach a deal, otherwise the two countries may hit each other with tariffs again. China’s peace offering is starting to come together. The government has made or hinted at a series of concessions over the past two weeks. It has resumed purchases of American soyabeans, announced tariff cuts on auto imports and indicated that it will modify an industrial policy that stokes suspicion abroad. This is the most notable series of steps taken by China to respond to America’s trade gripes. Whether they will satisfy Mr Trump is another matter. The early signs are that he likes what he sees on the table. On December 14th, after the Chinese state council said it would temporarily cancel an

extra 25% import tariff on American cars (imposed in retaliation for American tariffs), Mr Trump tweeted with glee. “China wants to make a big and very comprehensive deal. It could happen, and rather soon!” But Chinese negotiators are not about to uncork fine bottles of moutai just yet. One wild card is Meng Wanzhou, the finance chief of Huawei, a Chinese tech giant, who was detained by Canada on an extradition request from America. China has tried to insulate her case from the trade talks. Conveniently, it has been able to focus its ire on Canada, detaining two Canadian citizens in China as thinly veiled revenge. But if Canada does hand Ms Meng to America, the truce would come under strain. Moreover, America might pick new fights. The justice department is reportedly set to indict Chinese hackers over economic espionage. China has also learned that Mr Trump is an unpredictable combatant, torn between two camps within his administration. Doves such as Steven Mnuchin, the treasury secretary, supported previous offers by China to buy more American energy and agricultural products. Hawks, especially Robert Lighthizer, the United States Trade Representative, have wanted more, demanding that China halt practices that allegedly let its firms pilfer technology from America. And it is not just the hawks. James McGregor, head of China for APCO Worldwide, a consultancy, says that foreign businesses want to see “serious results”, having endured all the tariff drama. The crucial question is therefore what kind of results China can deliver. Reducing tariffs

on auto imports and buying soyabeans should not count for much. Those measures merely return the trade relationship to its position a year ago. But demands for fundamental change are much harder for China. They cut to the heart of its economic model, potentially requiring it, for example, to curtail subsidies for state-owned companies. Chinese negotiators are focusing on two themes, according to people familiar with the talks. First, they are walking away from the “Made in China 2025” plan, a blueprint for turning the country into an advanced manufacturing power. Foreign businesses object to it because it specifies marketshare targets for China in sectors from biotech to robotics. Chinese officials have already downplayed its significance, describing it as a vague, aspirational document. References to it have all but vanished from state media. Now, the government appears ready to rescind it formally. Even the Global Times, a nationalist state-owned tabloid, has called for a new plan. Second, the government wants to show that foreign companies play on a level field. Liu He, the lead Chinese trade negotiator, has asked the central bank to devise guidelines for how “competitive neutrality” would work in China, according to someone briefed on the project. The idea, promoted by the OECD rich-country club, is that state-owned companies can form part of a healthy market economy provided they enjoy no special advantages. China will try to convince Mr Trump that it is serious about meeting this standard. China is matching its words with actions—up to a point. After

a flurry of approvals, it can argue that it is opening its economy to foreign firms. Tesla is on track to be the first foreign carmaker to have a wholly owned manufacturing facility in China. UBS, a Swiss bank, recently became the first foreign firm to be allowed a majority stake in a Chinese brokerage. ExxonMobil will soon start to build a wholly owned petrochemical complex, which until recently foreign firms could not do. China has also published tougher rules for protecting intellectual property, which foreign companies have long demanded. Placating American negotiators will, however, be difficult. The challenge for China is to prove that these are more than cosmetic changes to an economic system in which the state remains overwhelmingly powerful. Scepticism abounds. As long as the government wants to build state-owned companies into global powerhouses, foreign rivals will have good reason to think that the deck is stacked against them in China. On December 18th China celebrated the 40th anniversary of the start of its “reform and opening” period, the rebirth of the economy following Mao’s disastrous rule. Some had hoped that Mr Xi would use the occasion to launch bold new reforms. But in a speech at the Great Hall of the People in Beijing, he instead reflected on how far China had come, guided by the Communist Party’s strong hand. A humble veneer cannot conceal China’s pride in its own success over the past four decades, even if the past few months have been turbulent. It is reluctant to junk and replace what it sees as a winning formula.

Rooftop solar remains marginal in America... Continued from page 14

them seven years later and gutted Mr Carter’s solar budget. Even so, today’s stuttering progress is striking. Two factors lie behind it: regulatory uncertainty and the unreliable business models of solar firms. Start with regulation. At first sight, this seems to be solar’s friend. In December, for example, officials in California upheld a mandate to require rooftop panels on new homes from 2020, boosting demand. Generous subsidies, including a 30% federal tax credit, add to solar’s attractiveness. Under a policy called net metering, a utility has to pay a homeowner retail rates for any extra energy generated, which, as in the case of the McMasters, can substantially lower a household’s monthly bill. Yet these subsidies are also responsible for ebbs and flows in demand. Uncertainty about how tax reform would affect solar projects weighed on growth earlier this year, says Michael Weinstein of Credit Suisse, a bank. More generally, the rules governing the way rooftop solar is regulated are in flux. Its appeal has long varied from state to state, based on electricity rates (the higher the rate, the greater the value of rooftop solar), as well as subsidies and the availability of sunshine. This variation may become still more exaggerated. In the three months to October, 45 states and Washington, DC, considered policy and rate changes for rooftop solar, according to the NC Clean Energy Technology Centre in Raleigh, North Carolina. These included changes that would depress residential solar. A critical question is how to price power produced at home. It used to be that electricity flowed in one direction, from utility-owned power plants to customers, who simply paid more for consuming more energy. But Mr McMaster and his shrinking electricity bill are a utility’s nightmare. Power giants shoulder fixed costs for maintaining the grid but, under net metering, earn less from customers with solar panels. So utilities say they must raise fees for customers, disproportionately hurting people without panels—which could prompt more people to use solar.

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Hard to swallow

As Theresa serves up a turkey, Brussels pouts MPs hate the Brexit deal, but the EU refuses to sweeten it

F ANYONE DESERVES a prize for stamina, it is Theresa May. The prime minister spent the run-up to Christmas defending her Brexit deal before MPs, who still show no sign of voting for it. She had hoped the EU summit on December 13th and 14th would agree to sweeten the deal to make it easier for MPs to swallow, particularly regarding the Irish “backstop” that may keep Britain in a customs union. But EU leaders refused. They said they hoped not to use the temporary backstop, but rejected a time limit or a unilateral British right of exit. Mrs May still hopes to win something from Brussels that helps her to get the deal through Parliament. She cites earlier changes for countries that have had problems ratifying treaties, from Belgium and the Netherlands to Ireland and Denmark. But there are big differences with Brexit. It is more palatable for the EU to make concessions to a

member than to a non-member. It is easier to find changes that help to reverse a narrow referendum result, as in those countries, than to overturn a big negative parliamentary vote of the sort Britain is heading for. And in

past cases the process has taken months or years, whereas Brexit is due in March. All this means the parliamentary vote on the deal, planned for mid-January, looks sure to be lost. What then? Mrs May’s

strategy seems to be to run down the clock. The March 29th deadline will be closer, and with it the risk of a no-deal exit. Yet although time pressure could change a few Tory minds, she will need Labour votes to get her

deal approved. And with Labour leaders pressing for an early election instead, she is unlikely to secure them. This is leading MPs and even some in the government to ponder alternatives. Some ministers suggest a series of indicative votes in Parliament to test whether other forms of Brexit— the close Norwegian model, or a looser Canadian-style arrangement—might win greater support. But none of these is likely to command a majority. Anyway, the response in Brussels will be that only Mrs May’s version of Brexit, negotiated over almost two years, is on the table and ready to be ratified. This explains growing talk of a second referendum. Mrs May says this would do irreparable damage to British politics. But Mujtaba Rahman of the Eurasia Group, a consultancy, puts its odds at 40%. It is now, in effect, the most popular backstop.

Combating tropical disease

Scanning mosquitoes with infrared light could help to control malaria Their spectra are full of valuable information

AL ARIA KILLED 435,000 people last year, most of them in Africa. The parasite that causes the illness is carried by females of some, but not all, species of mosquitoes of the genus Anopheles. An insect becomes infected by biting an infected human being. Over the course of ten to 12 days, the parasites then multiply inside her. Once this has happened she transmits them with her bite. The threat posed by an individual mosquito thus depends on its species, sex and age. Knowing these for lots of local insects gives a better idea of where, when and how to intervene in a particular place. If the locals are, for example, of a species that prefers to bite people inside houses, or to rest indoors after feeding, fumigating household interiors is the best approach. If not, it may be better to locate and disrupt breeding sites, using aerial spraying. Sex is easy to determine. Males have bushy mouths—in essence, beards. Females do not. Determining species and age, though, is slow and laborious. DNA must be sequenced. Bodies must be dissected under microscopes. Chemical analyses must be performed. Laboratories in Britain and Tanzania are therefore testing an alternative— infrared spectroscopy. Mario González-Jiménez, a chemist at the University of Glasgow, uses a diamond and a piece of steel that act as a hammer and anvil, crushing the mosquito to be analysed. The infrared light is then

Others dine as well on chickens, cows and goats. This is all valuable information. But it will be much more valuable if it can be gathered easily in the field. Engineers at Glasgow are therefore working on a laser optimised to emit light at the frequencies best suited for analysing mosquitoes. Meanwhile, those at Ifakara are experimenting with shoebox-sized versions of the apparatus that can be taken into the countryside. Their aim is eventually to shrink this to something the size of a mobile phone. That could shine a whole new light on the problem of malaria.

provided by a laser. With the insect duly splattered across one facet of the diamond, this laser is shone through the crystal onto it. The light reflected back out of the crystal by the insect’s remains is run through a spectroscope for analysis. Part of the incident light will have been absorbed by various chemicals in the mosquito—particularly chitin (a structural carbohydrate), proteins and lipids in the animal’s cuticle. This absorption shows up in the reflected light’s spectrum as an absence of certain frequencies. These absences are called Fraunhofer lines, after the German physicist who discovered them two centuries ago. Particular molecules create particular patterns of Fraunhofer lines, as the missing light energy has

been absorbed to drive the vibrations of atomic bonds within those molecules. Properly analysed, Fraunhofer lines provide information about the exact chemical make-up of whatever is reflecting the light. Their patterns in spectra therefore correspond to the different chemistries of species, sexes and ages. That permits the construction of a library, with which unknown insects can be compared. Diamond geezers That, at least, is the theory. Dr González-Jiménez is trying to put it into practice. His methods are now 83% accurate at recognising species, and close to 100% accurate at recognising age. He and his colleagues are also using the process to try to determine how resistant the now-

dead insect being examined would have been to insecticides. What works in a laboratory in a Scottish city might not, though, work in the African countryside. The person in charge of testing that out is Fredros Okumu, science director of the Ifakara Health Institute, a Tanzanian organisation. Ifakara runs Mosquito City, a research facility in the Kilombero River valley. Mosquito City’s buzzing, whining “biospheres” mimic local field conditions, even down to banana plants and goats. Besides testing the equipment, Dr Okumu and his team are also trying to extend the range of data that mosquito spectra can provide, including into the way the insects behave. Some mosquitoes, for example, feed only on people.

Monday 31 December 2018

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BUSINESS DAY

CITYFile Obaseki employs physically challenged person

Members of the Governor’s Band dancing during the inauguration of the grand finale for the 2018 Calabar Carnival in Calabar Friday. NAN

Akeredolu, others engage Miyetti Allah over incessant kidnapping YOMI AYELESO, Akure

overnor Oluwarotimi Akeredolu of Ondo State has charged the leadership of the Miyetti Allah to join hands with the security agencies to ensure that kidnappers terrorising the people of the state are arrested and brought to justice. The governor gave the charge during a meeting with heads of the security agencies and the leaders of the Miyetti Allah Cattle Rearers and Hausa community, at the Governor’s Office, Akure, the state capital. Akeredolu said his administration was not going to allow the peaceful nature of the state to be truncated by misguided elements. He warned that the state government would henceforth ensure that the full force of the law “falls hard on any person or group of persons found to be directly

or indirectly aiding acts of criminality in Ondo” In the same vein, the brigade commander, 32 Artillery Brigade Akure, James Ataguba, said the leaders of the Myetti Allah must call their members to order and get those in captivity released immediately otherwise the criminals won’t be shown mercy when caught. He said his men were joining forces with other security agencies in the state to end the ugly trend. The Commissioner of Police (CP) in Ondo, Gbenga Adeyanju, represented by the Assistant Commissioner of Police (ACP) operations, Tijani Umar said the security agencies were battle-ready and would make the state uncomfortable for kidnappers. He said that criminals would not be given a breathing space in the state. Speaking also, the state commandant of Nigeria Security and Civil Defence

Corps (NSCDC), Pedro Awili Ideba advised leaders of the Miyeti Allah and the Hausa community to cooperate with security agencies to fish out those threatening the peace of the state from among them rather than allow miscreants tarnish their reputation. The leaders agreed to assist security agencies to rid the state of any form of criminality. Chairman of Miyeti Allah, Bello Mohammed promised to expose anyone found among his people, as was he no longer prepared to bear the blame for unscrupulous persons amongst his members. Leader of the Hausa community in Ikare, Ibrahim Angolo, suggested an allethnic vigilante squad. In the last few weeks travelers and lecturers of the Rufus Giwa Polytechnic in Owo had been abducted by gunmen suspected to be Fulani herdsmen, which prompted the security meeting.

‘Operation Python Dance III’ begins in January – Army STELLA ENENCHE, Abuja

he Nigerian Army says it is flagging off third round of its exercise code named “Operation Python Dance III “from January 1 to February 28, 2019 across the six geo political zones of the country. The army first launched the ‘Operation Python Dance’ (Egwu Eke) in September

of 2016 following the up surge in kidnapping, banditry, armed robbery, human trafficking and other crimes in the southeast of Nigeria, which was followed up with operation Python Dance II in 2017. Chief of Army Staff (COAS), Yusuf Butatai, stated this in Maiduguri on Friday. He said the previous exercises had yielded positive results in checkmating the security challenges being witnessed in the region.

According to Buratai, “Exercise EGWU EKE III is significant because for the first time it will be conducted simultaneously across the country. It is also a reassurance of the resolve of the Nigerian Army and indeed the entire Armed Forces of Nigeria and other security agencies, to ensure that law and order are maintained as we approach the forthcoming 2019 general elections,” he said.

do State governor, Godwin Obaseki, has approved the employment of all 25 physically challenged applicants who participated in the recent recruitment exercise by the Edo State Civil Service Commission. The special adviser to the governor on media and communication strategy, Crusoe Osagie, said the governor gave the approval after a review of the last civil service recruitment process showed that a number of persons with physical challenges were screened out either because they applied incorrectly or the system didn’t make provision for their special needs. He said that the affected applicants include all persons with visible disabilities who appeared for interview irrespective of their level of performance, noting, “These persons were not initially invited for the Computer-Based Test conducted by the Information Communication Technology Agency due to the fact that they did not apply correctly during the online application stage. “These persons were however screened out by the computer system which had no means of identifying them as persons with visible disabilities,” he said. According to him, the governor also approved the employment of two physically challenged persons to work at the Information Communication Technology Agency, who fell below the commission’s established standards and one-visually impaired person, into the civil service. Osagie said the governor has mandated the civil service commission to develop a database of persons with physical disabilities who are employed by the state government. He said the 25 persons with disabilities whose appointments have been approved will be evaluated by the commission based on their academic qualifications and the approved scheme of service for placement into the civil service and provision made to take care of their special needs.

7 nabbed for vandalism of electrical installations in S/east

nugu Electricity Distribution Company (EEDC) says seven suspected vandals in three states of the south-east have been arrested. EEDC’s head of communications, Emeka Ezeh, said at the weekend that the suspects were arrested within one month, with the latest on Christmas day. According to him, the vandals were arrested in Anambra, Enugu and Imo States, while carrying out their nefarious activities. Ezeh said that one of the suspects, an electrician, at about 5:30 hours on December 25 attacked a 300KVA distribution substation belonging to EEDC located at Ugwuagulu Obiofia, Ozubulu, Anambra. “Luck ran out on him as an eyewitness who saw him leaving the scene on a motorcycle, reported the incident to the leadership of a local vigilance group. “The suspect was apprehended and he led the vigilance team to the very spot where he had buried the vandalised cables, in wait for the market so that he can hand the items over to a buyer. “The vigilance group took him to the traditional ruler of the community from where he was handed over to Special Investigation and Prosecution Taskforce on Electricity Offences (SIPTEO),’’ Ezeh said. The EEDC’s spokesperson added that another suspect, a native of Ikwo in Ebonyi State, was recently arrested for vandalising the water board distribution substation located at Victory Estate, Emene, Enugu State. “In the course of interrogation, the suspect named the buyer of the vandalised items that operates at the Tinker Market, Coal Camp, Enugu. The suspect was immediately arrested by the Police,’’ he said.

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Pg. 21

APPOINTMENTS

BANKING

Standard Chartered appoints Bola Adesola as Senior Vice Chairman Africa

Nigeria’s big banks to miss earnings guidance as economy stutters

tandard Chartered Bank Group has announced the appointment of Bola Adesola as Senior Vice-Chairman, Africa effective in the first quarter of 2019. In this new capacity, Adesola will be responsible for supporting the execution of the Bank’s strategic intent within the Africa region, including representing Standard Chartered Bank on various Boards in Africa. She will also lead as the Group’s Senior Banker on key relationships and transactions. Adesola joined the Bank in March 2011 as the CEO of Standard Chartered Bank Nigeria Limited and subsequently became the CEO for Nigeria and West Africa in 2015. Prior to joining the bank, Adesola was Executive Director, Corporate Banking in First Bank of Nigeria Plc, Nigeria’s biggest bank, and she also had oversight of the retail and commercial banking business in Lagos. Previously, she was CEO of Kakawa Discount House, Nigeria, a securities trading company where she drove record business performance. She also worked in Citibank for nine years in senior leadership roles in Nigeria and Tanzania. Called to the Nigerian Bar in 1985, Bola has over 30 years of banking experience and expertise. Bola is an Honorary Fellow of the Chartered Institute of Bankers Nigeria (CIBN) and also chairs the Central Bank of Nigeria (CBN) Bankers’ Sub-Committee on Economic Development, Sustainability and Gender. She had previously served on the boards of the Financial Markets Dealers Quotations (FMDQ) Company and the Nigerian Interbank Settlement Systems (NIBSS) Plc respectively. She was appointed to the Board of the United Nations Global Compact by

the UN Secretary General in 2015 and elevated to Co Vice-Chair of the Board in 2018. Passionate about the development and economic empowerment of women, Adesola co-founded Women in Management, Business and Public Service (WIMBIZ) Nigeria’s fore-most women-oriented network in 2001 where she remains a member of the Board of Trustees. She is also a board member of Heritage Homes Orphanage. In Standard Chartered, Bola is a member of the Global Diversity and Inclusion Council, and is actively involved with women’s networks across the Standard Chartered Bank Group. She also sits on the boards of Standard Chartered in Ghana and Cote D’Ivoire, respectively. The Board and Management of the Bank are pleased to also announce Bola’s successor, Lamin Manjang as the new Chief Executive Officer (CEO) Nigeria and West Africa, subject to Statutory and Regulatory approvals. Lamin joined the Bank in 1999 and has over the past 19 years, built up extensive experience including Cluster CEO for Kenya and East Africa, and CEO in Oman, Uganda and Sierra Leone. Sunil Kaushal, Regional CEO, Africa and Middle East, Standard Chartered Bank said: “In Africa, we have made investments in our people both in their career and personal development, and continue to support our People Strategy to maintain a high-performance culture through an integrated approach to talent and succession planning. We assure our customers of a smooth and orderly succession which will allow us to continue our unrelenting focus on delivering our strategy and capturing opportunities across West Africa and the Africa region.”

he Nigerian economy may have expanded at its fastest rate since 2015 this year, but not all banks got their financial projections right as many will see their actual earnings performance fail to match their forecasted earnings by year end according to analysts. As many as four tier-one banks, excluding GTBank, could miss their earnings guidance set at the beginning of the year. In financial reporting, earnings guidance is a publicly traded corporation’s official prediction of its own near-future profits or loss, stated as an amount of money per share. Earnings guidance is usually

Nigerian stocks now down 18.84% since start of 2018

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

IFEANYI JOHN

DAY

given in annual and quarterly presentations to forecast the corporation’s performance in the next accounting period. Guidance statements can include a variety of information typically based on the firms’ objectives towards sales projections, markets conditions and company spending. BusinessDay analysis shows that the total 2018 projected profit after tax by Tier one banks at the beginning of the year was N624.3 billion, however based on full year projections using their 9 months financial performance, it looks like Tier one banks may finish the year with profit after tax of around N570 billion, a miss of around N54.3 billion. Guaranty Trust bank is the only bank on track outperform its guidance and is expected to do so by

around 2 percent as the consensus post-tax profits of N177.8 billion is greater than the N174.3 billion initially forecasted by the bank at the beginning of the year. Zenith bank, Nigeria’s largest bank by assets (at least until the Access-Diamond merger is completed) may miss its N182 billion guidance by just N1.78 billion representing less than one percent variance. First bank on the other hand is expected to fall short of its guidance by N13.45 billion. FBNH projected PAT of around 69.6 billion this year but may likely end the year with N56.1 billion, presenting a variance of around 19.33 percent. UBA and Access bank may underperform their 2018 earnings guidance by around N18.17 billion

Edited by LOLADE AKINMURELE (loladeakinmurele@gmail.com) Graphics: CHINEDUM ONYEMA

and N24.56 billion. “The reason why banks have struggled to match their earnings guidance this year probably due to the lower yield on treasury bills we saw during the first half of the year. Most banks had decreased exposure to the real sector, slowed down on loan growth and expanded their allocation to risk-free securities that were yielding double digits,” said Maju Eldad, Lecturer in Economics department at Federal University, Kashere. “I think the in the second half of the year yields have gotten a lot better as they have risen due to CBN mop-up of the money supply. Banks should perform better in the second half than the first half but I think it is unlikely they will all meet their 2018 targets,” Eldad added.

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COMPANIES & MARKETS CURRENCIES

Naira finds comfort in Dollar weakness, Guest Writer LOLADE AKINMURELE

he Naira was granted some breathing room last week as the Dollar weakened on slowing growth fears in the United States. While the local currency has scope to end gains amid expectations over the Fed taking a pause on rate hikes this year, the upside is likely to be limited by falling crude oil prices. With depressed Oil reducing government revenues and complicating the CBN’s efforts to defend the Naira, the local currency remains in the firing line. If Oil prices continue to weaken during the early parts of 2019, the Naira is at threat of depreciating. Stock markets resume rollercoaster ride The final trading week of 2018 has been explosively volatile and wildly unpredictable due to geopolitical risks. Global sentiment repeatedly swung from extremely bearish to bullish this week as investors tussled with concerns over slowing global growth, US-China trade developments, Brexitrelated uncertainty and a partial US government shutdown. Although US stock markets bounced back to life yesterday

to end positive and Asian shares traded mostly higher this morning, it is certainly too early for any celebrations. With investor appetite for riskier assets seen diminishing amid the unfavourable market conditions, global equity markets remain vulnerable to downside shocks. The geopolitical risk factors weighing painfully on global sentiment are likely to encourage investors to seek safety in the Japanese Yen and Gold. Dollar hit by growth concerns and US politics Buying sentiment towards the Dollar was dealt a sharp blow after a drop in US consumer confidence rekindled fears over a slowdown in economic momentum. Concern over a partial US government shutdown compounded to the Greenback’s woes with the Dollar Index trading marginally below 96.45 as of writing. With slowing growth fears threatening the Dollar’s safe-haven status, the sentiment pendulum could swing in favour of the bears in 2019. In regards to the technical picture, the Dollar Index is shaky on the daily charts with prices trading below the 96.50 support. Sustained weakness below this level has the potential to open a path towards 96.00 in the near term. Commodity spotlight –

L-R: Tolani Anjou, senior area manager Ekwulobia. Nigerian Breweries plc; Chidi Egwu, brand manager, Life Continental Lager Beer, Nigerian Breweries plc.; Phyno , brand ambassador, Life Continental Lager Beer, and Olusegun Odejobi, senior area sales manager, Awka, at the recently concluded Bridge of Progress party in Ekwulobia, Anambra State.

Gold It is shaping up to be an incredibly positive trading week for Gold prices thanks to heightened geopolitical risks and Dollar weakness. Explosively volatile equity markets, global growth fears,

Brexit uncertainty and political instability in Washington have accelerated the flight to safety – ultimately sending Gold prices to levels not seen in more than 6 months. With turbulent market conditions guiding investors towards safe-haven assets, Gold

is on route to concluding 2018 firmly above the $1,272 resistance level. The yellow metal has the potential to become a major talking point across markets next year, especially when considering how the Dollar is seen

weakening on growth concerns and Fed expected to take a pause on rate hikes in 2019. Taking a look at the technical picture, a yearly close above $1,272 is likely to trigger a move higher towards the $1,288 and $1,300 level.

APPOINTMENTS

Diamond bank appoints Babade as acting Chairman

iamond Bank Plc on Thursday notified the Nig er ian Sto ck Exchange (NSE) that following the recent resignation of Oluseyi Bickersteth as Chairman of the Board, Dele Babade has been appointed acting Chairman. Babade holds Bachelors and Master ’s degrees in Law from the University of London and was called to both the Nigerian and English Bar. He star ted his career with Midland Montagu London (the predecessor of HSBC Investment Bank) on the Graduate Training Programme in 1988 and at various times worked in the UK and Greece mainly in Corporate and Merchant Banking. He joined Citibank in 1993 and garnered exper i e n c e f r o m C i t i b a n k ’s Emerging Markets business focusing on businesses beyond Africa and became Vice President in charge of all cross border/international deals for Africa in 1996, statement on the NSE website explained.

2007, but left briefly to join Ecobank Transnational Inc. as Head of Ecobank

African continent. He currently serves as C ha i r ma n o f t h e A f r i ca Risk Capacity Pan African

current responses to climate-related food security emergencies. Babade was nominated

Capital from 2010 to 2012 and was also a member of the Group Executive Committee, the top executive body for overall direction o f t h e E c o b a n k G r o u p. Since 2012, he has been running his firm focusing o n i n w a rd c ro s s b o rd e r t ra n s a c t i o n s a c ro s s t h e

Insurance Company (ARC Ltd) and is also the Chairman o f i t s F i n a n c e a n d Inv e s t m e n t C o m m i t t e e. ARC Ltd is a financial affiliate of the African Risk Capacity, a specialized agency of the African U n i o n ( AU ) , a n i n i t i a tive designed to improve

by First Carlyle Growth V (Carlyle) and his appointment as a Non-Executive Director was approved by the Central Bank of Nigeria effective April 20, 2017. Diamond Bank is currently in a business combination deal with Access Bank Plc.

CHART OF THE WEEK

Access bank’s merger with Diamond

In 1998, he joined Nomura International in London as a Director for Investment Banking for Africa. After re-joining Citibank in 2000, he was moved to Nigeria and Ivory Coast in 2001 as Executive Director covering Nigeria and West A f r i ca a n d wa s a b o a rd

member of Citibank Nigeria from 2001 to 2006. He also served as Citibank’s Director & Regional Head Sub-Sahara Africa Corporate Finance & Investment Banking based in S outh Africa from 2002 to 2006. He started his own investment advisory firm in

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MARKETS

Nigerian stocks now down 18.84% since start of 2018 David Ibidapo

h e Ni g e r i a A l l share index has suffered a massive sell off pressure resulting to a -18.84 percent dip in market performance year to date. Ni g e r i a n s t o c k s hav e b e e n ha m m e re d by r i sing interest rates in the United States which has triggered capital reversals from emerging markets. Another contr ibutor y factor to the stock-sell off is the perceived uncertainty of the outcome in the 2019 general election. This has increased Niger ia’s countr y r isk and accelerated the exiting of foreign investors. Slowdown in foreig n transaction Total foreign transactions on the NSE experienced a slowdown in the third quarter of the year as transaction on the nation’s bourse decline by 65 percent from N102.4 billion in June to 36.17 billion in July. Total foreign transaction on the exchange in No-

vember increased however to N84.36 billion, the highest since the significant drop in foreign transaction in July. However, foreign transactions experienced in November were more of foreign outflows than inflows accounting for about 59 percent of total foreign transactions. Oil and Gas Sector outperforms peers The oil and gas sector of the NSE amongst other sectors outperformed peers in market value appreciation. According to a report released by the NSE, market value of the Oil and Gas sector gained 8.63 percent to stand at N619.10 billion. Meanwhile, the Agricultural sector came second after market value appreciated by 7.48 percent with a market capitalization of N132.66 billion in Q3 2018 against Q3 2017. Also, the Natural resources and ICT industries of the NSE were recorded to be the worst performing sector as at Q3 2018. CCNN, Unity Bank and Learn Africa remain best performers YTD Despite the bearish state of the Nigeria Stock

Exchange market, companies such as CCNN, Unity Bank and Learn Africa occupied the top three top performers in 2018. Y TD analysis showed that on Fr iday, shares pr ices of these companies appreciated 105.79 percent, 103.77 percent and 71.59 percent respectively. Fo r e c a s t o f m a r k e t performance in 2019 Analysts maintain divergent views on the possibility of a favourable market performance in the upcoming year 2019. While some are of the opinion that a change in current government will induce an uptick in mark e t p e r f o r m a n c e, s o m e maintain the position that change in administration isn’t the key driver of market performance but policies and refor ms put in place. The EIU however forecasts the possibility of the People’s Democratic Party (PDP) winning the upcoming 2019 general election but concerns are raised on the possibilities of floundering against the same problem as the incumbent one.

The Sun King team during a special Christmas awareness drive aimed at educating customers about the value of choosing high quality solar products, in Lagos.

