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news you can trust I ** tuesDAY 31 DECEMBER 2019 I vol. 19, no 467

Presidency appraises self on economy in 2019 Here’s what’s true, almost true, and false about it SEGUN ADAMS

inister of information and culture, Lai Mohammed, on Monday presented President Muhammadu Buhari’s main achievements in the outgoing year 2019 to set the record straight and counter naysayers, he said. Mohammed, at an end-of-year press briefing in Lagos, praised Buhari for his fight against corruption, insecurity, border drill, critical infrastructure investment, the amended Deep Offshore Act and the economy. We look at the evaluation of Continues on page 39

Inside

Dangote Cement plans to buy back 10 percent of its outstanding shares P. 2

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BD Investigative Series

The Lagos hospital wards of deadly wait (II) For two weeks, TEMITAYO AYETOTO embedded herself with patients at the accident and emergency centres of two of Nigeria’s biggest tertiary hospitals, LUTH and LASUTH. In the second installation of this two-part series, she reveals how patients’ wait for never-available bed space is at their own risk, and how some beat the queue by calling on ‘somebody who knows somebody who knows somebody’. Continued from last week he triage doctor who referred us to the spillover ward was still outside, observing new cases. She

was looking for the right vein to connect a drip on a young girl of about 17 who was lying in a grey-coloured space car when I approached her. I particularly asked what

her assessment of Ebuka Ogbonnaya’s case was to be sure again that the problem warranted emergency response and we were not exaggerating his pains.

‘If you stay, it’s your choice’ “I have seen the result of his x-ray. It is an emergency situation. But he needs a bed space to be attended to. I can’t attend Continues on page 2

R-L: Zainab Ahmed, minister of finance, budget and national planning; Aliko Dangote, president of Dangote Group, and Devakumar V. G. Edwin, group executive director, strategy, capital projects and portfolio development, Dangote Industries Limited, during inspection of 650,000 per day Dangote Refinery and Petrochemical Plant currently under construction at the Lekki Free Trade Zone in Lagos State.

These 7 themes shaped Nigeria’s economy in 2019 LOLADE AKINMURELE & ENDURANCE OKAFOR

usinessDay, through a survey of over 40 analysts, has ranked the top seven themes that shaped Africa’s largest economy in 2019. Buhari’s re-election P re s i d e nt Mu ha m ma d u Buhari’s election for another four-year term in February was always going to be decisive for the economy.

The 76-year-old’s first stint was coloured by weak economic growth, rising poverty levels and a raft of protectionist policies that did the economy more harm than good. The economy slumped into recession in his second year in office as oil prices and production tanked. Critics say the government worsened the downturn by holding on to a currency peg for too long which deterred investment and saw thousands of companies go under.

His supporters say he rescued the economy from recession one year later. Data by the National Bureau of Statistics disagree with that claim. GDP data published by the statistics agency at the time showed that it took the rebound in oil prices and production for the economy to turn the corner rather than government policies. Buhari’s supporters also point to strides made in the agriculture sector. Again, NBS data show that the sector has not grown

above 4 percent since 2015 despite over N200 billion interventions in rice farming and other agric produce. Buhari would clinch power for the second term running in 2019 after fighting off his closest contender in former Vice President Atiku Abubakar, despite cases of electoral violence that manipulated results and drew the criticism of local and international observers. Expectations from Buhari’s second term were largely muted

with many expecting him to continue with his policies of old. He has done just that with a few additions. He ordered a closure of the country’s land borders to stem smuggling and has added milk and dairy products to a list of 41 items banned from accessing dollars at the official window. Pending reforms, from the Petroleum Industry and Governance Bill (PIGB) to adopting market pricing of electricity and Continues on page 39

Tuesday 31 December 2019

BUSINESS DAY

news Buhari orders military withdrawal from less volatile areas ...says ISWAP has attacked Nigeria 27 times in 2 weeks TONY AILEMEN, Abuja

resident Muhammadu Buhari on Monday directed security chiefs to withdraw the military from parts of the country where calm has returned. The directive is coming against the backdrop of increasing attacks on Nigerian communities by Islamic State West AfricaProvince-ledBokoHaram insurgents in the North East. Ibok Ekwe Ibas, chief of naval staff, while briefing State House correspondents after meeting with President Buhari in Abuja, said ISWAP has carried out no fewer than 27 attacks on Nigerian communities in the last two weeks, many of which were repelled by the Nigerian security agencies. “You will also recall that just two weeks back we have had over 27 attacks from Boko Haram and ISWAP in the northeast alone. Our gallant troops out there were able to repel these attacks and even take out some of their commanders,” Ibas said. “So, it is a thing of concern but the armed forces of Nigeria are doing all in their powers to ensure that together with other regional partners, that the menace of ISWAP is contained,” he said. He, however, assured that the withdrawal would be in phases and based on “results of assessment of current operations going on in various parts of the country”. “We had a security council meeting with Mr. President where we appraised the year 2019 generally with emphasis on ongoing operations both within as well as the regional operations ongoing. The nation’s armed forces are currently involved in various operations across the country, including the northeast,

northwest, north central, the southeast as well as the southwest,” Ibas said. He said “threats assessment will be carried out to determine areas that are capable of being manned by the police and the civil defence; that is the position that was reached”. Speaking further on the activities of ISWAP, Ibas said Nigerian borders with its neighbours had come under heavy attacks. “We have in recent past had attacks in Burkina Faso, Mali, Niger and other countries in West Africa. Of course, the genesis of the Islamic State West Africa Province (ISWAP) is well known for all of us here,” he said. “While it is painful to lose people and from within, I think the military is doing all within its power to ensure that we overcome the menace and the threats posed by ISWAP.” Ibas said Nigeria is eager to have the insurgency and terrorism issues resolved once and for all to enable it focus on matters of development. He noted that the areas wherethemilitaryhasbeenable to achieve desired objectives would now be handed over to the civil authority “to take back thoseresponsibilitiesasthemilitary draws back its forces from those areas to enable it focus its attention on other emerging threats and areas of concern”. Helistedthemaritimesector asareaswherethesecurityagencies have done a lot “to ensure thatourresourcesareprotected”. “Mr. President has directed that the council and the members of armed forces ensure a peaceful society in 2020. To that effect, we are more than determined to continue from where we stopped in 2019 and to ensure that we sustain our various operations to ensure a secured Nigeria for all of us,” he said.

The Lagos hospital wards of deadly... Continued from page 1

to him without bed and I

don’t know when a bed will be free. It could be in 30 minutes or two hours. Some people wait here for two days. If you stay, it’s your choice,” she said, exonerating herself. It was vivid that we had to wait for the unknown period. ‘Knowing somebody who knows somebody who knows somebody’ Our sojourn at the car park established some truths: that connection with people of strong influence on hospital officials can get a patient into the A&E ward real quick; that getting approved to move into the A&E reception does not necessarily imply getting swift treatment; that not being brought into the hospital by a vehicle or tricycle renders you unqualified for preliminary medical attention; that if there is some cash to spare for the security personnel, a

patient could enjoy the luxury of having more than a relative or friend by the side. Notable also was that patients brought in by ambulance from other hospitals stood better chance of attention. As we waited, a woman of average height, certainly in her 60s, came to the park with a patient – a man who bore no visible ailment. Dressed in a black pair of jeans complemented by a zebra-themed shirt, black pair of glasses, black hair braids and a black bag, she scanned all that were on the wooden bench until she found a spot for herself and her patient. Not long after a hospital official came around to note her case, she was called in with her patient, within just 30 minutes. Ogbonnaya, his wife and I were there perplexed. Shortly after that happened, the head nurse on duty came to the car www.businessday.ng

L-R: Muhammed Adamu, inspector general of police; Sadique Abubakar, chief of air staff; Ibok-Ete Ibas, chief of naval staff; Tukur Buratai, chief of army staff; Abayomi Olonisakin, chief of defence staff; Bashir Magashi, minister of defence, and President Muhammadu Buhari, during the security meeting at the Presidential Villa in Abuja, yesterday.

Dangote Cement plans to buy back 10 percent of its outstanding shares …capital market operators laud move angote Cement Plc has scheduled an Extraordinary General Meeting (EGM) for January 22, 2020 to consider its proposed share buyback programme, among other issues. According to the circular published on the Nigerian Stock Exchange (NSE), Dangote Cement plans to buy back 10 percent of its outstanding shares and thereafter cancel those shares within 10 business days of the last date of completion of the programme. The company intends to fund the programme from its reserves which stood at N731.2 billion as at September 2019. The share buy-back, which

provides support for Dangote Cement share price which declined in 2019 and drive long-term shareholder value, has been lauded by capital market operators, according to the News Agency of Nigeria. Share buyback, also known as a share repurchase, is when a company buys its own outstanding shares to reduce the number of shares available on the open market. Companies buy back shares for a number of reasons, such as to increase the value of remaining shares available by reducing the supply or to prevent other shareholders from taking a controlling stake. Dangote Cement said the share buyback scheme was intended to improve its return on equity and shareholder value in order to facilitate

future long-term growth. The company said that the buyback would also be either at the prevailing market price, or through a self-tender offer at a price to be determined by the board. However, it will not be more than 5 percent above the average calculated market price over the five days preceding the offer. Sola Oni, a chartered stockbroker and CEO, Sofunix Investment and Communications, said that share repurchase was a strategy deployed by a company to reduce its float by taking advantage of undervalued shares. “This helps to reduce cost of capital or equity financing for the company. It also helps to firm up the share price in the medium and long term. A company can

use share buyback to consolidate its equity. This is a way of reducing the numbers of shareholders and thereby reduce the burden of dividend and bonus shares among others,” Oni said. “The method increases Earnings Per Share (EPS) and boosts Return On Equity (ROE) for shareholders while upward trends in the share price as a multiplier effect of share buyback creates demand for the shares and therefore attracts more investors into the market,” he said. Ambrose Omordion, chief operating officer, InvestData Limited, said the Dangote Cement buyback share was the first in the history of NSE.

park, flicking through us all for someone in particular. She was a tall dark woman with an intimidating voice. When she couldn’t identify the patient in plain sight, she went back into the gates, looking through her phone. Apparently, after making a call, she dashed out, screaming “Nnamdika! Who is Nnamdika?” Nnamdika had been there lying limply on her brother’s legs for close to two hours. She couldn’t answer her own name but her brother, Ekene, did and magic happened. A porter in brown uniform surfaced with a wheel-chair to move her in but the car park was occupied by a wine Toyota Camry CE, a red Toyota Camry LE and the silver space bus, all bearing patients writhing in discomfort. Since the cars blocked access to Nnamdika, Ekene lifted her out and she was in. Ogbonnaya was still there, his waiting time nearing 20 hours. When we met later in one

of the hallways, I asked Ekene if he knew someone who could back us up as well, but he said his link wasn’t straight. He got his sister in quicker on the back of someone he knows, who then knows someone who knows a LUTH official. It was how he described it while he kindly inquired about the health of my supposed brother, Ogbonnaya. “We had previously taken her to a private hospital where she was operated on, but there were some complications. Some cells were dead during the operation and they had to be revived. The doctor asked us to come here (LUTH), assuring us that he would call someone who will attend to us,” Ekene explained. Similarly, the woman who went in initially told me she knows someone who works right in the hospital. There was also a case of an accident victim brought in by one St. Mary Hospital ambulance on one of the nights I

spent in LUTH. Three SUVs accompanied the ambulance. The accident involved the head, leg and claimed some of his fingers. It was obvious the patient was from a well-heeled background. In less than 30 minutes he was in and his family was ready to go in as well. Not more than a relative, they were informed. But in a twist of rules, about five of them were in: the mother and father, a couple (family friend) and one of their sons, Tunde. Two others, their eldest daughter and youngest son, waited outside. And after they were assured that the patient was in good hands, they returned outside, thanking God. Tunde cornered one of the security personnel and rubbed in a crisp N1,000 note in his hands. It was all smiles. Ogbonnaya’s hour finally arrived at 1:36pm. But no bed, no specialty doctor Like the two blind men

crying out loud to Jesus for mercy, patients and their relatives fought to win the attention of the triage coordinating doctor the moment he stepped out. The relatives of the woman with diabetes were chief among them. “You know the problem we are having, there is still no space,” he said and began to soliloquise. “The same people you are trying to help are still the ones that will now start shouting at you after they have sat for two hours in the reception. That is usually the case.” The elder among those who were with the woman with diabetes started begging. “Don’t be annoyed, my father,” she appealed to the doctor in Yoruba language. He then turned towards Ogbonnaya. “Let them call cardiothoracic surgical unit (CTSU). There is no bed but sit down in the reception. The most important thing is

Iheanyi Nwachukwu

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news The Lagos hospital wards of deadly... Continued from page 2

to remove that fluid in your chest,” he said. Finally, we found our way in 21 hours after presenting an emergency challenge. A rain of hope flooded Ogbonnaya’s heart. He was reassured, merely by being let into the reception. “When I get better, you will stay at home for two weeks. I will be feeding and taking care of you,” he said, heartily stroking his wife’s hair as they continued to wait. At 2:40pm, a young doctor, Ogunseye, approached us. “We have informed the surgical team that will attend to you. None of them is around now. When they will come, we don’t know. I just want to inform you; just exercise patience,” he said. The news was received with a mix of inexpressible gloom and a cheer that at least Ogbonnaya was now in their faces. By 8:07pm, a noise broke out in the reception. A man was furiously screaming at no one in particular. He accused the hospital officials of leaving his ill mother by herself without attention; he perceived she had got worse. None of the nurses responded until he approached their table, barking at them about how they had been negligent! The eldest among the nurses matched him up with equal anger that shocked him. “We have been watching her since and all of a sudden you are shouting after returning from wherever you went to. Can I come to your office and start shouting at you? My parents died right here in this hospital,” she yelled, indirectly warning us all to be informed beforehand that her folk were also victims of the poor healthcare. She didn’t need to go further before the aggrieved man swallowed his yearnings. Thankfully, a doctor, Amuda, showed up at 8:18pm. Ogbonnaya’s wife and I didn’t hesitate to relay Ogbonnaya’s situation to him, for the pains now resurged. He promised to help notify one of the CTSU doctors, who is a close friend. To ensure he did, I followed him up to ward E1 where he fetched his phone. He realised his friend was not on duty but one Dr.