L-R: Joshua Ajayi, editor-in-chief, Brand Communicator ; Yomi Badejo-Okusanya , group chief executive officer CMC Connect; Uche Ajene, managing consultant Quadrant MSL; Nike McMedal, wife to chairman NIPR Lagos State Chapter, and Olusegun McMedal, chairman, NIPR, Lagos State Chapter, at the Lagos PR Industry Gala and Awards (LaPRIGA) in Lagos recently.

BANKING

Ecobank assures customers of services during holidays via Xpress Point HOPE MOSES-ASHIKE

cobank Nigeria has called on its customers to avail themselves the services of its Xpress points across the country, during weekends and public holidays, particularly this Yuletide season. Ecobank Xpress Point is a unique type of agency banking that allows customers to access basic banking services even after regular banking hours. According to a statement by Carol Oyedeji, executive director, consumer banking, the Xpress points are designed to ensure members of the public carry out their financial transactions such as deposits, withdrawals and account opening at the outlets, stressing that it was part of the bank’s distribution strategy to take banking service

right to the door-step of the customer. She noted that, “Ecobank Xpress points are to complement our digital channels. They are essentially targeted at providing our customers, the unbanked and underbanked the opportunity to access banking services through retail outlets, fuel service stations, neighbourhood shops and other convenient places across the country. They are a fantastic option on all weekends and public holidays when conventional banks usually close their doors. We wish to encourage our customers to explore this opportunity during this Yuletide season.” Oyedeji further explained that the Xpress point is an aspect of agency banking in line with the financial inclusion strategy of the Central Bank of Nigeria (CBN), adding that it is in furtherance of

the Ecobank’s vision of building a Pan African Banking Institution that contributes to the economic development and financial Integration of Africa. ”Ecobank is determined to extend the reach of its banking services to customers in remote and rural locations with its agency banking initiative. To deliver our strategy of reaching 100 million customers by 2020, we have created innovative platforms, products and services, which are already serving a much larger customer base. These agent locations will support some of the innovative services we have introduced to the market such as Xpress Cash, which allows customers to withdraw cash at Automated Teller Machines without their cards and to transfer within and across 33 countries via the Ecobank Mobile App, she said.”

L-R: Neave Kannemeyer, chief security officer, Godwin Oche, national sales director, both of International Breweries, Oritsefemi, music artiste, Tolulope Adedeji,marketing director, International Breweries and Femi Adebayo, brand ambassador, Trophy Lager at the 40th anniversary celebration of Trophy Lager in Ibadan, Oyo State.

L-R: Femi Asenuga, managing director, Mutual Benefits Life Assurance Limited; Akin Ogunbiyi, chairman, Mutual Benefits Assurance plc; his wife, Dotun Ogunbiyi; and Segun Omosehin, with members of the Mutual Choir at the Company’s 2018 Christmas Carol held in Lagos recently.

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Access Bank Rateswatch Market Analysis and Outlook: December 28, 2018 - January 4, 2019

KEY MACROECONOMIC INDICATORS GDP Growth (%)

1.81

Q3 2018 — Higher by 0.31% compared to 1.50% in Q2 2018

Broad Money Supply (M2) (N’ trillion)

25.71

Increased by 1.74% in Oct’ 2018 from N25.28 trillion in Sept’ 2018

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

22.72 1.96

Increased by 0.72% in Oct’ 2018 from N22.56 trillion in Sept’ 2018 Increased by 1.55% in Oct’ 2018 from N1.93 trillion in Sept’ 2018

Inflation rate (%) (y-o-y) Monetary Policy Rate (%) Interest Rate (Asymmetrical Corridor) External Reserves (US$ million) Oil Price (US$/Barrel) Oil Production mbpd (OPEC)

11.28 14 14 (+2/-5) 43.29 52.42 1.75

Increased to 11.28% in November 2018 from 11.26% in October’ 2018 Raised to 14% in July ’2016 from 12% Lending rate changed to 16% & Deposit rate 9% December 27, 2018 figure — an increase of 2.88% from December start December 28, 2018 figure— a decrease by 13.08% from the prior week October 2018 figure — a decrease of 0.96% from September 2018 figure

COMMODITIES MARKET

STOCK MARKET Indicators

NSE ASI Market Cap(N’tr)

Friday

Change(%)

28/12/18

21/12/18

31,037.72 11.34

30,773.64 11.24

0.86 0.86

Volume (bn)

0.20

0.19

1.38

Value (N’bn)

6.54

3.67

78.52

MONEY MARKET NIBOR Tenor

Friday Rate

Change (Basis Point)

(%)

28/12/18

21/12/18

OBB

17.17

21.67

(450.3)

O/N CALL 30 Days

18.42 15.00 12.75

25.08 14.83 15.78

(666) 16.7 (303)

90 Days

12.63

14.11

(148.9)

Friday

1 Month

FOREIGN EXCHANGE MARKET Market

Friday (N/$)

(N/$)

Rate (N/$)

28/12/18

21/12/18

28/01/18

Official (N) Inter-Bank (N)

307.00 0.00

306.95 358.58

306.80 360.15

BDC (N) Parallel (N)

0.00 364.00

0.00 365.00

364.00 370.00

Indicators

Energy 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.)

Tenor

Friday

Change

(%)

(Basis Point)

28/12/18

21/12/18

3-Year 5-Year

0.00 15.32

0.00 15.43

0.0 (11.2)

7-Year 10-Year 20-Year

15.58 15.19 15.34

15.58 15.43 15.61

(0.2) (23.9) (26.8)

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.

YTD Change

(%)

52.42 3.34

(13.08) (7.99)

(18.68) 9.29

2395.00 101.55 72.21 12.22 512.50

4.86 (0.98) (3.99) (1.85) (2.01)

23.71 (22.00) (6.83) (20.29) 18.22

1278.30 15.35 268.00

1.32 4.85 (0.22)

(2.98) (10.70) (18.24)

Friday

Change

(%)

(Basis Point)

28/12/18

21/12/18

1 Mnth 2 Mnths

14.95

15.44

(49) 0

3 Mnths 6 Mnths 9 Mnths

14.49 13.46 16.55

13.42 13.93 16.74

108 (47) (18)

ACCESS BANK NIGERIAN GOV’T BOND INDEX

Indicators

AVERAGE YIELDS Friday

1-week Change

NIGERIAN INTERBANK TREASURY BILLS TRUE YIELDS

BOND MARKET Tenor

28/12/18

Friday

Change

(%)

(Basis Point)

28/12/18

21/12/18

Index

2716.56

2694.97

0.80

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

8.52 5.29

8.46 5.24

0.81 1.00

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

10.59 -45.25

9.71 -46.10

0.88 0.85

Rate (%)

Date

TREASURY BILLS (MATURITIES) Tenor

Amount (N' million)

91 Day 182 Day

24,372.79 23,157.66

11.2045 14.0155

28-Nov-2018 28-Nov-2018

364 Day

103,071.72

16.8829

28-Nov-2018

Global Economy In the US, the trade deficit rose to a 10-year high of $55.5 billion in October, data released by the US Commerce Department showed. Imports rose by 0.2% month-onmonth (m-o-m) to a record $266.5bn in October as US companies stocked up on Chinese goods ahead of the holidays before the next hike in US tariffs that were expected to kick in on 1 January 2019 (this was postponed following recent talks between the US and China at the G20 meeting). Meanwhile, exports slipped by 0.1% m-o-m to $211 billion, largely because of a big drop in soybean shipments. Retaliatory tariffs by China have curbed US exports of soybeans in particular. In a separate development, in China, the National Bureau of Statistics (NBS) reported that the country’s fixed asset investment (FAI) growth picked up to 5.9% y-o-y for the first 11 months of 2018, compared to 5.7% y-o-y for the previous ten months, implying growth of 7.7% y-o-y for the month of November. The private sector continued to outperform the headline figure, posting cumulative growth of 8.7% yo-y for 2018 until November, slightly down from October’s cumulative rate of 8.8% y-oy. In terms of sectors, manufacturing FAI remained the bright spot, picking up to 9.5% y-o-y from 9.1% over the same period. Elsewhere, the Bank of England (BoE) held the policy rate unchanged at 0.75% in its December meeting. Against a backdrop of a cautious outlook on the economy in light of Brexit-related risks, the BoE’s forward guidance suggests a gentle pace of rate hikes in the coming years. Domestic Economy Provisional estimates for Nigeria’s Balance of Payments (BOP) in the third quarter (Q3) 2018, showed the overall BOP deteriorated to a deficit of $4.5 billion in the third quarter of the year (Q3’18) from $503 million surplus in the second quarter of the year (Q2’18). A breakdown of the BOP data into its various components indicated that the current account balance (CAB) plunged to a deficit of $3.1 billion (relative to a surplus of $4.5bn in Q2-18), dragged down by a 70.5% increase in the payments for import of goods to US$14,1bn (especially non-oil products) which more than offset the 2.8% increase in export earnings. Similarly, the financial account also underperformed as net financial liabilities skyrocketed from $2.6bn in Q2-18 to $10.7bn on a 9.6% depletion in external reserves and decline in foreign portfolio inflow from US$4.2bn in Q2-18 to $1.8bn in Q3-18. In a separate development, the World Bank reiterated its expectation for 1.9% GDP growth for Nigeria in 2018. Earlier in October, the bank reduced its growth projection to 1.9% from an earlier forecast of 2.1%. The downward revision was hinged on the sluggish growth in economic activities recorded in H1-18, due to growth lags in both the oil and non-oil sectors of the economy. Stock Market Last week, investor perception improved in the equities market and the NSE ASI returned a weekly gain of 0.86% to close at 31,037.72 points. Similarly, market capitalization increased by N100 billion to end the week at N11.34 trillion. This week, we anticipate that continued hunt for bargains will lift performance gauges further.

Money Market Cost of borrowing moderated last week. Short-dated placements such as Open Buy Back (OBB) and Over Night (O/N) rates fell to 17.17% and 18.42% from 21.67% and 25.08% respectively the previous week. The 30-day NIBOR eased to 12.75% from 15.78% the prior week, while 90-day NIBOR closed at 12.63% from 14.11% the week before. The moderation in short dated rates resulted from Open Market Operation (OMO) maturity of about N218 billion during the week. In the coming year, rates will be influenced by the Central Bank of Nigeria’s (CBN) liquidity management efforts. Foreign Exchange Market The naira appreciated slightly against the United States dollar across various segments of the foreign exchange market last week on sustained supply of the greenback by the Central Bank of Nigeria (CBN). Specifically, on the Interbank segment, the local unit strengthened by 0.08% to close at N358.31/$. Also, the naira appreciated at the parallel market segment by 0.27% to close N364 to a dollar last week from N365 the week earlier. Next week, we envisage the naira would remain close to prevailing levels due to the Central Bank of Nigeria’s liquidity injections. Bond Market Bonds yields moderated across most maturities for the week ended December 28, 2018. Yields declined due to liquidity in the system resulting in demand for debt papers. Yields on the five-, seven- and twenty-year debt papers settled at 15.32%, 15.58% and 15.34% from 15.43%, 15.58% and 15.61% for the corresponding maturities the previous week. The Access Bank Bond index rose by 21.59 points to close at 2,716.56 points from 2,694.97 points the previous week. This week, status quo may persist due to liquidity in the system. Commodities Crude oil prices settled lower last week, pressured by concerns over a faltering global economy and worries about a glut in crude supply. US crude inventories rose by 6.9 million barrels to 448.2 million barrels on increased refinery output, according to data released by the American Petroleum Institute. Bonny light, Nigeria’s benchmark crude oil, shed $7.89 to close at $52.42 a barrel, a 13.08% loss from the previous week. In contrast, precious metals climbed last week, as concerns about slowing global economic growth and a partial government shutdown in the United States stoked safehaven demand. Gold prices edged up 1.32% to $1,278.30 per ounce last week, while silver prices finished the week 71 cents, or 4.85%, higher at $15.35 per ounce. This week, a number of bearish factors, notably resumption of production at Britain's largest oilfield and weak economic data from China will likely exert downside pressure on oil prices. We expect precious metals prices to sustain the upward momentum as ongoing geo-political uncertainties buoy safe haven demand. MONTHLY MACRO ECONOMIC FORECASTS Variables

Jan’19

Feb’19

Exchange Rate (Interbank) (N/$)

363

364

365

Inflation Rate (%)

11.31

11.61

11.45

Crude Oil Price (US$/Barrel)

55:00

58.00

60.00

Sources: CBN, Financial Market Dealers Association of Nigeria, NSE and Access Bank Economic Intelligence Group computation. For enquiries, contact: Rotimi Peters (Team Lead, Economic Intelligence) (01) 2712123 rotimi.peters@accessbankplc.com

Mar’19

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C002D5556

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Monday 31 December 2018

Live @ The Exchanges Top Gainers/Losers as at Friday 28 December 2018 GAINERS Company

Market Statistics as at Friday28 December 2018

LOSERS Opening

Closing

Change

Company

STANBIC

N50.6

N53.25

2.65

NESTLE

PRESCO

N62.15

N64

1.85

SEPLAT

FLOURMILL

N21.1

N21.95

0.85

BERGER

N7.85

N8.6

0.75

MOBIL

N184.8

N185.5

0.7

Opening

Closing

Change

N1617.1

N1480

-137.1

N642.9

N592.5

-50.4

DANGCEM

N187.7

N183

-4.7

N34.35

N31.85

-2.5

N10.8

N9.75

-1.05

UACN

ASI (Points)

31,037.72

DEALS (Numbers)

4,080.00

VOLUME (Numbers) VALUE (N billion)

6.544

MARKET CAP (N Trn

Foreign investors pull out over N600bn from Nigerian stock market Stories by Iheanyi Nwachukwu

n eleven months to November 30, 2018, foreign outflow from the Nigerian stock market reached a record high of N605.54billion, about N203.28billion higher than an outflow of N402.26billion recorded same period in 2017. In the review period, foreign inflow was lower at N553.48billion, a shortfall of about N45.34billion compared with N598.82billion foreign inflow in 2017. Total market transactions at the Nigerian Stock Exchange (NSE) in the eleven months period increased by N216billion to N2.278trillion as against N2.062trillion achieved in the corresponding period

of 2017. Domestic investors accounted for N1. 119 trillion worth of stocks transactions in the review period while foreign investors accounted for N1. 159trillion; while in the same period of 2017 foreign investors accounted for N1.001trillion worth of stocks transactions while domestic investors accounted for N1.061trillion worth of stocks in eleven months to November 2017. The domestic composition of transactions on the Exchange between January and November 2018 shows retail and institutional transactions respectively accounted for 52.29percent and 47.71percent of the domestic market in November 2018. This indicates a higher participation by retail investors over their institutional counterparts

in November 2018. Month-on-month (mom), total transactions at the nation’s bourse increased by 23.28percent, from N121.45 billion recorded in October 2018 to N149.72 billion (about $488.8 million) in November 2018, the NSE noted in its report on domestic and foreign portfolio participation in eq-

uity trading for the month of November. Foreign investors outperformed domestic investors by 12.70percent in November 2018. Total foreign transactions increased marginally by 1.05percent, from N83.48 billion in October to N84.36 billion in November 2018. The foreign outflows increased by 15.78percent,

from N42.66 billion to N49.39billion with an inverse reduction in foreign inflows which reduced by 16.72percent, from N40.82 billion to N34.97 billion over the same period. The total domestic transactions increased by 72.13percent from N37.97 billion in October 2018 to N65.36 billion in November 2018.

ment to diversify the economy with much focus on agriculture, Notore, which operates in the agro-allied space has huge headroom for growth, hence its decision to list on the Nigerian Stock Exchange (NSE) last August. Onajite Okoloko, Group Managing Director/CEO, Notore Chemical Industries Plc had said the listing would increase access to capital in order to fund the company’s future growth initiatives and grant Nigerians the opportunity to participate in its growth history. The company has been championing the introduction of Urea Super Granules (USG) into the Nigerian market for application by rice producers in flooded farmlands. USG is simply Urea compacted into big granules (2.7g per granule) so that it can be applied via deep placement in flooded rice fields and the com-

pany has taken the lead in promoting its widespread adoption across the country. In recognition of the potential benefits of the USG and its advantages over the conventional urea fertilizer for rice farmers, the company has attracted the interest and partnership of the Africa Enterprise Challenge Fund (AECF). Also, in its commitment to improving product/ service quality, processes and customer satisfaction, Notore has transited from its ISO 2001: 2008 Quality Management System (QMS) to the new ISO 9001:2015 Quality Management System (QMS) international standard. Notore is embarking on Plant Turn-AroundMaintenance (TAM) programme, which involves the acquisition and installation of a back-up power plant and for the stocking-up of critical equipment spares inventory.

Notore records N26.8bn full year revenue …eyes further growth after Turn-Around-Maintenance

otore Chemical Industries Plc recorded revenue of N26.823 billion for the year ended September 30, 2018, compared with N35.894billion in 2017. But the revenue is expected to improve in 2019 after the completion of the company’s plant Turn-Around-Maintenance (TAM) programme. The company’s audited results released at the Nigerian Stock Exchange (NSE) shows Notore recorded a reduction in cost of sales, which fell from N25.461 billion in 2017 to N17.217 billion in 2018. Administrative expensive went up from N4.421 billion to N6.21 billion, while sales and distribution expenses rose from N320 million to N530 million in 2018. Operating profit improved to N7.218 billion, up from N6.942 billion in 2017. However, financing cost rose from N9.091 billion to N10.848 billion,

making the company to end the year with a loss after tax of N2.013 billion, compared with a profit of N8.652 billion in 2017. Notore’s short and medium term plans entail achieving the 500,000 Metric Tonnes per Annum nameplate capacity and the construction of a fertilizer and a petrochemical plant with joint production capacity of over 2,000,000 Metric Tonnes per Annum respectively by 2023. During the 2018 financial year, Notore achieved the following milestones which are critical towards realising its short term and medium term growth initiatives: secured approval for $37million funding from Africa Export Import Bank to execute its TAM; and refinanced N46.73billion of its facilities from short term loans into long term loans with a 7-year tenor and 1-year moratorium on principal repayment. Also, Notore was awarded a Free

Zone Developer Status by the Onne Oil & Gas Free Zones Authority to operate and expand the Oil & Gas Free Zone in Onne; and it completed 95percent of the dredging activities of its jetty to a draft of 10.5meters to enable vessels with approximately 35,000 Metric Tonne capacity to berth at the jetty compared to the previous maximum size of 15,000 Metric Tonnes capacity vessels. The company is a leading producer of fertilizer products traded locally and exported to West Africa, Southern Africa and Europe. And given the efforts of the federal govern-

1,962,034,759.00

11.337

NSE launches X-Bot to enhance market participation

he Nigerian Stock Exchange (NSE) has launched ‘XBot’, an artificial intelligence (AI)-powered Chatbot that responds directly and automatically to enquiries through Facebook Messenger. X-Bot which is the first African securities exchange Chatbot is designed to provide market participants, especially retail investors, convenient, faster and real-time access to data and information from the Exchange. Commenting on X-Bot, Oscar N. Onyema, CEO of the Exchange noted that the introduction of X-Bot is in line with the NSE’s drive to improve market participation through greater access to market information. He said, “We aim for an Exchange that is easily accessible and actively matches investors’ increased thirst for information and detailed disclosure information to make sound investment decisions. With X-Bot, investors in our market can access on-demand market information, news and events on the activities of the Exchange and the various products and instruments that are listed and traded on it”. “The Exchange has always been at the forefront of innovation, and the launch of the X-Bot marks yet another significant milestone in our continuous adoption of new technologies with a customer-centric focus to make financial services more inclusive and to provide a superior customer experience in the access and use of capital”, said Onyema. On his part, John Adelana, Head, Regulatory Technology (RegTech), NSE stated that “Customer experience is a key priority for NSE and we are deeply committed to constantly improving it. With the launch of X-Bot, NSE becomes the first African securities exchange to launch a customer interactive machine learning chatbot, which contributes to facilitating and accelerating the process of providing information to market participants.

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Live @ the Stock exchange Prices for Securities Traded as of Friday 28 December 2018 Company

Symbol

Deals

Current Price

Trades

Volume

PRICES FOR MAIN BOARD SECURITIES (Equities) BANKING ACCESS BANK PLC. 196,710.21 6.80 -2.86 299 18,602,127 UNITED BANK FOR AFRICA PLC 268,465.46 7.85 -1.87 124 10,010,610 ZENITH BANK PLC 722,119.36 23.00 -1.29 424 39,606,872 847 68,219,609 OTHER FINANCIAL INSTITUTIONS FBN HOLDINGS PLC 271,009.46 7.55 -7.93 204 6,064,452 204 6,064,452 1,051 74,284,061 BUILDING MATERIALS DANGOTE CEMENT PLC 3,118,412.86 183.00 -2.50 136 1,068,334 LAFARGE AFRICA PLC. 108,417.85 12.50 -0.40 206 1,143,304 342 2,211,638 342 2,211,638 EXPLORATION AND PRODUCTION SEPLAT PETROLEUM DEVELOPMENT COMPANY PLC 348,653.40 592.50 -7.84 24 57,660 24 57,660 24 57,660 1,417 76,553,359 REAL ESTATE INVESTMENT TRUSTS (REITS) SKYE SHELTER FUND PLC 1,900.00 95.00 - 0 0 UNION HOMES REAL ESTATE INVESTMENT TRUST (REIT) 11,300.89 45.20 - 0 0 UPDC REAL ESTATE INVESTMENT TRUST 17,610.58 6.60 - 1 14,000 1 14,000 1 14,000 OTHER FINANCIAL INSTITUTIONS NIGERIA ENERYGY SECTOR FUND 411.91 552.20 - 0 0 VALUEALLIANCE VALUE FUND 3,312.39 103.20 - 0 0 0 0 0 0 1 14,000 CROP PRODUCTION FTN COCOA PROCESSORS PLC 440.00 0.20 - 1 3,530 OKOMU OIL PALM PLC. 72,687.94 76.20 - 8 14,066 PRESCO PLC 64,000.00 64.00 2.98 5 74,465 14 92,061 FISHING/HUNTING/TRAPPING ELLAH LAKES PLC. 511.20 4.26 - 0 0 0 0 LIVESTOCK/ANIMAL SPECIALTIES LIVESTOCK FEEDS PLC. 1,500.00 0.50 -3.85 18 357,998 18 357,998 32 450,059 DIVERSIFIED INDUSTRIES A.G. LEVENTIS NIGERIA PLC. 714.77 0.27 - 3 6,900 JOHN HOLT PLC. 171.23 0.44 - 2 14,837 S C O A NIG. PLC. 1,903.99 2.93 - 9 1,200 TRANSNATIONAL CORPORATION OF NIGERIA PLC 53,248.87 1.31 -2.24 191 28,927,776 U A C N PLC. 28,092.64 9.75 -9.72 59 1,723,252 264 30,673,965 264 30,673,965 BUILDING CONSTRUCTION ARBICO PLC. 711.32 4.79 - 0 0 0 0 INFRASTRUCTURE/HEAVY CONSTRUCTION JULIUS BERGER NIG. PLC. 26,532.00 20.10 - 4 14,750 ROADS NIG PLC. 165.00 6.60 - 0 0 4 14,750 REAL ESTATE DEVELOPMENT UACN PROPERTY DEVELOPMENT COMPANY PLC 4,962.94 1.91 9.77 10 267,936 10 267,936 14 282,686 AUTOMOBILES/AUTO PARTS DN TYRE & RUBBER PLC 954.53 0.20 - 0 0 0 0 BEVERAGES--BREWERS/DISTILLERS CHAMPION BREW. PLC. 14,171.39 1.81 9.70 4 119,040 GOLDEN GUINEA BREW. PLC. 242.22 0.89 - 0 0 GUINNESS NIG PLC 157,707.56 72.00 - 28 62,148 INTERNATIONAL BREWERIES PLC. 262,173.79 30.50 - 2 3,440 NIGERIAN BREW. PLC. 655,745.97 82.00 -0.61 71 2,153,059 105 2,337,687 FOOD PRODUCTS DANGOTE FLOUR MILLS PLC 34,250.00 6.85 -0.72 37 332,354 DANGOTE SUGAR REFINERY PLC 183,000.00 15.25 -0.65 44 618,543 FLOUR MILLS NIG. PLC. 90,003.33 21.95 4.03 55 779,130 HONEYWELL FLOUR MILL PLC 10,150.65 1.28 -3.76 52 2,506,101 MULTI-TREX INTEGRATED FOODS PLC 1,340.10 0.36 - 0 0 N NIG. FLOUR MILLS PLC. 855.36 4.80 - 0 0 NASCON ALLIED INDUSTRIES PLC 47,689.89 18.00 - 10 198,881 UNION DICON SALT PLC. 3,676.41 13.45 - 0 0 198 4,435,009 FOOD PRODUCTS--DIVERSIFIED CADBURY NIGERIA PLC. 18,688.11 9.95 -0.50 30 1,022,525 NESTLE NIGERIA PLC. 1,173,131.25 1,480.00 -8.48 68 215,206 98 1,237,731 HOUSEHOLD DURABLES NIGERIAN ENAMELWARE PLC. 1,680.31 22.10 - 0 0 VITAFOAM NIG PLC. 4,169.48 4.00 - 5 42,974 5 42,974 PERSONAL/HOUSEHOLD PRODUCTS P Z CUSSONS NIGERIA PLC. 45,461.96 11.45 4.09 39 317,014 UNILEVER NIGERIA PLC. 212,565.20 37.00 - 13 129,025 52 446,039 458 8,499,440 BANKING DIAMOND BANK PLC 46,089.17 1.99 9.94 36 13,447,361 ECOBANK TRANSNATIONAL INCORPORATED 256,893.72 14.00 - 22 172,629 FIDELITY BANK PLC 57,949.59 2.00 -1.96 102 7,956,962 GUARANTY TRUST BANK PLC. 1,009,489.45 34.30 -0.29 164 7,667,723 JAIZ BANK PLC 15,026.77 0.51 -1.92 15 3,335,232 SKYE BANK PLC 10,687.83 0.77 - 0 0 STERLING BANK PLC. 53,262.27 1.85 1.65 14 323,828 UNION BANK NIG.PLC. 163,076.22 5.60 - 13 146,044 UNITY BANK PLC 11,455.55 0.98 -9.26 28 6,904,056 WEMA BANK PLC. 23,530.42 0.61 8.93 41 657,277,566 435 697,231,401 INSURANCE CARRIERS, BROKERS AND SERVICES AFRICAN ALLIANCE INSURANCE PLC 4,117.00 0.20 - 0 0 AIICO INSURANCE PLC. 4,781.84 0.69 4.55 20 1,641,332 AXAMANSARD INSURANCE PLC 19,950.00 1.90 -5.00 9 412,000 CONSOLIDATED HALLMARK INSURANCE PLC 2,660.00 0.38 - 0 0 CONTINENTAL REINSURANCE PLC 19,811.94 1.91 3.24 5 241,500 CORNERSTONE INSURANCE PLC 2,945.90 0.20 - 2 3,338 GOLDLINK INSURANCE PLC 2,411.47 0.53 - 0 0 GREAT NIGERIAN INSURANCE PLC 1,913.74 0.50 - 0 0 GUINEA INSURANCE PLC. 1,412.20 0.23 - 0 0 INTERNATIONAL ENERGY INSURANCE PLC 487.95 0.38 - 0 0 LASACO ASSURANCE PLC. 2,197.03 0.30 -3.33 16 4,627,000 LAW UNION AND ROCK INS. PLC. 2,577.80 0.60 - 1 833 LINKAGE ASSURANCE PLC 5,280.00 0.66 - 7 19,615 MUTUAL BENEFITS ASSURANCE PLC. 1,600.00 0.20 -9.09 15 2,176,963 NEM INSURANCE PLC 13,518.09 2.56 -4.48 20 909,548,253 NIGER INSURANCE PLC 1,702.69 0.22 - 5 314,562 PRESTIGE ASSURANCE PLC 2,745.10 0.51 - 2 3,000 REGENCY ASSURANCE PLC 1,333.75 0.20 -4.76 10 4,506,109 SOVEREIGN TRUST INSURANCE PLC 1,834.98 0.22 10.00 8 1,082,452 STACO INSURANCE PLC 4,483.72 0.48 - 0 0 STANDARD ALLIANCE INSURANCE PLC. 2,582.21 0.20 - 2 4,940 SUNU ASSURANCES NIGERIA PLC. 2,800.00 0.20 - 0 0 UNIC DIVERSIFIED HOLDINGS PLC. 516.46 0.20 - 0 0 UNIVERSAL INSURANCE PLC 3,200.00 0.20 - 1 100,000 VERITAS KAPITAL ASSURANCE PLC 3,189.33 0.23 - 1 2,000 WAPIC INSURANCE PLC 5,486.92 0.41 - 5 126,147 129 924,810,044

Company

Symbol

Deals

Current Price

Trades

Volume

MICRO-FINANCE BANKS FORTIS MICROFINANCE BANK PLC 11,799.67 2.58 - 0 0 NPF MICROFINANCE BANK PLC 3,772.95 1.65 - 5 60,050 5 60,050 MORTGAGE CARRIERS, BROKERS AND SERVICES ABBEY MORTGAGE BANK PLC 4,116.00 0.98 - 1 10,805 ASO SAVINGS AND LOANS PLC 7,370.87 0.50 - 0 0 INFINITY TRUST MORTGAGE BANK PLC 5,922.05 1.42 - 0 0 RESORT SAVINGS & LOANS PLC 5,664.87 0.50 - 0 0 UNION HOMES SAVINGS AND LOANS PLC. 2,949.22 3.02 - 0 0 1 10,805 OTHER FINANCIAL INSTITUTIONS AFRICA PRUDENTIAL PLC 7,900.00 3.95 -0.50 92 2,813,697 CUSTODIAN INVESTMENT PLC 30,879.79 5.25 - 72 63,691 DEAP CAPITAL MANAGEMENT & TRUST PLC 660.00 0.44 - 0 0 FCMB GROUP PLC. 38,417.26 1.94 2.65 225 25,526,915 ROYAL EXCHANGE PLC. 1,080.53 0.21 5.00 5 1,002,366 STANBIC IBTC HOLDINGS PLC 545,309.44 53.25 5.24 25 128,828 UNITED CAPITAL PLC 17,340.00 2.89 -2.69 96 5,668,574 515 35,204,071 1,085 1,657,316,371 HEALTHCARE PROVIDERS EKOCORP PLC. 1,680.29 3.37 - 1 22,842 UNION DIAGNOSTIC & CLINICAL SERVICES PLC 959.35 0.27 -3.57 4 325,000 5 347,842 MEDICAL SUPPLIES MORISON INDUSTRIES PLC. 544.04 0.55 - 0 0 0 0 PHARMACEUTICALS EVANS MEDICAL PLC. 366.17 0.50 - 0 0 FIDSON HEALTHCARE PLC 7,425.00 4.95 - 3 225 GLAXO SMITHKLINE CONSUMER NIG. PLC. 17,340.21 14.50 - 8 19,847 MAY & BAKER NIGERIA PLC. 2,401.00 2.45 - 5 101,600 NEIMETH INTERNATIONAL PHARMACEUTICALS PLC 1,484.80 0.86 - 24 473,164 NIGERIA-GERMAN CHEMICALS PLC. 556.71 3.62 - 0 0 PHARMA-DEKO PLC. 325.23 1.50 - 0 0 40 594,836 45 942,678 COMPUTER BASED SYSTEMS COURTEVILLE BUSINESS SOLUTIONS PLC 710.40 0.20 - 1 2,000 1 2,000 COMPUTERS AND PERIPHERALS OMATEK VENTURES PLC 1,470.89 0.50 - 0 0 0 0 IT SERVICES CWG PLC 6,413.06 2.54 - 0 0 NCR (NIGERIA) PLC. 648.00 6.00 - 1 5 TRIPPLE GEE AND COMPANY PLC. 381.11 0.77 - 0 0 1 5 PROCESSING SYSTEMS CHAMS PLC 939.21 0.20 - 144 28,800 E-TRANZACT INTERNATIONAL PLC 16,590.00 3.95 - 2 1,000 146 29,800 148 31,805 BUILDING MATERIALS BERGER PAINTS PLC 2,492.48 8.60 9.55 12 667,404 CAP PLC 24,395.00 34.85 - 7 60,021 CEMENT CO. OF NORTH.NIG. PLC 25,070.72 19.95 2.05 52 654,517 FIRST ALUMINIUM NIGERIA PLC 759.73 0.36 9.09 7 602,500 MEYER PLC. 313.43 0.59 - 1 4,882 PORTLAND PAINTS & PRODUCTS NIGERIA PLC 1,999.41 2.52 - 0 0 PREMIER PAINTS PLC. 1,279.20 10.40 - 0 0 79 1,989,324 ELECTRONIC AND ELECTRICAL PRODUCTS AUSTIN LAZ & COMPANY PLC 2,256.91 2.09 - 0 0 CUTIX PLC. 3,135.15 1.78 - 6 22,596 6 22,596 PACKAGING/CONTAINERS BETA GLASS PLC. 34,148.09 68.30 - 1 50 GREIF NIGERIA PLC 388.02 9.10 - 0 0 1 50 AGRO-ALLIED & CHEMICALS NOTORE CHEMICAL IND PLC 100,754.14 62.50 - 0 0 0 0 86 2,011,970 CHEMICALS B.O.C. GASES PLC. 1,752.39 4.21 - 3 1,367 3 1,367 METALS ALUMINIUM EXTRUSION IND. PLC. 1,803.64 8.20 - 0 0 0 0 MINING SERVICES MULTIVERSE MINING AND EXPLORATION PLC 852.39 0.20 - 2 44,500 2 44,500 PAPER/FOREST PRODUCTS THOMAS WYATT NIG. PLC. 50.60 0.23 - 0 0 0 0 5 45,867 ENERGY EQUIPMENT AND SERVICES JAPAUL OIL & MARITIME SERVICES PLC 1,252.54 0.20 10.00 14 1,098,801 14 1,098,801 INTEGRATED OIL AND GAS SERVICES OANDO PLC 60,913.92 4.90 -1.01 90 3,201,670 90 3,201,670 PETROLEUM AND PETROLEUM PRODUCTS DISTRIBUTORS 11 PLC 66,890.42 185.50 0.38 9 14,492 CONOIL PLC 16,134.39 23.25 0.65 22 116,422 ETERNA PLC. 6,129.48 4.70 -6.00 21 466,269 FORTE OIL PLC. 41,484.02 31.85 -7.28 276 4,009,137 MRS OIL NIGERIA PLC. 7,833.01 25.70 - 0 0 TOTAL NIGERIA PLC. 66,546.28 196.00 - 15 47,100 343 4,653,420 447 8,953,891 ADVERTISING AFROMEDIA PLC 2,219.52 0.50 - 0 0 0 0 AIRLINES MEDVIEW AIRLINE PLC 19,501.30 2.00 - 3 76,091,061 3 76,091,061 AUTOMOBILE/AUTO PART RETAILERS R T BRISCOE PLC. 447.02 0.38 - 0 0 0 0 COURIER/FREIGHT/DELIVERY RED STAR EXPRESS PLC 2,475.89 4.20 - 2 750 TRANS-NATIONWIDE EXPRESS PLC. 304.75 0.65 - 5 59,300 7 60,050 HOSPITALITY TANTALIZERS PLC 642.33 0.20 - 0 0 0 0 HOTELS/LODGING CAPITAL HOTEL PLC 4,801.22 3.10 - 0 0 IKEJA HOTEL PLC 3,180.56 1.53 -10.00 9 399,940 TOURIST COMPANY OF NIGERIA PLC. 7,862.53 3.50 - 0 0 TRANSCORP HOTELS PLC 46,362.46 6.10 - 0 0 9 399,940 MEDIA/ENTERTAINMENT DAAR COMMUNICATIONS PLC 4,800.00 0.40 - 0 0 0 0 PRINTING/PUBLISHING ACADEMY PRESS PLC. 302.40 0.50 - 1 1,000 LEARN AFRICA PLC 1,049.17 1.36 -9.93 5 500,331 STUDIO PRESS (NIG) PLC. 1,183.82 1.99 - 0 0 UNIVERSITY PRESS PLC. 940.47 2.18 9.00 9 139,887 15 641,218 ROAD TRANSPORTATION ASSOCIATED BUS COMPANY PLC 480.73 0.29 - 1 4,000 1 4,000

BUSINESS DAY

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This is M NEY A daily guide to your Personal Finance

@Businessdayng

Monday 31 December 2018

• Savings • Travel • Debt & Borrowing • Utilities • Managing your Tax

Have you made your financial resolutions for 2019? ing, contact your creditors to discuss the possibility of coming up with more palatable repayment arrangements. • Invest for the future If you have some savings and your debt is under control, consider investing in the stock market. It is important to remember that the stock market over the long-term has outperformed other asset classes. Many stocks are currently selling well below their true value. If you are fortunate enough to have cash for long term investing, this is a good time to seek professional advice to build a diversified portfolio. Remember that investing comes with risk; to mitigate this, you should diversify across the primary asset classes. • Improve your Health A heathier lifestyle means fewer medical expenses. If you are healthy, you will have brighter prospects in all aspects of your life. Do you need to lose weight, eat more healthily, or exercise more regularly? Take your health seriously and take concrete steps to improve it. Make this a way of life for your family to ensure that your spouse and children are healthy.

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It is important to note that the most fulfilling things in life have little to do with money. They have to do with relationships; with your partner, your spouse, your children, your siblings, your parents, your friends

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he complex nature of our nation’s turbulent economy has impacted all Nigerians and leaves many feeling confused and anxious. The good news is that no matter how challenging things may be, the basic fundamentals of personal financial management still apply so stay focused on this. Have you made your New Year Resolutions? Did you include any financial ones? All major life events such as getting married, having a baby, educating children, losing a job, getting divorced, buying a home, losing a loved one, planning for your retirement and your estate come with financial consequences that must be prepared for. Here are 12 resolutions to consider for 2019. Don’t try to tackle them all. Tackling just 3 or 4 will lead to significant improvement in your financial life. • Establish a budget Living as though nothing has changed during challenging times can make a situation worse; changing your spending habits must be a priority. Budgeting is one of the most important tools for financial security. A good budget will help you to plan and monitor your expenses so you can identify where to cut back if necessary. Where does your money go? The traditional suspects are eating out every day, recharge cards etc. Can you cut back a little on these? • Build an emergency fund An emergency fund is a must-have, particularly during times of financial challenge. Build a fund with at least six months’ worth of your expenses in an accessible, interest bearing account. If you are suddenly faced with unemployment, medical

expenses, or other unexpected events, you will have this financial cushion to fall back on. If you can’t build 6 months, focus on 3 months. The key is to have something saved. • Automate your savings Can you set aside a minimum of ten per cent of your monthly income for savings. One of the most effective ways to increase savings is to automate the process by having the funds deducted via a direct debit into a savings, money market or mutual fund account. If the funds are in an account attached to your debit card you may be tempted to dip into the funds. • Reduce your debt Getting out of debt or at least reducing it is another key step to taking control of your finances. List all your debt, and prioritize by focusing on the debt with the highest interest rates first. Are you one of those people that avoid your lenders? Have you stopped taking their calls or ignore their reminders? You need friends and family as a lifeline when things are really bad so if you damage relationships, it only comes back to haunt you. If your debt has become overwhelm-

•. Invest in yourself There is something everyone of us can do to earn extra income and it is time to find out what that is. What can you do outside your full time job? If you are unemployed, this becomes even more urgent. Have you considered tutoring, consulting, blogging, photography? Identify and nurture your passion and talent and begin to leverage on it to earn in 2019. • Protect yourself and your Assets with Insurance You are your greatest asset. Do you have adequate cover for your health

and your life, particularly if you are the primary breadwinner? Are your properties including your car and home adequately insured? Things happen and you cannot afford to be careless with insurance. In addition, do keep up with routine maintenance of your assets so that you can identify festering problems before they require expensive repairs. The odd noise coming from your car engine should not be ignored. Attend to issues early. • Retirement Most Nigerians do not have enough money saved by the time they face retirement. Most of your retirement income will have to come from money you set aside and invest today whilst you are still young and earning. Do you have a Retirement Savings Account? Make this an important part of your longterm plans. • Put an Estate Plan in Place No one wants to think about death at the start of a new year, but you owe it to your family to put something in place should something untoward happen to you. Make an appointment with an estate-planning attorney who will put you through a relatively simple process. If you already have a will, review and update it to make sure you have included any new assets or beneficiaries. • Build Philanthropy into your Plans In spite of how difficult

things might be for you, there are always people worse off. Philanthropy is a powerful and effective way to change lives. Determine your area of interest and identify ways in which you can make a positive impact. • It’s not all About Money It is important to note that the most fulfilling things in life have little to do with money. They have to do with relationships; with your partner, your spouse, your children, your siblings, your parents, your friends. Remember to count your blessings in 2019. Enjoy your Life and may God grant you good health, happiness, and peace this year and beyond. Happy New Year! Register for Financial Resolutions in 2019 at www.moneymatterswithnimi.com/financial-resolutions-2019/ Nimi Akinkugbe has extensive experience in private wealth management. She seeks to empower people regarding their finances and offers frank, practical insights to create a greater awareness and understanding of personal finance. Instagram and Twitter: @ mmwithnimi, Facebook and Google+: ‘Money Matters with Nimi’. www. moneymatterswithnimi. com, or send us an email info@ moneymatterswithnimi. com Nimi Akinkugbe has extensive experience in private wealth management. She seeks to empower people regarding their finances and offers frank, practical insights to create a greater awareness and understanding of personal finance. For more personal finance tips, contact Nimi: Email: info@ moneymatterswithnimi Website: www. moneymatterswithnimi. com Twitter: @MMWITHNIMI Instagram: @ MMWITHNIMI Facebook: MoneyMatterswithNimi

Monday 31 December 2018

real sector watch C002D5556

BUSINESS DAY

Local sourcing falls to 57% as manufacturers look outwards for inputs ODINAKA ANUDU

anufacturers cut down on their local content in the first half (H1) of 2018, as domestic input sourcing fell by 4.12 percent due to manufacturers’ decision to look outwards for raw materials. Data from the Manufacturers Association of Nigeria (MAN) show that local sourcing declined from 60.72 percent in H1 of 2017 to 56.6 percent in the H1 of 2018. The 56.6 percent represents 9.1 percentage fall from 65.7 percent recorded in the second half (H2) of 2017. “Local sourcing of rawmaterials sourcing in the manufacturing sector slowed in the first half of 2018 with the exception of motor vehicle and miscellaneous assembly group. This may be adduced to the general sluggishness of the economy and a renewed ability for importation of raw-materials considering the tranquillity in the foreign exchange market,” MAN discloses. The foreign exchange market has remained stable in the last 16 to 18 months owing to the Central Bank’s management finesse, which has helped manufacturers to access dollars to import inputs. Nigerian manufacturers import a number of inputs, ranging from wheat to sorghum, to animal skins and packaging materials. In 2016, manufacturers were unable to access dollars as the economy went into recession due to low crude oil prices and Niger Delta militancy. Nigeria relies on crude oil for 90 percent of its foreign exchange earnings and any hit on oil hurts the entire economy. This is bad news for the economy as this is happening when oil price is declining. Analysts believe this will put more pressure on the naira and hurt the economy. Brent crude was about about $55 on Friday, De-

cember 28. A manufacturer told Real Sector Watch that this could be attributed to quality and quantity of available inputs within the first half of the year. “Sometimes we do not get the required quality here. This makes us look for it elsewhere. If you are a consumer, you will not like a product you buy regularly to change taste due to quality issues. Sometimes too, it is about availability,” the manufacturer, who did not want her name mentioned, said. Real Sector Watch has found some cement makers importing limestone due to issues around quality and availability. But recently, Gloria Elemo, professor and director-general of the Federal Institute of Industrial Research, Oshodi (FIIRO), said quality was no more an issue, as the body has come up with a number of innovations that aid the manufacturing sector in input sourcing. A number of manufacturers are already pumping billions in local input sourcing by way of backward integration or partnership with local suppliers to prevent a

repeat of 2016 when 54 firms went under owing to lack of access to dollars. Nigerian Breweries is already substituting barley for sorghum sourced locally from an agriculture-based firm called Psaltery Nigeria Limited. More than 250,000 farmers spread across several agronomic zones in the North are directly or indirectly involved planting sorghum for the country’s biggest brewer, BusinessDay understands. Jordi Borrut Bel, managing director of NB, said at a pre-AGM meeting held in Lagos this year that the brewer would raise this from 50 to 60 percent. “We optimise the cassava value chain in the country by providing industrial quality cassava starch to extract maltose syrup for use in NB’s brewing process,” said Oluyemisi Iranloye, MD/CEO of Psaltery Limited, supplier of cassava starch to NB, at a recent visit. She added that the firm has created a supply chain involving up to 5,000 farm families, which include more than 2,000 registered and unregistered out grower farm families, marketers,

transporters and retail input suppliers. Nestlé Nigeria is sourcing 80 percent of its maize, sorghum, millet, soya, cassava starh, cocoa powder, palm olein from more than 41, 600 local farmers and processors scattered across the country. Nestlé Cereals Plan project has over 30,000 farmers who supply 100 percent of the grain requirement for Golden Morn Maize. Through its Sorghum and Millet in the Sahel (SMS) project, now called Nestlé Nigeria & IFDC / 2Scale Project Sorghum & Millet, the food and beverage giant has engaged up to 10,671 farmers. “The Industry has huge needs and we must help far mers improve their yields to meet them. To achieve real success with connecting farmers to industry, a 360 degree approach which will include the aggregators, processors, and logistics suppliers must be considered within this value chain,” said Mauricio Alarcon, CEO of Nestlé Nigeria Plc. D a i r y m a k e r FrieslandCampina WAMCO is sourcing some of its raw milk from farmers in

communities in Oyo State. As of 2017, over 70 farming communities, including 962 women, supply raw milk to FrieslandCampina WAMCO on a daily basis, BusinessDay found. “The capacity the company has there is even more than what I can supply. Things have dramatically changed for us dairy farmers,” Mayosore Olatunde Rafiu, CEO of Genius Integrated Farms, one of the milk suppliers in Iseyin, told BusinessDay. Second biggest brewer Guinness Nigeria Plc is ramping up local use of maize and sorghum sourced from farmers from 43 percent to 87 percent over the next two years. “Our patronage has increased tremendously from manufacturing companies. Some of the crops we farm like dry maize were being imported into the country before the foreign exchange crisis. But with the shortage of forex, importers and manufacturers could not bring in dry maize to sell and make profit, so they are now buying from us at large quantity,” said, Abiodun Olorundenro, chief executive officer, Green Vine Farms, said in an earlier interview

with BusinessDay. Azeeco International supplies cocoa to Cadbury, Olam, and Bolawole international, BusinessDay found. Major manufacturers such as De-United Foods and Chikason Group source palm oil from manufacturers, including Presco and Okomu. Dangote Farms, Savannah Farm and Ikara Processing Plants had off-taker arrangement with tomato farmers. But Dangote tomato plant is currently not in operation owing to high cost of tomato seeds. PZ Wilmar, which is a subsidiary of PZ Cussons, has acquired over 50,000 hectares of oil palm plantation in Cross River State. The firm acquired the defunct Calaro Oil Palm Estate, formerly owned by the Cross River government, as well as the 12,805 hectare Kwa Falls oil palm plantation, formerly owned by Obasanjo Farms. It also bought the 5,450-hectare Ibiae Oil Palm Estate and another 8,000 hectare estate in Biase. Santosh Pillai, managing director of PZ Wilmar, said the company has invested approximately $150 million. “We are determined to continue with these investments and looking for opportunities to expand our plantations in the state. We have also invested around N20 billion in an oil palm refinery in Lagos,” he told Real Sector Watch. Dangote Sugar is investing over $2 billion in over six states in the country through its Savannah Sugar plc in Numan, Adamawa State, North-East Nigeria. It is already expanding plantations in backward integration projects in sugarcane and has pledged to extend this investment to Nasarawa State. Flour Mills of Nigeria, through its sugar subsidiary known as Golden Sugar Estate Limited, is investing $300 million in sugar production at Sunti, Niger State. Backward integration occurs when a company buys its suppliers or internally produces segments of its supply chain

BUSINESS DAY

C002D5556

real sector watch

Monday 31 December 2018

Manufacturers scrambling for cheap credit to expand operations ODINAKA ANUDU

igerian manufacturers are scrambling for cheap funds to expand operations, but lending rate remains among the topmost in sub-Saharan Africa. Most of the funds in Nigerian banks are only accessible to manufacturers at over 20 percent, they say. Nigeria’s monetary policy rate (MPR), which is a benchmark interest rate in the country, is 14 percent. Compared with other countries, it is easier to see why Nigerian manufacturers are facing tough times. The monetary policy committee (MPC) of the South Africa’s Reserve Bank met in March this year and cut interest rates by 25 basis points. The current repo rate (central bank lending rate to commercial banks) in South Africa is now 6.5 percent, and the prime lending rate (lending rate to customers) is 10 percent. The Reserve Bank’s MPC had earlier cut the repo rate in July 2017 by 25 basis points from 7 percent to 6.75 percent. Similarly, Kenya Cen-

tral Bank’s monetary policy committee cut the determining bank rate in late July to 9 per cent from 9.5 per cent. BusinessDay gathered that Kenyans now borrow at an interest of 13 per cent (as against from 13.5 percent earlier) in line with the interest rate capping rule that limits lending rates to 4 percentage points above the CBR. Zambia is one of the emerging countries in SSA

and its central bank cut benchmark lending rate by 50 basis points to 9.75 percent in February this year, citing lower consumer inflation and weaker economic growth, according to Reuters. In October 2017, the central of Ethiopia raised its benchmark interest rate to 7 percent from 5 percent. At least the benchmark interest rate of most SSA countries have remained single digit, barring few,

meaning that it is cheaper for businesses to access funds there than in Nigeria. The Central Bank of Nigeria (CBN) has held the MPR at 14 percent for the 11th time, due chiefly to high inflation rate. Inflation rate in June 2018 was 11.23 percent. Nigeria is facing a make-or-mar general election, which will see politicians spending huge sums on campaigns and votebuying. Analysts see this

as one of the main reasons why the CBN is reluctant to cut rates. The average borrowing rate to manufacturers in 2017 was 22.8 percent, according to data by the Manufacturers Association of Nigeria (MAN). While Nigeria has some development finance institutions, single-digit funds available for onward lending, especially to SMEs, are small. SMEs also complain of short tenor of most available funds in the country. Bismark Rewane, CEO of Financial Derivatives Company, has been consistent on asking the CBN to cut rates to aid economic recovery for a country that just exited recession. “No economy will grow when businesses get interest rate at a very high rate. What we need is a single-digit interest rate as manufacturers. We believe that this is what can stimulate growth,” Frank Jacobs, former president of MAN, told BusinessDay recently. “It is important to fasttrack the recapitalisation of the Bank of Industry (BoI) to enable it to meet up with huge credit demands of the industrial sector,” Jacobs

said. He said government now needs to open up access to various development funds created by the Central Bank of Nigeria (CBN) such as the N220 billion Micro, Small and Medium Enterprises Development Fund (MSMEDF) and the N300 billion Real Sector Support Facility (RSSF) by relaxing stringent conditions denying manufacturers and businesses access to these funding windows. Babatunde Paul Ruwase, president of the Lagos Chamber of Commerce and Industry (LCCI), said the current state of the economy shows the government must prioritise stimulation of investment and growth. “The proposition is that low interest rate will stimulate investment, impact positively on growth, create more jobs, increase income, and boost output. This would ultimately have a moderating effect on inflation,” Ruwase said. Ikecukwu Madu, a manufacturer in Port Harcourt, said Nigeria should create a separate bank for the manufacturing sector if it is serious with boosting the fortunes of manufacturers.

How to diversify Nigerian economy, by Osunkeye, Otudeko ODINAKA ANUDU

lusegun Osunkeye, former chairman of Lafarge Africa and Nestlé Foods Nigeria, has asked Nigeria and African governments to diversify their economy in order to facilitate rapid development. He urged the Nigerian government to support the manufacturing sector to rely less on crude oil. Delivering a speech at the Nigerian-American Chamber of Commerce (NACC) 2018 annual dinner dance and inauguration of its 18th president held in Lagos recently, Osunkeye stated that before the discovery of oil in 1956, agriculture had been the country’s leading revenue provider, but this has changed as crude oil now stands as the major source of revenue for the country, occupying about 90 percent

of this space. He further said that the discovery of oil has been both a blessing and a curse. He stated that Nigeria’s failure to responsibly manage its resources has caused

so much suffering for the people, wreaking havoc in many ways in terms of insecurity, corruption, tribal and ethnic clashes. He also said that other African countries have been

able to diversify their economy, especially with the agricultural sector, which has helped raise their development, advising the country to follow that path in order to achieve the very much

Oluwatoyin Akomolafe, national president, Nigerian-American Chamber of Commerce (2nd L); Oba Otudeko, chairman, Honeywell Group (R); W. Stuart Symington, U.S. ambassador to Nigeria (L); Olusegun Osunkeye, former chairman, Nestle Nigeria Plc at NACC 2018 annual dinner & presidential inauguration held recently in Lagos

coveted development of the economy. Oba Otudeko, chairman, Honeywell Group, stated that although 2018 was a tough year for NACC, it was able to successfully achieve great feats like the increase in trade volumes. “Bilateral trade between Nigeria and the US was $9.2 billion in 2017. It is hearty to note that NACC members have helped create the drops that have resulted in the $9.2billion ocean.” “While we await the 2018 figures, we must not lose sight of the fact that such impressive trade volumes could not have been achieved without efforts of critical stakeholders. You are one such major stakeholders in bilateral economic relations between Nigeria and the US and truly deserve accolades for the tremendous work you have been doing over the past 58 years to pro-

mote and increase bilateral trade between Nigeria and the US.” Toyin Akomolafe, president and chairman of the board of NACC, said Nigeria is attractive for foreign direct investments. “Nigeria’s current economic growth depends on the non-oil sector, particularly construction, telecommunications, wholesale/ retail trade, hotel and restaurant services, manufacturing, and agriculture. “The development of the non-oil sector is imperative to enable continued development even amidst temperamental oil prices.” He said that his aim is to help businesses in Nigeria achieve the necessary measures to improve margins, and intensify investment partnership with the United States in order to facilitate increase in the country’s exports.

Monday 31 December 2018

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Odunayo Oyasiji

The Nba, its image and the year 2018 AKOREDE HABEEB LAWAL

Assistant Publicity Secretary, Nigerian Bar

he Nigerian Bar Association has an enviable space for a nongovernmental organization in the national set up of Nigeria. This is no mean feat in view of the obvious fact that the whole make up of the country revolves around the government, particularly the Federal Government. Outside the government and the activities of its parastatals, its actors - the politicians that govern, few issues and persons commonly interest Nigerians, except of course, religious matters and personalities. It is in this complex maze of citizen’s reluctance to be concerned that the Nigerian Bar Association catches some reasonable attention aided by the media occasionally in need of the ‘other news’, even if it is untrue. The truth however is that the year 2018 has thrown the Nigerian Bar Association up and down the national gaze. It was at the Annual General Conference of the association in August 2018, that the Nigerian President’s speechwriter deemed it fit to include in his principal’s address to lawyers that the rule of law is subject to national security. Also, the nation heard of how difficult it was for the Bar to conduct an electronic election to elect fourteen national officers. And very recently, without an order for substituted service, the EFCC served Nigerians her charge against the NBA President through Sahara Reporters and other media outlets, while it took her almost a week and a court adjournment before serving the subject of the charge. These are the highlights of the headlines commanded by the NBA in this ending year. Another truth is that as negative as these headlines may seem, their effects on the image of the Bar is as insignificant as throwing waste in a busy waste

bin. For some years, citizens have exhausted their hope for a serious Bar to lead the civil vanguard against the recklessness of politicians that have made Nigeria spiraling down economic definition of backwardness to find a space beneath a third world nation, despite the abundance of resources. Since the turn of the millennium and the return to democracy, the NBA has struggled to replicate its fine form that earned her popular respect of Nigerians during the military era. It is arguable that the military was in part responsible for bringing the Bar to its knees by fueling the crisis that created leadership hiatus in the association between the year 1992 and 1998. It is a cliché that government

is a continuum, but leadership is in phases and it is important to apportion successes and blames where they belong, in order to avoid past mistakes while seeking improvements on previous successes. The NBA now has a new leadership that is just four months into a two year term, and of the 2018 headlines earlier referenced, only one has relationship with the present bar leadership. It may be early days, but going by the evidence of the last four months, this new bar headship has clearly set itself apart from the supposed “brave bar” that was asleep when judges were woken up in the middle of the night and dragged out like common felons only to wake up and grant a tacit approval to the highhandedness of the government by saying nothing about the disgrace meted on the judges and saying everything about judges recusal from their duties. The NBA is a big organization by reasonable financial standard. Members’ yearly subscriptions alone run into hundreds of millions of Naira. However, the management of the funds of the organisation has always been of concern to her members, and aside the eight storey edifice housing her national secretariat, there is hardly anything that could be identified as the product of the use of members’ practice fees. Going by the recent financial statement of the association, the money is not even in the bank, hence the Paul Usoro led administration commenced its term from the financial scratch with the NBA Administration account not only

empty but in deficit. It is therefore apposite to note that the first indicator of the positive efforts of the Paul Usoro-led NBA administration at repositioning the association is the apparent prudence and transparency in the handling of the finances of the association. Paul Usoro and his team are committed to institutionalizing corporate governance in the NBA and one great index of their readiness is the decision to issue to members quarterly reports of the association’s financial statement. Two of such financial statements have been issued in the last four months and members now know where their monies are and what and how their collective funds are being used. It is ugly to acknowledge, but for the first time in more than sixty years of her formation, the association is talking about budgeting. Before now, expenses were made without a foresight of the expected income, leading to the association borrowing funds to fulfill her commitments. Also, the present leadership is cutting costs in small and big manners. The last statutory meeting of the National Executive Committee (NEC) of the association – the first to be organized by this administration was a departure from the money-burden-laden meetings of the past. Tags of NEC members will not be reprinted at every quarterly NEC meetings as the ones given to them in December, 2018 will be used until 2020 when their term as NEC members will expire. Also, the heavy NEC bundles were

emailed to members long before the meeting, thereby avoiding some millions in printing costs. These fine steps being taken by Paul Usoro - the new sheriff in town in returning confidence to the bar earned him a standing ovation at the end of the last National Executive Committee meeting of the association. Also, the NBA is steadily regaining its leading voice on national issues. The pervasive insecurity in the land which had recently caused the death of four lawyers in different circumstances had been met with unequivocal condemnations of the perpetrators and security agencies by the bar leadership. Government had been severally advised to be steadfast in observing its primary purpose of protecting and securing lives and properties. The bar lend its voice to the dispute between the labour and the government, the Executive Order 6 was also roundly condemned as ’executive recklessness’. The NBA on International Human Rights Day stood for Ochanya and other abused girls, the Bar condemned the highhandedness of security and other law enforcement agencies, particularly as it relates to harassment of lawyers and soldiers have been told in no mincing words to go back to their barracks. With an eye on the biggest national event in 2019 – the general elections, the Nigerian Bar Association under the Paul Usoro, SAN leadership monitored the most recent election in Nigeria which is the Osun gubernatorial election conducted in September, 2018. The rerun election according to the report of the NBA’s monitoring group “fell far short of a free and fair election…from the actions and inactions of the Nigerian Police Force they appeared to have been compromised given the fact that the Police did not question the activities of the about fifty (50) fierce looking men who invaded the area at Orolu”. The NBA did not stop at releasing this ‘say it as it is’ report which has earned her the commendation of national and international watchers of Nigeria, the Bar went on to organize a one day conference on Nigerian electoral challenges, participants were drawn from all stakeholders in the electoral process and at the end of that day, workable solutions were proffered. It is a fine dawn in the life of the Nigerian Bar Association and to the credit of Paul Usoro, SAN the confident and hardworking NBA president who has refused to be distracted, 2019 promises to be a year where Nigerian lawyers can again be proud of being members of the largest Bar association in Africa and Nigerians will again have the privilege of being led by lawyers in asking the right questions of governments at all levels.