Okeke. His friend promised to call Okeke’s attention. By 9:10pm, Dr. Okeke approached us in the company of a younger doctor, Obinna. In total, it took almost 29 hours of wait and staunch faith for Ogbonnaya to get treatment attention. Had we not pressed Dr. Amuda, then Dr. Okeke might have shown up too late or even the following day. And to our dismay, after assessing his x-ray picture, Dr. Okeke himself was in a bigger hurry to carry out minor surgery on Ogbonnaya in what he described as a very important procedure to restore his respiration to normal. But nothing could be done as recommended, because the patient was never informed he would need N54,489 for the minor operation without histology, and an additional N20,000 charge that was not clear. In what appeared an expensive sacrifice for a bed space opening, the mother of the man who had earlier picked a fight with nurses over negligence died. And a bed space finally opened. It was past 11pm that rainy night. Promotion versus reality On documents, paper, signboards, and website pages, hospitals string together captivating words to describe the sort of memorable service rendered. But reality checks such as in Ogbonnaya’s experience and many others indicate otherwise. In fact, Ogbonnaya appeared to be luckier when compared to the woman with diabetes. She arrived at about 7pm on Tuesday night but did not get a bed space until some minutes past 10am on Thursday. The promises were just often fictitious. On a signboard, stringed to the gate of the A&E ward, the letterings are clear: “A doctor or nurse will come and attend to you or your patient WITHIN THE SHORTEST POSSIBLE TIME. A quick assessment may be done in this area if the patient moved immediately into the emergency centre. The decision to admit a patient is NOT DETERMINED BY FIRST COME FIRST SERVE basis but is based on HOW CRTICAL OR SERIOUS the case

The Accident and Emergency Centre, LUTH

A patient waiting to be triaged outside the Surgical Emergency Unit, LASUTH

is DETERMINED TO BE BY THE DOCTOR OR NURSE. PLEASE REMAIN CALM; WE PROMISE TO ATTEND TO YOU/YOUR PATIENT AS QUICKLY AS WE CAN. In case of any unnecessary delay, please call: 08070591234 or 08163874391.” To begin with, the numbers listed were both not functional during the day and at night. The response from calling 08070591234 is: “The number you are calling is not available. To send a voice SMS at regular call charges, please stay on the line. Otherwise, hang up now.” That from the second line 08163874391 simply says: “The MTN number you are trying to call is currently switched off. Please try again later. Thank you.” As in all standard cases and like the LUTH management stated, emergency responses are launched in order of priority. Emergency medicine in itself specialises in the acute care of patients who present without prior appointment, either by their own means or by that of an ambulance. Considering the unplanned nature of patients’ attendance, the department must provide initial treatment for a broad spectrum of illnesses or injuries, some of which may be life-threatening and require immediate attention. Patients who exhibit signs of being seriously ill but are not in immediate danger of life will be triaged to acute

care where they will be seen by a physician and receive a more thorough assessment and treatment. Chest pain, difficulty in breathing, abdominal pain and neurological complaints include some examples of acute problems. Advanced diagnostic testing may be conducted at this stage, including laboratory testing of blood or urine, ultrasonography, CT or MRI scanning. These are medical steps experts say Ogbonnaya should have been exposed to if he had a government that cared enough to empower the public hospitals to respond with such standard of healthcare. Instead, he waited about an hour before he got a triage doctor to notice his presence, despite being glaringly sick. When his case made it into the register, it took another 28 hours for him to see a physician for a thorough assessment. When Dr. Okeke was going to perform a minor operation to drain his chest of fluids, Ogbonnaya’s blood had not been tested, neither had his urine. “What has the A & E been doing?” the doctor asked in wonder. “We don’t even know whether to protect ourselves.” But they did the operation anyway, without an idea of Ogbonnaya’s infection status, for instance. Nigeria spent an average of 3.4 percent of its total budget on healthcare in the last 10 years to 2016, according to the World Bank database.

Out of Nigeria’s budget of $4 trillion between 2014 and 2016, $107.1 billion was spent on healthcare. Africa’s largest economy lags behind emerging market peers, managing to outperform only Indonesia which had spent 2.9 percent of its total budget in the period. LUTH and LASUTH, birds of a feather The twin problems of bed space and overstretched capacity at LUTH were visible at the Lagos State University Teaching Hospital (LASUTH), Ikeja, where I spent two days and nights. The hospital is itself one of the chief referral sources to LUTH. But the triage system was quicker. Patients both at surgical and medical emergency were not subjected to unnecessary wait before understanding their status. Preliminary care was equally administered to sick people in vehicles, since bed spaces weren’t available too. Initial triage and treatment constitute one of the weakest links in the emergency medical care system in developing countries, according to a report by the World Health Organisation Bulletin in 2002. WHO’s qualitative study of 21 hospitals in seven countries found that poor triage of incoming patients and inadequate provision of emergency care jeopardised the lives of arriving patients. “Emergency is emergency, except of course for Nigeria where anything goes. Emergency is a place where you are attended to immediately. If

your case is severe, you should be attended to even ahead of people who came before you. That is what is called triage in emergency medicine. So, it is an abnormal case, if not completely aberrant that somebody is spending four hours or even 29 hours at the gate before he can be assessed. These are not normal situations,” Akeem Olowofela, a resident doctor at a Federal Neuropsychiatric Hospital, Aro, Abeokuta, explained. “In fact, in a good country, that kind of person can stay in his house and call 411 and an ambulance will be sent to pick you up. You will be attended to immediately. It’s that serious. Every hour lost brings a person closer to the grave,” he said. Besides triage, our experience with the case of Nnamdika and the ‘big madam’ clearly betrayed some of the standards that the hospital associates with. Truly, the admission was neither determined by ‘first come, first served’ nor by how critical a case is as promised. It was instead determined by knowing somebody who knows somebody who knows a hospital official, many times. Most pathetic is the unlimited length of waiting period at the emergency gates. Patients who have no hope elsewhere wait endlessly with a strong faith in a miracle. The woman with diabetes waited for roughly 40 hours, from

Continues on page 39

A triage doctor registering new cases outside the Accident and Emergency ward, LUTH www.businessday.ng

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Benue signs N189.4bn 2020 budget into law

overnor Samuel Ortom of Benue State has signed the state’s N189.43 billion 2020 budget into law. Ortom, while signing the budget 2020 tagged “Advancement, Growth and Development” on Monday in Makurdi, pledged that the government would strive to implement the fiscal policy. The News Agency of Nigeria recalls that Ortom had on November 12, 2019, presented the same N189.4 billion 2020 budget estimates to the state House of Assembly for approval. The 2020 budget was N10b less than the 2019 approved budget of N199 billion, representing 9.2 percent. He said the implementation of the 2020 budget would give rise to addressing deficiencies in the social sector especially education, health and water and infrastructures. According to him, the 2020 budget will promote education, healthcare delivery and other infrastructures for growth and development of the people. He promised to run an all-inclusive government that would accommodate ideas, suggestions and constructive criticism for the good of the people. “If we do not fear Benue people that elected us we are bound to fear God. There is no time, Benue people are eager to see us deliver good dividends of democracy no need for procrastination again. “All executive members should ensure timely delivery on all government commitments and there must be proper justification for all transactions.” The governor further said

his administration would also consolidate on the success recorded during his first term and ensure that there were no more mistakes. He disclosed that he would “personally” monitor projects, stressing that “no more office work, we will be more in the field now.” Earlier, the speaker of the state House of Assembly, Titus Uba, said the legislature would continue to collaborate with the executive to provide dividends of democracy to the people. Uba further said the lawmakers had to forgo their Christmas vacation to ensure that the budget was passed within record time so that the 2020 budget implementation would commenced on January 1. A breakdown of the budget showed N114.5 billion for recurrent expenditure, N74.9 billion for capital expenditure and N43.1 billion for deficit financing. Similarly, the economic sector got the highest vote of N73.7 billion, followed by the Social sector with N64.6 billion, administrative sector N48.2 billion, while Law and Justice got N2.8 billion, respectively. NAN Osun signs 2020 appropriation bill into law, pledges full implementation Governor Gboyega Oyetola of Osun State on Monday signed the 2020 budget of N119.5 billion into law, promising that the budget would be fully implemented. The governor signed the budget in his office in Osogbo shortly after it was formally presented to him by the speaker of the Osun State House of Assembly, Timothy Owoeye.

Industrialisation drive: Edo earmarks N3bn for Enterprise Park, Production Centre, others

do State governor, Godwin Obaseki, says his administration will commit N3 billion to the Benin Enterprise and Industrial Park, the Benin River Port, Edo Production Centres and other initiatives to enhance production and other industrial activities in the state by 2020. In a statement, special adviser to the Governor on Media and Communication Strategy, Crusoe Osagie, says the fund is part of efforts of the Godwin Obaseki-led government to spur industrialisation, which has the potential to unlock economic growth. According to Obaseki, “With Edo State replete with evidence of efforts at enhancing social welfare of our people, improving governance, and boosting economic development, we are committed to actualising the aspirations of our people to live in a just, fair, productive and progressive state. “To deepen industrialisation, we will by 2020 commit N3bn to the Benin Enterprise and Industrial Park, the Benin River Port, Edo Production Centres and other initiatives to enhance production and other economic activities in the state.” He continued, “While we are on course on our legacy projects, such as the Benin River Port and the Benin Enterprise and Industrial Park, we have successfully piloted the Benin Production

Centre in the Sapele Road Axis of Benin City, as part of multipronged strategy to drive industrialisation in the state. “For the Benin Enterprise and Industrial Park, we are already carrying out the Environment and Social Impact Assessment for the project, as we have sealed a deal with a world leading textile company to open shop at the facility as one of the anchor tenants. “We are confident that the money would further spur industrialisation, which has the potential to unlock economic growth.” The Benin Production Centre hosts hundreds of artisans and Small and Medium Enterprise (SME) operators, who are provided with a serene work environment and access to shared infrastructure, 24-hour electricity, security, water supply, internet, access to low-cost loans. The artisans and SMEs are involved in polythene production, furniture making, shoe making and leather works, toothpick and cotton wool production, welding (iron and brass) and fabrication, ice block production, cosmetic production, hair extensions production, garments production, waste recycling, etc. Two more of the facility, the government has assured, will be established in Edo Central and Edo North senatorial districts of the state. www.businessday.ng

L-R: Tunde Kuponiyi, general manager, Ecobank; Nkech Nwoka, chief executive officer, Migo Technology Services; Bola Asiru, principal, Mastercard Advisory Sub Sahara Africa); Stanley Jacob, chairman, CeBIH; Emeka Okoye, managing director, Cymantic, and; Tomiwa Aladekomo, CEO, Tech Cabal, at the 2019 retreat of committee of Head of E-Business Heads (CeBIH) held in Abeokuta, Ogun State.

2019 concludes a deadly decade for children in conflict, says UNICEF … as Nigeria records over 20,000 grave violations against children

hildren continue to pay a deadly price as conflicts rage around the world, including in Nigeria’s north-east, the United Nations Children’s Fund (UNICEF) report reveals. Data obtained from UNICEF show that since the start of the decade, the United Nations has verified more than 170,000 grave violations against children in conflict with the equivalent of more than 45 violations every day for the last 10 years, while in Nigeria’s north-east, the figure is almost 20,000 in the last seven years. “Beyond Nigeria, the number of countries experiencing conflict has been highest since the adoption of the Convention on the Rights of the Child in 1989, with dozens of violent armed conflicts killing and maiming children and forcing them from their

homes,” the report notes. Pernille Ironside, UNICEF Nigeria acting representative, in a statement on Monday, said 10 years of conflict in Nigeria’s north-east, which closely coincide with the decade about to end, had seen a massive level of violations that include killings, maiming, abductions, rape, severe psychological trauma, and extreme disruption of education against Nigerian children, leaving them vulnerable possibly for the rest of their lives. “Children should never be a target in any armed conflict and everything must be done to protect children when they find themselves in areas of conflict. Sadly, this has too often not been the case during the conflict in north-east Nigeria, with children paying the heaviest price for the ongoing crisis,” ac-

cording to the report. Henrietta Fore, UNICEF executive director, lamented that conflicts around the world were lasting longer, causing more bloodshed and claiming younger lives, adding that attacks on children had continued unabated as warring parties flout one of the most basic rules of war, which is the protection of children. She said, “For every act of violence against children that creates headlines and cries of outrage, there are many more that go unreported. “In 2018, the UN verified more than 24,000 grave violations against children globally, including killing, maiming, sexual violence, abductions, denial of humanitarian access, child recruitment and attacks on schools and hospitals. While monitoring and reporting efforts have been strengthened, this number is more than two-and-a-half times

higher than that recorded in 2010. “Globally, continued, widespread use of airstrikes and explosive weapons such as landmines, mortars, improvised explosive devices, rocket attacks, cluster munitions and artillery shelling cause the vast majority of child casualties in armed conflict. “Attacks and violence against children have not let up throughout 2019. During the first half of the year, the UN has verified over 10,000 such violations against children although actual numbers are likely to be much higher. This number is close to 200 children in Nigeria’s north-east crisis. “UNICEF calls on all warring parties, including in Nigeria, to abide by their obligations under international law and to immediately end violations against children and the targeting of civilian infrastructure, including schools, hospitals and water infrastructure.”

N37bn NASS renovation: Lawmaker wants fund utilise for education reform

FG, Nasarawa to revisit Farin-Ruwa falls as plans to engage PPP on hydro-power project underway

Anthony Adgidzi, Lafia

aheem Olawuyi has suggested that the proposed N37 billion budgeted for National Assembly renovation should be channelled to development of education and other critical sectors. Olawuyi, representing Ekiti/Irepodun/Isin/Oke-Ero Federal Constituency, made the call in an interview with the News Agency of Nigeria on Monday in Omu-Aran. According to Olawuyi, some members of NASS are opposed to expending the huge amount on renovation of the complex. The proposed renovation of the National Assembly complex is expected to gulp N37 billion from the 2020 budget signed by President Muhammadu Buhari on December 17. But Olawuyi said such amount would have empowered 3.7 million rural women at the rate of N10,000 each in boosting their trading and commercial activities. He said it was not too late to correct

an unpopular policy which has received series of knocks from the citizenry. Olawuyi, also chairman of the House Committee on Emergency and Disaster Preparedness, said the amount would facilitate the emergence of at least 370,000 new businesses. “The widows’ empowerment initiative is a product of an in-depth research and fact finding which reveals that a small amount is needed by some constituents to turn around their fortunes for the better. “We discovered that with small amount added to their existing small businesses, some of the constituents can take care of the feeding, school fees and other pressing needs of their families,” he said. The lawmaker also said renovation of the complex was exclusive preserve of the National Assembly Commission. “There are many misconceptions going on among the

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overnor Abdullahi Sule of Nasarawa State says his administration is considering partnering the Federal Government to revisit the abandoned multi-billion naira Farin-Ruwa waterfalls to boost tourist activities in the state. He said he was going to study the prospect for another hydro power company to generate alternative source of electricity to the people of the state through Public Private Partnership (PPP) arrangement. The state governor stated this when he visited the Farin Ruwa waterfalls in Masenge village and Farin Ruwa dam in Kwarra, all in Wamba Local Government Area, to take stock as well as to appraise prospects for the state. GovernorSule,whonotedthat he had always shown interest in what was happening in the area, said his decision to visit to Farin Ruwa site was to enable him get first-handinformationonprojects in the area, as well as study the prospects available to the state. At the Farin Ruwa falls, the governor, who inspected the @Businessdayng

abandoned hotel project started by the administration of former governor, Abdullahi Adamu, lamented the level of vandalism of the buildings. “It’s an amazing site and for some of us who had the opportunity to visit other falls like Niagra Falls and places like that, this is also very interesting. It will be something that every Nigerian should be interested in visiting,” Sule said. He however pointed out that before the area was turned into a tourist attraction, “the state government must first carry out its feasibility properly. “We have to be able to construct the roads, we have to provide the infrastructures, and we have to ensure that a part of the road, there is water here for drinking, there is opportunity for maybe accommodation and then sites for people to rest. “These are the reasons why I decided to come, to see, instead of just waiting in Lafia for people to be feeding me with information. I wanted to see things for myself and I am glad that God gave me the opportunity to come.”