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Monday 31 December 2018

Odunayo Oyasiji

Case Review

Pan Bisbilder Nigeria Ltd V. First Bank of Nigeria Limited (2000) Lpelr-Sc.114/91

hat to note: This is a matter that was decided at the Supreme Court in year 2000. It touches on issues like illegal contract, undue influence, terms of contract and breach of contract. Facts The appellant (Pan Bisbilder Nigeria Ltd) was the plaintiff at the court of first instance. The appellant sued the defendant for breach of contract which it claimed arose from the defendant’s failure to honour its loan agreement of N116,500 entered into with the plaintiff. The said loan was subsumed under the Agricultural Guarantee Credit Scheme Fund Act 1977 whereby the defendant was to grant the said loan to the plaintiff. The said loan was to be guaranteed by the Central Bank of Nigeria. The loan was to be disbursed in two instalments of N60,000 and N56,000. The first instalment was fully disbursed while the second instalment was partly disbursed. The defendant withheld 30,000 naira from the second instalment to offset the previous overdraft granted to the plaintiff by the bank. The plaintiff denied that there was such an arrangement with the defendant to use part of the money to offset the previous overdraft that was granted to the plaintiff. The trial court held that the parties agreed to divert part of the loan to settle the outstanding overdraft. The trial court then upheld the breach of contract claim and awarded special damages and costs in favour of the plaintiff. The defendant filed an appeal and the Court of Appeal held that the plaintiff’s claim must fail as both parties were guilty of illegality of contravening the Agricultural Guarantee Credit Scheme Fund Act 1977. Therefore, the two parties cannot seek the benefit of the guarantee provided by the Central Bank of Nigeria. On the basis of the foregoing, the appellant filed an appeal at the Supreme Court. Issues for determination The counsel to the appellant formulated five issues for determination i.e. “(1) Whether the Court of Appeal was right in giving effect to the bilateral agreement to divert funds under the loan for a purpose outside its ostensible

al principle which is founded on public policy, is that any transaction that is tainted by illegality in which both parties are equally involved is beyond the face of the law as no person can claim any right or remedy whatsoever under an illegal transaction in which he has participated. No court will lend its aid to a man who founds his cause of action upon an immoral or illegal act.”

object which by the finding of the learned trial Judge which the Court of Appeal did not disturb was illegal under statute’? (2)Whether the Court of Appeal was right as to the effect of the resultant illegality or in relation to the agreement of loan’?(3)Whether the appellant was precluded from seeking to enforce the agreement of loan in its original tenor by reason of the collateral illegality or of his being privy to it? (4)Whether the Court of Appeal was right to have upset the alternative ground of liability for which the learned trial Judge also found when there was no appeal or complaint against it? (5)Whether the Court of Appeal was right to have dismissed the appellant’s CrossAppeal in the Court below on all the heads of complaint as a matter of course’?” The respondent’s counsel on the other hand also formulated five issues for determination- “(1)Whether the Court of Appeal was right in giving effect to the collateral agreement by which the N30,000 from the enhancement loan was used to upset (sic) the overdraft previously owed by the appellant. (2) Whether the parties are bound by the collateral agreement.(3) Whether the appellant was entitled to rescind the collateral agreement.(4) Whether the Court of Appeal was right in setting aside the damages awarded by the High Court. (5) Whether the Court of Appeal was right in dismissing the appellant’s cross-appeal on quantum of damages.” The Supreme Court formulated two issues to address the problems raised in the appeal and for the purpose of

determination of the suit- “1. Whether the diversion of fund under the contract of loan between the parties subsumed under Agricultural Guarantee Credit Scheme Fund Act 1977 rendered the said contract illegal and void to the extent that neither the appellant nor the respondent can enforce the said loan contract. 2. Whether the Court of Appeal was right to have dismissed the appellant’s cross-appeal on all the heads of complaint as a matter of course.” Arguments/Submissions The counsel to the appellant submitted that the fact that the appellant is privy to the bilateral or collateral agreement to divert funds under the loan does not stop it from seeking to enforce the contract loan. He further stated that the parties with regards to agreement to divert funds under the loan were not in pari delicto (i.e. they are not to share the fault equally) as there is the factor of undue influence of a bank over its customer. The respondent’s counsel on the other hand argued that the agreement of the parties to divert the loan was binding on the parties and that it was just a form of variation of the original agreement which the law recognizes and permits. Judgement The court with regards to the issue of illegality of the contract to divert the funds held that “A contract is illegal where the subject-matter of the promise is illegal or where the consideration or any part of it is illegal.Without getting unduly enmeshed in the controversy regarding the

definition or classification of that term, it will be enough to say that contracts which are prohibited by statute or at common law, coupled with provisions for sanction (such as fine or imprisonment) in the event of its contravention are said to be illegal. There is however the need to make a distinction between contracts that are merely declared void and those declared illegal. For instance, if the provisions of the law require certain formalities to be performed as conditions precedent for the validity of the transaction, without however imposing any penalty for non-compliance, the result of failure to comply with the formalities merely renders the transaction void, but if a penalty is imposed, the transaction is not only void but illegal unless the circumstances are such that the provisions of the statute stipulate otherwise.” In applying the above to the matter under consideration, it was held that “It is clear that section 13(1) of the 1977 Act did not only prohibit the application of the loan granted under the 1977 Act to any purpose other than that for which the loan was granted, sub-sections 13(2) and 13(3) provide sanctions for fine or imprisonment. In other words, the collateral agreement between the parties herein was void and illegal because its aim was to divert funds under the contract of loan to a purpose other than the purpose for which it was meant (i.e. poultry farming) and punishable, as shown hereinbefore, by fine or imprisonment”. The court further held with regards to contracts tainted by illegalities that “The gener-

Furthermore, the court stated that the consequence of illegality in relation to the parties’ contract is that “the court will come to the assistance of any party to an illegal contract who wishes to enforce it. This position of the law is founded on the principle of public policy and is expressed in the maxim ex turpi causa non oritur actio, meaning that an action does not arise from a base cause. Therefore, it goes without saying that the promise or consideration exchanged by the parties herein. i.e. to divert part of the loan contract guaranteed by the Central Bank of Nigeria to off-set the appellant’s overdraft is illegal and the reason by the parties in making the agreement to divert some or the funds to liquidate the overdraft was to promote an act expressly prohibited by statute. But whether or not a party can recover under an illegal contract may depend on whether that party was aware or privy to the illegality because it is unfair, in equity. for the guilty party to hold the innocent party bound by an act of illegality that he is wholly unaware of. The result is that generally, money paid or property transferred under illegal contract is irrecoverable where both parties are equally guilty of the fact of illegality, This is also buttressed by the maxim in pari delicto potior est conditio defendentis and means that where the parties are both at fault, the condition of the defendant is better”. The Supreme Court unanimously dismissed the appeal. Conclusion There is always need to be sure that the contract being entered into is not tainted with illegalities. Search to see that the law does not oppose an agreement you are about to entered into with another person.

Monday 31 December 2018

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economy

Insurers with low debt ratio means they are sweating shareholders’ funds BALA AUGIE

n the insurance industry, some firms that are sweating owners’ money in taking on more risks have seen liability balloon and are rewarded with huge premium income compared to c0mpetitors that allow such money lie fallow. Analysts are of the view that companies with low leverage and high liabilities may have underwritten annuity products. After all, the kind of risk undertaken determines the asset and liability side. Nigerian insurers such as AIICO Insurance Plc, the country’s largest quoted insurer by assets, as well as Mutual Benefit Plc have financial leverage ratio-which simply divides equity by asset- between 12 percent and 15 percent, this compares with Linkage Assurance Plc; 79.87 percent, prestige Assurance, 66 percent; Wapic Insurance; 51, Law Union and Rock; 62 percent, NEM Insurance Plc; 55 percent, Regency Assurance; 56 percent and Sovereign Trust Insurance Plc 57 percent. “Equity is a liability to the organization and owners expect a return for taking the risk. The low ratio could be that these firms have annuity in their books,” said Moronfola Monsuru , actuarial

ement Company of Northern Nigeria (CCNN) Plc has utilized its fixed assets in generating higher sales and profit compared to peers. CCNN has a Fixed Asset Turnover (FAT|) of 1.45 times as at September 2018, this compares with Dangote Cement’s 0.57 times, and

P.E

SHORT TAKES N219.5 Average price paid by consumers for automotive gas oil (diesel) increased by 0.10% monthon-month and 10.18% year-on-year to N219.54 in November 2018 from N219.33 in October 2018. Imo (N242.11) and Kwara (N200.00) recorded the highest and lowest average price respectively

$51.98 per barrel

analyst - Wapic Insurance Plc “Because these firms are sweating their shareholders’ fund, it is unsurprising they have huge liabilities in their balance sheet,” said Monsuru. Every insurer is taking in premium and paying out claims. Every insurer should ensure that they strike a balance between returns and leverage. It is generally acceptable finance principle that a highly geared firm might not be able to meet financial obligations when a large catastrophic event occurs. Indeed there is a correlation between leverage ratio and the size of premium in-

come as firms that utilize assets generates more revenue. AIICO Insurance with a leverage ratio of 12 percent, has gross premium written of N27.67 billion as at September 2018, this compares with Linkage Assurance, a firm with a leverage ratio of 79.87 percent, and gross premium written of N4.53 billion. Similarly, Mutual Benefit Assurance with a leverage ratio of 14 percent, has gross premium written of N11.30 billion in the period under review, this compares with prestige Assurance leverage ratio of 66 percent and gross premium income of N3.79 billion. The business of an insur-

ance company is to underwrite risk. This means they have more shareholders’ funds than equity. The ones that have a high ratio are not sweating their asset enough. They are lethargic, according to an industry expert who doesn’t want his name mentioned. Insurers have continued to lose huge premium to foreign firms due to lack of capacity to take on lore risk despite regulators efforts in ensuring that players in the industry maintain strong capital base. For instance, the cumulative shareholders fund of 19 largest quoted insurers was N191.95 billion as of Septem-

ber 2018; this is less than Tier 2 lender Fidelity Bank’s total equity of N192.38 billion. Nigeria loses a whopping N2.8 trillion annually to foreign insurance companies due to low capacity of local insurers to absorb huge risks, LEADERSHIP Newspaper investigations have revealed. Investigation by LEADERHIP reveals that foreign insurers control more than 80 per cent of risks in the country, owing to the fact that only about 15 to 20 per cent are retained locally. Most airline owners prefer they have assets insured by foreign firms as the local players continue to grapple with weak capital base.

CCNN utilises assets to generate higher sales compared to peers BALA AUGIE AND Israel ODUBOLA

Lafarge Plc’s 0.30 times. Fixed Asset Turnover (FAT) is an efficiency ratio that indicates how well or efficiently the business uses fixed assets to generate sales. This ratio divides net sales by net fixed assets, over an annual period. A first glimpse of the financial statement of CCNN shows it grew third quarter net income by 96.05 percent, this compares with Dangote Cement‘s profit growth of

2.61 percent, while Lafarge Africa recorded a loss of N10 billion as the company

continues to grapple with rising costs, mounting debt and ebbing sales.

In the period under review, CCNN’s recorded revenue growth of 43.61 percent, this compares with Dangote Cement’s revenue which jumped 13.54 percent, and Lafarge 4.75 percent. Cement makers are intensifying strategies in order to take advantage of federal government proposed capital expenditure spend, but heightened political Continues on page 32

The most recent trade which took place at 7pm last Thursday Brent Crude traded at $51.98 per barrel, up from $50.98 per barrel traded the previous day. The last traded price is tangibly below the benchmark of US$60 per barrel proposed for 2019

N34.35 At the close of trade on Thursday December 27, the share price of Forte Oil Plc grew by N3.10 to N34.35, the highest recorded in last 7 day trades. Stock volume expanded by 63.4% to 3,574,349 at the close of trade last Thursday compared to 2, 183, 897 recorded last Monday

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

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 Email the BMI team patrick.atuanya@businessdayonline.com

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Monday 31 December 2018

Markets Intelligence

Unity Bank: Next for bankruptcy or possible take over? … Accumulated loss swells to N338bn

… Reports negative equity book value of N242bn IFEANYI JOHN

t may be open season on poorly performing banks in the Nigerian banking sector and Unity bank’s underwhelming performance over the past year puts them on the map of newly deposed banking giants for a possible takeover/merger. The race to be the market leader in the Nigerian Banking sector intensified on the news of the proposed merger between Access Bank and Diamond Bank. Analysts told BusinessDay that the synergistic value of the merger is expected to propel the new Access Bank to become the biggest bank in Nigeria by size of balance sheet, loan size and share of deposits. Barely two months ago, Skye bank needed a N786 billion capital injection to properly transition into Polaris Bank and a capital injection into Unity Bank is not a farfetched idea with a negative book value of N242 billion and accumulated loss of N338 billion as at Q3 2018. Prior to the revocation of the banking license of Skye Bank, it had a market value of N10.6 billion and negative book value of almost N800 billion according to Godwin Emiefele, Governor of Central Bank of Nigeria. At the point of suspension of trading of Skye bank shares on the day of the Polaris takeover, the market cap of Skye bank was N1.25 billion higher

than Unity Bank’s current market capitalization of N9.35 billion. With a few banks struggling to weather the economic headwinds in recent times, the opportunity baskets for takeovers by bigger banks have now become wider. In a bid to compete, analysts say Tier 1 banks will look towards possible mergers and/or take overs of other banks as an option to propel them back to be the leader in the banking sector. Unity bank is currently the cheapest bank on the exchange in terms of valuation and may garner some interests from bigger banks. But Unity bank has not shied away from controversy in recent times. Following a suspension on trading the shares of Unity Bank on November 1, 2018 the bank released its results for the last three quarters and the previous years’ annual performance. The struggling bank lost over N14.5 billion at the end of the financial period of 2017 with operating expenses recorded as 140 percent above the operating profits. In the first nine months of 2018, cost efficiency improved from N18 billion to N15 billion, a decline of 17 percent. In a note to the Nigerian Stock Exchange, Unity Bank’s management said “The delay in filing the financial statements was occasioned by certain corporate actions, including ongoing discussions with the bank’s prospective

investors undertaken by the Bank which necessitated extensive reviews by our primary regulator.” On the local bourse, the N9.35 billion market capitalization of Unity bank is below the minimum capital base of N25 billion required to own a national bank license in Nigeria. Currently at a price of N0.80 from February highs of N1.92, investor sentiment is not on the side of the tier 3 lender that is the only bank in the country with a negative book value. Earlier in March, private equity firm Milost Global Inc disclosed their interest in acquiring Unity Bank in a $1 billion offer but withdrew their interest in the bank in very controversial circumstances. After the deal failed, Unity Bank sold about N400 billion worth of its bad debts to Frontier Capital Alternative Assets, a unit of Lagos based advisory and investment firm Frontier Capital Group. “I think investors remain very concerned about unity bank and it must be worrying the Central Bank too. It has managed to survive through the years, but its luck may be running out. They have managed to clean up a significant part of their books by selling the bad debt to Frontier Capital but its still not enough. I think there are still more debts to writeoff and their equity position will take a massive hit if they do. If any bank is going to be taken over in 2019,

Dell returns to stock market with $34bn listing US tech group back on NYSE after five years of private ownership

C pioneer Michael Dell made his return to the stock market on Friday after a long battle with investors, as Wall Street put a value of $34bn on newly traded shares in his company. The listing on the New York Stock Exchange ended five years of private ownership during which Mr Dell and his private equity partner Silver Lake used financial engineering and heavy borrowing to overhaul the PC maker. The dealmaking, including buying the data storage company EMC for $67bn, led to a mountain of more than $50bn in debt. But Dell’s decision to buy out shareholders in an existing stock, rather than carry out an IPO, triggered a brutal fight over price. Mr Dell estimated that his complex cash and shares offer would be worth $23.9bn to the owners of DVMT, an unusual class of tracking stock that Dell had created to help pay for EMC. In the end, Dell shares began trading on Friday at $46, implying a buyout value of $20.9bn. But this was still more than investors stood to get before opposition from a group of dissidents, including activist Carl Icahn, forced Dell and Silver Lake to sweeten the terms of the offer last month. Mr Dell turned his back on Wall Street in 2013 with a $24bn buyout of the company he had founded while a student at the University of Texas nearly 30 years before. At the time, he accused shareholders of lacking patience for the kind of long-term investment his company needed as it made the transition from PC maker to broader IT conglomerate. At nearly every step, Mr Dell and Silver Lake have faced pressure from investors demanding a larger slice of

the rewards from the financial engineering used to take the company private, transform it through acquisition and now take it public again. The controversial round of dealmaking has left Mr Dell firmly in control of a greatly enlarged tech empire. He was projected earlier this year to be left with about half the shares in his newly public company, compared to only 14 per cent before the 2013 buyout. His expanded influence will leave the PC entrepreneur with much stronger control than he had the previous time his shares were traded publicly, and Dell executives have said the company intends to maintain the longer-term perspective it took as a private company. Mr Icahn led a revolt over the terms of the initial buyout, eventually winning only a minor concession. Dell later used a controversial financing structure to pull off the $67bn takeover of storage company EMC. The DVMT tracking stock issued to grease the wheels of that deal ended up being valued by Wall Street at about $10bn less than the company had advertised, eating into returns to shareholders. Mr Dell had to fight Mr Icahn again this year as he tried to retire the tracking stock, trading it in for cash and shares in his main vehicle, Dell Technologies. He was forced to improve the terms of the deal last month to avoid it being voted down by investors. The deal paved the wave for shares in Dell Technologies to begin trading on Friday, at a price of $46. Along with $14bn of cash, the share price put a value of $6.9bn on the stock component offer Mr Dell used to retire the tracking stock. He had suggested that the stock component would be worth $3bn more.

CCNN utilises assets to generate higher sales... Continued from page 31

climate could distract from capex disbursements, hence casting a pall on cement consumption. The cement industry is the fastest-growing sub-sector in the Nigerian manufacturing industry, with a real growth rate of 8.14 percent in 2018 Q3, up from 3.84 percent recorded in previous quarter. Federal Government has earmarked N2.031 trillion, which is about 23 percent of the 2019 proposed budget, on capital expenditure. For the first nine months through September 2019, consumption estimated at 15.6 million MT jumped 10 percent higher than the same period in 2017, according to a latest report by Vetiva Research. Nigeria’s cement consumption per capita of 104kg is sub-optimal for an economy of its size and suboptimal relative to EM peers and traditionally-favoured African investment destinations, according to RMB Nigeria Stock Broker Ltd. “This supports our argument for a structural upside for cement consumption. For Nigeria to attain South Africa’s 234kg-per-capita consumption, our estimates show that Nigeria would have to consume.

For instance, Cement Company of Northern Nigeria (CCNN), owners of the 500,000 metric tonnes per annum Sokoto Cement Plant, merged with Kalambaina Cement Company Limited Plantwith 1.5 million metric tonnes per annum- to form a combined entity with 2 million metric tonnes

per annum cement plant. Both firms are owed by BUA Group of companies. Lafarge Africa, the second largest cement producer, with a market share of 25 percent, bought a plant in Calabar, in south eastern Nigeria, that can produce 5 million metric tons of cement a year

and is also investing in its South African operation as it seeks to increase capacity to 17.5 million tons from 14 million tons across the continent. The company plans to raise N131 billion in rights issue to trim debt and further lower the cost of borrowing for future expansion.

Dangote Cement, Nigeria’s largest cement producer, with 67 percent market share and cement operations in ten African countries, having invested more than $8bn in cement plant capex, as it seeks to consolidates efficiency optimization across its Pan African operations.

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Temiloluwa Smyth: The smart fashion entrepreneur Gbemi Faminu

emiloluwa Smyth Fakunle is the creative director of Smyth Couture Nigeria, a fashion outfit based in Ibadan, Oyo State. He deals in corporate wear, shirts, suits, trousers and kaftans. He was born almost three decades ago in Ede, Osun State. He attended Government College Ibadan before proceeding to the Federal Polytechnic Ede, Osun State, to study Quantity Surveying. He has considerable experience in project management, administration, business development, community service, and interpersonal communication. He started in 2012 and registered his business name at the Corporate Affairs Commission in July 2014. “Sometime in February 2012, I met my secondary school mate Vincent Abuchi- Egwu of Cylex Clothing, who was in the business of branding and customising t-shirts and polo, and I asked if he was still in the business. I told him I would need shirts, which he succeeded in delivering in less than 48hrs. I was marvelled by this. I got a lot of compliments on the t-shirts and I thought about being his sales representative. “In his magnanimity, he decided to teach me the process so I could make it on my own, having brought a few jobs for him. After a while, I wasn’t getting the right satisfaction in the business, so I spoke with my mentor Walter

Temiloluwa Smyth

Emiedafe of Sapient Vendors Limited. He is a very open person who always points out opportunities to people around him. He told me his Dad—who owns Vicky Creations—makes well-tailored shirts at affordable prices at almost the same standard as the likes of TM Lewin, Giants, Hawes and Curtis. He told me I could learn the process from him,” he narrates. A strong believer in God, Temiloluwa says he learns extremely fast and works well individually or within a team

He got N4,000 from a friend in March 2012 and another N6,000 in October from his brother. Today, he has five staff members, with three stylists and two interns. The entrepreneur gets his fabrics locally in Ibadan and also in major Lagos markets. “Year in year out, we keep learning from our mistakes and getting better,” he tells Start-Up Digest. “Business has experienced steady growth with referrals and publicity,” he admits. Why should Nigerians pa-

tronise his products? In his response, the entrepreneur says, “Our prompt delivery time-frame and the ability to make luxury affordable to everyone and craft our customers’ ideas to fit their body structures make us stand out. We are very open to criticisms and feedbacks from our customers, which we always work on promptly.” Like many entrepreneurs, Temiloluwa has plans for expansion. “At the moment, we are channelling our strength to making clothes and giving our customers the desired satisfaction. We plan to bring in better structure into the business and breed new set creative fashion designers in Ibadan that will pay maximum attention to details,” he explains. His main challenge is poor power supply. “I have electric machines which aid my work, but epileptic power supply is a burden. Sometimes I have lots of orders that will require extra hands but I will not have enough tailors to help. Also, sourcing for good quality fabrics can be difficult at times. I have challenges getting loans and grants to expand my business, and some clients owe me even after getting their orders,” he states. He believes government should show more interest and pay more attention to small- and mediumscale enterprises by finding sustainable solutions to the epileptic power supply all around the country. He urges government to improve the ease of doing business in

Nigeria and ensure that financial institutions—both commercial and microfinance banks— lend at affordable rates to young entrepreneurs. In spite of economic crunch, the entrepreneur has been able to sustain growth and margins. For him, fashion is a necessity no matter how good or bad the economy is. “People will always see the need to look good while attending events. During the last recession, people got married; people went to school; people went to work. So, they will always need our service in the fashion industry, but with the pool of loyal and satisfied customers we have gathered over the years, we have been able to weather the storm.” His life values include: humility, loyalty, consistency, efficiency, appreciation, honesty and love. Where does he see himself in the next five years? “In the next five years, I hope to have a degree from the Savile Row Bespoke Academy and New York Fashion Institute to further train as a tailor and creative designer,” he answers. He also has a few pieces of advice for other entrepreneurs. He advises them to be focused and disciplined. “I will advise them to stay focused because entrepreneurship is a bit difficult. So, you must be deliberate about your decision and be disciplined. They must be prudent in spending, dedicate time in their business, continue to develop them and read widely to increase creativity.”

Lydia: Start-ups need loans, grants to boom Ekanem Lydia is a make-up artist who loves making women look more beautiful. She is the chief executive of @ gg_base, an online-based make-up business. A graduate of Mass Communication, she started this business in 2016. She speaks with Jonathan Aderoju on the industry and her plans for expansion. What inspired the business? irstly, I love everything that has to do with beauty, which I believe is the true essence of life. So, making other people look beautiful inspired me to establish the business. What was your initial start-up capital and how were you able to raise the fund? I started with N15, 000, that’s apart from the initial money used in learning the art. I got my startup fund from my personal savings. Whatever I got as ‘pocket money’, I used to remove some amount for this purpose. How would you say the business has grown since you started? My business has grown a lot better than how I started. I now have better products I work with and more clients compared with when I started. Do you have employees? I have four students working under me.

Where do you source your raw materials from? I buy my products, mostly online, from trusted brands. What are some of the challenges

Ekanem Lydia

confronting your business? Capital is the major challenge preventing my upgrade. So right now, I really don’t have enough money to run the business, espe-

cially because some of my clients will need home services and I really will not want to disappoint them. How the challenges be addressed? Government should help with grants to assist start-ups like myself to push our businesses forward. This can be in the form of loans. Why should anyone buy your products? Because I render services that are affordable and I also do a great job on your face. My present clients can testify I don’t disappoint. What are some of your expansion plans? I really would love to get a good camera to enhance my photography because it is one of the added benefits for clients, having nice pictures after their makeup sessions. Going for upgrade classes to improve my skills for more satisfaction and getting a space of my own for clients’ convenience are important to me.

What’s the biggest piece of advice you can give to other startups? From my experience, I will advise that anybody going into any business should be focused, work hard and never give up.

Start-Up Digest Team Odinaka Anudu Editor

odinaka.anudu@businessdayonline.com 08067478413

Reporters Josephine Okojie Bummi Bailey Gbemi Faminu Joel Samson Graphics

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Start-Up Digest

Major innovations by Nigerian start-ups in 2018 farmers to earn more by reducing farm wastages and helping manufacturers of all sizes to find new markets. The start-up has refused to be intimidated by heavyweights such as UPS, FedEx, and DHL and has invested heavily in the haulage business. The logistic start-up has been accepted into Y Combinator’s 2018 cohort, having raised $1.2 million. Kobo360 was founded by Obi Ozor.

Josephine Okojie

he outgoing year has been an impressive one for Nigerian start-ups as they showed doggedness in their quest to solve societal problems. As a result, they made impressive innovations this year. Start-UpDigest looks at some of the major innovations. Gokada The terrible traffic gridlock in the metropolitan city of Lagos has made movement difficult. To alleviate the plight of residents, Gokada came to the rescue. Gokada has now become a startup that helps Lagosians beat traffic and as a result save their valuable time. It is an on-demand motorbike hailing service focused on changing the face of transportation in Nigeria by leveraging technology to connect users to the nearest motorbikes within their area, thereby helping them move smartly while beating traffic. It has redefined the popular ‘Okada’ business by introducing technology into it. Gokada drivers are cautious, verified, experienced and welltrained. They all pass through the Gokada Driver Training School and are re-taught how to properly drive around the streets of Lagos, safely, with passengers. In their quest to change the face of transportation in Nigeria and subsequently Africa, Gokada has introduced over 5,000 motorcycles to set off a new wave of ride-hailing prosperity in Nigeria. Gokada was founded in June 2017 by Nigerian entrepreneur Deji Oduntan. The service was launched

originally and started operations in Yaba axis of Lagos state and has extended their operations across Lagos. Kitovu Nigeria’s agricultural sector has continued to suffer owing to the inability of the government to find lasting solutions to challenges that have limited farmers’ productivity. Some of these challenges include: high rate of post-harvest losses for fruits and vegetables, low yield per hectare, and inadequate market access for farm produce. To address this, Kitovu has devised a geo-location technology that matches crops with the right soil types to increase farmers’ yields per hectare.

Kitovu’s soil tests are affordable for farmers and have helped to considerably boost their yields per hectare. The startup also developed a service called eProcure that connects farmers directly to buyers for their farm produce. The eProcure is like an inventory management system, with an algorithm that guarantees delivery of high quality produce when and where you need it. This has helped remove the middle men from the distribution chain. The success of these took Kitovu’s innovations to about 3,000 farmers, and has opened the doors to further growth possibilities of Africa’s $100 billion agro-sector.

‘Entrepreneurs lack skills, information for effective business operation’ Angel James

xperts in the small and medium scale enterprise (SMEs) space say Nigeria entrepreneurs lack the required skills and information to effectively scale their businesses. The experts spoke during the launch of ‘Essays on Nigerian Business Law’ book authored by Iyiola Oyedepo, managing director of Iyiola Oyedepo and Company (IOC), in Lagos recently. Oyedepo noted that the book was published to aid entrepreneurs over the challenges they face by equipping them with vital skills and information to grow their businesses. “The book covers everything starting from conceiving an idea to establishing it. It cuts across working with property vendors, dispute resolution and regulatory compliance, resolving tax

issue, and entrepreneurship experience,” Oyedepo said. “What we are trying to do is to give entrepreneurs the toolkit for effective business operations. As a business owner, we are trying to teach you where and how to manage your tax, how you can explore incentives and access alternative funding from private investors,” he explained. Augustine Edet, executive director and chief operation officer, NEXTZON Business Services Limited, during a panel session titled ‘Powering SMEs to Success’ stated that small business face both internal and external problems they must address for scale. “Lots of small businesses are unable to access loans from money deposit banks because they lack the understanding of preparing their financials for loans,” Edet said. Also speaking during the launch, Sanusi Idowu Dauda,

founder, DFS Professional Science, stated that intellectual gap has remained a major challenge confronting operators of smalland medium-sized businesses. Bumikole Dawodu, head, Ogun State, Simeman, stated that policy flipflop is a problem that limits the growth of SMEs in the country. He urged the government to enact policies that will drive the growth of entrepreneurship in the country, saying that lack of adequate funding for start-ups has continue to limit the country’s economic growth. Dawodu said that entrepreneurship is about providing solutions to problems. “Wherever there are challenges it becomes an opportunity for entrepreneurship. We should get the right information and relate them to our business, information on books like this should reach out to the SMEs” he explained.

Kobo360 Despite the huge infrastructural gaps, Kobo360 is making impressive waves in the Nigerian logistics business. Kobo360 is a tech-enabled digital logistics platform that aggregates end-to-end haulage operations to help cargo owners, truck owners and drivers, as well as cargo recipients to achieve an efficient supply chain framework. The start-up has an Uber -like app that connects Nigerian truckers to companies with freight needs. It uses the app to pay drivers online immediately after successful hauls. Through an all-in-one robust logistics ecosystem, Kobo uses big data and technology to reduce logistics frictions, empowering rural

BathKandy Though this firm was founded in 2014 by Blondie Okpuzor, it has major innovations this year. It is a beauty company that creates dessert-inspired beauty treats. This year, it came up with 50 different types of soap, using raw materials such as goat milk, scrubs made from garri, coffee and chocolates, in making them. This year, she also produced soap from jollof rice. “We are using local ingredients to make them. We have found that there are a lot of natural things that are there for you, but if you don’t know or use them, then you don’t get the benefits. So, we merge science with arts,” she told Start-Up Digest. Wella Health WellaHealth introduced an innovative malaria testing service to the public at an affordable rate. Through its e-health app platform, people with malaria symptoms can book a test and treatment online. The booking allows them access to nearby laboratory centres for test and treatment. Nigeria’s malaria incidences accounts for 27 percent of 216 million global cases. With this initiative, Nigeria’s malaria cases will be drastically reduced.

Union Bank, Connect Nigeria collaborate to reward 100 emerging SMEs

nion Bank of Nigeria and Connect Nigeria have partnered to reward 100 emerging Nigerian small and medium scale enterprises (SMEs). The award ceremony, which is an initiative of Connect Nigeria and Union Bank, was organised to challenge, encourage and recognise Nigerian small and medium businesses. The campaign for the awards kicked-off in February 2018 with a call for nominations of emerging SMEs that had distinguished themselves in providing excellent products and services for due recognition, honour and celebration, a statement states. Union Bank said it recognised the 100 emerging businesses as part of its yearlong celebration of 100 years of operation from a record total of 13,470 nominations in 25 broad categories. Ogochukwu Ekeide, head of corporate communications and

marketing, Union Bank, commended the recipients for their hard work and dedication and expressed the bank’s willingness to partner, support and reward SMEs. Emeka Okafor, managing director, Connect Nigeria, said businesses in Nigeria were beginning to understand the dynamics of doing business in a global economy and putting systems and structures in place, to be able to compete globally. Okafor, who was represented by Uzo Anekwe, head, business development, Connect Nigeria, said Connect Nigeria was committed to investing in SMEs because they would be the future of Nigeria. “100 free tables will be given to all the winners of this year’s event, to showcase and exhibit their products and services at Africa’s largest SME event in April 2019,” he said. “All winners will enjoy free oneyear membership on the Club-connect Platform with all the benefits that come with it,” he added.

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‘Start-ups should start small, then grow big’ Oluwajide Adetoso Osoniyi is a fashion designer. He is from a family of four in Ibadan, Oyo State, graduating from Yabatech with HND in Graphics in 2014. In this interview with Bunmi Bailey, he speaks on the industry and what motivated him to set up the business. Tell us about your fashion business and how long you have been running it. y fashion business grew from my school life. While in school, I had great zeal for modelling, which I did for my school and outside the school. I had been customising with painting brush and acrylic on shirts, graduating into splashing of colours on native tops and t-shirts. One of my mentors Yemi Opanuga advised and guided me on how to take my business to the next level with regarding to registration at the Corporate Affairs Commission (CAC). My business is all about looking good. My mother and my grandma were tailors. My mother gave me her mother’s sewing machine, which was a show of support from my family. I have been in fashion business for six to seven years, but officially for two years.

sowing, weaving and presser, among others.

How did you come into the business? Well, I will say that it is not by chance. It is about passion to create beautiful outfits (creation). When I was in Yabatech, I was inspired to move forward. I had my insight, visions and dreams. They all kept me pushing and hoping for the promised future. How much capital did you start with?

How can the challenges be addressed? Create more avenues for youths or people that have the passion to do create things. Get equipment for them to use or give grants or loans to individuals to boost or support their passions and dreams. Why do most start-ups businesses fail? I will say that it is probably lack of focused management and location. It could also be lack of funds. It is important to start small. Every small business wants to be big at once, which is not possible. They don’t want to take their time to grow. It is important to allow our businesses to grow naturally.

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Well, I can’t say this is the particular amount I started with, but I can say from the aspect of business registration that it was about N20,000. How is the fashion industry performing? The fashion industry has really grown bigger and faster than it was then and there is a greater future

for the industry. Who are your clients? My clients are fashionable people who love creativity in style and dynamics, including the youth and adults, both male and female. What challenges are you are facing in your business? Well, it is the resources for expan-

sion into a premium standard brand that is sometimes the problem. We have not even done 10 percent of our potential and we can do more if we find the capital. What are the skills and tools needed to set up your kind of business? The skills are marketing/advertising, graphics, and then the tools are different types of machines:

How would you say your business has grown since starting? My clients range has really increased and also doing business with customers again and again brings referrals. My customers has been the best in my life and in my business, most of them patiently grew with me, knowingly and unknowingly. What would you tell your younger self? Work and walk smarter; be patient and wise. Enjoy the growth, be on the alert, move swiftly, be committed and follow your mind.

A peep into Tony Elumelu’s entrepreneurship model ODINAKA ANUDU

he United Nations data show that 46 percent of African youths live on less than $1 per day, which more or less means that they live in acute or chronic poverty. Only those earning above $1.90 live above the poverty line. An International Labour Organisation report in August 2016 showed that working poverty rates among youths in sub-Saharan Africa was almost 70 per cent, translating into over 64.4 million working youths in the region living in extreme or moderate poverty. One in every four working youth in North Africa lived in extreme or moderate poverty in 2016. Similarly, 50 percent of the 10 million graduates produced by more than 668 universities in Africa yearly do not get jobs. With the level of poverty, unemployment and high working poverty, the youth have no option than to seek migration. According to the ILO report, 38 percent of youths in the subSaharan Africa are ready to move

out of the continent. The figure was 35 percent in North Africa in 2015. Among sub-Saharan African countries, the percentage of youths willing to migrate ranges from 77 per cent in Sierra Leone to 11 per cent in Madagascar, according to ILO. This is why entrepreneurship remains the biggest hope for Africa. Tony Elumelu, chairman of Tony

Tony Elumelu

Elumelu Foundation (TEF), has taken up a challenge to raise 10,000 young graduates that will become the pride of the continent in five to 10 years. The model is simple. There is $100 million meant for 10,000 entrepreneurs across Africa. Apply online, and if your business is highimpact, then you will get seed funds

to spur your business. Tony Elumelu often regrets that he can only take 1,000 out of thousands that apply. This year, over 150,000 Africans from 114 countries worldwide applied to join the 4th cycle of the programme. The 2018 class, however, included an additional 250 entrepreneurs to the standard selection of 1,000. This was made possible by $1 million partnership with the International Committee of the Red Cross (ICRC) which pledged to support 200 entrepreneurs in conflict and fragile zones of Nigeria, particularly in the North-East where Boko Haram insurgency is rife and the Niger Delta region hard hit by environmental degradation from oil spillage. There was also a $200,000 agreement with the United Nations Development Programme (UNDP) to support 40 pan-African entrepreneurs and a $50,000 partnership with Indorama to support 10 Nigerians. This year, there was a near 50-50 split between male and female applications, reflecting the entrepreneurial ambition of Africa’s women. Agriculture was the leading sector among selected

entrepreneurs with a turnout of 30.5 percent, followed by technology (10.5 percent) and education/ training (9 percent). “The number and quality of applicants, 151,000 in total, was outstanding. It illustrates the strength and depth of entrepreneurial promise and commitment on our continent. Selection is never easy, and we profoundly regret that we cannot help all. Our partnerships with the Red Cross, UNDP and Indorama, alongside ongoing discussions with other international organisations, reflect the growing global recognition of what we have known all along – that entrepreneurship is the most effective path to sustainable development on our continent and our Programme is the model to follow,” Tony O. Elumelu, TEF founder, had said. Elumelu has thrown a challenge to well-to-do Africans and is showing the way that the continent’s talents should not be allowed to waste. “If his model is copied by African countries, the economic landscape and story of the continent—including its trade, employment and exports— will change,” Ike Iheaso, a technology entrepreneur, said.

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Fostering Employee Innovation at a 150-Year-Old Company the right direction. More than 600 were selected. Inspired by John Kotter’s dual-operating-structure model, we asked all of these employees to maintain their “day jobs” within the established hierarchy, while also using 5% to 10% of their time to work on fast-cycle, informal innovation projects, across silos. Innovation ambassadors, meanwhile, oversee the coaches, ensure that the initiatives in their respective countries are aligned with the

Monika Lessl

ayer’s mission is “Science for a Better Life.” To achieve that goal, however, we must innovate not only in terms of science and R & D, but also in how we run our business. This means shifting the way we work so we’re able to match the pace of change happening in the wider world. Our solution — one transferable to other organizations pursuing innovation — has been to create an agile network of volunteer ambassadors and coaches throughout the company who have taken collective responsibility for making innovation happen and steering our organizational culture in

priorities of Bayer’s senior leaders, and serve as cheerleaders for collaborative innovation. Our experience in changing the way we work to hasten innovation has given us three key insights: INNOVATION IS A SOCIAL ACTIVITY, AND CONNECTIVITY IS AN ASSET. The image of the lone inventor is alluring, but almost always wrong. — THE DUAL-SPEED MODEL NEEDS A NEW MINDSET. The notion that people should spend 5% to 15% off their time working on fast-cycle projects, while the rest of their work is conducted at a slower clock-speed, is attractive but requires a lot of adjustment. — VOLUNTEERS NEED TO BE REFRESHED AND

REINFORCED. Now that we’ve built the agile network and created a portfolio of activities to support them, we move on to the next, arguably harder, step of institutionalizing the new behaviors across the company. For this to happen, we need to actively replenish our agile network.

(Monika Lessl is vice president and head of corporate innovation and R & D at Bayer AG, where Henning Trill is head of corporate innovation. Julian Birkinshaw is deputy dean and professor of strategy and entrepreneurship at the London Business School.)

What companies can do to help employees address mental health issues Barbara Harvey

eople are increasingly waking up to the magnitude of the mental health issue and its importance in the world of work. When employers create a culture that supports mental health, workers are more than twice as likely to say they love their job. They are also more likely to plan to stay with their employer for at least the next year. What can companies actually do to take on this challenge? Research points to three keys. SIGNAL “IT MATTERS.” There’s a lot of concern about “opening up” at

work. Many fear that doing so could limit their opportunities, get in the way of promotion and generally be seen as a sign of weakness. Senior leaders can ensure that employees

at all levels are made aware of the services and support the company offers. RAISE AWARENESS THROUGH TRAINING. It can be very hard, for both the speaker and

online training classes to help employees recognize signs of stress or mental ill health in themselves and in others, and webinars led by senior leaders. CURATE AND IMPROVE ONLINE TOOLS. Most people are prepared to turn to online tools and applications for information and advice about mental health in which they can remain anonymous. Even companies the listener, to have a with scarce resources conversation about a to dedicate to these mental health problem kinds of benefits can ofand then to know what fer employees a curated to do next. Training in list of the most trustall forms is essential. ed publicly available Tools that the arsenal sources and provide should contain include access to those sources

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where possible. Mental health challenges touch us all in some way at some time in our lives. As employers we have the power to help — to make it easier for people to talk, to help them get the support they need in the way that works for them and to help them be their best selves at home and at work.

(Barbara Harvey is a managing director at Accenture Research and executive sponsor of Accenture’s mental health program in the UK.)

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How to help your employees stay productive around the holidays their work done. Others want to come in and leave early to have more holiday family time. For these workers, flexible scheduling options during the holidays can significantly drive productivity and morale. — PROVIDE BETTER TRAINING FOR MANAGERS: While managers can’t blindly let their entire team take the holidays off, they can do a better job of having open conversations with their employees. If you create the right environment by listening to employees’ needs and equipping your managers to make good decisions, you’ll ultimately help your employees and the business get through this busy time of year successfully.

Michael Hughes

e conducted a survey of 2,000 fulltime employees in the United States to determine the holiday season’s effect on productivity. Our results reveal that it’s not just money that keeps employees motivated. Here’s what we found: MANAGERS DON’T ALWAYS MAKE ASKING FOR TIME OFF EASY. Over half of employees said they’re uncomfortable asking their manager for time off during the holidays. The top reason, they say, is that their manager expects them to be available during their time off. REMOTE WORK AND OFFICE CLOSURES YIELD GREATER HOLIDAY PRODUCTIVITY. Over half of employees surveyed said their companies allow them to work remotely. Among this group, there’s no ambiguity about the efficacy

of working remotely; the overwhelming majority — 91% — told us they’re just as productive or more productive when doing so. We have several recommendations, based on the survey data and our experience as workforce consultants in a

tight job market: — CLOSE THE OFFICE FOR ADDITIONAL DAYS BEYOND FEDERAL HOLIDAYS, WHEN FEASIBLE: If it’s not possible for your business to close for additional days during the season, then it’s even more important to offer workers al-

ternative ways of disconnecting and recharging, such as greater scheduling flexibility. — CONSIDER FLEXIBLE SCHEDULING: During the holidays, 38% of employees want fewer in-office distractions so they don’t feel they have to put in overtime to get

(Michael Hughes is a managing director with West Monroe and a member of the executive team.)

Excel functions everyone should know Adam Lacey and Deborah Ashby

or the regular knowledge worker, Microsoft Excel, 30 years on, remains the go-to product for people looking to make sense of data. Cut through the more than 500 Excel functions and you’re left with 100 or so truly useful functions and features. We’ve selected 10 that are especially easy to learn. PASTE SPECIAL: Paste Special enables you to pick which elements of the copied cell you bring over. Alt+E+S+V is the shortcut to just paste values — probably the most common use of Paste Special. ADD MULTIPLE ROWS: Often, just highlighting the number of rows you want to add and using right click, insert, is quicker when adding in bulk as it will add the number of rows you’ve highlighted. FLASH FILL: Flash Fill automatically fills your data when it senses a pattern. If Flash Fill is turned on (File

Options, Advanced) just start to type the next product number in the cell below and Flash Fill will recognize the pattern and fill down the remaining product numbers for you. INDEX-MATCH: INDEX and MATCH used in combination help you extract the data you need from a large dataset efficiently and precisely by allowing you to look

up a value anywhere in the lookup table regardless of its position. SUM: This is one of the first functions you’re likely to learn in Excel. But did you know you can select the cell at the end of a row or column and press Alt + to do this function in seconds? CTRL Z/CTRL Y: If you aren’t using Ctrl Z to undo mistakes in Excel, then you

should be. What many people don’t know is that Ctrl Y performs the opposite task. REMOVE DUPLICATES: Remove Duplicates does exactly what you’d expect. It’s found on the Data tab in the Data Tools section of the Ribbon. FREEZE PANES: Identify the columns and rows of the area you want to freeze. Then select the cell immediately to the right of those columns

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and beneath those rows. Go to the View tab and Freeze Panes in the Window section. F4: There are two especially satisfying ways to use F4 in Excel. The first is when creating an Absolute Reference: F4 toggles you through the various options. The second is one that few people know about: F4 repeats your last action, where available. CTRL + ARROWS: If you’ve found yourself scrolling through a data set to reach the bottom of it, stop right now and start using Ctrl + the arrow keys! Whether you want to help justify data-driven business decisions at a high level or simply get home to your family earlier, mastering the right Excel functions is a quick and easy way to maximize your productivity.

(Adam Lacey is managing director of Excel with Business. Deborah Ashby is the information technology training manager at Excel with Business and Filtered.com.)

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Next president must review auto policy ODINAKA ANUDU

hoever emerges the next president must look at the Automotive Policy again. Back in 2012, Nigerians could afford to buy new cars at N4 million each. Six years after, prices of new cars have shot up to N10 to N20 million each, pricing out the middle-class who often make up a large percentage of buyers. The 2013 National Automotive Policy imposed 35 percent levy and 35 percent duty on imported vehicles, amounting to a total of 70 percent. Even with 70 percent fees paid on imported vehicles, importers of damaged or ‘accidented’ vehicles officially enjoy a rebate of 30 percent. What this has done is to encourage the importation of rickety vehicles, which make up 70 percent of imported cars today. The age of most imported used cars in Nigeria is 15 years, whereas that of Algeria, Angola, Chad, Mauritius and Seychelles is three, according to a research done by PwC, presented by Andrew Nevin, partner and chief economist at PwC Nigeria in Lagos. “Imported used car segment (Tokunboh) dominates the industry, accounting for 74 percent of all vehicle imports, making Nigeria the largest in the world. Ten percent of imported cars are less than three years old, while 63 percent are over 11 years,” Nevin said at

Lagos Chamber of Commerce (LCCI) automotive sector event. The prohibitive levy and duty paid on imported cars have encouraged smuggling of vehicles into Nigeria. Officially, market for cars in the country is just 6,999 as against 555,716 in South Africa; 181,001 in Egypt; 168,913 in Morocco, and 94,408 in Algeria. So, for investors, there is no market in Nigeria. But in a country where right things are done, this should not be the case. “The fact is that cars are too expensive. We have seen a market drop of 75 percent in the last three years. Increase in duties has increased smuggling,” Pelletier said. The National Automotive Design and Development Council (NADDC) has issued licenses to

54 vehicle companies for local assembly. Industry experts estimate the capacity of these firms at 400,000 units per annum. The National Bureau of Statistics says Nigerians imported 105,189 units of vehicles in 2016 through the ports and raised the number to 181,404 (72.46 percent increase) in 2017. The capacity of 54 licensed asemblers is 410,000 units. “If we want to develop a market for 54 companies that have got licenses with 410,000 capacity plants and we import a huge number of used vehicles, how are we going to support vehicles being assembled, since the ones assembled locally will be more expensive?” Bambo Adebowale, chairman, Auto and Allied Sector group of the Lagos

Chamber of Commerce (LCCI), asked in a recent interview with BusinessDay. PwC estimates that 410,000 cars were imported into Nigeria in 2014, out of which 74 percent are used. Passenger cars and commercial vehicles lead vehicle sales with a combined share of 61 percent. Corporate purchases account for the largest share of vehicle sales with 34 percent of the market, while individual purchases are a close second, owning 30 percent of the market. At this point, the auto policy is not making any headway with government losing a significant revenue from smuggling and importation of accidented vehicles; the local assemblers not selling because of pricing, key players say

Nigeria needs to come up with a policy that will make vehicles affordable. Experts say the real issue is affordability. The ultimate aim of the immediate past government was not only to develop a local auto industry but also to provide cars at cheaper rates. Five years down the line, Nigerians do not see cars anywhere. Even they see these cars, they are expensive. A sample list of 1.6-litre engine cars used by banks and other corporate buyers have had their prices double between 2014 and 2017. In 2014, a brand new Kia Cerato 1.6 litre automatic transmission saloon car cost N3.96 million, but this went for N9.54 million in 2017, according to BusinessDay findings. A Picanto one-litre engine capacity car went for N2.25 million three years ago, but was sold for N4.95 million in 2017. Similarly, Toyota Corolla 1.6 litre GLI automatic transmission fabric was sold for N4.45 million in 2014, but it surged to N18.9 million last year. During the same period, a Mescedes-Benz C200 luxury Sedan, which was sold at a dealership price tag of N10.5 million, cost N25 million in 2017, while a G63AMG model sold for N50 million currently wears a price tag of N78 million today. Analysts want the new president to have another look at the Auto Policy to enable local firms that have invested into the industry to produce and make profits, while Nigerians are able to buy cars.

Women urged to play role in politics, governance HOPE MOSES-ASHIKE

s the 2019 general elections draw nearer, Women in Management, Business and Public Service (WIMBIZ) has issued a wakeup call to women all over Nigeria to begin to play an active role in politics and governance. The non-profit organisation has, over the last 17 years, implemented programs that inspire, empower and advocate for greater representation of women in leadership positions in the public and private sector. In a statement made available to BusinessDay by Olubunmi Talabi, senior staff of the organisation, WIMBIZ commends all the individuals who have put themselves up to be elected to serve the country. In particular, recognition is given to the courageous women all over the country who have listened to their inner voice, and

have taken the decision to step up and step out. As 2018 comes to an end and 2019 general elections draw near, it is imperative for more women to begin to be active in the political sector of the country, the body says, pointing that there has been an increase in female participation in decision-making at the national and state levels around the world, most recently seen in the 2018

mid-term elections of the United States where over 100 women occupy seats in the United States House of Representatives. “In Rwanda women make up more than 60 percent of the parliamentarians. Indeed, emerging economies like Ethiopia and Bangladesh have a female President and a female Prime Minister, respectively.” The statement says in Nigeria,

whilst women have always played the all-important home-building role which is also critical to overall nation building, women have historically played a role in governance as well. “From Margaret Ekpo, the first female member of the Eastern Regional House of Assembly (1961), to Wuraola Esan, first female member Nigeria National Assembly (1960) and Franca Afegbua, first female elected senator (1983), some progress has been made. Furthermore, the march to equality continues through the brave women who are contesting in 2019,” the statement adds. The latest statistics indicate that 50 percent of the voting population is female. As long as women obtain their Permanent Voter’s Card (PVC), they can use their voting power to decide who the winners will be in a free and fair election. Women have the power to elect into office, men and wom-

en that represent their interests in developmental issues such as education, health, nutrition and security for us and our children, it states. The statement says that WIMBIZ remains an apolitical organisation, while commending political parties that have recognised not only the voting power of women, but also their high competence, achievements and governing abilities. “It is evident that more competent and capable women need to step up and fill the gap that currently exists. This is, therefore, a call for women to make the decision not only to run but to run with the objective of winning. It is a call for women to partner with men to engage more actively in nation building at its highest levels, to apply those skills of teamwork, decision-making, multi-tasking, negotiation, creative and strategic thinking in building the country in which all desire to live.”

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Why conducive business environment is critical GBEMI FAMINU

ith the 2019 general elections around the corner, whoever becomes Nigeria’s next president must look at the ease of doing business again. According to the 2019 World Bank’s Doing Business Index, Nigeria ranked 146th out of 190 countries, scoring 52.89 out of 100 points. After the presidential election, investors will be looking at pronouncements from the next president and what he/ she has in stock for the country in terms of improving the business environment. Realities of today show that the number of taxes paid by businesses in the country has increased from 37 to 54 in the last three years, owing to states’ new drive for internally generated revenue (IGR). Drop in monthly federal allocations due to oil price turmoil has pushed states into embarking on desperate revenue drive, but this is not without costs to businesses, especially the micro, small and medium enterprises (MSMEs). Many taxes, levies and fees charged by the federal government are duplicated by states and local governments. Local governments in Lagos still ask businesses to pay television and radio taxes, which make little or no sense. Also, the ports in Lagos are increasingly becoming a clog in the wheel of progress. A recent research report conducted by the Lagos Chamber of Commerce and Industry (LCCI) shows that at least 5,000 trucks seek access to Apapa and Tin Can ports in Lagos every day, despite that the two ports were originally meant to accommodate only 1,500 trucks. The report shows that Nigeria loses N600 billion in customs revenue, $10 billion (N3.6trn) in nonoil export sector and N2.5 trillion in corporate earnings across various sectors on annual basis due to the poor state of Nigerian ports. The LCCI report notes that 25 percent of cashew nuts exported from Lagos to Vietnam in 2017 went bad or were downgraded owing to delays at Lagos ports. Similarly, only 10 percent of cargoes are cleared within the set timeline of 48 hours, while the majority of cargoes take between five and 14 days to clear. The report further states that some cargoes take as many as 20 days to be cleared at the ports.

More so, the number of government agencies at the ports is now 12 rather than eight, with each demanding inspection and associated fees. Speaking on these, Babatunde Paul Ruwase, president of the LCCI, advised the federal government to begin reforms on the ports. “There is a need to extend reform action plans of Presidential Enabling Business Environment Council (PEBEC) to Eastern ports, air and land ports,” Ruwase said at a press conference in Lagos. “The concessioning of Onitsha seaport should be finalised, while government should improve the security situation along and within the Warri port in order to ward off militants and touts. Stakeholders request that government should approve and publicise a bouquet of incentives to importers and exports that patronise ports outside Lagos,” he added. Many Nigerians may think that Apapa and Tin Can ports crises do not affect them, but the fact is that every Nigerians bears the cost in one way or another. First, raw materials arrive factories late, after manufacturers spend huge demurrage charges. These manufacturers, who are typical profitdriven enterprises, transfer the costs to the consumers. In some cases, the goods are not sold and are kept in warehouse as inventories. Either of the two involves economic costs. Also, exporters, who should repatriate dollars into

the economy, are frustrated by Apapa. This further narrows the contribution of the non-oil sector to the foreign exchange, thereby weakening the Naira further. Although Nigeria is Africa’s largest economy, it has not done well enough to attract investors. Some investors are withdrawing their investments, taking them to other African countries. The exit of OXL, a trading website, earlier this year is still fresh on Nigerians’ memory. OLX, which had been operating in the country since 2012, offered Nigerians a platform to buy and sell second-hand items. The site had more than a million second-hand items posted on it in 2016, but it still struggled to remain profitable in the country’s difficult operating environment, forcing it to pull out. Most businesses, especially MSMEs, are the worst hit as they are more susceptible to the vagaries of multiple taxation and regulatory gridlocks. An entrepreneur told BusinessDay that she applied to register a product with the National Agency for Food and Drug Administration and Control (NAFDAC) for over eight months but could not obtain any certification, owing to unnecessary demands by officials of the body. This is worsened by the fact that even the Standards Organisation of Nigeria (SON) will not accept tests done by NAFDAC and vice versa. Although the Muhammadu Buhari/Yemi Osinbajo adminis-

tration has given attention to the ease of doing business through various implemented reforms and policies, what it has done is not effective enough. There are still various things that the federal government can do to improve the ease of doing business in Nigeria, say analysts. These include improving the infrastructure and transportation system as well as reforming the taxation system. Infrastructure is one of the major drivers of any economy. Analysts say good infrastructure boosts businesses and raises the gross domestic product (GDP) , creating jobs and economic prosperity. However, Nigeria lacks the necessary infrastructure needed to grow businesses, especially steady power supply and developed rail and water transport system. According to USAID’s energy sector review, Nigeria’s growth and economic development is limited despite its large economy, which is attributed to constraints in the power sector. Nigeria has the ability to generate 12,522 megawatts (MW) of electric power from existing plants, but it is only able to distribute around 4,000 MW. It is also yet to tap into other forms of energy. According to the South Africa’s Ministry of Energy, the country’s total domestic electricity generation capacity is 51,309 megawatts (MW) from all sources. About 91.2 percent or 46,776 MW comes from thermal power stations, while

4,533 MW or 8.8 percent emanates from renewable energy. Much of this power is transmitted and distributed by Eskom. South Africa has a population of 57 million while Nigeria is estimated at 198 million, according to the National Population Commission. “It is no more news that manufacturers in Nigeria currently selfgenerate as much as 13,000MW through alternative sources of energy in order to stay afloat. In fact, cost of alternative electricity generation alone constitutes about 40 percent of our production cost. With such high costs, made-in-Nigeria products will hardly be competitive,” Frank Jacobs, immediate past president of MAN, said in Lagos in June 2018. In fact, manufacturers have given up on power distribution companies (DisCos), prompting them to form a corporation known as MAN Power Development Company to cater to their energy needs. Many firms now generate power for themselves with the use of generators or solar energy, but these in turn erode their margins. Despite having the largest road network in West Africa, Nigeria’s transport system is not encouraging as major transport systems are mostly in dilapidated condition with bad roads, non-functional rail systems, badly maintained boats, ferries and airplanes causing panic and prolonged movement. Poor infrastructure increases logistics costs of firms in the country, raising their cost of production and causing losses, especially in common cases of accidents and thefts. Funding is also a major hiccup. Businesses require funding either in the form of loans or grants. Nigerian banks are usually reluctant to lend to businesses especially MSMEs. Those willing to give out loans charge high interests that are usually difficult for firms to pay. The results of survey conducted by MAN shows that the average interest rate banks charged manufacturers in the second half (H2) of 2017 was 23.05 percent as against 22.65 percent in first half (H1) of 2017 and 21.4 percent in H1 of 2016. Analysts say the next president must practically look into improving the ease of doing business in order to make the economy more attractive for investors. Analysts are keenly watching the elections and weighing the impact of the result on portfolio and direct investors.

BUSINESS DAY

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Monday 31 December 2018

says it takes about 1,200 tweets from 100 -500 users to make an issue trend depending on the time of day and location. However, the danger for a country like Nigeria with a poorly developed political system and an even worse educational system many say, is the capacity for a lie to be so deodorised, it begins to smell like truth. This is especially important considering that these so-called influencers, like mercenaries are for hire and render their services to the highest bidder. Many are bereft of values and their belly is their goal. Their loyalty is first to the food chain and will gladly throw their parents under the bus for their paymaster. Political watchers have identified voter education as a missing link in Nigeria’s electoral process. But this is not solely a problem of lack of competence (though this is a present danger in the view of many analysts) but lack of capacity attributed to inability to equip the Independent

Electoral Commission (INEC) to carry out this vital function is also considered a threat. Few months to an election and the Commission is not certain it will get the required manpower to conduct the elections, considering that many of the ad-hoc staff it uses, who are mainly university lecturers, may be difficult to be mobilised as they are currently on strike. As the election approaches, there are concerns more factual inaccuracies and outright lies will dominate the airwaves. Media houses sympathetic to different contestants will publish reports that assail objectivity, social media influencers will dig up information that are bereft of context to support a cultivated bias and heated debates will arise at newsstands and street corners and buses and market places where some will confuse noise as proof sound reasoning. Therefore separating fact from fiction is a personal responsibility.