Tuesday 31 December 2019

BUSINESS DAY

news HURIWA faults suspension of NBET boss by power minister TEMITAYO AYETOTO

uman Rights Writers Association of Nigeria (HURIWA) on Monday faulted the suspension of Marilyn Amobi, managing director of the Nigeria Bulk Electricity Trading (NBET) plc. HURIWA argued that Saleh Mamman, minister of power, does not have the lawful powers to suspend the NBET managing director. Given the provisions of the NBET Act and the fact that the minister is one of the seven Board members of NBET, neither the Act nor NBET’s Articles of Association empowers the minister to unilaterally supervise NBET, HURIWA said in a statement signed by Emmanuel Onwubiko, its national coordinator, and Zainab Yusuf, the national media affairs director. It said in the absence of any authorisation from the Board, it is an improper and unlawful exercise of the powers of NBET’s Board for any member to suspend the managing director.

“HURIWA has observed that the Hon. Minister of Power ordered Dr. Marilyn Amobi to step down with immediate effect as Managing Director of NBET as a result of the myriad of complaints against her. This was widely reported by news media on 24 December, 2019,” the statement said. “We are unable to discern the motive of the Minister. However one thing that is crystal clear when viewed against the statutory regime for the regulation of the Nigerian Electricity Supply Industry (NESI) is that the actions are wrong and unsupportable under the laws of the land. NBET’s Articles of Association show that 4 million of NBET’s shares are held by the Ministry of Finance Incorporated (MOFI) while 16 million of the shares are held by the Bureau of Public Enterprises (BPE). Consequently, while MOFI holds 20 percent of the shares, BPE holds 80 percent of the shares,” it said. But a media aide to the minister of power, who spoke to BusinessDay on Monday, argued that the minister only lacks the power to sack

but can suspend the NBET managing director. In any case, said the aide who asked not to be quoted, the minister only asked the NBET managing director to step aside so that allegations against her can be investigated. According to HURIWA, NBET’s shareholding structure is in line with section 9 of the Electricity Sector Regulatory Act, 2005, which provides that the shares of successor companies after incorporation shall be held jointly in the name of the MOFI and BPE for and on behalf of the FGN. NBET’s Amended Memorandum and Articles of Association show that NBET’s Board presently has seven members including a chairman and a vice chairman, HURIWA said. The chairman of the Board of NBET is the minister for finance. “It is pertinent to distinguish NBET from public corporations which are typically established by law or Acts of the National Assembly as government vehicles to enable government to be involved in certain industries,” it explained.

SEC moves to tackle unclaimed dividends Iheanyi Nwachukwu

ecuritiesandExchangeCommission (SEC) has outlined a number of initiatives in a bid to resolve the issue of unclaimed dividends in the capital market. Mary Uduk, acting director general of the SEC, said in the new year, the commission would employ various strategies in a bid to ensure that issues of unclaimed dividends are effectively tackled in the capital market. Uduk,whospokeinAbuja,said unclaimeddividendsarelegacyissuesastheyhappenedwaybackin the past, adding that right now the majorproblemhastodowithidentitymanagementwhichthecapital market and other stakeholders are working to resolve. “Right now you will not get unclaimed dividends from new issues. Part of the problem of un-

claimed dividend has to do with identity management which we are doing all we can to educate the publiconandengagingthevarious stakeholders to be able to get a lot of the information that we require. “Since then, items like BVN have been added to help in identity management. The capital market is also taking advantage of it. The Central Securities Clearing System and the registrars are working together to ensure that more information from the legacy shareholders are being collected to be able to update their information and get them to claim their dividends,” she said. Uduk said of recent, there have been a lot of engagements with shareholdersonthisissuetoensure that it is resolved. “The registrars don’t have direct interface with shareholders, they deal directly with stockbro-

kers.ButthereisacommitteecomprisingoftheSEC,theregistrars,the stockbrokers, the issuing houses, the CSCS and NSE working on that in addition to the e-dividend management committee. The committee has come up with a resolution which was adopted at the last Capital Market Committee meeting.Partoftheresolutionswas that stock brokers will update information in respect of their client. “Before 2008, we had a lot of Nigerians who bought shares in the capital market and at that time we did not have BVN numbers. Even some of them did not provide their account numbers. What was agreed was that we would update information of such shareholders. That information will be transmitted to the CSCS who will update their own information and send them to the registrars,” she said.

CIBN calls for creation of education development bank HOPE MOSES-ASHIKE hartered Institute of Bankers of Nigeria (CIBN) has reiterated its call for the creation and full implementation of education development bank to facilitate the achievement of 21 percent budget ratio for education prescribed by United Nations Development Programme (UNDP). Uche Olowu, president/ chairman of Council, CIBN, who made the call recently during a stakeholders engagement with President Muhammadu Buhari, stressed that the bank would manage all subsisting intervention funds set up toward ensuring education for all and enhancing its quality in the country. According to the CIBN president, the establishment of the bank would provide the platform for all the strategic stake-

holders in the education sector to access short to long term loans at single digit interest. The Institute expressed concerns on the erroneous public impression that banks are making huge profits at the expenses of the other sectors of the economy without any empirical evidence. Olowu further expressed concerns of the banking industry on multiplicity of taxes by various governments which has continued to hamper their business operations and provisions of Land Use Act impacting negatively on their abilities to extend mortgage backed facilities. He therefore appealed for the urgent harmonization of the taxes to reduce the burden on the banks and review the Land Use Act to expressly state property and security www.businessday.ng

rights and address the bureaucratic process occasioned by Governor’s consent. The CIBN President acknowledged President Buhari’s political will and tenacity of purpose to rebuild the economy and address the security challenges in the various parts of the country and reaffirm the commitment of the banking and finance industry to towards ensuring a stable and secured financial system. President Muhammadu Buhari, who received the CIBN team, told them that he was proud to note that Nigeria has the most vibrant , creative and innovative banking sector in Africa. Also, he commended the industry’s collaboration with the Central Bank of Nigeria (CBN), which has been a key anchor to his government’s food security programme. https://www.facebook.com/businessdayng

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Tuesday 31 December 2019

BUSINESS DAY

news Lagos Assembly passes 2020 budget of N1.1trn Joshua Bassey

he Lagos State House of Assembly has passed the year 2020 budget of N1.168 trillion. The passage followed the presentation of a report by the joint committee of the House on Appropriation and Finance by the chairman of the House Committee on Budget and Economic Planning, Gbolahan Yishawu. The approved budget contained 78 amendments as recommended by the joint committees and approved by the House through a voice vote conducted by Mudashiri Obasa, the speaker of the House. With the amendments, the approved budget contained N451,528,914,805 billion from the Consolidated Revenue fund as the recurrent expenditure and N711,032,979,185 billion from Development Fund as the total capital expenditure. The total budget for the year ending December 31, 2020, is now N1.168,561, 893, 990 trillion as against N1.168,562 trillion proposed by the governor. Governor Babajide SanwoOlu had presented a budget of N1.168 trillion for year 2020 on Friday, November 8, 2019, with education and healthcare as top priorities. With a proposed fiscal plan of N115 billion for public infrastructure in Lagos State, the governor stated that next year would be a massive construction site. Sanwo-Olu had unveiled his administration’s plan to accelerate the growth of state’s economy by proposing aggressive investments in critical areas of priorities – physical infrastructure, environment, human capital and security. He announced that the state would be spending N1.168 trillion, which will be funded from a projected Internally Generated Revenue (IGR) of N1.071 trillion. The budget deficit, put at N97.53 billion, will be financed through internal and external loans, the Governor said. Besides, the fiscal proposal also included a provision for the new minimum wage. Giving a breakdown of the budget tagged “Awakening to a Greater Lagos,” SanwoOlu earmarked 62 percent, representing N723.75 billion of total spending, for capital expenditure, he said recurrent expenditure, put at 38 percent, would take N444.81 billion. He justified why his administration would be earmarking huge funds to the environment and public infrastructure, the Governor said Lagos had been facing combined threats from population explosion and climate change. “Lagos faces an existential threat, arising from the interplay of demographic and climate change. Lagos will continue to be a magnet for multitudes within and outside Nigeria, in search of jobs and economic prosperity. These levels of migration put phenomenal strain on the physical and fiscal resources of the state.

Abiodun assents to N449.97bn Ogun 2020 budget with slight CAPEX increase RAZAQ AYINLA, Abeokuta

aving made a slight increase in favour of capital expenditure as against recurrent expenditure by Ogun State House of Assembly, Governor Dapo Abiodun of Ogun State on Monday assented to the N449.97 billion Appropriation Bill prepared for 2020 fiscal year. Recall that G overnor Abiodun had earlier presented N449.97 billion Appropriation Bill before the State House of Assembly, which was passed last week with a slight upward adjustment of N2.1 billion to the capital expenditure, increasing the capital expenditure to N271.2 billion as against N269.1 billion earlier voted for capital expenditure, while recurrent expenditure now standing at N178.8 billion. The slight upward adjustment done to the capital expenditure now brings CAPEX to 60.3% as against the 60% earlier quoted in the

Appropriation Bill which is still within the confines of Medium Term Expenditure Framework (MTEF) which projects 5% systematic increase of three-year fiscal plan, starting from 60% for 2020; 65% for 2021 and 70% for 2022. Speaking at a brief event which took place on Monday at the Governor’s office, Oke-Mosan in Abeokuta, State capital, Governor Dapo Abiodun lauded the members of the House of assembly for passing the budget in record time and pledged to implement the first budget of his administration to the latter. He said, “Let me appreciate our members of the Ogun State House of Assembly who have demonstrated their commitment, who have demonstrated their knowledge of what this assignment entails, they have also demonstrated their patriotism for this state. “I know for a fact that this, they have done despite other responsibilities we have saddled them with which

included the screening of Commissioner-nominees, it has taken them a lot of time, a lot of energy, a lot of sleepless night, they broke up into different committees. “They didn’t just gloss over the budget, they interrogate it line by line because I had opportunities at different points in time of having the Speaker himself engaged me on a number of items which I have to refer back to them, it was properly worked on and it shows the depth and quality of people in our House of Assembly. “On the part of the Executive, our administration will further be underscored by the implementation of this budget that is indeed how we can demonstrate the appreciation to the speedy passage of the budget and to the citizens of this state by extension. “We will ensure that this budget is implemented to the latter to ensure that all the assumptions that have been made, particularly in

the area of revenue generation, that it becomes a reality and we will follow through on our vision which over and over again, we are reminded of, which is to provide a focused and qualitative governance, while creating an enabling environment for Public Private Partnership across Ogun State. “That is very fundamental to the economic growth of this state because if there’s economic growth, there would be individual prosperity. We manage as much as we could from the budget that we inherited, now that we have had this our budget successfully passed, I believe, we will be able to do much more with the budget that is originally ours.” Earlier in his very short speech, Olakunle Oluomo, the Speaker, said that the passing of the budget within a record time demonstrated the importance attached to the budget and the determination of the assent to work with the administration.

L-R: Austin Eruotor, president, White House/celebrant, his wife Nike Eruotor; Lai Mohammed, minister of information and culture, and Tayo Ayinde, chief of staff, Lagos State, at the 60th birthday celebration of Austin held at the Radisson Blu Hotel, Ikeja, Lagos.

Africa50 increases stake in Azura Power Plant IDRIS UMAR MOMOH, Benin

s part of deliberate plan to make AzuraEdo Power Plant, a pan-Africa power company, the management of Africa50 has increased its stake in the power plant by investing in a major chunk of its equity shares. Edu Okeke, managing director of Azura-Edo Power Plant, made the disclosure at a recent inspection of the power plant by the minister of state for power, Goddy Jedy-Agba, in Edo State. According to Okeke, Africa50 is the second major shareholder in the power plant after Actis. Africa50, a division of Africa Developwww.businessday.ng

ment Bank (AfDB), brings significant power generation experience having invested in several key infrastructure projects across the continent representing over 1,000 megawatts of capacity. “We are delighted to have Africa50 as an investor in our Azura-Edo Power Plant. To have the governments of 28 sovereign African states invest in one’s business is a fantastic endorsement, and an incentive for us to keep doing better. “It is a thing we are proud of today. We actually closed transaction when Africa50, a division of AfDB, just took a major chunk of equity in the company, making it the second highest equity holder in Azura. “So, Azura has now gone from being such a small Ni-

geria power company to now a pan-Africa company. The majority shareholder in the company is Actis, a UK private equity firm,” he said. Nigeria needs more of power plants to be able to get to where we intend to be in power generations, transmissions and distributions, he said, saying the company got it gas supply from Seplat and NPDC. He however attributed inadequate remittance of funds by Discos as one of the major challenges confronting the establishment. In his remark, the minister of state for power, Goddy Jedy-Agba, who commended the management of Azura Power Plant for investing in the nation’s sector, noted that the investment was good for

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African and Nigerians. Agba, who noted that Azura was working to make power available to Nigerians, said he was at the power plant as part of his oversight functions. According to Agba, I am here to see what the power plant is doing for Nigerians so that the management can improve on whatever the shortcomings they have; but from what I see today the company is doing well. “The power sector is improving gradually and it is better than before. For me power is stabilising. I am sure we will do better. Government, Discos and all the stakeholders in the power sector are putting heads together to ensure that it improve better than what it is now,” he said. @Businessdayng

How digital skills can help reduce 23% unemployment rate ODINAKA ANUDU

igital skills can reduce Nigeria’s unemployment rate estimated at 23.1 percent rate, experts say. It has the capacity to keep young people busy, while providing them with an opportunity to earn a decent living, they say. “The youth unemployment rate in Nigeria has steadily risen from an average of 12.3 percent in 2006 to 23.19 percent in 2018. Since almost half of Nigeria’s population lives in extreme poverty, this continuous increase in unemployment should be given more focus and response,” Zehra Talib-Emiko, interim executive director, United Way Greater Nigeria, said in Lagos. “With this in mind, vocational education, particularly skills to employment, plays a critical role in alleviating the burden of unemployment and poverty,” Talib-Emiko further said. In line with this, the United Way Greater Nigeria (UWGN) in partnership with eDigital Africa and VFD Group offered Nigerian youths a free social media marketing workshop on December 14. The social media marketing workshop was held to assist a portion of the unemployed Nigerian youths acquire relevant digital skills to help their transition into gainful employment and further increase their income earning potential. The training partners, eDigital Africa, provided facilitators who demonstrated vast knowledge in social media marketing and content creation. During the workshop, eDigital facilitators supported the participants with lessons on social media best practices and hands-on practice sessions. About 40 participants benefitted from the workshop where they were able to gain knowledge on the best practices of building an online presence, creating captivating written and visual content to help businesses stand out, including generating leads and learning techniques to effectively communicate with their target audience and the general public. One of the core focus areas of United Way Greater Nigeria is financial stability. UWGN works to boost financial stability in Nigeria through vocational training for unemployed youths and young entrepreneurs. This allows Nigerian youths to attain their full potential translating into decent and honest living, the organisation said. “This social media marketing workshop will provide the opportunity to equip Nigerians with skills for financial stability and consequently, stimulate economic growth,” Talib-Emiko added. United Way Greater Nigeria is a non-profit organization that focuses on education, health and financial stability for all in Nigeria. It is the local partner of United Way Worldwide, an organisation that is over 100 years old, working in over 40 countries and 1800 communities worldwide.

Tuesday 31 December 2019

BUSINESS DAY

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BUSINESS DAY

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Let’s begin the year 2020 with the end in mind STRATEGY & POLICY

MA JOHNSON

he year of our Lord 2020 is perhaps just a few hours away as you read this article, and by now, I am certain that most of us have written our wish list for the New Year. With a new year in mind, many humans across the world are optimistic, and they believe that material prosperity is attainable. As we step into the next decade in the Twenty-first Century, it is likely that citizens and those in government are imagining what the future holds for us. Contemplating the future tends to induce fear because a sizeable portion of Nigerians barely survived the year 2019, which ends with its troubles today. Fear, worry, and anxiety are all fallouts of an uncertain future. But let’s review our current conditions. Presently, we have an economy that creates jobs but the jobs being created are not enough to bring down the overall rate of unemployment and inflation. We have an economy with closed borders in a globalized world, with food inflation that keeps rising even at the end of the third quarter of the year 2019. Some of us have already began praying and fasting, because the oncoming fourth industrial revolution will make the few jobs created disappear sooner or later.

So, whatever situation we find ourselves, we must choose to either live in it or be guided by a vision for our lives. If we let our lives be controlled by circumstances, then we will be permitting other people’s agendas, including their personal habits, to control our lives. In the midst of uncertainty and confusion, most individuals never establish a vision that will guide them into the future. They simply take things as they come their way. As Nigeria’s population increases, but with straggling economic growth, it is imperative for us all to envision what we want for the future, so that we can collectively work and plan towards it. I realised the significance of this several years ago when I read the book authored by Stephen Covey titled The Seven Habits of Highly Effective People. It was the second habit- begin with the end in mindthat inspired this article. What this means is that as we usher in the New Year, we must start with a clear understanding of our ultimate destination as a people, say by 2030, when the population of Nigeria, Africa’s most populous nation, is projected to be about 264 million by world population review. Drawing inspiration from Covey, the best way to handle this situation is for Nigerians, particularly those in the government, to give serious thought to the legacy they want to leave behind. Those of us on the fringes should also reflect on our legacies, if any. Covey suggests to us to consider a thoughtful experiment of attending our own funeral. So, we must begin to ask ourselves: “What character would you like people to have seen in you when you were alive? What contributions and achievements would you want relatives and colleagues to remember

you for? Look carefully at the people around you, what difference would you like to make in their lives? Contrarily, when a man’s love for material prosperity is dominated by greed, he will not think of leaving a legacy behind. It has been observed from the genealogies of mankind that human beings are the most complex corporeal created by God. Will Roger’s autobiography reveals that the Lord so constituted everybody that no matter what colour you are, you require the same nourishment. This expression to my mind is another way of advocating equality in status, rights or opportunities which would perhaps form the basic foundation on which democracy stands in Nigeria. But this goal is unrealized due to man’s greed. Why is this so, you may ask? It is because man has always thought that the quality of life he lives is in the plethora of his possession. According to Mahatma Gandhi, the earth provides enough to satisfy every man’s need, but not for every man’s greed. A man driven by greed or envy loses the power of seeing things in their roundness or wholeness and his otherwise possible successes becomes failures. It is greed that has blurred the vision of most of our leaders to an extent that what they refer to as “success,” when reviewed by the citizens they govern, is revealed to be a complete failure. Indeed, the rising rate of abandoned and failed projects across the country is attaining a worrisome dimension. It took 60 years for the 40 megawatts Dadin-Kowa hydro-power plant to be ready for commissioning after execution setbacks (See Daily Trust, 26 December 2019). If a society is infected with greedy leaders, they may achieve astonishing feats but they become increas-

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Nigeria will be celebrating 60 years of her existence as an independent nation. But we are still grappling with questions such as: How do we remain together as one united nation; how do we ensure equitable distribution of resources; and how do we accommodate interests of various ethnic groups in a democracy?

ingly incapable of solving the most elementary problems of everyday existence. This must be why billions of Naira was spent to build an ultramodern football stadium when the roads leading to the sports arena are in a state of disrepair. In the year of our Lord 2020, Nigeria will be celebrating 60 years of her existence as an independent nation. But we are still grappling with questions such as: How do we remain together as one united nation; how do we ensure equitable distribution of resources; and how do we accommodate interests of various ethnic groups in a democracy? Since my days as a student at Eko Boys’ High School, Mushin, Lagos, in the early 1970s, successive governments in Nigeria have failingly promised job creation, poverty reduction, and elimination of hunger. There is no government that has not made attempts to “wipe out” corruption, but yet, corruption waxes stronger. With the battle against corruption for decades, one wonders why our own dear country ends up as the world poverty capital. It is a shame! Some governments go as far as to promise “prosperity for all” while others have come up with various forms of social programs with the objective of improving the economy, security and well-being of the people. But all do not add up in the end. As we march towards 2020, we should all remember that our failures are simply an opportunity to begin again, this time more intelligently. We should always endeavour to make a difference in the lives of others. Happy New Year in advance and God bless us all. Thank you! Johnson is an author and a retired naval engineer who has passion for African development and good governance

Effective and efficient transport system – vital for Nigeria’s economic success

n efficient transportation system and infrastructure is one of the most fundamental structures for any nation’s economic progress and it is not a hidden fact that the Nigerian nation has great and diverse transport potentials yet to be fully tapped into and explored. Although Nigeria transport sector have its own share of challenges and low points, it can still succeed through better strategy, restructuring, hiring the services of experienced technocrats with background in transportation to help manage the sector effectively. We as a nation cannot continue to be applying the same old formula and techniques and expect to achieve a better result. This is one of the most challenging problems facing the growth of the sector in Nigeria. Although we cannot overemphasize the importance of the transport sector than call it the ‘lifeline’ of a nation, it has been proven by experts that upgrading transport infrastructures helps add speed and efficiency to a nation’s economy and also add good physical connectivity in the urban and rural areas that helps fast track economic growth. Furthermore on the above, with a sense of pride we can confidently say Nigeria is the largest nation in Africa both economically and population; with a gross domestic product (GDP) of $397.30 billion in 2018 and a population of over 200million people, including being the world’s sixth largest oil producer and largest in Africa with proven oil and gas reserves of 37 billion barrels and 192 trillion cubic feet

and over 300 square kilometres of arable land and significant deposits of largely untapped minerals, it is however sad to see that Nigeria has one of the poorest transportation systems and infrastructures globally. Domestic transportation is a key driver for economic growth, because it is a means of connecting urban and rural dwellers together and to gain physical access to goods, services and activities they need for their livelihoods and well-being through a variety of transportation modes such as land, maritime, air, rail, and pipeline. Poor infrastructural systems in any nation transport sector can cause delays in the arrival of goods and services to its destination which can ultimately affect a nation’s economy and so urgent steps must be taken to address the challenges affecting the growth of the sector. Nigeria’s vision to be among the world’s top 20 economies come 2020 might not be a reality because the transport sector has not been given the top priority needed. The vision and plans might be unrealistic because of inadequate transport infrastructures, security concerns such as boko haram insurgency in the nation, high rate of kidnapping, inconsistent power and electricity supply, slow business development as a result of high corruption rate, unequal income distribution resulting in high level of poverty because most of the population still live below the poverty line of $1.90 a day, which is one of the reasons for vandalization of oil pipelines causing high levels of devastating environmental impacts www.businessday.ng

which has been affecting the transport system and networks. Developments in any society can be defined as improving the living condition and welfare of a society through appropriate social, political and economic conditions because the expected outcomes bring about quantitative and qualitative improvements in human capital, such as reasonable income, good educational system as well as modern infrastructures such as efficient transport systems, constant power supply, good communication systems and effective logistics relies on quality infrastructures and managerial expertise because of the importance of the transport sector to the economy of nations which is a very vital structure for development. Relating the quantity and quality of transport infrastructure of any society and the level of economic development which is clearly visible as the reason why high-density transport infrastructures and high connected networks are responsible for high levels of society development. It is worth mentioning that when transport systems are efficient, it provides great economic and social opportunities which results in high positive multipliers effects such as better accessibility to markets, increase in employment opportunities, additional investments and a buoyant economy. Additionally, when transportation systems are deficient in terms of capacity or reliability, it impacts negatively on economic cost such as reduced or missed opportunities and lower quality of life.

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Festus Okotie

It is also worthy to state that in every society and nation globally, economic opportunities are directly proportional to the mobility of the people, freight, information and communication systems available, which further highlights the importance of why Nigerian government should take urgent steps to address the challenges affecting the growth of the transport sector and also work out modalities of engaging policy makers, planners, professionals and experts to develop strategies which will help boost and upgrade the transport sector. Finally, injecting new blood of highly technical and experienced experts in the sector would also go a long way in adding value to both the short- and long-term vision and objectives of the sector and the nation at large. This will help strengthen our nation’s transportation growth projections and also help build greater capacities to reposition, transform and upgrade Nigerian transport sector. Okotie, a maritime transport specialist, writes via fokotie. bernardhall@gmail.com, Fokotie@bernardhallgroup. com

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Culture and doing business in Africa (3) Rafiq Raji

s discussed in the first & second parts of the paper over the past two weeks, my cultural framework for doing business in Africa relies on culture, doing business ranking, EM status, & soft power ranking to recommend sectors in Africa that are likely to be successfully tapped by foreign investors. Having already discussed the energy, materials, industrials, consumer discretionary, consumer staples sectors, this week I consider the healthcare, financials, information technology, communication services, utilities, and real estate sectors. Healthcare High-end pharma activities are largely not viable in most African countries. Still, when a venture relies on certain local factors for success, it is still feasible. 54gene, a Nigerian healthcare start-up, leverages on the local population for Africa-focused genetics research. That

is, even as local expertise is scarce. Diaspora expertise fills this gap. And much of its output feeds into ventures abroad. So, this is an example of a high-end innovative venture that uses the advantages of a large population and overcomes the expertise constraint using highly qualified diaspora Africans who also understand the local culture. Financials There are now quite a number of panAfrican banks; mostly headquartered from South Africa & Nigeria. Insurance has not been similarly successful across Africa, with West Africa the continental laggard. Insurance unsurprisingly thrives in South Africa, which scores high on individualism and low on power

distance. I would not advise foreign investments in the insurance sector in West & East Africa, for instance. But my framework would certainly recommend one in South Africa. Information technology Only southern Africa comes close to being well-suited for high-end tech hardware and semiconductor production. The latter is virtually non-existent on the continent, in any case. Low-end tech hardware like PC assembly could thrive almost anywhere. But such lowend tech hardware production is already being phased out. A Chinese firm manufactures phones on the continent, though. Software and services, on the other hand, could be viable in most

African countries. The success of Nigerian tech talent firm Andela is a good example. Call centres would certainly also thrive across the continent, since talking is a favourite past-time. Communication services Collectivism, high power distance scores, etc. support talking as a pasttime in most African countries. The huge success of South Africa’s MTN in Nigeria is an ideal case of how an investment decision based on a cultural practice proved to be quite profitable. Utilities Except for South African countries, where there is relatively high state capacity, my framework would not recommend an investment in the African utilities sector; not in the traditional way, at least. Innovative solutions like off-grid, solar & other renewable power solutions are proving to be viable, though. But they tend to be development-oriented and better suited for NGO-type ventures. Real estate My framework would not recommend REITS ex-South Africa. There is a culture of direct house ownership for those who can afford it. And for rented real estate, there is a huge informal element in most African countries. References available at https://rafiqraji. com/2019/11/10/culture-doing-business-in-africa/ “Dr Raji is chief economist at Macroafricaintel. He was previously an Africa Economist at Standard Chartered Bank, London, UK. (Twitter: @DrRafiqRaji)”

Looking back at 2019

he year 2019 was an interesting year for Nigeria, dominated in Q1 by the general elections, and the inevitable drama they brought. It is not an exaggeration to say that all significant political and economic events took their lead from the vote in which President Buhari retained his position by a wider margin than that with which he first won it, thus giving him an endorsement of sorts to double down on his dated economic policies. The President’s governance approach will challenge Nigeria’s economy going into the future. How will the country’s institutions, and indeed the wider economy, cope with policies that are implemented based on whims rather than data? Early indicators appear to suggest that the answer is: badly. The first thing that needs fixing is the politics. In the election period, at least 600 people were killed in election-related incidents. As far as I know, no one is in custody for any of these deaths giving a strong incentive for impunity, one that was duly cashed on in subsequent sub-national elections. There is increasing voter apathy with the political process, a development which risks delegitimising future governments. This sets the stage for Nigeria’s biggest political challenge, which will be restoring faith in the democratic process.