Separating fact from fiction in political campaigns ISAAC ANYAOGU

even days ago, five vice presidential candidates in Nigeria’s forthcoming general elections squared off in a debate organised by the Nigeria Election Debate Group in collaboration with the Broadcasting Organisation of Nigeria (BON) and Civil Society Organisations. The key contenders were Peter Obi on the platform of the People’s Democratic Party (PDP), Yemi Osinbajo, Nigeria’s vice president, who represented the All Progressives Congress (APC).

Others were Khadija Abdullahi-Iya, the vice presidential candidate of the Alliance for New Nigeria, Ganiyu Galadima of the Allied Congress Party of Nigeria and Umma Getso of the Young Progressives Congress. But they could easily have stayed home as many say they failed to impress on the night. While the debate was on, many Nigerians on social media platforms and in media organisations were performing real time fact-check of the claims made by the contestants. While some of the claims were true, many were found inaccurate. For example, Peter Obi claimed that Nigeria had about two million vehicles but data from the National Bureau of Statistics shows the figure is above 11million. Osinbajo said that LagosIbadan expressway was “practically” abandoned for the 16 years that the PDP ruled the country between 1999 and 2015 but the claim was found to be

false. Apart from the fact that ‘practically’ may be difficult to quantify in statistical terms, the Goodluck Jonathan administration made many interventions on the Lagos-Ibadan expressway, awarding a multi-billion naira contract to Julius Berger and RCC. But the tendency to obfuscate facts or stretch the borders of truth to align with a narrative seems the stock in trade of politicians world over, as well as those who peddle their images on Nigeria’s social media platforms. Curiously labelled influencers because of their huge following on social media, these nouveau opinion shapers have the capacity to make their views trend and rise to the level of national discourse. They employ a lot of different means, including paying other users who form a collective to continue to post massive amounts of the same information over a short period of time. One online marketing website

NEWS

Police debunks news of dismissing 121 officers for absconding from deployment … warns against reckless publications INNOCENT ODOH, Abuja

he Nigerian Police Force has debunked reports that 121 officers of the Force have been dismissed for absconding from deployment to participate in the fight against the Boko Haram insurgents, stressing that no police officer was dismissed by the Force among the 2,000 personnel deployed to the North East. Force Public Relations Officer Jimoh Moshood, said this a statement on Friday even he dismissed the report as ‘fake news’. He said, “the attention of the Nigeria Police Force has been drawn to a story published by Premium Times Online media on 27th December, 2018 captioned “Police dismiss 121 officers for absconding from deployment against Boko Haram

credited to one Samuel Ogundipe attaching a forged counterfeit list of 121 Police officers purportedly dismissed from the service of the Nigeria Police Force. “The Force is categorically stating that the story in its entirety is a fake news and not credible, and should be disregarded and discountenance by the public. No Police officer has been dismissed among the 2000 Police Mobile Force (PMF) personnel deployed to the North East. “Police officers and men found wanting in any way in the discharge of their statutory duties go through internal disciplinary procedures and if found guilty are either dismissed from the Force or given commensurate punishment(s). In this case, no officer was tried in orderly trial for any offence (disciplinary or otherwise) that

will warrant dismissal from the Force and none was dismissed,” the statement said. The police added that the writer of the story ignorantly and for mischievous reasons relied on forged counterfeit documents which did not emanate from the Force as the basis for his story. The police added that it is a crime under the penal and criminal code laws to tell falsehood with intent to mislead the public to acts that can cause disturbance of public peace and public disobedience. The statement said further that for avoidance of doubt, the Inspector General of Police did not order the dismissal of 121 police officers as claimed by the report adding that the story is evidently the characteristics mindset and pattern of the writer to deride and castigate public institutions,

such as the Nigeria Police Force without any fact whatsoever. “The pronouncement of dismissal of Police officers from the Force to the public is the responsibility of the Force Public Relations Officer and not that of the writer of the story. “It would be recalled that on the 26th December, 2018, the Force debunked a fake and misleading report from Premium Times online publication that 167 out the 2000 additional Police Officers recently deployed by the IGP to the North East absconded and the attached list of personnel and the police signal were discovered to be forged documents. “The Force therefore, implores the public to be aware that the story is ill-motive, orchestrated to puncture the morale of officers and men of the Force engaged in the fight against in-

surgency in the North East and other Police personnel carrying out core Police duties to protect lives and property of all Nigerians across the Country, and this should be condemned by all. “The Force will no longer tolerate or condone deliberate mischief and reckless publications aimed at defaming and derogating the integrity of the service from any individual(s) or group(s). The full weight of the law will be applied to protect the image of the service. “The Nigeria Police Force is assuring the Media of a continuous cooperation in guaranteeing public safety and security across the Country, however, it is important for Premium Times Online Publishers to consider National Security and public interest as paramount above sensational publications,” the statement said.

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42 BUSINESS DAY NEWS

Nightmare on Broad Street as 23 stocks lose... Continued from page 1

new investments due to their

very low valuations as they fall out of the view of major portfolio investors. Even though 2018 started on an optimistic note for stocks, it is ending with investors seeing the value of their stocks decline by N2.3 trillion, an amount that is almost equivalent to the size of Nigeria’s capital budget for 2018 or enough money to buy 23,000 flats at N100 million each in Banana Island, one of Nigeria’s most expensive neighbourhoods. Equities which opened the year with a market value of N13.609trillion, increased to N15.896 trillion as at end of January; it rallied further to a record high of N16.019 trillion as at end of June. But then the market commenced its descent, as the political environment heated up and uncertainty around the 2019 elections forced many foreign portfolio investors to

flee the country. The market never recovered from the downward trend until it touched a new low of N11.337 trillion as at Friday December 28, 2018. The All Share Index (ASI) closed at 31,037.72 points on December 28, 2018 representing Year-to-Date loss of 18.84 percent. This is in contrast to 2017, when the Nigerian stock market made a return of 42 percent, making it the third best performing market in the world. Equities value were up 4.36 trillion in 2017, which means that investors have lost about half of what they gained in 2018. With a year to date loss of 18.84 percent, the country’s stock market now ranks as one of the worst performing globally in 2018. Losses are spread across all sectors of the market. The NSE 30 Index closed at 1,402 points on Friday December 28, 2018, representing a loss of 19.73 percent year to date. The NSE Banking index is down 16.34 percent; NSE Consumer Goods is down 24.35percent; and NSE Industrial Good Index is down 37.73

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percent. At 125.96 points, NSE Insurance Index is down by 9.62 percent this year; while that of Oil & Gas declined 11.89 percent this year despite higher oil prices in the global market. “At the moment, performance indicators such as the All-Share Index and market capitalisation of the Nigerian Stock Exchange are weak, reflecting continuous loss in investment appetite. This is expected to continue till the end of the first quarter (Q1) as 2019 election fear is palpable,” Sola Oni, a Lagos-based stockbroker said in an emailed response to BusinessDay. Today is the last trading day of 2018 and it is already certain that no matter the gains today, the stock market is not going to reverse the losses of 2018. “The usually expected ‘Santa Claus Rally’ between December and early January may be moderated by the current mood of the market, characterised by investor apathy. Real investors are likely to adopt a wait-and-see attitude while speculators may intensify moving their asset

classes from variable to fixed income,” Oni explained. He believes however that some discerning investors will always take advantage of low valuation of stocks and strong market fundamentals to beef up their portfolios. But analysts at Cordros Capital and Afrinvest have a cautious view on how investors should trade going forward. “Our view continues to favour cautious trading in the equities market amidst brewing political jitters ahead 2019 elections, and the absence of a positive market trigger,” research analysts at Lagosbased Cordros Capital wrote in their December 21 note to clients. They however expect the positive macroeconomic fundamentals to drive recovery in the long term. Analysts at Afrinvest also maintain a bearish short-term outlook for the market as political uncertainties remain heightened and also expect investors to take positions in fundamentally sound stocks for short term gains. Top on the list of major losers in

Monday 31 December 2018

2018 are Lafarge Africa Plc (-72.2 percent), AG Leventis Plc (-61.4 percent), Cornerstone Insurance Plc (-60 percent), FTN Cocoa Plc (-60 percent), and Japaul Oil Plc (-60 percent). Also, Courtville went down this year by 60 percent, Mutual Benefit (-60 percent); Royal Exchange (-58 percent), Guinea Insurance (-54 percent), Multiverse Mining and Exploration Plc (60 percent), and Niger Insurance (-56 percent), Regency Alliance Plc (-58 percent), and Sovereign Trust Insurance Plc (56 percent), and Universal Insurance Plc (60 percent); and Veritas Kapital Assurance (54percent). But not all stocks lost value in the year. Some actually made significant gains: Cement Company of Northern Nigeria Plc recorded the highest gain in 2018 with over 110 percent rally, followed by Unity Bank Plc which advanced by 84.91 percent. Other stocks that advanced above 50 percent are: Sterling Bank Plc (71.3percent); Learn Africa Plc (54.55 percent) and NEM Insurance Plc (54.22 percent).

Five issues that shaped Nigeria’s economy... Continued from page 1

had only acquired another local lender, Mainstreet Bank, in 2015.

The Bank’s eventual implosion started off July 2016 when the CBN stepped in to replace the chief executive officer, chairman and 10 others, following the lender’s consistent breach of cash and liquidity ratios. The new board then engaged KPMG and PWC to carry out a forensic audit to ascertain the financial position of the struggling bank which last filed a financial statement in 2015. The result of the audit was ugly. It revealed that the bank had a negative capital position of N690 billion as of December 2016, after which it worsened some 5.8 percent to N730 billion as of June 2017. “The major reasons for the negative capital position were impairment of loans to the tune of N529 billion and transactions in suspense to the tune of N280 billion, relating to balance sheet and profit and loss manipulations from 2006 to 2016, and direct and apparently fraudulent cash withdrawals by certain individuals,” the audit note read. On receiving the report from the forensic audit, the bank’s board set up a special Investigation Committee to look into circumstances surrounding the N280 billion in “suspense.” This was in order to identify possibility of recoveries and to recommend appropriate sanctions against culpable individuals. The amount was linked to some N29.5 billion spent in acquiring Mainstream bank in addition to a purchase price of N126 billion, manipulation of the bank’s accounts, and some N7 billion disbursed to individuals and corporates without due process. Godwin Emefiele, the CBN Governor, and Umaru Ibrahim, managing director of NDIC would later conclude that some N786 billion will be injected into the bank by the Asset Management Corporation of Nigeria (AMCON) and that a bridge bank, Polaris, will take over the bank’s operations. The regulators ensured that depositors didn’t lose their funds as they were covered by the Nigeria Deposit Insurance Corporation (NDIC) and the CBN’s cash injection. The biggest losers from Skye bank’s collapse were equity investors who lost about N10.6 billion, given that the bank had a market capitalisation of same amount at close of trading the Friday afternoon the announcement was made. Skye bank was up 60 percent year to date at the time, as investors piled cash into the struggling bank despite obvious signs of trouble. Investors have a right to feel hard

done by, as regulators having being made aware of the dire state of the bank after the audit should have suspended trading on the shares. Perhaps it is these investors who will struggle the most to put 2018 behind them. US$8.1 billion fine on MTN and eventual reversal MTNNigeria’sregulatory clash with Nigeria in August was one that sent chillsdownthespinesofmanyaforeign investor and cost shareholders of the Johannesburg-listedcompanymillions of dollars in eroded market value. MTN was facing an uphill battle to convince investors that it would not succumb to an order from the Central Bank to refund some $8.1 billion, alleged to have been illegally exported out of the country at various times between 2007 and 2015. The CBN argued that MTN, along with four banks who were fined N5.87bn, violated the country’s foreign exchange monitoring and miscellaneous act of 1995 and the 2006 foreign exchange manual. That sparked a crisis home and abroad as foreign investors started to question if the CCIs they had obtained in exporting or importing money into the country were genuine. And why not, when a little over 80 percent of foreign transactions done on Nigerian shores involved at least one of the four banks which include Standard Chartered, Citi Bank, Stanbic IBTC and Diamond bank. MTN proceeded to seek a court injunction against the CBN as it claimed no wrong doing. Analysts and investors held the view that the punishment being dished to the Telco by Nigerian authorities was excessive and one that almost signalled an intention to kill MTN, the country’s largest non-oil investor. Investors took every opportunity with a Nigerian official to seek clarity over the matter which had left a bad taste in their mouth. Nigeria’s acting finance minister, Zainab Ahmed, would later say the collision with MTN was a mistake. However, on December 24, the CBN virtually reversed its order when it said that on the basis of fresh facts submitted by MTN, the telecommunications giant was being let off with a “notional” reversal of the repatriation involving the private placement that will compel it to pay a difference in value of about N30 per dollar and amounting to $53 million. This was after the apex bank said it established a technical error involved in the issuance by banks of the CCIs relating to the repatriation of proceeds of a private placement conducted by MTN in 2008 and

L-R: Biodun Ifemade; Bukola Ifemade, newly sworn-in chairman, Lagos Area Committee of Nigerian Council of Registered Insurance Brokers (NCRIB-LAC); Adedotun Gbadebo, Alake of Egbaland/special guest of honour, and Shola Tinubu, president, NCRIB, at the investiture ceremony of Bukola in Lagos.

which allowed its original shareholders to sell about 10% of the shares of the company to Nigerian investors. MTN shares rallied some 9 percent as investors heaved a sigh of relief over the settlement. The resolution is positive for Nigeria which is struggling to attract foreign direct investment to act as catalyst to grow its economy which remains in troubled waters despite having emerged from a devastating recession. Diamond Bank weds Access Access bank’s merger with Diamond bank was as unexpected. Diamond Bank said Access emerged the preferred bidder in an auction which saw the latter acquire the entire issued share capital of Diamond in exchange for a combination of cash and shares in Access Bank that amounted to N72 billion (about $200 million). The merger, which remains subject to certain shareholder and regulatory approvals, will create Nigeria and Africa’s largest retail bank by customers, the banks claim. Moody’s Investors Service said the merger between the two lenders

will be “credit positive” for the overall Nigerian banking system. This is because, according to the global ratings agency, the merger would limit the threat of contagion of Carlyle-backed Diamond bank’s relatively weak credit profile to the banking system of Africa’s largest economy. The two banks expect the transaction to be completed in the first half of 2019. BuhariholdsoffonsigningPIGB A lot of Nigerians expressed outrage when President Muhammadu Buhari refused to assent the Petroleum Industry Governance Bill (PIGB) over concerns that it whittled down his powers. Considering the slow crawl of governance by the Buhari administration, analysts have said it was better to have an imperfect law that can be amended later than to waste the efforts and resources spent in developing the bill when the 8th assembly comes to an end next year. The PIGB proposes fundamental governance reforms providing that the Minister of Petroleum Resources cannot longer unilaterally award oil blocks vesting the power in a regula-

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about 10 percent of Nigeria’s gross domestic product. This is a world record. Otedola in his own way is also a significant player in the Nigerian economy. Just this week, he decided to divest his 75 percent shareholding from the downstream business

of Forte Oil, where he the majority shareholder. That decision set the stock market abuzz, with investors scrambling to get a part of what the market considers a juicy asset. Otedola said in a statement issued by Forte that he was divesting from the oil marketing company to focus on refining and petro-

tor, the Nigerian Petroleum Regulatory Commission (NRPC). The PIGB also splits the NNPC into three commercial entities providing for the incorporation of two entities to be known as the Nigerian Petroleum Assets Management Company (NPAMC) and the National Petroleum Company (NPC), which will be vested with certain liabilities and assets of the NNPC. The failure to pass the petroleum industry bill for the past 17 years prompted its splitting into four namely, a fiscal, governance, revenue management and host community aspects. But controversy has always dogged the law due to concerted efforts by various groups to preserve their interests. That’s despite the immense gains the bill holds for fresh investments in the oil and sector. Many had expected President Buhari to be one person to assent the bill, but it wasn’t to be, at least not during his first tenure. Buhari seeks a second term at the next year’s poll.

•Continues online at www.businessday.ng chemicals, areas where margins are said to be higher. Such a big player is not a minnow in the local economy and definitely not one that should be cornered into a tight position by a political party in a bid to get votes, especially if he is not known to be a member of that party.

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Baga under Nigerian army’s control … Islamists kill at least 10 in bid to capture town - residents

oko Haram Islamist militants and Nigerian Army troops have been fighting in Baga, a fishing town on Lake Chad, as the insurgents step up attacks in the run-up to a presidential election in which security is a campaign issue, the army and residents said. The Nigerian army said in a statement the militants attacked a military base in Baga, in eastern Borno State, on Wednesday evening. The borders of Nigeria, Niger, Chad and Cameroon meet on the lake. Residents said 10 people had been killed and clashes were still going on as the militants tried to capture the town. But Nigerian army spokesman Sani Usman said: “We are clearing and mopping up,” saying the only military death was a member of the navy, which supported army troops

along with the air force. However, the Nigerian Army on Friday said it never lost control of Baga town, as against reports that Boko Haram insurgents overran the area. Major General Lamidi Adeosun, the Chief of Training and Operations made the clarifications in Maiduguri, while fielding questions shortly after unveiling new military operations in the northeast. He spoke on behalf of Tukur Buratai, the Chief of Army Staff, Adeosun said the gallant troops successfully repelled the insurgents’ attack and secured Baga and its environs. According to Adeosun, the insurgents had on Wednesday unleashed a coordinated attack on a military base in the town but the gallant troops repelled and pursued the insurgents. “We have taken control of Baga. I am talking about

the position of Baga as at yesterday when we stabilised the situation. “Baga is not in the hands of the Boko Haram insurgents; I repeat Baga is not in the hands of the Boko Haram terrorists, they contested and lost.” Confusing reports earlier indicated that Boko Haram insurgents had overrun the fishing town on Nigeria’s border with Chad and Niger Republics, and hoisted their flags, a situation which forced the inhabitants to flee. Army spokesman Brig. Gen. Sani Kukasheka Usman, said the insurgents on Wednesday, December 26, 2018; attacked the 7 Brigade, Multinational Joint Task Force (MNJTF), based in the town at about 7:00 pm. “The troops along with their Nigerian Navy counterparts put up a very determined fight to repel the attack throughout the night, while Sector 3 Operation

LAFIYA DOLE sent in reinforcement who are in hot pursuit of the terrorists. “Similarly, a Search and Rescue team has been constituted. “The Nigerian Air Force component has also been mobilised and are engaging the fleeing terrorists. Unfortunately; a naval personnel was killed in action.” Baga was the scene of mass killings by Boko Haram militants in 2015 when hundreds, possibly thousands, of people died and much of the town was destroyed. At the time Boko Haram held territory around the size of Belgium in northeast Nigeria but were later beaten back. This attack, however, was the latest in a string of strikes on military bases in the northeast. President Muhammadu Buhari’s security record has become a campaign issue ahead of an election in February in which he will seek a second term.

L-R: Stuart Symington, US Ambassador to Nigeria; Babatunde Akin Moses, president, Africa Business Conference; Raymond Ihuoma, vice-president, Africa Business Conference; Lazarus Angbazo, CEO, General Electric Nigeria/president, American Business Council, and Enase Okonedo, dean, Lagos Business School, at the Africa Business Conference, organised by the American Business Council in partnership with the Lagos Business School in Lagos.

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Ex-President Shehu Shagari dies at 93 DIPO OLADEHINDE

ormer Nigerian’s Second Republic President Shehu Shagari, GCFR, is dead. His demise was announced on twitter by his grandson, Bello Shagari. “I regret announcing the death of my grandfather, H.E Alhaji Shehu Shagari, who died right now after a brief illness at the National Hospital, Abuja,” Bello tweeted. He died at the age of 93. Late Shehu Shagari was the first Executive President of the Federal Republic of Nigeria between the year

1979 and 1983, a period known as the Second Republic before his government was overthrown by the military.

South Korea displaces China as Nigeria’s biggest import trading partner MICHEAL ANI

outh Korean has displaced China to emerge as the top country Nigeria imported from in the third quarter of 2018. The country for the first time became the top importing partner for Nigeria, a position China held since 2011 when Nigeria started collating the data. “The reason China moved from its position as the top importing partner for Nigeria this time was because of the submersible drilling platform imported from South Korea during the quarter which was quite expensive,” NBS says in its foreign trade statistics report. Of the N4.17 trillion worth of goods and services imported into the country, imports from South Korea accounted for 29.1 percent or N1.2 trillion worth of the goods. China’s share of total imports stood at 14 percent, down from 25 percent and 22 percent in Q2’18 and Q3’17 respectively. “I do not expect this trend to extend in the coming quarter, since the up

movement by the South Korean nation was mainly driven by Nigeria’s import for submersible equipment in August (amounting to N1.16trn) and accounted for 28 percent of imports in the reference quarter,” Gbolahan Ologunro, an equity research analyst at Lagosbased CSL Stockbrokers said on phone. On the flip side, India maintained its top spot as being the major export trading partner, constituting 16 percent of the N4.9 trillion exports recorded in the quarter. The top five Import Trading Partners of Nigeria in Q3, 2018 were South Korea, China, Netherlands, Belgium and USA accounting for 29.11, 14.17, 11.58, 6.99, 5.37 percent, respectively, while India, Spain, France, South Africa and Netherlands were Nigeria’s major export trading partners, accounting for 15.76, 10.76, 10.31, 6.91, and 5.69 percent of total share of exports, respectively. Import trade from African countries stood at N138.7 billion or 3.3 percent while imports from the region of ECOWAS alone amounted to N16.9 billion.

Offa robbery: Lai Mohammed’s name synonymous with lies - Saraki’s aide NCAA sanctions four airlines over various violations OWEDE AGBAJILEKE, Abuja

pecial adviser on media and publicity to the president of the Senate, Bukola Saraki, Yusuph Olaniyonu, has described Lai Mohammed, minister of information, as an unrestrained and compulsive perjurer, whose name has become synonymous with misinformation and untruths. Responding to Mohammed’s claim that during a radio interview in Kwara on Christmas day, Saraki had trivialised the Offa robbery, which claimed the lives of 33 Nigerians, by saying that he had donated N10 million to the Offa Monarch as compensation for victims, Olani-

yonu stated that those who were trying to implicate the Senate president in the Offa robbery affair by all means were so fixated on that mission that they were messing up with the due process that would give justice to the victims, both dead and alive, and closure to their families. “During the Senate President’s syndicated radio interview, he made it clear that it was unthinkable that anybody would want to link him with armed robbery or violence against his own people. He stated categorically that anybody that would want to link him to such violence should first ask what he has to gain from such a dastardly act. “It was then the Senate

President mentioned that the desperate narrative that has been spun to implicate him after the robbery does not make any sense, as when he visited the monarch, he donated N10 million for the care of the wounded — while it has been revealed that the money stolen by the robbers was just N7 million. “Dr. Saraki also stated that those who have tried and have failed to implicate him in the Offa robbery, have been so fixated on that unsuccessful mission that they are now trampling on the due process that would give justice to the victims, both dead or alive, and much-needed closure to their families and the affected community.

IFEOMA OKEKE

he Nigerian Civil Aviation Authority (NCAA) has sanctioned four erring operators for various degrees of violations. This includes both scheduled and non-scheduled operators. A statement issued by Sam Adurogboye, general manager, public relations, NCAA, stated, “During a spot inspection carried out by NCAA Aviation Safety Inspectors (ASI) on those operators, a number of deficiencies, including non implementation of training programmes of

maintenance personnel as required, irregularities concerning Helicopter flight identification, deliberate violation of the regulations, performing maintenance programme without necessary approval and using outdated manual were discovered. “All these findings were found to be in violation of the Regulations.” Consequently, the various operators were fined, ranging from one million and five hundred thousand naira to two million naira, while the operator involved in deliberate violation of the Regulations had its Air Operator Cer-

tificate (AOC) suspended for 180 days. According to the statement, the authority has ensured that the affected personnel in question in the employment of one of the airlines are trained accordingly. “NCAA wishes to reassure all stakeholders that it will continue to ensure that Standard Operating Procedures [SOPs] are strictly followed. The authority expects strict compliance with the Nigeria Civil Aviation Regulations in the future and violations will be viewed seriously,” Adurogboye said.

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Increased year-end activities drive PMI expansion by 61.1 index in December HOPE MOSES-ASHIKE

anufacturing Purchasing Managers Index (PMI) expanded for the 21st consecutive time by 61.1 point in December from 57.9 in November, driven by increased end of year activities. The Central Bank of Nigeria (CBN) weekend, released the December PMI, which shows that production level, new orders, supplier delivery time, employment level and inventories grew at a faster rate in the month under review. “The expansion is associated with the end of year increased activities,” Ayodele Akinwunmi, head of research, FSDH Merchant Bank Limited, said. The index grew at a faster rate when compared with the

index in the previous month. Consequently, 13 out of the 14 sub-sectors surveyed reported growth in the review month. These include transportation equipment; furniture and related products; printing and related support activities; textile, apparel, leather and footwear; plastics and rubber products; chemical and pharmaceutical products; food, beverage and tobacco products; non-metallic mineral products; paper products; fabricated metal products; cement; electrical equipment, and petroleum and coal products. The primary metal subsector recorded decline in the review period. At 63.6 index points, the production level index for the manufacturing sector grew for the twenty-second consecutive months in December 2018. The index indicated a faster growth in the current month, when compared to its level in the preceding month. A total of 10 out

Knocks, lamentations greet performance of education sector in 2018 KELECHI EWUZIE

nocks, lamentations and disgruntled reactions have trailed the performance of the education sector in the assessments of concerned stakeholders in the sector. They observed that unaddressed alarming rate of out-of-school children in the country coupled with the disruption of academic activities as a result of ongoing strike by the Academic State Union of Universities (ASUU) have made the sector worse off, given the nature of it neglect occasioned by the uncertainty that trailed key government decisions in the year under review. According to them, ASUU strike for the umpteen times has altered the academic calendar of schools, which will affect students learning in public tertiary institutions. Given the kind of response that emanated from parents, students and education experts that bared their minds to BusinessDay, it is obvious from their appraisal of the performance of the educational sector that more policy direction is urgently required from the government in term of encouraging not only educational development but also the nation as a whole. Majority of the respondents were of the opinion that a state of emergency should be declared on education, if we are to keep tab with the growing education community globally. Ejike Uchechukwu, a concerned parent in his assessment of the sector in the year under review, points out that any country that neglects the power of knowledge and information that comes from educational activities set itself back big time. According to Uchechukwu, “Any country that does not pay attention to

the educational needs of her youths is likely to face a difficult times in the future,” adding that the situation Nigeria educational sector is in at the moment is a case in point. Uchechukwu further advocates that the present administration of President Muhammadu Buhari, ably assisted by the minister of education, Adamu Adamu, should seriously look into education because the development of Nigeria depends on the technical knowhow of it youths who represent a larger percent of the Nigerian population. Emmanuel Ibukun, an educationist, laments that the sector has not fare any better in the last 365 days, questioning the reason behind the continued neglect of a vital sector like education by the government, especially in resolving the lingering ASUU strike. In his view, the issue of education should rank among the first in the scale of preference of this present government if it were to regain it pride of place in the country, calling on the Buhari-led administration to set the ball rolling through the implementation of an education friendly policy. Similarly, Nkeiruka Chimezie, a parent who is disgruntled with the plight the sector is facing, says successive governments neglect of the sector has pose serious danger to Nigeria. According to Chimezie, “The life wire of any country lies in her youths, one wonders what will become of any nation where her youths are deprived of a basic right like education, and the outcome is better imagined than said.” She calls on government and its agencies to as a matter of priority implement policy that is in line with the developmental objective that education in the country deserves.

of the 14 manufacturing subsectors recorded increased production level, three remained unchanged while one recorded decreased production level. According to the report new orders index grew by 62.3 points, in December from 68.1 index points in November, for the twenty-first consecutive months, indicating increase in new orders in December 2018. Thirteen subsectors reported growth, while one contracted in

the review month. The manufacturing supplier delivery time index stood at 58.4 points in December 2018, indicating faster supplier delivery time. The index has recorded growth for 19 consecutive months. A total of 13 sub-sectors recorded improved suppliers’ delivery time, while one remained unchanged. The report revealed that employment level index in December 2018 stood at 57.0

points, indicating growth in employment level for the twentieth consecutive months. The Manufacturing sector inventories index grew for the twenty-first consecutive months in December 2018. At 63.2 points, the index grew at a faster rate when compared to its level 58.7 points in the November 2018. The Manufacturing and Non-Manufacturing PMI Report on businesses is based on

survey responses, indicating the changes in the level of business activities in the current month compared with the preceding month. The composite PMI for the non-manufacturing sector stood at 62.3 points in December 2018, indicating expansion for the 20th consecutive months. The index grew at a faster rate when compared to 58.4 index points in November 2018.