CHETA NWANZE

Sadly, this does not appear to be a priority for the current administration as the disinterest towards updating the Electoral Act indicates. Rather, regime entrenchment appears to be the matter of urgency. Within the last month, after weeks of denial, a bill to extend the tenure of members of the Executive and legislators to a single term of six years was introduced in the National Assembly. The process risks putting the country on a political slippery slope. If it can be argued that two-term eight years isn’t enough time to appreciably turn around the fortunes of the country, it would not be long before arguments that a six-year single term is also not enough. When squared with bills seeking to regulate social media and “hate speech”, the trajectory of the current government is perilous. If the public has no ability to hold government accountable, we will no longer be in a democracy. On the rule of law, the government continued to flout court orders late into the year with the repeated defiance of numerous court orders. Cherry-picking what court orders to obey do not indicate a government committed to the rule of law, and thus it is no surprise that foreign investment into the country has been on a steady downward trajectory. Capital does not like the uncertainty of arbitrariness. Inflation is at its highest in nearly a de-

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cade, partially driven by the government’s arbitrary decision to shut the country’s land borders to all imports and exports. Food prices have surged beyond the seasonal spikes customary during the festive season. I don’t expect the border closure to end soon, and given that the fundamentals that cause smuggling, the initial reason the government gave for closing the border, well, whenever it is reopened, expect business to resume as usual. Speaking of arbitrariness, the CBN’s decision to introduce a N50 charge on the use of Point-Of-Sale (POS) terminals for every transaction above N1000 had a depressingly predictable outcome of not only pushing more people to use cash to settle their transactions but also creating yet another barrier of entry for Nigerians whose lives are entirely governed by the informal economy; thereby creating the same cash management issues the CBN says it was trying to resolve with its Operation Cashless policy. Let us not talk about the attendant security risks. Regulatory somersaults do not come more elaborate than that. All of these ill-thought out policy actions mean that the key metrics for measuring the wellbeing of the average Nigerian are in decline. Per capita income has fallen, unemployment is most probably at such a level that the failure to fund the National Bureau

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of Statistics (NBS) to do a single unemployment survey in the calendar year 2019 is very suspicious. This in a period of surging inflation and weak economic growth. All of the government’s missteps in the year 2019 point to an almost indisputable fact: Nigeria’s government is severely cashstrapped and desperately needs money. That it is seeking fresh loans instead of embarking on long-overdue cost-cutting and reducing the size of government is telling. Heck, after agreeing to pay government workers 83 percent more than they were earning, the government found reasons, until faced with a shutdown, to kick the can down the road regarding those payments to an already bloated public service. At some point, Nigeria will face the reality of having to live within our means. The year 2020 starts tomorrow, and not one goal of the colourful Vision 2020:20 has been met. Until we fix the politics, Nigeria’s potential will remain unfulfilled.

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Tuesday 31 December 2019

BUSINESS DAY

EDITORIAL Publisher/CEO

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

Bashir Ibrahim Hassan

Moving ahead with critical collaboration on sports industry reform

or sports in Nigeria, 2019 ended on a promising note with the collaboration of the Nigeria Economic Summit Group and the Federal Ministry of Sports on a reform of the sports industry. The effort entered high gear during the Nigerian Economic Summit in October 2019 and continued unto December with workshops and sessions featuring the two parties in talks with the many stakeholders of the sports sector. It sounds exciting at first glance, but the litmus test would be in the implementation of the agreed workplan and timeline in 2020. The Sports Industry, Reform, Repositioning and Development Agenda is a ten-year plan (2020-2030) that seeks to “position sports as a viable contributor to the Nigerian economy through job creation, new revenue streams and social development.” Its ambitious objectives include contributing to the economic agenda of the Federal Government under the

ERGP as well as to the goals of the UN Sustainability Agenda. It also wants to tie-in to the goals of the African Union Agenda 2063. The Sports Industry Agenda 2020-2030 promises to deliver significant economic outcomes. These include ten million jobs composed equally of direct and indirect, annual revenues of N2 Trillion and contribution of three percent to GDP. Underlying the agenda is the concept of Public and Private Sector Partnership. The concept revolves around incentives, investment, infrastructure and policy. The Federal Ministry of Youth and Sports Development will represent the public sector while the Nigerian Economic Summit Group will lead the private sector. Within the public sector, the Youth and Sports Ministry will collaborate with and lead other MDAs of Finance, Education, Budget and National Planning, Industry, Trade and Investment, Women Affairs as well as Information and Culture. The public sector would de-

velop an industry-specific policy framework and supporting initiatives to drive investment into the sports industry while the private sector would then implement the strategies. According to the 2020 work plan, both parties should establish a Sports Industry Working Group to run operations and coordinate the activities of the players. The Sports Industry Working Group is one of five outcomes expected in 2020. Others are agreeing MOUs on inter-ministerial collaboration on sports development in February; outlining the incentives package for reform and development of the National Sports Industry in April as well as a business and investment summit and road shows for the national sports industry between July and September. The private sector led investment and infrastructure development platform would kick in August 2020. The plans speak to a recognition of the significant role and contributions of sports now run in most countries as a serious business. Alongside results of

games are discussions of the economics of sports. Sports is a significant contributor to economics, urban planning, education, citizens welfare and youth development. It is salutary that Nigeria is working out plans for developing the sector. The collaborative nature of the planned development is a critical enabler. Public-private sector partnership is an imperative. At commencement in 1945, the then Nigerian Football Association was an association of independent clubs. They ran the game. In the years of state control, this hitherto private sector organ became a government agency. Today, the Football Federation has independence de jure but is de facto still an agency of government. Nigerian sports currently run on state subsidy whereas across the world governments count sports as one of the areas to generate taxes and other income to the state. There are many knots to unravel on this long journey of redefining Nigerian sports. Commence early as 2020 beckons.

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

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Tuesday 31 December 2019

BUSINESS DAY

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20 years of unbroken democracy in Nigeria: Challenges and prospects The Reformer

JOE ABAH

ith regards to the Malthusian Theory of Population Growth, there is actually no consistent correlation between high population density in countries and real income per capita. SubSaharan Africa has much lower population density than prosperous Japan. Malaysia was much poorer when its population was lower than now that its population has risen by more than 300 percent. Densely populated places like Hong Kong and Singapore are actually quite prosperous. The point to make though is that these are countries with very high productivity rates. If Nigeria is to turn its population size to an advantage, it must focus more on increasing productivity, rather than representation and the sharing of increasingly scarce resources. Globalisation and digital technology also mean that there are clear opportunities to turn what

has been described as our youth timebomb into explosive growth. India took advantage of globalization and technology to position its youth as some of the leaders in the technology space. Technology giants like Google, Microsoft, Nokia and Adobe are all run by Indians. A lot of the leading lights in America’s Silicon Valley are Indians. It is worth pointing out that the Indian technology revolution did not start with government but was driven by the private sector, with government jumping on the bandwagon much later. Government cannot employ every unemployed Nigerian youth. It can, however, provide an enabling environment for their talent and industry to thrive. Providing such as environment would mean making it easier to register small businesses, removing multiple taxation and providing incentives for innovation. There is no developed country that is a rural agrarian society. In developed countries, more people live in urban areas. Urbanisation is actually a necessary corollary to development, so the rural-urban migration that we often see as a problem may simply be a necessary characteristic of development and growth. In the book ‘Making Africa Work: A Handbook’, President Olusegun Obasanjo, writing with Greg Mills, Jeffrey Herbst and

Dickie Davis says: “Cities must be seen as drivers of Africa’s diversified growth and jobs. Urban-centred growth represents a dramatic change from the export of natural resources, which has been central to most African economies.” Let us next look at our ethnic, cultural and religious diversity. Not many people know that more than 350 languages are actually spoken in the United States. Even in the United Kingdom that many would naturally see as English-speaking, 14 different indigenous languages are spoken. Various empirical studies have also shown that cultural diversity actually has the effect of significantly increasing output. Developed countries like Canada, the United Kingdom and the United States have greatly benefited from immigration, regardless of the fact that the last two countries mentioned have recently swung to the right. Rwanda suffered a damaging ethnic conflict that set two of its main ethnic groups against each other. Today, Rwanda is one of the world’s fastest growing economies, currently growing at 7.6 percent. The argument that Nigeria is not working as well as it could because it is “a mere geographic expression” cobbled together by the British, according to Chief Obafemi Awolowo, is, in my view, a lame excuse. The

‘

There is no developed country that is a rural agrarian society. In developed countries, more people live in urban areas. Urbanisation is actually a necessary corollary to development, so the rural-urban migration that we often see as a problem may simply be a necessary characteristic of development and growth

Tax and tithes: The role of religion in national economic development

igeria is a paradox by all ramifications. A nation where the sentiments of religion and region reigns supreme. According to Pew Centre, nine out of ten Nigerians profess strong belief in either Islam or Christianity. Unfortunately, in Nigeria, religious virtues and values are 100 metres wide outwardly but 100 millimetres deep inwardly. While not intending to question the moral pay offs of our religious doctrines and conceptions, our deeply religious citizens must not forget that their civic responsibilities remain an integral part of what God and mankind expects from true worshippers and good citizens alike. By 2050, Nigeria is expected to be the thirdmost populous country in the world. World Bank projected that the Nigerian economy will be growing at only 2.2 percent in 2019 while the average population growth is about 3 percent. The implications of this trend are far reaching. Our media on several occasions have reported that the federal government is finding it difficult to raise money for its operations. In 2017, Oxfam reported that Nigeria occupied the last position out of the 41 countries in Africa ranked according to spending on healthcare, education and social security. Our budgetary allocation to the education sector is still far below the UNESCO benchmark of 15-20 percent. In 2018, the Federal Government generated a revenue of N3.96 trillion as against the N7.16 trillion apportioned in the budget. As at June 2019, the government had generated 2.042trillion as revenue from both oil and non-oil sources from N6.998trillion target for full year. Figures from 2020 budget showed that the allocation to Power, Works and Housing is lower than the figures for 2019 by N39 billion. This is worrisome for a nation with decaying road infrastructure and huge housing deficit. In the past five years, the gap between the budgeted and actual revenues has widened thereby forcing government to resort to huge borrowings to fund

its planned expenditure. Today, debt service as a percentage of revenue has exceeded 60 percent which is above the safe borrowing limit. Evidence of funding challenges and the consequent governance failures in our society is endless. Raising revenue is one of the most basic responsibilities of any nation-state. Before a state can protect its citizens, provide basic amenities or administer justice, it needs to raise money. More government revenue most times results to more public infrastructure. A limiting factor in determining the government budget for its duties to her citizens is the capacity to tax. The level of taxation is used as an indicator of state capacity. Developed countries raise more tax and therefore are able to provide better welfare services to their citizens. According to Jim Young Kim, the immediate past president of World Bank Group, “fair and efficient tax systems, combined with good service delivery and public accountability build citizens trust in government and help societies prosper”. The general level of tax compliance in Nigeria is still abysmally low. Recent IMF country report on Nigeria shows that only about 10 million people out of a labour force of about 77million people are registered for taxes. Nigeria’s tax to GDP ratio of about 6.1 percent is low both in absolute and comparative terms relative to other developing countries. This is far below the global average of 15.2 percent according to 2017 data provided by IMF and World Bank. 2015 figures show that tax as a percentage of GDP is 20.8 percent in Ghana, 26.9 percent in South Africa, 18.2 percent in Cameroon, 15.4 percent in Benin Republic and even 11 percent in our neighbouring Niger Republic. Compared to the low middle-income countries and upper middle-class countries average tax to GDP ratio of 19 percent and 23.3 percent respectively, it appears that one of the attributes of under developed countries is that they are yet to learn how to tax their citizens. The challenge before our policy makers then

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becomes how best can government use the instrument of tax to increase its revenue. While the illusionary easier approach is to increase the tax rate, available data suggests the opposite. In a country where only 10 percent of the workforce pay tax, it is not a rocket science to know that if we succeed in increasing the number of tax payers, the government will not need to increase tax rate to increase revenue. We run the risk of taxing the existing businesses out of existence if we continue to increase tax rates. Government has a duty to ensure that paying today’s taxes does not endanger the ability to pay tomorrow’s taxes. If we get our economic policy right, we don’t need to increase tax to generate more revenue. In Ireland, the corporate tax rate has been lowered substantially from 50 percent in the 1980s to 12.5 percent today. Despite the tax cuts, Ireland’s revenues from corporate taxes have gone up as a share of GDP because tax base has grown significantly largely as a result of massive inflow of foreign investment driven by good policies. In 2016, the Ghanaian government identified the tax burden on the private sector as a contributory factor in the slowdown in their economy. In response, the government abolished and reduced various taxes in an effort to stimulate the economy. Today, Ghana’s revenue is growing at over 20 percent driven mainly by tax revenue which increased as a result of tax reforms that stimulates private sector and consumer spending. Putting into consideration that Nigeria’s informal sector is a significant portion of her GDP, moral suasion would do far more than the tax enforcement can do in improving voluntary compliance. It is imperative to note that for as long as the informal sector largely remains outside the fiscal net, the formal sector alone cannot generate the required level of taxes required to fund government expenditures. Considering that Nigerians are deeply religious, our churches and mosques have a significant role to play in fixing and promoting the fundamental social contract

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USA, a cocktail of immigrants from all over the world, mixed with native Americans, was similarly cobbled together by force. The issue, therefore, is not ethnic, cultural or religious diversity. The issue is how that rich diversity is harnessed for the benefit of all. The challenges facing Nigeria are undoubtedly daunting. To pretend that we do not have serious challenges will be intellectually dishonest. My argument in this paper, however, is that within each of these challenges exist significant opportunities. I have consistently argued against “Path Dependency” Theorists that claim that your future will be dictated by your past. We can rise above our challenges as a country. As the American actor James Dean once said, “I can’t change the direction of the wind, but I can adjust my sails to always reach my destination.” How do we adjust our sails as a country in order to get to our destination? Saint Francis of Assisi has some very good advice. He says: “Start by doing what is necessary; then do what is possible; and suddenly you are doing the impossible.” Concluded Dr Abah is a development practitioner and the immediate past Director-General of the Bureau of Public Service Reforms.