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Juncker calls on UK to ‘get your act together’ on Brexit talks

EU impatience grows as UK attempts to gain concessions before Brexit divorce vote Mehreen Khan

ean-Claude Juncker has told the UK to “get your act together” before making demands on Brussels to amend a Brexit divorce agreement weeks before it is due to be voted on by the House of Commons. In a sign of the EU’s impatience with the UK government’s insistence that it can extract concessions from Brussels before the vote, the president of the European Commission said it was “entirely unreasonable for parts of the British public to believe that it is for the EU alone to propose a solution for all future British problems”. “My appeal is this: get your act together and then tell us what it is you want,” Mr Juncker told German newspaper Welt am Sonntag. Theresa May is still hoping to extract concessions from the EU over backstop arrangements designed to prevent a hard border between Northern Ireland and the Irish Republic. The government wants further assurances the backstop — which would create a UK-wide customs union with the EU — would never be

used in practice to convince Eurosceptic Tory MEPs it is not a “trap” and to vote through the deal due to be held on the week beginning January 14. But EU27 leaders including Germany’s Angela Merkel and France’s Emmanuel Macron have repeated there will be no re-writing of a 585-page legally binding divorce agreement which lays out the backstop arrangements and has taken nearly two years to negotiate. Instead of concessions on the backstop like a one-year time limit as demanded by Mrs May, EU27 leaders at a testy summit earlier this month offered the prime minister only non-binding language saying if the backstop was ever in force it “would apply temporarily” until it was superseded by a UK-EU trade deal that would also prevent a hard border in Northern Ireland. “Our proposed solutions have been on the table for months,” added Mr Juncker, who was confronted by Mrs May at the summit after calling the UK’s debate “nebulous and imprecise”. Jeremy Hunt, foreign secretary, has said Brussels should give more clarity on how the

China and US hail ‘positive progress’ on trade talks Beijing ‘stands ready’ to secure deal after Trump-Xi phone conversation Gabriel Wildau and Sam Fleming

hina has said it is willing to work with the US to implement the “important consensus” reached at the G20, in a potential sign of progress in trade negotiations following a phone call between the two presidents at the weekend. US President Donald Trump and his Chinese counterpart Xi Jinping spoke by phone on Saturday, and Mr Trump praised the “positive progress” in bilateral negotiations, China’s foreign ministry said in a statement. Mr Trump struck a positive note on Twitter over the weekend, describing a “long and very good call” with his counterpart. Mr Xi told Mr Trump that he “hopes that the two teams will meet each other half way, work hard, and strive to reach an agreement that is mutually beneficial and beneficial to the world as soon as possible”, China’s foreign ministry said after the call. Worries about the danger of a collapse in the trade truce have unsettled financial markets in

the month following the two presidents’ discussions at the G20 summit in Buenos Aires. The two sides offered different interpretations of the supposed agreement, raising questions about whether they could ultimately avoid higher tariffs. At the same time, concerns about existing and threatened tariffs are beginning to eat away at business confidence around the world, contributing to forecasts of slowing global growth late this year and into 2019. Analysts question whether it will be possible to achieve by early March a substantive agreement tackling major problems such as intellectual property theft and forced technology transfer. Top US and Chinese officials will not hold face-to-face trade talks until January, highlighting the tight timeline that faces the countries. Nevertheless, the parties have been taking steps to prevent the ceasefire from collapsing. China, for example, has cut car tariffs back to their levels before the trade war and has begun buying Continues on page 54

temporary backstop will work ahead of the Commons vote. “The EU has agreed that the backstop is temporary and what we need them to do is define what temporary is,” Mr Hunt told the BBC’s Today programme earlier this week. “My view is this is not the time to be talking about what other major changes we might be faced with making because actually we can get this through.” There have been no formal EU-UK Brexit negotiations

since the summit ended in acrimony on December 13, with EU diplomats on holiday over the Christmas and New Year break. Donald Tusk, European Council president, has also warned there is “no mandate to organise further negotiations”. To assuage Eurosceptic fears, Mr Juncker said Brussels was ready begin future relationship negotiations with the UK “the very next day” if the Commons backs the Brexit treaty.

“[We would] not wait until after the official withdrawal date of 29 March. I have the impression that the majority of British MPs deeply distrust both the EU and Mrs May,” said the commission president. “It is being insinuated that our aim is to keep the United Kingdom in the EU by all possible means. That is not our intention. All we want is clarity about our future relations. And we respect the result of the referendum.”

China ban on importing contaminated waste leaves Australia awash in rubbish Policy shift means trash processed for recycling still ends up in landfill Jamie Smyth

ozens of workers sifting through bundles of plastics, cardboard and paper at an Australian recycling centre are at the front line of a global waste crisis sparked by China’s ban on reprocessing contaminated materials. Craig Barker, general manager of Suez Western Australia, says the Chinese move has “taken out effectively 50 per cent of the global capacity for recyclable material to be re-manufactured — it’s removed it overnight.” The French utility is one of thousands of companies struggling to cope with Beijing’s imposition in January of strict limits on the recycling it imports. Australia’s situation is symptomatic of a burgeoning global problem. Countries are awash in the waste previously sent to China, which until recently served as the world’s recycler. As materials pile up in Australia the solution is often to send trash designated for recycling straight to landfill, appalling environmentalists. Suez said China’s policy shift halved the value of recycling it collected in Australia and warned that the nation urgently needed a new national waste strategy, fresh investment and a strong local

market for recycled materials if the industry was to remain viable domestically. “We’ve got to reduce reliance on offshore reprocessing and that means building local infrastructure and creating demand for recycled product,” said Mr Barker. He said consumer education was also important to reduce contamination in household recycling. Sankey chart showing exports of paper waste The impact of China’s rules, which restrict imports to recycling with just 0.5 per cent levels of contaminants or lower, has been dramatic, since the vast bulk of material is excluded. In the first half of 2017 China and Hong Kong bought 60 per cent of plastic waste exported by G7 countries, according to data compiled by the Financial Times. This fell to 10 per cent in the same period this year, as companies sought alternative markets, such as Vietnam, Thailand and Malaysia, or stockpiled recycling materials. China’s ban is one element of a global waste crisis, the result of a surging population, growing urbanisation and a failure to adopt more sustainable practices, including recycling. A World Bank study estimated that global production of waste would rise from today’s rate of 2bn tonnes a year to 3.4bn

tonnes by 2050. By that time, the World Economic Forum has predicted, the weight of plastics clogging the world’s oceans will be heavier than that of all the fish in the sea. These global waste problems are mirrored in Australia. Mark Venhoek, Suez Australia chief executive, told a parliamentary inquiry in March that China’s virtual import ban on recycling had sent the industry into “crisis mode”. About 1.3m tonnes of Australian recycling exported to China has been affected, including 35 per cent of plastics and 30 per cent of paper and cardboard. Some of the total was redirected overseas but a government report in October concluded that large volumes of recycled materials ended up in landfill because of contamination and technical restraints on sorting co-mingled waste. In February Remondis, a multinational company, wrote to clients in Melbourne warning them it would have to bury some recycling as “processing centres can no longer send the waste to China”. In April Ipswich council in Queensland warned it would send all its recycling to landfill because of the China crisis, although it later signed a contract with a recycling company under which it would not bury all the material.

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Voting under way in historic Congo poll after rain delays

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US soyabeans again. Mr Trump took to social media over the weekend to talk up the possibility of an accord with China. The “deal is moving along very well. If made, it will be very comprehensive, covering all subjects, areas and points of dispute. Big progress being made!” On Sunday, Chinese foreign ministry spokesman Lu Kang added to the positive rhetoric in a statement commemorating the 40th anniversary of the establishment of diplomatic relations between the US and China. “China stands ready to work with the US to implement the important consensus reached by President Xi Jinping and President Trump in Argentina, expand co-operation on the basis of mutual benefit, manage differences on the basis of mutual respect,” Mr Lu said. Mr Trump is facing pressure at home to ratchet down trade tensions following a torrid period for financial markets, while concerns grow about the impact on key constituencies, including US farmers. Jon Tester, a Democratic senator from Montana, said on Sunday the loss of foreign markets was now threatening farmers’ solvency as he called for the trade war to be ended. “If this continues we will see more farmers go broke and see rural America be further diminished,” he told CBS. “There are other ways to put pressure on China other than using the family farmer, the American farmer as a tool.” The arrest of Meng Wanzhou, chief financial officer of Huawei, in Canada following an extradition request from the US has also added to broader anxieties about relations between the two powers. Nevertheless, China did not direct particular ire towards the US for Ms Meng’s arrest. Instead, it focused on punishing Canada. The US, for its part, insisted there was no relationship between the Huawei case — a law enforcement matter — and the trade talks. China, which has called Canada’s arrest of Ms Meng a “ serious violation” of her human rights, has arrested two Canadian citizens in apparent retaliation. An appeals court in northeast China’s Liaoning province on Saturday ordered a retrial of another Canadian, Robert Lloyd Schellenberg, who was convicted of drug trafficking in 2016. The court sided with prosecutors who said his original 15-year sentence was too lenient. Experts said that the ruling, which could mean that Mr Schellenberg will face the death penalty, appeared to be an additional effort to gain leverage over Ottawa.

Monday 31 December 2018

Storms blight start of election that could see first transfer of power via ballot box Tom Wilson

Sudan’s opposition urges New Year’s Eve march against president Omar al-Bashir faces growing pressure as demonstrations enter their third week Tom Wilson

pposition groups in Sudan have called for a New Year’s Eve march to the presidential palace in protest against Omar al-Bashir’s 29-year rule as anti-government demonstrations entered a third week. The uprising, which started in the eastern city of Atbara on December 19 over a government decision to raise the price of bread, has spread across the country as opposition parties have sought to capitalise on the public’s anger. “The protests that erupted in provincial towns as a result of accumulated frustration with the rising cost of living have now morphed into a fully politicised movement,” said Muhammad Osman, an independent analyst based in Khartoum. “Multiple constituencies with a laundry list of grievances against Bashir’s regime have jumped on the bandwagon.”

Sudan has a history of public protests. Popular uprisings toppled the government in 1964 and 1985 but until now Mr Bashir, who seized power in a military coup in 1989, has used his close control of the military to suppress any signs of dissent. Demonstrations over the deteriorating economic conditions in the country took place in 2013 and in January this year, but the latest protests are far more significant. Opposition groups, including the Communist party and the Sudanese Congress party, are seeking Mr Bashir’s resignation, then a transitional period and elections. An umbrella of independent professional unions is calling on people to march on the presidential palace in Khartoum on New Year’s Eve, AP reported. “The political parties are trying to catch up with the spontaneous demonstrations,” said Hassan Elhag Ali Ahmed, professor of political science at the University of Khartoum. “Tomorrow [New

Year’s Eve] will be an important test. If they are able to mobilise a lot of people, in the heart of the city, then this will be significant,” Mr Ahmed said. Sudan’s largest opposition group, the National Umma party, has so far not backed the call for the New Year’s Eve demonstration, concerned about the spontaneous, uncontrollable nature of the protests and the consequences if the movement fails or leads to greater chaos, Mr Ahmed said. “Some people are afraid of the chaotic situation, or what happened in Libya or Yemen, and want to see greater co-ordination first,” he added. Accused by the US of sponsoring terrorism in the 1990s, Mr Bashir has survived a 20-year US trade embargo, an international arrest warrant for war crimes committed in Darfur and the secession of half of the country in 2011 but the country’s recent economic decline has proved to be his sternest test.

Downturn in Iranian economy blamed for UK migrant surge

National Crime Agency says non-return policy makes British waters a target Robert Wright

conomic hardship in Iran is driving an upsurge in attempts to cross the Channel in small boats because the UK has a policy of not returning migrants, the man in charge of tackling people-smuggling gangs has said. Chris Hogben, head of the Invigor organised immigration crime task force, led by the National Crime Agency, said that the issue was complicated by the UK’s stance towards Iran, the origin of most of those making the crossing. The UK does not return Iranian nationals who arrive in the UK to Iran

because of the country’s poor human rights record. Mr Hogben said the Iranian nationality of most of those involved was “really significant”. “They don’t have to be smuggled covertly into the UK,” Mr Hogben said. “All they need to do is get into British waters and call for British law enforcement’s help. Once they’re picked up by Border Force or law enforcement, they’ve made it because we’re not going to send them back.” Caroline Nokes, immigration minister, visited Dover on Saturday to speak to officials involved in combating the surge. Sajid Javid, home secretary, has called the upsurge — in which more

than 220 migrants have sought to cross the Channel in small boats since the start of November — a “major incident”. Ms Nokes that Mr Javid would cut short a family holiday to return to the UK to deal with the situation. During calls in the last few days, Mr Javid has asked the Border Force to consider whether deploying more vessels in the Channel might help to reduce the problem. Mr Hogben said one of the tactics used by smugglers of was to claim there were children on board boats to make them a higher priority for rescue. In some cases, it had turned out there were no children involved.

Alpha Beta Consulting wishes it business partners and Nigerians a successful Christmas and prosperous new year

he management and staff of Alphabeta Consulting wishes all clients, tax payers, stakeholders, business partners and all Nigerians a Merry Christmas and Prosperous 2019 in advance. It is a firm with a great revenue maximisation strategies that is also the pioneer developer, proprietor and provider of the technologybased Electronic Banking and Internal Controlled-Revenue Enhancing System that helps its Clients to flawlessly monitor and enhance Revenue Collections, promote Accountability, Transparency and Good

Governance. Nobody changes a winning team with an International Standard – compliant processes, procedures and practices coupled with our unrivalled performances that have continuously endeared us to our clients. Lagos State, for example, has every reason to be thankful for patronising us since year 2001 because we have helped to catapult its IGR – 55 folds – within the period from a paltry N600 million monthly average, to N33 billion, thus enabling the rapid development of the State as well as provision of improved social services. So it is with Abia, Imo,

Bayelsa, Akwa Ibom, Sokoto, Kano, Plateau, and Nasarawa states, all of which are now playing in the big league in terms of IGR. We have also extended our services beyond Nigeria as we have operations in Ghana and are currently working hard to commence business in Sierra Leone soon. Finally, with the increasing success of the self-assessment scheme coupled with improvement of the economy, we are confident that the citizens are primed to enjoy more dividends of democracy in terms of Infrastructure and Enhanced Social Services in 2019.

oting in the Democratic Republic of Congo’s longawaited election began slowly on Sunday after torrential rain in the capital Kinshasa delayed the opening of some polling stations. In the early hours, a storm swept through the city preventing some election officials from reaching their designated polling stations, a final hurdle in flawed preparations, which have seen the vote suspended completely in three opposition strongholds. The vote to replace Joseph Kabila as head of state should make history. Congo has never had a transfer of power via the ballot box. But a two-year delay and an election campaign marked by government repression has left voters uncertain about whether the vote will deliver democratic change. Mr Kabila, in office for almost 18 years, was due to step down in 2016 but the vote was postponed, citing technical constraints, and he held on to power. In August, he picked the former interior minister Emmanuel Shadary to replace him as the candidate for his sprawling ruling coalition. Though the only credible polls gave opposition candidate Martin Fayulu a 28-point lead over Mr Kabila’s man going into the vote, some Congolese fear the ruling party will find a way to give Mr Shadary victory. “I think victory is on my side and that tonight I will be president,” Mr Shadary said after casting his ballot in Kinshasa. In the Kintambo district of the capital, voters queued in the early morning under dark skies. The process was orderly but slow. At one voting station, only 40 people had voted by 9am after two-anda-half hours of voting, according to Mafuta Nkwanjata, the senior election official on site. The untested electronic voting system introduced by the electoral commission this year for the first time was proving difficult for voters to use, she said. “Only five people have been able to use the machine unaided.” In another polling station in the city centre, voters crammed into a dimly lit corridor on the second floor of a primary school. The polling booths should be open from 6am until 5pm but after a late start and technical problems election officials were predicting a long night. Those that had voted were buoyant. “There is no chance Shadary can win,” said Kabambi Tshusuaka, 22, who said he had voted for opposition candidate Felix Tshisekedi. “I don’t know a single person who will vote for him [ Shadary],” he said. But even in the pro-opposition capital, ruling party voters could be found. “You can’t deny there has been progress [since Kabila came to power], so I am voting for his successor,” said 58-year-old Antoine Kimbulu.

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Regional US central bankers turn their focus to Main Street Community development is the one under-used weapon left in the Fed’s arsenal Rana Foroohar

he coming year was never going to be an easy one for markets. Between the record amount of corporate debt, trade conflicts between the US and China, and the fact that we are almost 10 years into a recovery cycle — the time when economic slowdowns typically occur — many of us have been expecting the volatility of the past year to continue, if not worsen. Yet Donald Trump’s administration has thrown kerosene on the fire with a number of unforced errors — most notably the US president’s politicisation of the Federal Reserve. Fantasising about firing its chairman, Jay Powell, is a great way to tank stocks and further reduce already weak public approval ratings. Live by the market; die by the market. Mr Trump’s tantrums aside, there is a legitimate, data-driven debate to be had about where monetary policy should go in the short term. But, even as the president and investors cling to the old narrative of low rates and easy money, hoping against hope that such tactics can last just a few more quarters, the Fed is increasingly turning its own focus towards the real economy. Several regional Fed governors — including those in Boston, Dallas and Kansas City — are prioritising another, less well known, function of the central bank: community development. Just as central bankers stepped in 10 years ago to stabilise the economy via low rates and massive asset purchases, when politicians struggled to create more fiscal stimulus, so now they are stepping in to address issues not in the markets, but on Main Street. While the Fed has a mandate to keep unemployment low and inflation stable, it is also empowered to bolster growth in local communities. This includes everything from industrial policy initiatives in the rust belt, to helping immigrants in depressed areas start businesses, pushing educational reform and encouraging efforts to bring broadband to rural areas. With the potential of monetary policy largely exhausted, and political leadership still lacking, community development is the one under-used

weapon still left in the Fed’s arsenal. And it will be an increasingly important one in the years ahead, as it becomes clear that the gains of this recovery have not been evenly spread. In the US, as elsewhere, a handful of cities have taken the bulk of productivity and growth gains over the decade, since they are home to the largest pools of human capital and thus attract the most productive companies, in a snowballing cycle of wealth concentration. A mere 75 out of 3,000 US counties represent over 50 per cent of the country’s job growth. In this superstar economy, places that don’t have the right ecosystem — decent schools, digital connectivity and so on — don’t thrive. That is why Robert Kaplan, the head of the Dallas Fed, recently told me he is spending just as much time calculating how many food pantries and liquor stores there are in his region as he is thinking about interest rates. “About a third of students in Dallas are growing up in poverty,” he says. “Things like that matter in terms of productivity and growth, and so they should matter to the Fed.” Hence the Dallas Fed’s work with local community leaders on increasing access to pre-kindergarten programmes and preparing high-school students for college. He is not alone. The Boston Fed has for the past five years run the Working Cities challenge, with a variety of public and private partners, aiming to retool old industrial regions. This includes engaging with young people deemed at risk of committing a crime, jump starting Latino-owned businesses and bolstering access to health services in at-risk communities. “People get tied to their housing and to schools,” says Boston Fed president Eric Rosengren. “They aren’t going to move for jobs — we have to bring the jobs to them.” He recently took a busload of eight reserve bank presidents who want to copy the programme to Lowell, Massachusetts, the birthplace of the industrial revolution in the US, to see the Boston Fed’s projects in poverty reduction and workforce development.

Popular apps share data with Facebook without user consent Developers say social network’s default option puts them in breach of EU regulations Madhumita Murgia

ome of the most popular apps for Android smartphones, including Skyscanner, TripAdvisor and MyFitnessPal, are transmitting data to Facebook without the consent of users in a potential breach of EU regulations. In a study of 34 popular Android apps, the campaign group Privacy International found that at least 20 of them send certain data to Facebook the second that they are opened on a phone, before users can be asked for permission. Information sent instantly included the app’s name, the user’s unique ID with Google, and the number of times the app was opened and closed since being downloaded. Some, such as travel site Kayak, later sent detailed information about people’s flight searches to Facebook, including travel dates, whether the user had children and which flights and destinations they had searched for. European law on data-sharing changed in May with the introduction

of General Data Protection Regulation and mobile apps are required to have the explicit consent of users before collecting their personal information. Fines for breaching GDPR can be up to 4 per cent of revenues or €20m, whichever is greater. The researchers looked at apps with built-in Facebook trackers and intercepted data as it was sent. Many of the apps are free, suggesting that they make money from data-sharing and advertising. Frederike Kaltheuner, who carried out the research, added that while Facebook places responsibility for complying with regulations on app developers, the US company’s developer kit did not give the option of waiting for a user’s permission before transmitting some types of data. “At least four weeks after GDPR, it wasn’t even possible to ask for consent, because of the default setting of Facebook’s SDK [software development kit]. This means data is automatically shared the moment the app opens,” she said.

Pressure by President Donald Trump on the Fed, chaired by Jay Powell, to announce the end of the tightening cycle has raised fears in the markets of a policy shock © Reuters

Strategists and speculators at odds over dollar outlook Consensus among banks is for declines but market positioning tells a different story Eva Szalay

all Street’s foreign-exchange strategists are at odds with speculators over the outlook for the dollar, underlining the uncertainty over the direction the world’s reserve currency will take next year. The consensus among banks is that the dollar will decline in 2019, with much of the weakness expected in the second half of the year as shifts in monetary policy begin to favour other currencies, including the euro. However, that prediction comes as speculative bets on an appreciation in the dollar stand near the highest levels of the year, according to data from the Commodity Futures Trading Commission. “Most banks and FX strategists think that the dollar is going to go

weaker next year, but — interestingly — positioning tells a very different story,” said Andreas Koenig, head of global forex at Amundi Asset Management. “At the moment the market is very long dollar so it’s either the prediction for a weaker greenback that’s wrong or the markets’ positioning. It doesn’t add up.” The past 12 months have offered a reminder of the dangers in being too confident in forecasting currencies. At the start of this year, the consensus among most investors was that the dollar would continue to weaken — a prediction that came unstuck in April as the clear outperformance of the US economy saw the dollar index, a broad measure of the currency, jump 8 per cent in a matter of months. Its strength hit emerging market economies with current account deficits and lots of dollar-denominated debt, but also

offered the European economy some relief via a weaker euro. As the Federal Reserve persisted in tightening monetary policy, investors rediscovered the appeal of dollar-denominated assets as the attraction of riskier bets, such as in emerging markets, eroded. Mr Koenig said that being long the dollar and US assets had been “a very popular trade this year” because it was a low-risk asset that also had an attractive yield. The consensus view for a weaker dollar in 2019 is built on the assumption that weaker growth in the US prompts the Fed to stop raising interest rates, while the European Central Bank continues to withdraw stimulus. Analysts at UBS argue that “we think the dollar is likely to depreciate over time as policy normalisation gets under way in Europe and Japan”.

Bruising and unpredictable: the year in markets From a melt-up in stocks to a near meltdown, few will have fond memories of 2018 FT reporters

he buzzword at the start of the year was ‘melt-up’ as US stocks raced almost 3 per cent higher in the first week of January. Jeremy Grantham, the founder of asset manager GMO who predicted the dotcom and housing bubbles, warned that the almost euphoric rally was the harbinger of bad news. But with investors still basking in the effect of the US tax cut on corporate profits, not many were listening, as January became one of the best months for global equities since the financial crisis. But over the next few weeks much of January’s rally unravelled, as investors had their first taste that 2018 would be far more volatile than 2017. Vixmageddon As would be the case later in the year, the bond market inflicted the initial damage on equities. A steep rise in average US earnings in January raised the fear of inflation, sending bond yields sharply higher. But the decline in stocks turned violent as “inversevolatility” funds, or those linked to the Vix volatility index that traders used to bet on markets remaining tranquil, buckled. Their collapse on February 5 rippled through the US stock market as banks and other traders rushed to hedge their own positions. It resulted in one of the swiftest 10 per cent corrections in history. De-Faanged

As the dust of “Vixmageddon” settled, investors were confronted by a threat to the handful of tech behemoths known as the Faangs, which in recent years powered US stocks higher. While concerns over the Faangs had been brewing for some time, claims in March that analysis group Cambridge Analytica had mined the personal data of 50m Facebook users for use in the US presidential election, crystallised fears that big tech risked tougher regulation. While each of the Faangs — Apple, Amazon, Netflix, Google parent Alphabet and Facebook — faced different challenges, this year has proved tougher for each than 2017. “It is just like a helium balloon that can only fly so high before eventually the helium wears off and the balloon floats back to earth,” Michael Underhill, chief investment strategist at Capital Innovations, said of this year’s trading in Faangs. Dollar rebound At the annual January gathering of the business and political elite in Davos, Switzerland, US Treasury secretary Steven Mnuchin sent the dollar lower by voicing the administration’s preference for a weaker currency. Although Mr Mnuchin’s comments were a taste of the trade tensions that would simmer — and occasionally erupt — between the US and its trading partners during 2018, talk of a falling dollar had been forgotten by April.

With expectations for both US economic growth and interest rates rising, the dollar began a rally that confounded forecasts. The dollar index, a broad measure of the currency, jumped more than 8 per cent between the middle of April and mid-August. Analysts at JPMorgan called the dollar revival “the most notable phenomenon” of the year. Turkey meltdown A resurgent dollar proved particularly painful for emerging markets, whose bonds, equities and currencies began falling in the spring. Turkey was one of the hardest hit thanks, partly, to its president Recep Tayyip Erdogan. He provided a contender for quote of the year in May after declaring interest rates the “mother of all evil”, in effect kicking off a full-blown currency crisis. The combination of higher inflation, a rising dollar and doubts over the Turkish central bank’s resolve to raise rates unleashed the lira’s plunge, with a row over a detained American pastor fanning the crisis. The currency kept on sliding, at times dramatically, through the summer, even raising concerns about how the situation could pinch European banks. The central bank took some of the steam out of the decline with a series of backdoor tightening measures and eventually took the initiative in September with a hefty rise in interest rates.

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Monday 31 December 2018

ANALYSIS Jair Bolsonaro’s shake-up echoes beyond Brazil’s borders Argentina feels presence of nationalist president next door Benedict Mander

Charts of the year: from polarised politics to damaging pollution The FT’s graphics tell many of the most important — and often hidden — stories of 2018 Alan Smith

he American mathematician John Tukey, a devotee of charts, once wrote that “the greatest value of a picture is when it forces us to notice what we never expected to see”. There were plenty such surprises among the graphics published by the FT, which brought into focus many of the most important stories of 2018. In between polarised politics, social divisions and environmental degradation — as well as a new race for space — they serve to remind us that the second decade of the 21st century has been anything but predictable. The widening political divide between Republicans and Democrats was dramatically revealed by the US midterm elections in November, where some of the biggest losers were moderate politicians from both parties. According to a scoring system developed by professor Adam Bonica of Stanford University, the ideological overlaps between House representatives from the two parties have all but disappeared — a contrast to the 1980s, where the presence of some conservative Democrats and centrist Republicans made for a more continuous political spectrum. Chart showing how US House of Representatives is more ideologically polarised than ever before The current partial government shutdown has been triggered by a dispute over funding for the president’s border wall. Such shutdowns are set to become more commonplace as bipartisanship dwindles: December’s federal closure is a recordbreaking third of the year. Political divides can be strikingly geographical, as the Italian election demonstrated in March. The far-right League and anti-establishment Five Star parties both experienced an extraordinary surge of support — but from different groups of people at opposite ends of the country who are growing apart, economically as well as politically. The new political map of Italy reveals a starkly divided nation. In the north, the League triumphed largely on the back of an anti-immigration,

anti-EU agenda. Meanwhile, in the south, the anti-establishment Five Star Movement gained a majority of votes in many areas. A new political map of Italy showing the League dominant in the north and Five Star the South All eyes are now on the European parliamentary elections in May as the League’s Matteo Salvini, the Italian deputy prime minister and standard-bearer for European nationalism, takes on committed Europhiles including French president Emmanuel Macron to determine the direction of the EU. Some divides are not new, they have just been difficult to see. In April, the results of new legislation requiring British companies to publish figures on the pay of their male and female employees provided a previously hidden view of the gender pay gap. FT analysis of that data revealed that women are overwhelmingly more likely to work for an employer where men are paid more. The main explanation for the gap is the presence of more senior men in companies than women. The sectors of the UK economy with the worst pay gap include construction, financial services and education. Chart showing UK gender pay gap - 9 in 10 women work for a firm that pays men more The reporting requirement is an annual one and the early indication from companies reporting ahead of the April 2019 deadline is that the gap has barely narrowed. Conventional wisdom holds that internet speeds in rural areas are much slower than in towns and cities. While that may be true overall, FT analysis of UK industry regulator Ofcom’s detailed broadband speed data revealed that Britain’s city centres are running slower than its suburbs, while the fastest broadband speeds in the country are to be found in the rural north courtesy of B4RN — a volunteer-led effort that involved the community digging their own trenches for new cables. Chart showing how rural and urban broadband speeds compare in Britain; urban is generally fast, but it’s not always the case Data analysis can often seem

dry and impersonal, but for the residents of these Lancastrian villages, the new network has been a deeply human story: “The main benefit is not really gigabit speeds. It is the community,” Chris Conder, co-founder of B4RN, told the FT. “Most of the volunteers are 65 and now they’re as fit as butcher’s dogs with all the trench digging. Their wives have fallen in love with them again. They’ve got their six packs back.” Over the past decade, China has grabbed the most headlines for poor air quality. However, the 10 most polluted cities in the world are all now in northern India. In December, the FT collated Nasa satellite data of fine particulate matter and mapped it against population density data from the European Commission. The analysis shows that at least 140m people in India are breathing air 10 times or more over the World Health Organization’s safe limit, with the biggest causes including vehicular pollution, industrial emissions, thermal power plants, construction dust, waste burning and millions of poor households’ use of cheap and dirty fuel (including wood and cow-dung). Map and chart showing how India’s pollution levels are even higher than China’s With the Indian government seeking to reduce such emissions as part of its commitments to the Paris agreement, action on climate change is also likely to extend the lifespans of its citizens: A study published in The Lancet estimated that pollution killed 1.24m Indians in 2017, lowering the country’s average life expectancy by 1.7 years. One person has taken responsibility for plotting a new path for the direction of humanity. In November, Elon Musk gave himself a 70 per cent chance of moving to Mars as part of a new “direct democracy” enabled by SpaceX, his private space company. In February, it memorably launched Mr Musk’s personal Tesla Roadster into orbit around the Sun, paving the way for future missions to the Moon and Mars. Whether you consider him a visionary or a publicity hound, at the very least Mr Musk is lifting discussion above the divisive daily noise.

hen Argentina’s centreright government modified regulations to enable security forces to shoot criminals fleeing arrest this month, it triggered alarm in a country that still has clear memories of its savage 1976-83 military dictatorship. P re s i d e nt Mau r i c i o Ma c r i seemed to be taking a leaf from the playbook of Jair Bolsonaro, Brazil’s president-elect, who won notoriety during his campaign for provocative comments such as endorsing torture and defending his country’s two decades of military rule. “It is pretty clear that in the last few weeks the Macri government [has decided] that there are some features of Bolsonaro’s discourse that are worth imitating. That is why we see this shift towards heavyhanded [security] policies,” said María Esperanza Casullo, a political scientist at the National University of Río Negro. Mr Bolsonaro’s rise to power in Brazil — he takes office on January 1 — is presenting a tricky challenge

Mr Macri does not plan to attend Mr Bolsonaro’s inauguration. Similarly, when Chile’s Mr Piñera recently lauded Mr Bolsonaro’s economic plans, he later qualified his praise, saying he had “large discrepancies” with Mr Bolsonaro “when it comes to behaviour that is homophobic, not respectful of democracy and shows little commitment to democracy”. A similar ambivalence exists in economic affairs. Brazil accounts for 16 per cent of Argentina’s exports and the strength of its economic recovery will be a decisive factor in whether Argentina exits recession before Mr Macri bids for re-election. But Mr Bolsonaro’s administration also wants to weaken Mercosur, the regional trade bloc led by Brazil and Argentina. Brazilian officials have openly stated the bloc “not a priority”. That in turn has fuelled concern over the fate of a stalled Mercosur trade deal with the EU. “Bolsonaro [will have] an ideological external agenda which could be very problematic for Argentina. Its pragmatism is going to be put to the test, as it is going to have deal

for centre-right politicians such as Mr Macri in a polarised region. On the one hand, Mr Bolsonaro’s plan to unwind years of statist policies and liberalise South America’s biggest economy should be music to the ears of Mr Macri, who has pushed a similarly liberalising reform agenda in Argentina, the region’s other heavyweight economy. Brazil is Argentina’s biggest trading partner and the success of Brazil’s reformist economic programme could directly impact Mr Macri’s chances in next October’s presidential elections. At the same time, though, Mr Bolsonaro’s rightwing views could clash with more centrist positions generally held by fellow South American leaders such as Mr Macri, Colombian president Iván Duque and Chilean president Sebastián Piñera. It could also, possibly, push them further to the right — as with Mr Macri’s greater emphasis on law and order as he prepares to seek re-election next year. A similar emphasis by Mr Bolsonaro in Brazil was a key part of his electoral victory. Even before Mr Bolsonaro takes office the ideological tension between Brazil and centrist governments in the rest of the region has shown in leaders’ personal dealings. In what is perceived as a snub,

with a [Brazilian] neighbour that is very unpredictable [unlike before],” says Monica de Bolle, a senior fellow at the Peterson Institute for International Economics. Mr Bolsonaro has also frequently criticised China, Brazil’s biggest trade partner. “China is not buying in Brazil, China is buying Brazil,” was a recurring Donald Trump-like refrain during his campaign. It contrasts with Mr Macri, who has sought to keep strong relations with China to boost investment, even though Washington is concerned by what it sees as Beijing’s increasing challenge to US influence in Latin America. “There is a fight for the position to be Trump’s best friend in the region,” says María Victoria Murillo, a professor of international affairs at Columbia University. “Everybody wants to be best friends with someone they need, and the US is a very powerful force . . . My impression is that Brazil wants to be [Trump’s best friend] even at the expense of losing other friends,” she added. Analysts said that competition for Mr Trump’s favour, and particularly US investment, could take the region back to the dynamic in the 1990s, before several leftwing Latin American governments that emerged in the 2000s strongly rejected US influence in the region.