EJIKE NWOLISA

between citizens and their government which requires taxpaying from citizens in return for provision of social goods from the government. Churches in America helped to end slavery in the country and also helped them to develop positive attitude to charity. Till today, America is still one of the most philanthropic nations in the world. Our religious institutions should take a cue and prepare their religious believers to be good democratic citizens. Luckily, it appears that they are beginning to appreciate the need to be the agents of social change judging from the robust advocacy for PVC collection that came from the pulpits during the recently concluded voters’ registration exercise. The same drive or even a higher zeal would be required from our religious leaders in informing their congregations and laymen that it is indeed noble and theological to be a tax payer. Nigerians must strike a balance between religious obligations and civil responsibilities for the nation to transform to the country we all desire. To “give Caesar what is due to Caesar” is a divine command that Jesus used to reconcile religious belief with citizenship duties when the Jews refused to pay Roman led government-imposed taxes. It is therefore imperative for Christians not to see civic duties as optional but rather as a fundamental obligation that is firmly rooted at the very core of the Christian faith. Thus, we cannot in all honesty claim to be good Christians if we pay our tithes but refuse to pay our taxes. Christians and other religious citizens alike who ignore their civil responsibilities but fulfils their religious obligations and at the same time expect our society to be a good place to live, work and play, lose the right to be model citizens. Nwolisa, Lagos based economist

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Tuesday 31 December 2019

BUSINESS DAY

COMPANIES & MARKETS

COMPANY NEWS ANALYSIS INSIGHT

MARKETS

Winners and losers of Nigeria stock LOLADE AKINMURELE

he Nigerian stock market had a year to forget in 2019 as listed stocks turned in a loss of 17 percent on average. This follows from the 17.8 percent decline recorded in 2018 and implies that the All Share Index, which tracks movement in listed stocks, has lost 35 percent in just two years. The decline in 2019 makes Nigerian stocks the worst performers among African and frontier market peers surveyed by BusinessDay. Despite South Africa’s many economic troubles, the Johannesburg Stock Exchange posted a 2.9 percent increase in 2019. Kenyan stocks returned 17 percent in a late rally driven by investors who cheered Nairobi’s move to dump a controversial interest rate cap on bank lending in November. Egyptian stocks returned 6.6 percent as a raft of market reforms that started in 2016 continues to come good for Cairo. The only other African country surveyed by

BusinessDay that posted a negative return in 2019 was Ghana following an 8.4 percent slide. Frontier stock markets returned 9 percent, emerging markets did 14 percent and developed markets posted a 17.9 percent growth. It’s particularly worrisome that developed markets recorded 34 times the return of the Nigerian stock market despite offering less

risk. That could lead to heightened investor apathy towards Nigerian stocks which have fallen out of favour since that 42 percent rally in 2017 that saw them rank one of the best performers. This is because it makes little business sense to invest in a risk- laden market only to earn far less than you would have if you invested in a developed mar-

ket where your investment is much safer. The reason why foreign investors venture into risky frontier markets is due to the promise of superior returns. If they can’t get superior returns from a risky market, they might as well look elsewhere. The abysmal performance of Nigerian stocks, however, could attract bargain hunters. Bargain hunters are in-

vestors who acquire assets when they are trading at depressed prices that are well below their intrinsic value. Not only are Nigerian stocks the worst performers among peers they are also the cheapest, with investors pricing them at six times of each naira earned. That compares to a valuation of 15.7 times of earnings for South African stocks, 15.4 times in Ghana, 12 times in Kenya and 11.9 times in Egypt. Nigeria has itself to blame for the low valuation placed on some of the biggest and most profitable companies in Africa. The government failed to implement key reforms in the foreign exchange and electricity markets, the lack of which investment bankers say deters investment. Both Kenya and Egypt are proof that investors will react to the right economic policies. Sectoral Performance Every sector in Nigeria closed lower compared to the start of the year. The NSE 30, which tracks price movements in the share price of the 30 largest listed companies, fell 20 percent, even worse than the 18 percent decline in 2018. Every sector from bank-

ing, oil and gas, industrials to consumer goods index saw double digit declines. One of the biggest losing class of investors from the stock market’s fumbling in the last two years are the pension funds, who hold the country’s largest pool of domestic capital. Although they are mostly exposed to federal government bonds they have a 5 percent exposure to stocks. Retail and institutional investors also counted looses running into billions of naira judging by the decline in market capitalization during the year. There were however some winners in the market. At least ten stocks outperformed the market and returned over 30 percent to investors. Leading that list of outliers is AG Leventis which returned 103 percent. Making up the list of the top five biggest gainers are Cornerstone Insurance (90 percent), Chams Plc (70 percent), Thomas Wyatt (65 percent) and ABC Transport (55 percent). Others include Transcorp (52 percent), Access Bank (42 percent), Jaiz Bank (40 percent), Caverton (33.3 percent) and Boc Gases (30.6 percent).

HEALTHCARE

Neimeth’s full-year revenue surges 4.5% as profit hits N220 million OLUFIKAYO OWOEYE

rug maker, Neimeth Pharmaceuticals Plc recorded a 4.5percent surge in revenue for full year ended 30th September from N2.26billion in full year 2018 to N2.37billion in Q4 2019. Cost of sales increased to N1.17billion in Q4 from N1.10billion in 2018, leaving gross profit at N1.19billion as compared to N1.16billion in 2018. Marketing and distribution expenses increased to N377million from N361million in full year 2018. Expenses on advert and promotions ballooned 78.14percent to N164.4million from N92.31million. Expenses on Energy cost also increased to N2.7million from N2.47million. Administrative expenses dropped to N375million in full year 2019 from N542million in 2018. Profit for the year

however stood at N220million as compared to N148million in 2018. However, conference and meetings expenses increased to N20.64million from N15.54million. Revenue from its pharmaceutical unit increased marginally to N2.28billion in full year 2019 from N2.24billion in 2018. Revenue from its Animal health segment ballooned to N90.14million from N28.85million in 2018. Pharmaceutical companies, like other manufacturers, had a challenging working environment in the last two years on the back of cheap imports from Asian countries and influx of adulterated drugs impacted on their profitability. Foreign exchange crisis that only abated in 2017 meant that access to foreign exchange to buy raw materials was difficult. Where available, it threw spanners into most projections.

Neimeth International Pharmaceuticals Plc was incorporated on 30th August

1957 as a limited liability company. It commenced operations in 1958.

On May 14th, 1997, Pfizer NY divested from the company through a management

buyout. The company then underwent a name change to Neimeth Plc.

Winners of the Orange Corners Innovation Fund: Victor Boyle-Komolafe, founder, Garbage in Value Out (GIVO); Olabanke Subair, founder/ creative director, Cyrus45 Factory; Boluwatife Arewa, co-founder, Scrapays Technologies Limited; Chidiebere Nnorom, founder, Paper Bags by Ebees; Riches Attai, founder, Winich Farms, with Adenike Adeyemi, executive director, FATE Foundation, and Kars Gerrits, programme advisor, Innovation Funds, Netherlands Enterprise Agency, at the Orange Corners Innovation Fund pitching organized by the FATE Foundation in Lagos.

Tuesday 31 December 2019

COMPANIES&MARKETS

BUSINESS DAY

Business Event

MANUFACTURING

Nissan orders drastic spending cuts to stem profit slide REUTERS

apan’s Nissan Motor Co has told its managers to slash non-essential spending as the automaker grapples with slumping car sales and tumbling profits, a Reuter’s report quoting three company sources with knowledge of the matter read Sunday. The penny-pinching drive is in place for the rest of financial year until endMarch and will most likely continue into the coming business year, the sources who spoke to Reuters said. Managers have been told to put the kibosh on unnecessary travel, sales incentives and promotional events to “conserve every yen,” as one source put it. Meetings that three or four people would once have traveled to attend in person, might now only have one Nissan representative, the sources said, while other gatherings and dinners have been canceled altogether or replaced by video-conferencing.The extensive spending cuts come in tandem with Nis-

san’s decision this month to order a two-day furlough for U.S. employees Jan. 2-3. There is also an effective travel ban for staff in the United States, where sales have been particularly hard hit, one source said. While the automaker is not facing any cash crunch, the actions underscore a deepening sense of crisis at Nissan which has been rocked by the ouster of scandal-hit leader Carlos Ghosn, the departure of other top executives and strained relations with alliance partner Renault SA. In April, it embarked on a wide-ranging turnaround plan to revive sales and boost profits but the business outlook has worsened more than anticipated, the sources said. In November, it reported 70% slide in second-quarter operating profit and cut its full-year forecast to an 11-year low. The de facto freeze on non-essential spending is “increasingly a modus operandi at Nissan globally,” a second source said, adding: “The house is not on fire, but there’s something smoldering.”

The three sources declined to be identified as Nissan has not publicly disclosed the extent of the cuts. A Yo ko ha ma - b a s e d Nissan spokesman said: “Given the business and operational situation we face, we’re carrying out moves to cut expenses.” The sources stressed that the automaker had sufficient cash resources. According to a fourth Nissan source, the automaker has good credit lines and plenty of cash, including money in China, which he said is years of accumulated profit from Nissan’s China joint-venture operations. This week Nissan’s stock hit lows not seen since September 2011 after Jun Seki, its vice chief operating officer and a former contender for CEO, said he was leaving the firm to become the president of Nidec Corp. On Friday, the automaker named executive officer Hideyuki Sakamoto as a candidate for the board of directors following Seki’s resignation.

L-R: Adams Ibrahim Adebola (aka VJ Adams), Video Junkie; Chidi Ashimole (aka Lexash), photogragher/creative director, The Lexash Studio; Folake Ani-Mumuney, marketing & corporate communications, FirstBank; Derin Fabikun, fashion designer, Fablane; Gbenga Shobo, deputy MD, FirstBank; Sandrah Tubobereni, fashion designer, Tubo; Gbemi Olateru, Olagbegi, online air personality (OAP), The Beat 99.9 FM, and Kelechi Amadi-Obi, creative photographer/ publisher , Mania Magazine, at the FirstBank Youth Empowerment Series (YES) 3.0, in Lagos.

Joshua Ajayi, editor-in-chief, brand communicator; Obinna, Mother of the winner; Charles Obinna, Marvel of Kings College, winner of the OVL International Literacy Day Essay Competition; Gbenga Agboola, regional overseer, MFM Lagos Region 84, Victoria Island; Victor Laniyan, executive director, OVL Foundation, at the 2nd Annual End of the year Mega Praise Concert and Love Outreach Program for widows and Single Mothers in Lagos

OIL & GAS

Egypt awards oil and gas exploration concessions in Red Sea SEGUN ADAMS

gypt said on Sunday that it awarded oil and gas exploration concessions in the Red Sea to Chevron, Royal Dutch

Shell and Mubadala in an international tender. Chevron was awarded the first block, Shell a second block, and a third block was awarded jointly to Shell and Mubadala with

a total exploration area of around 10,000 square km (3,860 square miles) and with a minimum investment of $326 million, the petroleum ministry said in a statement.

London’s prime housing market shows signs of stabilising Agents say prices of exclusive properties in UK capital may have bottomed out in last quarter

he beleaguered estate agents of Mayfair can raise a small festive cheer: house prices in London’s most exclusive districts have stopped falling for the first quarter in more than four years. Prices in prime central London were flat in the final quarter of 2019, according to researchers at the listed property agents Savills, while prices of high-end homes across the broader area known as prime London — which includes districts further from the centre, such as Chiswick — rose slightly, by 0.1 per cent. That helped annual price drops to slow: prime London prices fell 0.5 per cent year-onyear, down from a 3.2 per cent decline a year earlier. Lucian Cook, head of residential research at Savills, said:

“This is a stronger year-end for prime London than we had been anticipating, given the levels of political and economic uncertainty, and reflects a narrowing of buyer and seller expectations.” Mr Cook said the apparent levelling off of prices could be a “turning point” for the falling market in what is still Europe’s most expensive city for housing. But he cautioned that Brexit concerns would continue to cast their shadow over the market despite Boris Johnson’s general election victory this month. “2020 will not be without its challenges as the Brexit deal is negotiated, so we are not forecasting a significant bounce in values until 2021,” Mr Cook said. The UK is currently due to leave the EU at the end of next

month and to continue its current trading arrangements with the bloc until the end of 2020. If it does not agree a trade deal by then, there is a risk of a cliff-edge “no-deal” scenario that could seriously damage the UK economy. The Bank of England has tested the resilience of the financial system to disruptions including UK house prices falling 33 per cent in a “worst-case disorderly Brexit” scenario. However, both buying and selling agents in wealthy areas of London reported a bounce in transactions after the Conservatives’ election victory, which removed the possibility of a Jeremy Corbyn-led Labour government. Mr Corbyn’s leftwing agenda had sparked concerns among the wealthy, who had expected tax rises.

Amaka Adekoya, chief operating officer, LADIV Integrated Services and 3rd Place winner of the Scaling Up Nutrition Pitch Competition; Michael Ojo, country director, Global Alliance for Improved Nutrition (GAIN); Oluwaseun Sangoleye, mom-in-chief, Baby Grubz Nigeria, and 1st Place Winner of the Scaling Up Nutrition Pitch Competition; Adenike Adeyemi, executive director, FATE Foundation, and Juliet Aigbe, founder, Cakeflair, 2nd Place Winner of the Scaling Up Nutrition Pitch Competition, at the 2019 Scaling Up Nutrition Pitch Competition hosted by FATE Foundation in Lagos.

L-R: Ayodeji Oke, regional business manager, Port Harcourt, Nigerian Breweries plc; Termina Nersisyan, key account manager, activations, Nigerian Breweries plc; Oscar Obilor, key account manager, Port Harcourt, Nigerian Breweries plc, and Marcus Collins, draught executive, Port Harcourt, Nigerian Breweries Plc., at the Star Lager Draught Launch in Port Harcourt.