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‘Toyota Nigeria’s NAJA Awards confirms our brand superiority’ MIKE OCHONMA mikeochonma@gmail.com

s NIgeria’s automotive space enters into the 2 0 1 9 ma rke t year, it holds a lot of promising future to some of the leading brands in the country aftermath the recent Nigeria Auto Journalists Awards held at Eko Hotel, Lagos. It would be recalled that during the just concluded NAJA Awards, the Toyota Hilux and Toyota Hiace clinched the Pick-up of the Year award and Mini Bus of the Year awards respectively, while the Executive Car of The Year Award went to Toyota Camry. Speaking exclusively to BusinessDay after the historic event, Bukky Ogunnusi, public relation manager, Toyota Nigeria Limited (TNL) said, “We at TNL thank NAJA for the awards which cut accros our passenger and commercial vehicles segments. The awards testify

to the superiority of the brand in terms of designs and functionality. It also demonstrates the fact that Toyota remains the preferred vehicle brand in Nigeria brand”. According to thevTNL’s image maker, “We will continue to deliver on our resolve to market vehicles that match the aspirations of our customers at top notch quality hinged on international standards. Our gratitude goes to our teeming customers that have remained faithful to the brand. We will continue to push the frontiers of technology to deliver to them vehicles that are secomd to none”. She concluded. The award night which had the director general of the National Automotive Design and Development Council (NADDC) , Aliyu Jelani and the representative of the Corp Marshal of the Federal Roads Safety Corps (FRSC) as special guests was well attended by many chief executives and other stakeholders in

the nation’s automotive sector.. In the award categories for 2018, Hyundai Creta compact SUV won the Car of The Year (COTY) Award beating Toyota Corolla and GA 3, a Chinese brand.

In the Luxury Car of The Year, Mercedes Benz S-class emerged winner ahead of BMW 7-series while the Luxury SUV of the Year award went to Range Rover Autobiography.

Indigenous Lubricant of the year went to Lubcon, just as Ceat smiled home with the Tyre brand of the year. Also Massilia Motors Limited also won many awards, including the

Light Duty Truck of the year, while Elizade Autoland’s JAC T6 Pick up won Value for Money in the Pick-up segment, and AIICO named the Auto Insurance Company of the year,among others.

NAJA Awards puts Mitsubishi Motors stronghold in Nigeria

itsubishi Motors has once again hit the headlines with its recent recognition by the Nigeria Auto Journalists Association (NAJA) Awards at the 2018 edition held in Lagos. Massilia Motors, sole distributor of Mitsubishi vehicles in Nigeria, a joint venture consolidated with the CFAO group, was awarded the most innovative automotive brand in 2018 and the most outstanding SUV design for the recently launched Eclipse Cross model. The Mitsubishi L200 was also amongst the nominees for the best pick-up of the year. This did not come as a surprise to many industry watch-

ers as Massilia Motors has in recent times, been very innovative in its marketing push and has given a new look to its car showrooms . The company has also invested in its

aftersales facility in Ijora and ensuring continuous quality improvement. With the introduction of models such as the Pajero Sport and the Eclipse Cross,

Massilia Motors offers customers sophisticated vehicles that are good value for money. The brands new approach was seen during the unconventional launch of the Eclipse

Cross at the Heineken Lagos Fashion Week where a virtual reality booth was set up for visitor to tour the vehicle through VR glasses. The company also collaborated with fashion designer Sisiano to create the ‘’Eclipse collection’’ inspired by the compact SUV. Earlier this year, Massilia Motors celebrated the centenary anniversary of Mitsubishi Motors as part of its repositioning strategies. The event tagged the Heritage Week was one of its kind in the industry and was an opportunity to share milestones and achievements of the Japanese car manufacturer. It was a memorable week for the Mitsubishi Motors family and visitors

with fun filled activities in the Victoria Island showroom in partnership with renowned brands, celebrities and influencers. In addition, giveaways were organized to reward Mitsubishi car owners for their patronage over the years. Commenting on the NAJA Awards, deputy managing director of Massilia Motors, Kunle Jaiyesimi stated: ‘’we are delighted with the recognition. We will continue striving to find new ways to add value to our customers.’’ Aside the Pajero Sport and Eclipse Cross, other models distributed by Massilia Motors include the ASX, Outlander, Pajero Suv and the L200 robust Pickup.

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Congestion, bad roads, high cost remain major challenges to port business in 2018 AMAKA ANAGOR-EWUZIE

takeholders in the maritime sector have listed port congestion, bad state of roads leading to the nation’s seaports and high cost of doing business as major challenges to effective port business in 2018. According to them, exporters and importers now pay dearly to move their cargoes from either the hinterlands to port cities or port cities to the hinterlands due to the bad roads around the ports as well as the ineffectiveness of the nation’s railway system to serve as alternative means of transportation. They say the situation degenerated in the year under review as Nigerian importers continued to operate under serious harsh condition given the decay of the access roads to the port, persistent gridlock on roads leading to

Apapa and Tin-Can Island ports and congestion within the port terminals. Tony Anakebe, managing director of Gold-Link Investment Limited, a Lagos-based clearing and forwarding company, told BusinessDay that entrance into the port had become a very big problem such that importers now spend as much as N700,000 to load one by 40-foot container to warehouses in Lagos and over N1 million from Lagos to Abuja and states in the East and South-South parts of the country. Anakebe, who said importers now spend longer time to clear their containers, added, “It also takes over three weeks to be able to return the empty container to the port, and the importer would continue to pay demurrage to the shipping companies. “The Federal Government has made lots of revenue from the port in 2018. These

Consumers’ confidence index rises by 8.7 points HOPE MOSES-ASHIKE

he consumers’ overall confidence index rose by 8.7 points to 9.7 in the fourth quarter of 2018 compared with 1.0 points in the corresponding period of 2017. The Central Bank of Nigeria (CBN) weekend, released Consumer Expectations Survey (CES) for Q4 2018, which was conducted during the period November 24 - December 7, 2018, covering a sample size of 1,770 households drawn from 207 Enumeration Areas (EAs) across the country, with a response rate of 99.2 percent. The report shows that

the consumers’ overall confidence outlook improved in Q4 2018, as more consumers were optimistic in their outlook. Respondents attributed this favourable outlook to improved family income, family financial situation and economic condition. The consumer outlooks for the next quarter and next 12 months were positive at 33.2 and 28.4 points, respectively. The outlook could be attributed to the expected increase in net household income, the anticipated improvement in Nigeria’s economic conditions and expectations to save a bit and/ or have plenty over savings in the next 12 months.

are monies paid as charges and tariff by Nigerian importers and the service providers also generated reasonable sum in revenue. But the importers are the greatest losers because from January till date, every imported goods takes nothing less than one to two months to be cleared. “The importer pays duty to the government, demurrage and storage charges to shipping companies and terminal operators and at the end, Nigerians pay back because the importer adds the expended cost into the market prices of the commodities.” Continuing, he said: “In 2018, a lot of car dealers could not import vehicles because of the high import duty placed on every vehicle that comes into the country. This

was why many resorted to importing accident vehicles. “There was relative scarcity of foreign exchange because most importers could not have access to forex because some goods were placed under the 41 items prohibited from accessing forex from the official window while those allowed access to forex still finds it difficult to have access to the amount of money required for their business.’ Confirming this, Emma Nwabunwanne, a Lagosbased importer, said the bad state of the roads leading to the two major economic gateways and indiscriminate packing of trailers on the port access roads resulted in difficulty in moving containers in and out of the ports, and it also led to delayed cargo clearance.

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Monday 31 December 2018

Average prices of 43 commodities fell by 0.19% in November 2018 ISRAEL ODUBOLA & SEGUN ADAMS

verage prices for 43 food commodities across Nigeria contracted by 0.91% in November, according to figures released by the National Bureau of Statistics (NBS). The price fell to N629.70 from N630.87 in the previous month, NBS said. The average price of one dozen of medium-sized agric egg fell 1.06 percent to N477.76 in November from N482.90 in previous month. The average price was at its peak in Anambra (N561.54) and lowest in Abuja (N425), according to the report. The average price of beans (brown & white) went down by 2.89% to N371.57 in November as against N382.62 recorded

in the preceding month. Average price for beans (both brown and white) was highest in Ebonyi (N510.66 and N460.56 respectively), while Adamawa (N295.05) and Kastina (N263.66) recorded the lowest average price in brown and white beans, respectively. The price of rice per 1kg (agric sold loose, local sold loose, medium grained and imported high quality sold loose) averaged N325.79 in November up from N322.27 in October, showing an increase of 1.09 percent. Agric sold loose, local sold loose and medium grained rice was most expensive in Bayelsa State. While the average price of white garri increased marginally by 18 kobo in November that of yellow garri fell by N13.84.

Monday 31 December 2018

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COMPREHENSIVE COVERAGE OF NATION’S CAPITAL

Reps probe MDAs over non-remittance FCTA Education managers recommend ways to drive budget projection of forex component of revenue KEHINDE AKINTOLA, Abuja

igeria’s House of Representatives has summoned heads of revenue generating agencies over failure to declare multi-million dollars component of the revenue accrued into their accounts. The heads of various revenue generating agencies are expected to appear before the Ad-hoc Committee investigating the under-remittances of revenues generated into the Federation Account, chaired by Abiodun Faleke (APC-Lagos), on resumption from the Christmas/New Year recess as from 16th January, 2019. Faleke who frowned at the level of impunity being perpetuated by most revenue generating agencies over the years, reiterated the resolve of the House to recover all the funds without compromise. Worried by the development, Faleke summoned heads of various MDAs including Director General of National Agency for Food and Drug Administration and Control (NAFDAC) to provide audited accounts and other financial statements of their respective agencies, as well as evidences of remittances through REMITA, bank statements for legislative scrutiny. Breakdown of the revenue declared by NAFDAC include: N6.3 billion for 2012; N7.1 billion in 2013. However the agency informed the Ad-hoc Committee that the Budget Office directed the agency to split its revenue into two, hence declared N2.4 billion as revenue and N5.5 billion as Users fee in 2014; N1.8 billion revenue and N6.6 billion as Users fee in 2015; N918 million revenue and N6.7 billion as Users fee in 2016 and realized N772 million as revenue

and N7.2 billion as Users fee in 2017. The lawmakers who faulted the disparity in the revenue accrued to Federation, observed that the

Agency accrued larger chunk of its revenue to itself at the detriment of the Federation Account, despite benefitting from yearly budgetary allocation.

German-based Nigeria Artist, Chielo Ojirika, is to organise 5-day skills acquisition training programme for hundreds of youths in Kogi State, under the initiative: ‘Finger off the trigger’- Violence is stoppable, peace is Possible’. Ojirika, also known as ‘Chiboy the Black Courage’, who disclosed this in a statement in Abuja, explained that the training programme was part of the initiative’s ongoing nationwide security, peace and stability campaign ahead of the 2019 general elections. “The general public needs to be enlightened, especially the youth, on peaceful and violencefree elections.

ederal Capital Territory Administration (FCTA) Education Secretariat Management Committee has recommended a condition survey of its facilities to develop a NEEDS assessment to drive its budget projections. The committee suggested that there should be an early budgeting cycle with full involvement of the Department of Policy Planning Research and Statistics, Planning Officers from Boards and Departments as well as school Heads in the budgeting process should be intensified. Members of the committee also asked the Department of Policy, Planning Research and Statistics to produce the cost of training of a child in the Federal Capital Territory. The Committee made these recommendations in a communiqué issued at the end of its two-day retreat held in Abuja, which also directed the Department of Quality Assurance to enforce the guidelines on the establishment and operations

of educational institutions in the territory. It explained that no school should start operating before registration with the Department, Boards and Departments in the Education Secretariat should work harder at integrating and collaboration in the discharge of their mandates. According to the communiqué, the Education Secretariat has recommended for a bi-annual retreat in its calendar of activities, with an intensified efforts on orientation of newly employed teachers. The communiqué called for a quarterly report of their progress and challenges to management and advised Boards and Departments in charge of students’ admission to devise means of ensuring that only children within the approved age specifications are admitted into FCT schools. Bala Liman, Secretary of the FCTA Education Secretariat during the retreat pledged the Secretariat’s commitment to completing all ongoing projects at the permanent site of FCT College of Education Zuba.

Rid Kwara of criminals before 2019 general elections - Minister tasks Police OYIN AMINU, Abuja

L Festus Akhimien, Bishop, Church of God Mission International (CGMI), Abuja (m), his Wife, Juli, National President, Christian Women Fellowship International; the Adeniyi Omoles, (parents of the new born), and Dogara Gimba (l), Director of Admin, Faith Mediplex Hospital, Abuja, during a visit by CGMI members to the hospital on Christmas day. The Bishop, his wife, leaders and members of the church presented gifts and cash to patients in the hospital during the visit.

Peace Initiative: German-based artist to train Kogi youths in various skills, vocations OYIN AMINU

JAMES KWEN, Abuja

“Thus, the need for these basic skills that will positively engage them towards sustainable peace, growth and development. “Especially as a stabilised Nigeria means a stabilised Africa and by extension, the world,” the artist said. He said that the campaign was intended to benefit thousands of youths across the state. According to him, the programme will feature professional facilitators cutting across security agencies and vocational trainers from within and outside the country. “Participants will benefit from various skills acquisition and vocational training in selected areas including peace and conflict resolutions, website development, video and photography.

“Others are crime prevention and community security, music and film production, Plaster of Paris (POP) and screeding, graphic design among others,” Ojirika said. According to him, the campaign which is focused on security, peaceful focused coexistence, tolerance, patriotism also centres on attitudinal change, economic empowerment and good governance. “It is being organised in collaboration with Salute Nigeria Initiative, Dream Projects, National Orientation Agency (NOA) and the Nigeria Union of Journalists (NUJ). “Other collaborators are Voice of Nigeria and Innovative Edge Solutions with the support of the State House, Abuja,” the artist said.

ai Mohammed, Minister of Information and Culture has called on the authorities of Nigeria Police Force to redouble its effort towards ridding Kwara State of criminals and miscreants before elections. The Minister, made the call at the commissioning of an ultramodern Mobile Police Barracks built by the Offa Community in Kwara State on Thursday, said recent events have shown that hoodlums and miscreants are still very much active in the state. “With what Offa people have done today, they have given you the necessary support to rid not just Offa but the entire Kwara State of hoodlums, cultists, armed robbers and all undesirables. “This is a call to duty and I want to call on the police in Kwara State to redouble their effort in ensuring that Kwara State is safe for all,” he said, adding that this was necessary to create a secure and peaceful atmosphere for development to thrive in the state. “Those who witnessed what happened a few days ago in the state will agree with me that cultists, hoodlums, hooligans and brigands are still very much active in Kwara State,” he said. Mohammed noted that it

has become expedient for the police to act now and secure the environment, especially in the run-up to the 2019 general elections. “You must please ensure that every citizen of this state is free to cast his vote and that his vote will not only be counted but his vote will count, and the only way you can assure us of this is by ensuring that you rid the state of all criminal elements before elections,” he said. The Minister commended the Offa community for providing a befitting barracks for the Mobile Police Force in the town, in view of the series of robberies in the area, especially the April 5, 2018 attack that left 33 people dead. The Inspector General of Police, who was represented by the Commissioner of Police in charge of Mobile Police, Lawal Jimeta, said the Squadron Base was strategically located to check violent crime in Offa and the adjourning states of Ekiti, Osun and Kogi. Also speaking, the Olofa of Offa, Oba Mufutau Gbadamosi, said the community spent N700 million to build the Mobile Police Barracks within six months. The barracks boasts of one 3-bedroom and 44 two-bedroom flats, as well as an Administrative block, an Armoury, a Guard House and a Communication Room, among other facilities.

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OLU FASAN 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

oday is 31 December, the last day of 2018 and the eve of 2019. It’s a bridge between the old and the new! And it behoves us, on this day, to say ‘goodbye’ to the outgoing year. So, this column wants to say adieu to 2018. But in doing so, I want to focus on what defined the year and,in particular,what clues we can get from it on where things are heading next year.What can we deduce from 2018 to chart the uncertain paths ahead, about the significant events in Nigeria, Africa and the rest of the world next year? Let’s start with Nigeria.Well, 2018 has been dominated by pre-election politics.Apart from President Buhari’s perfunctory presentation of the (traditionally meaningless) budget on 19 December, the economy has received no serious attention this year. Last year, the government launched its Economic Recovery and Growth Plan (ERGP). One would have expected its hands to be full this year, turbocharging the economy with much needed reforms.Alas, what we’ve seen are hyper activities on politics but policy inertia on the economy.Yet, even President Buhari recently admitted that the economy “is in bad shape”. The National Bureau of Statistics said youth unemployment rose from 3m in 2015 to 13m in 2018 (a 263% increase over 3½ years). Sadly, 2018 doesn’t bode well for the economy in 2019. But what about politics? Well, from January to date, it’s all been about politicking and political manoeuvrings. The All Progressives Congress (APC) splintered, losing over 90% of the former members of people’s Democratic Party (PDP) that joined in 2014. The PDP prodigals, including former vice president Atiku Abubakar and Senate President Bukola Saraki, left the APC and returned to their former party.The APC didn’t only lose the defectors, it also lost a major supporter. Former President Olusegun Obasanjo, who strongly supported Buhari, the APC presidential candidate, in 2015, is now determined to orchestrate Buhari’s defeat next year. But with the recent news that Africa’s richest man, Aliko Dangote, has joined the APC, serving as a special adviser to Buhari’s presidential campaign council, the APC seems to have had a major win. So, what do the political events of 2018 tell us about next year’s presidential race?The truth is no one can, with certainty, predict the outcome.To pretend otherwise is sheer hubris. It’s interesting that even two arms

of The Economist magazine disagreed on their predictions.While the Economist Intelligence Unit predicted that Atiku would win, The Economist magazine itself reckoned the winner would be Buhari. Predictions that are not based on scientific polls, but mere conjectures, are risky. That said, if policies are enough to win an election, Atiku should win with his radical policies of political, economic and institutional reforms. Buhari’s pedestrian promises to fight corruption, tackle insecurity and expand social intervention programmes are not enough to move Nigeria forward. What’s more, given his current poor performance in these areas, they should not be enough to give him victory next year. But politics is not always rational, it’s often emotional. Buhari has a cult of personality that gives him a worshipful image among his followers. Atiku doesn’t have such followings. Politics is a game of numbers. And it’s not clear that Atiku can beat Buhari in the North, without which he cannot win, despite strong support from the Southeast and the SouthSouth.What’s more,Atiku carries a burden of negative perceptions and is running under a party that still has a serious image problem. As we have seen, the APC is already playing the integrity card, and they will play it mercilessly against Atiku and the PDP during the campaign. So, nothing in 2018 tells us much about the outcome of next year’s presidential race, although I would say that, as things currently stand, Buhari has a slight edge! From Nigeria, let’s now turn to the rest of Africa. The main development in Africa this year is economic: the launch of the agreement establishing the African Continental Free Trade Agreement (AfCFTA) in March this year. It was a landmark moment. Forty-four of Africa’s 55 countries signed the agreement in Kigali, Rwanda. Since then, 5 more have signed, bringing the number up to 49. Of course, Nigeria has, so far, failed to sign the agreement. On 22 October, President Buhari inaugurated the “Committee on the Impact and Readiness Assessment for the AfCFTA”, asking it to “develop short, medium and long-term measures to resolve the issues” raised by stakeholders, and to report in 12 weeks, i.e. in early January. Of course, with the elections taking place in February, it’s unlikely the government would act on the report until after the elections, if at all. Which raises another question: even if Buhari wins, would he sign the AfCFTA agreement? Well, given the president’s lethargic approach to decision-making, and his lack of enthusiasm for free trade, the likelihood is if re-elected, he would kick the AfCFTA can down the road, although it would be deeply embarrassing if after the positive analyses Nigeria still refuses to sign the agreement. By contrast, Atiku made a commitment is his manifesto to sign the agreement, saying: “We are confident of the potential gains of our participation (in AfCFTA) and conscious of the risks of

inaction”.There is thus a strong indication that if he wins, he would sign the agreement. But the AfCFTA agreement does not need Nigeria’s signature to enter into force. It has already been signed by 49 countries, including South Africa.

‘

Well, given the president’s lethargic approach to decision-making, and his lack of enthusiasm for free trade, the likelihood is if re-elected, he would kick the AfCFTA can down the road, although it would be deeply embarrassing if after the positive analyses Nigeria still refuses to sign the agreement

However, it requires 22 ratifications to enter into force. So far, 14 countries have ratified it. Given that it has taken 10 months, since March this year, to secure the 14 ratifications, it seems very unlikely that the remaining 8 could be secured within one month to enable the agreement to enter into force in January, as intended. However, what really matters is not the date –previous deadlines were missed – but that the agreement enters into force and other relevant negotiations are completed next year. But 2018 presages a very slow progress in 2019 on thetake off and implementation of the AfCFTA agreement. Now, let’s look at the rest of the world. And, here, the dominant issue is Brexit, the UK’s

on 10 December. She said she would go back to Brussels to secure legal clarifications on the backstop. But a few days later, some members of her party triggered a vote of confidence in her leadership, which she won by 200 votes to 117. But the issue has not gone away. The EU has, so far, not given the prime minister any legal guarantee on the backstop, and the postponed voting in the House of Commons would now take place in January. All of this raises questions about what would happen to Brexit next year. Given that 29 March 2019 has been set in legislation as the exit date, does it mean that if the prime minister loses the vote in January, the UK would leave the EU without a deal? Of course, that would be devasting in many areas, particularly for businesses. Some are talking about other alternative options, such as postponing the exit date or holding a second referendum. But 2018 shows us that Britain will face a very rocky 2019 on the Brexit issue. It is an interesting year to watch for Britain! And for the US too! As I write, the US government has been shutdown for several days, due to disagreement between President Trump and Congress over funding for his plan to build a wall along the Mexican border. But the gridlock may get worse next year, because, in November this year, Democrats won the House of Representatives, while the Republicans retained the Senate, ushering in a divided government. Would 2019 be dominated by the Democrats probing President Trump and even impeaching him? 2018 presages deeper political divides in 2019. Then, finally, China’s fractious relationship with the West. The tariff war between the US

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Insight Goodbye 2018: The next will be rockier for the world

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20%

xpectedly, alarm bells are ringing at OPEC capitals around the world as treasury managers of countries making up the cartel watch, almost helplessly, the unstoppable plunge in global oil prices that will have far reaching consequences for social cohesion and peace in especially countries like Nigeria which depend heavily on oil revenues. The price of the global benchmark grade, Brent has fallen from $86 per barrel which it attained on October 3, to below $55 Friday. Analysts say this could wipe out almost 20% from Nigeria’s expected oil revenues which could fall to a mere $49bn in 2019 when the country holds crucial elections.

0.8% There is more than a week left until the new year, but at this point, it’s almost certain European stocks will post the worst year since 2008. The Stoxx Europe 600 dropped 0.8 percent on Friday in London, taking this year’s loss to 14 percent. Meanwhile, the blue-chip Euro Stoxx 50 is less than 1 percent away from entering a bear market after hitting the threshold earlier.It’s a testimony to how fragile sentiment is that even news of Chinese stimulus couldn’t lift the gloom, with U.S. futures pointing to a third day in the red on Wall Street. Tensions between America and China are simmering again after China demanded that the U.S. withdraw espionage charges against Beijing officials. A government shutdown also looms in the U.S.

mbattled South African President Cyril Ramaphosa has asked his finance minister to begin the process to set up a council of economic advisers. South Africa which has just emerged from recession is asking itself if it is “not stuck in a thinking mode which is not relevant to the actual conditions in South Africa?” the finance minister said. Government officials are meeting in Pretoria to present policy proposals to raise the level of economic growth in South Africa’s where annual expansion hasn’t exceeded 2 percent since 2013.

85%

lobal battery prices have fallen 85 percent since 2010, BloombergNEF reports in its annual Lithium-Ion Battery Price Survey, and with storage forecast to grow to 14 times its current level by 2030 as millions of electric vehicles hit the roads. BNEF predicts demand will total 1,851 gigawatt-hours in 2030, up from the current 132. EV batteries are expected to account for 84 percent of that. decision to leave the European Union.After nearly two years of tortuous negotiations, the UK Prime Minister, Theresa May, secured a withdrawal deal with the EU in November this year. But the deal is very unpopular with UK parliamentarians, particularly on the so-called backstop, designed to prevent a hard border between Northern Ireland and the Republic of Ireland, but which would keep the UK tied to the EU customs union and regulatory regime, even after leaving the bloc. Several ministers, senior and junior, resigned from the government because of the deal. The prime minister, knowing she would lose a vote on the deal, cancelled the scheduled voting in the House of Common

and China took a dramatic turn in 2018, with tit-for-tat tariff hikes. President Trump threatened to add 25% tariff on another $250bn worth of Chinese imports in January 2019.A truce agreed between President Trump and President Xi Jinping early this December led to a suspension of the tariff threat. But would it unravel in 2019? What about the ongoing row about Chinese companies allegedly spying on the West? Would this escalate in 2019? The outgoing year, 2018, has been challenging, but it’s presaging a rockier one for Nigeria and the world. Interesting times ahead! Season’s greetings, dear readers!

$11.7bn

frica’s troubled aviation sector is on the verge of a massive make over after it was announced that Boeing Co and Nigeria based Green Africa Airways have committed for up to 100 737 MAX 8 aircraft, in a deal that carries a list price of $11.7 billion. The deal is the largest aircraft agreement from Africa the commitment is evenly split into 50 firm aircraft and 50 options, it added. The 737 MAX 8 is the fastest-selling airplane in the Boeing fleet, accumulating more than 4,800 orders from over 100 customers worldwide. It is estimated that airlines in Africa will require 1,190 new airplanes as the continent boosts both intra-continental and intercontinental connectivity over the next couple of decades, Boeing said, citing its 20-year Commercial Market Outlook.

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