Tuesday 31 December 2019

BUSINESS DAY

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Tuesday 31 December 2019

BUSINESS DAY

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Tuesday 31 December 2019

BUSINESS DAY

Media business Speakers proffer solution on companies’ survival in harsh economy Daniel Obi

peakers at the seventh edition of the Brand Journalists Association of Nigeria (BJAN) conference 2019 with the theme Survival Amidst Harsh Economy: Inside Stories of Top Brands’ have suggested that companies should constantly restrategise in order to improve their profitability. The speakers advised companies to endeavour to expand their customer base by offering extra difference from what competitors offer. They also advised on the need to research and discover what they can offer to consumers to switch loyalty. The speakers said that during lean times, brands must not make the mistake of eliminating or cutting their marketing budget to the bones as consumers are restless and looking out to make changes in their buying decisions. Chief Executive Officer of X3M Ideas Limited, Steve Babaeko who was the lead speaker, represented by Director, Brand Management and Strategy of the company, Babatunde Olaifa in his presentation said: “History shows that structural shifts in the pecking orders of industries occur more often in difficult times and these shifts endure for a long time. Therefore, the fight to sustain company performance during a downturn is not just about short-term survival; it is also about long-term positioning in the industry hierarchy. This is clearly a battle worth fighting.” He went on to say that it is during this period that improved marketing budget time will help consumers choose products and services congruent to their needs. “If possible, brands should step up their marketing budget and efforts. Instead of cutting marketing budget which has become the tradition, brands should

diversify their markets and packages to ‘speak the language of the common man’ because the consumers are no longer passive but very active due to increased scarcity of resources.” He however advised brand custodians and handlers to step up their business intelligence and think out of the box, as deeper creativity will enable them to weather the storm during harsh economy. In addition, he said, agencies handling brands were specifically advised to consistently retain the awareness and posture of a consultant and scale up their intellectual content as well. The program whose overall objective was to x-ray the depression and recession that gave insights into how some brands survived and thrived during economic downturn also recognized and honoured some brands and players in the brands and marketing industry that have made remarkable impacts. As part of cost saving measures, speakers pointed out huge opportunities for brands to create deeper awareness using the digital and other social media platforms. Marketing professionals should take advantage of the opportunities social media provide to create Top of Mind Awareness (TOMA) for their brands. Creative agencies, public relations practitioners, experiential marketers and others in the ecosystem including brand owners should work in deeper collaboration to see themselves as partners to

eliminate the usual master/ servant relationship between brand owners and agencies. This will help both brands and their agencies to survive the current difficult times. The consumers must jettison bureaucracy especially during harsh economic situations, as brands would need to take decisions swiftly and respond promptly to agency/ public enquiries if they want to increase their level of acceptability. Engage in deeper innovation with local content as this will go a long way to enable them control larger market share with reduced cost of production. Agencies should not ignore opportunities offered by Start-ups and other small organisations as they are source for business during difficult times, also advised on the need to engage in the smart use of data to improve their services to brands and corporate organisations. In attendance was a distinguished audience cuts across the Integrated Marketing Communications industry. They include Bolaji Okusaga, Chief Executive Officer of Precise Limited as the moderator; Tokunbor George-Taylor, Chief Executive Officer, Hill & Knowlton Strategies; Idiare Atimomo, Chief Operating Officer, Up in the Sky; Ifeoma Okoye, Sustainability & Public Affairs Manager, Nigerian Bottling Company (NBC) and Odion Aleobua, Chief Executive Officer, Modion Communications were panelists that dissected the main paper.

CMC Connect bags two wins at Lagos PR Industry Awards 2019

erception management firm CMC Connect was recognized and honored with two prestigious awards at the Lagos PR Industry & Gala Awards 2019, which recently held at Civic Centre, Victoria Island, Lagos. Themed ‘PROVATION’, the ceremony witnessed a gathering of astute industry leaders, stakeholders and corporate

organizations, some of who were also recognized for their laudable feats and contributions to the PR practice and industry. CMC Connect took home the prestigious awards for the ‘Model Agency of All Time’ and ‘The Best Agency’ to work. The company was honoured with the awards for its leadership and relevance in the PR industry as well as its unswervwww.businessday.ng

To rebrand Nigeria, we need to change our mindset – Joko Okupe

he Founder and Board of Trustee member of the Mindshift Advocacy for Development Initiative, Joko Okupe has said that Nigeria cannot change or develop if Nigerians, at home and in the diaspora, do not change their way of thinking. Okupe stated this at the official launch of the Mindshift Advocacy for Development Initiative in Lagos. The Lagos launch which held at the Quite Pools Inn and Residence located at Adeniyi Jones was strategically targeted at the youths. The event tagged Lagos 70 saw the attendance of discerning, empowered and motivated youths and Youngat-heart Nigerians who trooped in to the venue to be part of the advocacy group. Various speakers made presentations at the event to inspire and activate a radical and positive change in the mindset of the young people present who would serve as Mindshift catalysts in the society. In the first presentation, Okupe introduced the concept, vision and mission of Mindshift. He rationalised the need for a mental shift of all Nigerians. “We have to change the way we think. I mean to change our mindset – the way we perceive things, our values, our priorities, our beliefs, in fact our worldview. We need to inspire all positive possibilities as more Nigerians buy into the idea of Mindshift.” He explained that, “Nigeria’s problems, and by ex-

tension that of the African continent, is the mindset of Africans as individuals, communities and nations, about themselves and the mindset of the rest of the world about Africa. The wrong mindset of Nigerians and Africans in general which influences the way we do things, has created myriads of problems for us such as: lack of visionary and purposeful leadership, bad governance standards, erosion and loss of good value systems, corruption, poor understanding of global issues and how it impacts their lives; unprecedented never-ending poverty, heavy debt burdens, over dependence on international aids, endless conflicts, inadequate education etc.” According to him, the Initiative was incorporated as a non-partisan movement that all Nigerians can effectively identify with and get involved to tackle this menace that has kept Nigeria and the entire African continent down for so long. Okupe also explained that to achieve efficiency and steady results, the initiative has in place well-articulated key focus areas toward its agenda. These areas are: family and society, government and politics, education, business and economy, media, arts and entertainment, innovation and technology, religion, culture, and health and wellness. Additionally, it will approach this systematically through social research,

targeted issues campaigns, action-oriented initiatives, knowledge sharing, events, and public discourse A former Commissioner for information and strategy in Adamawa State and member BOT, Mindshift Advocacy for Development Initiative, Ahmad Sajoh explained that the Mindshift movement is focused on redirecting the mindset of Nigerians from negative, unproductive and fatalistic thinking; to positive, productive and progressive mindsets. In his words, “When you look at the great nations of the world, you will discover that their people have mindsets of greatness. How can we have progress and development when majority of our citizens have the wrong mindset? We cannot achieve any meaningful transformation without a re-orientation of the citizens’ mindsets. Even when Government decides to run a campaign on changing attitudes, the success will depend on whether the mindsets of the citizens have changed or not. We cannot but pay attention to how people think”

MRA calls on government to implement policies on journalists’ safety

edia Rights Agenda (MRA) has called on the Nigerian government to adopt and implement policies and laws instituting preventive measures aimed at eliminating or reducing attacks against journalists and ensuring routine but diligent prosecution of perpetrators of attacks against journalists. The call was contained in a report by MRA titled “A Profession Endangered: An Analytical Report on the Safety of Journalists in Nigeria” in which it highlighted a variety of attacks faced by Nigerian journalists in the course of carrying out their professional

duties, including assault and battery, arrests and detention, shutdown of media outlets, raids on media organizations and facilities, confiscation or destruction of work equipment, and abductions, among others. The project which led to the report is aimed at finding solutions that ensure the safety of journalists at all times, particularly in the face of shrinking civic space in Nigeria manifested in sustained attacks on the right to freedom of expression and media freedom and in the light of the failure of successive governments, law enforcement and security agencies to take meaningful steps to

ing employment of global best practices since its inception over two decades ago. Presenting the ‘Model Agency of All Time’ award to the company, the Nigerian Institute of Public Relations council, led by President & Chairman, Mallam Mukhtar Sirajo lauded CMC Connect for its growth trajectory, citing the company as a beau ideal of PR practice in Nigeria. https://www.facebook.com/businessdayng

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address the problem which has significantly affected the ability of the media to provide the public with accurate and reliable information. The report documents cases of attacks on journalists and the media in Nigeria between January 2017 to May 2019. MRA said: “in all cases of attacks against journalists in Nigeria, there is no evidence of any diligent effort made by security and law enforcement agencies to investigate and prosecute perpetrators; the perpetrators invariably commit these crimes with impunity as they go scot-free without any repercussion for their actions.” Ayode Longe, MRA’s programme director, said: “It has become imperative that we call attention to this ugly trend of attacks against the media because of the negative effect especially when government is doing nothing to address the issue. We have consistently made the point that when attacks on the media go unpunished, perpetrators are emboldened and journalists are silenced in many ways.

Tuesday 31 December 2019

BUSINESS DAY

Marketing & Pr African PR practitioners need to seize narrative on climate change to stop Western propaganda Anthony Elikene

ikipedia says “Climate Change occurs when changes in Earth’s climate system result in new weather patterns that remain in place for an extended period. This length of time can be as short as a few decades to as long as millions of years.” In a simpler explanation, Climate Change is the rise in average surface temperatures on Earth. Also called Global Warming, Climate Change is the biggest threat to the world and mankind – this is beyond the environment. What causes Climate Change? The western Public Relations firms and media have developed several explanatory narratives that seek to exonerate the West (Europe and America) of complicity in the deterioration of our collective planet. Some of the causes of Climate Change these Western PR outfits and media postulate are: Greenhouse Effect, which is warming when the atmosphere traps heat radiating from Earth towards space. Using the word ‘Humans’ to replace Europe or the West, by this they make it an all involving culprit (we all did it together). You find narratives such as “in the mid-20th century human expansion of the Greenhouse Effect. Another narrative is “Human activities are changing the natural greenhouse. Over the last century, the burning of fossil fuels like coal and oil has increased the concentration of atmospheric carbon dioxide (CO2). To a lesser extent, the clearing of land for agriculture, industry, and other human activities has increased concentrations of Greenhouse gases.” – NASA Global Climate Change Other minor narratives are: “The warming is caused by a more active Sun… since 1750, the average amount of energy coming from the Sun either remained constant or increased slightly.” – NASA. United Nations in its “Fifth Assessment Report, the Intergovernmental Panel on Climate Change, a group of 1,300 independent scientific experts from countries all over the world under the auspices of the United Nations, concluded there’s a more than 95 per cent probability that human activities over the past 50 years have warmed our planet.” – UN. These Western narratives are spins of logical truth but not the ultimate truth. The ultimate truth will be used to disarm these tactical lies and they are as follow: Logically, it is correct to say humans contributed greatly to the Climate Change issues but the ultimate truth is that the West (Europe and America) unilaterally caused these problems through several activities in the guise of science and warfare.

NASA space activities; Nuclear activities; unnecessary global warfare to colonize the rest of the world; inventions of destructive weaponry; invention and use of biological weapons; over mining and destroying of the Earth’s core for minerals; production of carbon-emitting cars and generators; commercial production of chemicals, and industrial pollution of the environment among others. In a recent CNN report on Climate Change, experts said Africa’s contributions to the Climate Change problem is less than one per cent (1%) but failed to say Europe and America’s contributions are ninetynine plus per cent (99+%). The less than one per cent (1%) the experts identified is largely not from Africans but from European corporations and industries that would stop at nothing from exploiting the natural reserves in Africa. These activities and the dumping of Western originated toxic wastes in Africa will cause environmental problems. The West through NASA also blamed the Sun’s increased warming effect claiming it started since 1750. According to Eric Hobsbawm, “the European industrial revolution began in Britain in the 1780 and was not fully felt until the 1830s or 1840s” while T.S. Ashton held that it occurred roughly between 1760 and 1830. According to Britannica, on December 5 to 9, 1952, Great Smog of London, this was the name used to describe the combination of industrial pollution and high-pressure weather conditions. People could not see themselves in the streets due to the thickness of the smoke pollution which destroyed the environment and all these activities damaged the Ozone Layer as it cut across Europe. The UN science experts’ findings are correct in the sense that 95 % Climate Change issues are caused by humans but failed to identify the humans were Europeans and Americans. www.businessday.ng

The destruction of the Ozone Layer started a long time ago in Europe and America when Africa was all jungle and the cleanest ecosystem on Earth. The African system of subsistent agriculture did not allow them to over hunt, over fish, overuse the soil, until Europe colonized Africa and changed everything. Colonialism was an attempt to forcefully create a new market for the Western products and exploit the rich resources of Africa especially as Europe was in economic turmoil. But the narrative played was that they brought Western education and Christianity to save Africa when Africa was already so rich without mentioning the millions of Africans killed and enslaved for the commercial benefits of Europe and America. The effects of Western-caused Climate Change issues are being felt in Southern parts of Africa as reported by CNN. Even though Africa is an agrarian society they are paying the price of commercialization and capitalism tendencies of the West. Today, Europe is experimenting on the commercial production of solar energy cars leaving Africa to suffer the damage they created while they seek solutions for themselves. A Tesla car goes for about $135,000 but it won’t get to Africa for decades maybe not this century as the West only shares what it doesn’t need at a price. The Public Relations practitioners in Africa should brace up and be proactive to tell the true stories of Climate Change before the Western propaganda portrays Africa as the cause of Climate Change issues. Sympathizers of everything Western might come to the defence of the West but they should remember that a people that blame the Sun and everything else for what they did will not think twice to blame a continent they have exploited and branded negatively for centuries. Anthony Elikene , Strategist, Brandfit PR & Events

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Latest report predicts ‘Digital Paradox’ for media industry in 2020 Daniel Obi

s technology continues to redefine media landscape also expected even in year 2020, latest research report predicts that marketers and media owners will be challenged to develop the skills, engagement models and measurement capabilities to meaningfully engage consumers in the crowded media landscape. Kantar’s global 2020 latest Media trends and predictions report said as Ad spends on social and tech platforms continues to grow; technology innovations will also enable a rebirth in real-world engagement. Kantar further predicts there will be a digital paradox; while new and evolving media channels will create opportunities, the deluge of digital touchpoints will make it more difficult to connect with consumers. Marketers will also need to navigate the ‘data dilemma,’ meeting consumer demand for relevant, per-

sonalised content, without breaching trust and privacy. The report said “2020 will be an exciting year for marketers. “Increased advertising and content possibilities, along with the data generated, create a plethora of opportunities for marketers and media owners”. With new opportunities though come new challenges. “Emerging foundational technologies could transform media usage, and other industry shifts, such as the demise of third-party cookies, will force marketers to evolve how they measure audiences across screens and wider campaign effectiveness. “Other channels, like influencer marketing and the newer audio channels, will face a make-or-break moment; their credibility could be at risk unless they evolve and live up to their promise. Marketers will need to improve their understanding of how different touchpoints effectively work for their brands – online and off” said Jane Ostler, Global Head of Media Effectiveness, Kantar in the report.

BD Brand Talk

Communication lessons for the Marketer in African tradition not? Do what viewers experience help explain what they take away from the ad? Employing storytelling successfully is about identifying the drivers of people’s responses. While there may be commonalities among summary metrics (lots of expressions are better than no expressions, more smiles mean more enjoyment, etc.), stories come in many shapes and sizes, so there is no one type of story or storyline that is most effective for all ads. Knowing whether the reactions are correct for the story you are trying to tell is much more useful. You need to know whether your story is working for your brand or not. And rather than merely jumping on the storytelling bandwagon, know when to employ a story and when to choose a more straightforward approach. Stories can evoke stronger enjoyment and engagement, but without a clear and compelling role for your brand, the emotion generated by the story will be wasted. Marketers can also go one step further by Innovatingly asking for consumers feedback on the stories or marketing communication heard as a second level of creating buzz for the brand while ensuring understanding of the marketing communication at play. When Africans tell stories in the moon light the storyteller would ask for feedback and a summary lesson of what the story is driving at. Once the purpose is understood and there is a connect, it is assumed that the story would do the job that it is meant to do which is sell the brand and making if profitable. Africans have used this route for thousands of years and this method is still relevant to society today. Engaging the end users of the brand is a win - win strategy to ensure memorability and communication recall. As a way of conclusion, I would like to acknowledge the savvy ness of the African story tellers as their method is still very relevant till date.

Mike Umogun

hen elders in Africa want a key message to stick, they would either talk via proverbs or through moon light tales. Reason for this is simply people relate to stories better because they provide a garb for the key message to take residence, flight and arrive the desired destination as it were unscathed Well-deployed stories can and do improve an ad’s impact, and they are great instruments for engaging people since they generate more emotion and are more likely to be enjoyed than other types of ads. Storytelling can also be an excellent tool for conveying information if the brand has a clear role in the story—in other words, the brand cannot be an afterthought. It must have a role, and the role it plays must be believable. We know that stories are powerful devices, but our research at Kantar Insight shows that story ads are not always more persuasive than nonstory ads. This ineffective persuasion is likely caused by a lack of brand fit in many story ads and a consequent lack of believability. While a story might be enough to engage viewers and generate emotions, if it jars with how people think of a brand, then it won’t necessarily be compelling. The mere presence of a story in an ad is not enough to make it persuasive, and a bad story is worse than no story at all. If they don’t relate to the brand, or are not integral, then stories can make ads less compelling. Just as we Africans cherish story telling we also hate irrelevant perambulations and not hitting the desired story objective on the head. So many people in Lagos would typically say in pidgin English leave mata or leave that story when a story is becoming purposeless. Neuroscience techniques that use real-time facial coding can be very helpful in determining whether Michael Umogun is Marketing and a story ad is appropriate and working for your brand. Are people responding New Business Specialist at Kantar Inwhere you would expect? If not, why sight Nigeria. @Businessdayng

Tuesday 31 December 2019

BUSINESS DAY

The top business insights and productivity hacks of 2019 Business leaders and FT columnists reveal what has inspired them most and how to get more out of work Janina Conboye

hat is the best thing they have learnt this year, or what positive change have they made to their routine? Here’s what they said: –Andrew Hill, the FT’s management editor This year I have learnt to think of myself as a proud generalist rather than an embarrassed non-specialist. In part that is because I have read some interesting books about the value of cultivating a variety of interests as a way of coping with uncertain times — David Epstein’s Range, for example, or Waqas Ahmed’s The Polymath. I have also written one myself — Ruskinland, about the Victorian thinker John Ruskin. I have enjoyed opening up new perspectives, exploring and explaining the life, works and influence of a man whose interests spanned geology, drawing, architecture, economics, the environment, social reform, and more. Of course, some cynics will say I have merely buried myself deep in an esoteric 19th century niche. In fact, though, the whole exercise of researching, writing and promoting a non-business book has taught me the mind-expanding benefit of dabbling in areas beyond the ones I usually work on. –Sir Andrew Likierman, professor of management, London Business School The best thing I learnt this year was that some of the gloomy predictions about artificial intelligence taking everyone’s jobs look just as unrealistic as those which claim that nothing will change. As part of my work on human judgment, I have been looking into any algorithm that is said to be a substitute for it. These algorithms do many amazing things, but what they do not do is judgment. This, along with empathy and ethics, will for now remain the province of the human being. We know many jobs will go and new jobs will be created. Even more importantly, even more jobs will be changed, so carrying on doing things the same old way will not be an option. –Gachoucha Kretz, professor of marketing, HEC, Paris The most fruitful change has been learning how to manage my mental load more effectively. I am a single mum living in Paris and travel to HEC’s campus about an hour outside the city. So with doing research

and consulting, there is limited time for holidays and time off. I thought about how I could still perform well without always being fully prepared — I now aim for good enough, rather than perfect. In fact this way you learn more: like how to deal with uncertainty. You learn to trust yourself and work more effectively with the colleagues that can help you. It makes you way better at delivering your work. –Anne Boden, chief executive, Starling Bank Starling uses technology to make money management easier. So things that inspire me most are other examples of where science and tech have become game-changers for people’s lives. I am a scientist by training and was amazed to read about some researchers at Nottingham university, who have created a blood test that has the potential to detect breast cancer up to five years before a lump or other symptoms appear. The test is easier, cheaper to administer, and far less invasive than a mammogram. It is a powerful reminder of the power of technology for good. –Pilita Clark, the FT’s business columnist I have always thought the best way to boost productivity is to stop reading the relentless slew of advice on how to be more productive. But this year, an office move forced me to adopt one of the most common “life hacks”: www.businessday.ng

varying your morning routine. For 16 years I had followed, sheeplike, the same path to work each day, jamming myself on to the Tube to London Bridge and ambling through Borough Market to my desk. But when the FT moved across the river to a new spot by St Paul’s Cathedral in May, a bonanza of choices opened up. I could take the bus, the overland train, the Tube to several stations or, if feeling peppy, a 20-minute bike ride. I have done them all and admit there is something refreshing about not knowing exactly how I will arrive, nor what new alley or café I might spot on the way in. I could not swear I am more productive but I feel as if I might be, which is more than I would have predicted a year ago. –Tiina Alahuhta-Kasko, president and chief executive, Marimekko This year for me has highlighted how the successful companies of the future will be the ones that have a meaningful purpose, and walk their talk to make this world a better place. Sustainability and responsibility are integrated in their DNA — their value proposition and way of working. They build their story transparently, together with their customers, engaging and educating them in a more sustainable way of living. These are the visionary companies for which the top talent of tomorrow wish to work. They are motivated by the idea of work-

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ing towards a shared mission. These companies will redefine the world of business. –Joanna Payne, founder and director, Marguerite I have learnt the importance of recognising my professional limitations. This has raised the value I place on making sure the people I hire are competent and fill the gaps in my own skills. In the early years of Marguerite, a network for women in the arts, I was taking care of all areas of the business. But this year I have found that with the right people in place, I can develop my business strategy and have time to see it through. This has been liberating and makes me excited for the growth of the company. One of the most valuable pieces of advice a former boss once gave me was never to be afraid of hiring people who are better than you are — something I agree is key to success. –Nicolas Bidon, chief executive, Xaxis This year has reinforced the importance of being focused to achieve your personal or business objectives. In our industry (at the intersection of media and technology) the pace of change keeps accelerating and there are distractions everywhere. It is easy to become short-term oriented or to switch priorities too often. In fact, Xaxis has adopted “Do not be distracted by the noise” as one of its company values. I try to stick to this by meditating @Businessdayng

daily. It helps me calm my mind and be more productive. I would encourage every executive to consider adding this to their todo list for 2020. –Karim Kaddoura, cofounder, Virtuo I now focus more on the human side of our premium car rental business: investing more time in leadership and management team check-ins, and ensuring I carve out some time to work on personal tasks. We have a strong team at Virtuo and since any great business is the sum of the people who work in it, we are working more and more to ensure our people are thriving and that we retain our best people. Likewise, in making more time for myself this year, I feel I have been able to be a more present and effective leader. –Sophia Matveeva, founder, Enty This year I learnt a great trick to boost my career, expand my network and open a new revenue stream. I started hosting events about things that I don’t know about. I find a topic relevant to my business, a fashion tech start-up, find experts and interview them in front of an audience. If you want to learn something, doing it in public could open unexpected new doors. Asking questions is much easier than answering them. Hosting events or interviewing experts for your company’s blog boosts your personal brand and brings new opportunities.

Tuesday 31 December 2019

BUSINESS DAY

Omri Farber as told to Patricia Nilsson December 8 2019

From soldier to chef to MBA student Cass Business School unfazed by student’s unconventional profile whether I wanted a full-blown military career, which I didn’t. I felt I had achieved what I wanted to do, and the political climate was changing. The outlook for peace became more complex. Instead, I went back to an old passion. I was born the year my father opened his first restaurant and I was literally raised on its counter. My father was one of the early celebrity chefs in Israel — he had a lot of restaurants, books and TV shows. Because of that I have essentially been working in restaurants since I was about 12, running around kitchens tugging

on aprons and asking to be taught. I ended up moving to London to study at the Cordon Bleu. It was fantastic but very different, which required adjustment. If you come from working in restaurants, you think you know how to do things and then someone humbles you, saying “look, you need to learn how to dice”. The course took a year and then I found the restaurant Lyle’s, which served the most exciting food I had in my life. It took weeks of pursuing the head chef, trying to convince him to give me a job. After a month, I had one.

‘‘

For the people at Cass, my non-traditional background was a plus, or at least interesting enough for them to give me a shot. Another thing that convinced me to do my MBA at Cass was its relationship with the City of London

‘‘

hy Cass? Well, it was a gut feeling. When they looked at my CV, they did not say: “Oh, this is an issue because you have not been to university.” They said: “This is something we have not seen, and this is really interesting.” In Israel, military service is mandatory, but I ended up doing six years. It was a different time then, I really felt like I could make a difference, and I think I did to an extent. It was also an amazing opportunity for self-development. The experiences I had between 18 and 24 were incomparable to those of most other people my age. I served in the department of casualties and missing persons and my job was to communicate with the families. I got hooked on how I could help people who were going through probably the most difficult times of their lives. At the same time, I had to understand our entire operation and represent the military in very sensitive situations. I progressed fairly quickly, slightly faster than I should have, probably. At 23, I was a captain. Soon I had to make a decision

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It is a difficult industry, which was one of the drivers for me doing the MBA. My head chef was a great inspiration, but he was acclaimed, running his own Michelin star restaurant — he had everything — yet was still there every day, 7am to 2am, working nonstop. For the people at Cass, my nontraditional background was a plus, or at least interesting enough for them to give me a shot. Another thing that convinced me to do my MBA at Cass was its relationship with the City of London. The speed at which you meet the right sorts of people from the industry is incredible. The school would host breakfast sessions with companies, have us visit firms interesting to us, or just put you in touch with the right people. One of my dream companies sent a recruiter one day, and the careers team called me up and said “you want to meet this person”. That ended up being an hourlong interview, and I have another meeting with the company. We were a class of just under 70 from many different backgrounds and countries. Obviously a lot of people from accounting and HR professions and a lot of @Businessdayng

finance people, but we also had the head of a logistics operation who worked across several African countries and a teacher. We became dependent on each other, which is very similar to the camaraderie in the military. One of my classmates, who was an actuary, sat with me for a week helping me develop my financial projections. It was a one-year course and one of my favourite classes was an international elective where we flew out to study digital innovation in Silicon Valley and marketing in Las Vegas. Another great class was a strategy module with Charles Baden-Fuller, who was one of the best professors I’ve met and a huge inspiration. Right now, I am working at an Israeli automotive start-up of an old connection of mine, while I look for the big job. Longer-term, I’m looking to join one of the technology-focused companies that are the future of the restaurant industry, as the changing behaviour and preferences of customers are putting pressure on a sector that has remained largely the same since the dawn of the first modern restaurant a few hundred years ago.

Tuesday 31 December 2019

BUSINESS DAY

EDUCATION

Weekly insight on current and future trends in education

Primary/Secondary

Higher

Human Capital

Ahead of 2020: Educationists provide to-do list for education sector KELECHI EWUZIE

s the muchanticipated year 2020 commences, educationists are of the views that Nigeria education sector can only develop if certain inputs were put into the methodology of teaching and learning, especially secondary school education which many consider to be the bedrock of any education system in the world. The academics and scholars while assessing the performance of the education sector in 2019 observe that that Nigeria education system suffered a setback because there was no pragmatic approach to teaching and learning of academic subjects and courses, especially at the secondary school level which has, therefore put on undue pressure on Nigeria education system. The whole education system without gain saying the fact lacks adequate funding especially the citadel of higher learning for research and innovative ideas says Isaac Adebayo Adeyemi, former vice chancellor, Bells

A cross section of 2019 graduands from McPherson university, Seriki Sotayo, Ogun State during the Graduation ceremony held at the University Multipurpose Hall.

University of Technology, Otta, Ogun State. Adeyemi opines that so far, the country education space still lacks good planning and management, teaching materials and quality teachers at all levels, owing to poor governance and infrastructure. He further noted that it

is equally important to add that apart from the challenge of poor funding bedeviling the sector, there is the problem of lack of quality work force to propel the economy as a result of low moral for teachers a situation that have held back the nation’s educational system

Greensprings School to strengthen alumni for positive social impact KELECHI EWUZIE

he management o f G re e n s p r i n g s Schools has indicated its willingness to strengthen the school’s alumni towards creating positive social impact and networking purposes. “We want to build a very strong alumni; while they were here in school, we instill in them the sense and purpose of giving and helping the community,” said Lai Koiki, executive director of Greensprings School at the second home coming celebration of the school held at the Ikoyi campus, tagged ‘White Party’. According to Koiki, the school felt the need to bring all old students together to reconvene and support the school. “It is also to help them start networking because we know that will benefit everybody.

“So, we need them to come together, not necessarily for Greensprings school, but in the name of the school to support the needy,” said Koiki. She opined that the home coming was initiated to encourage the old students back to Nigeria. “It is also another opportunity to ensure that they come back to Nigeria; we continuously tell them that yes go away, get a good education, even get some job experience but know that Nigeria is home and come back to Nigeria with all your experience to build this nation,” Koiki stated. Koiki stated that the school will be celebrating its 35th anniversary next year and part of what it intends doing is to have some in-road into helping to run government schools. This she said is based on the fact the nation’s future depends largely on the quality of education it offers to the generality of its citizenry. www.businessday.ng

“We think that without education - not just for the few that are able to come to private schools, but generally it is important because our whole future depends on ensuring that all of the children in Nigeria are educated, and so we hope that we will be contributing our own quarter to that space,” Koiki concludes. Oluranti Bankole, the school head of admission said, “Alumni is the legacy we leave as a school and we want to celebrate them and ensure that they are keeping the flag flying.” Motolani Awokoya, also known as ‘Motion Cakes’ said the home coming is a great idea as it affords him opportunity to catch up with everybody from Greensprings School. Awokoya who work as a Disc Jockey (DJ) said, “it is all about networking and coming back to base, and it is nice to reconnect with old friends.”

from performing its basic objectives. “There is also the largescale teacher migration, poor working conditions, lack of professional recognition of teachers by other professions and the wider society”, he said. As Nigeria moves into 2020,

it is sad to see that the present managers of education sector are still foot dragging in their quest to implement any discernible action plan to stem the tide of the crippling education sector. Peter Okebukola, a university professor believes that it is necessary and possible to

position Nigerian universities to stimulate economic growth through a deliberate agenda of Production of Entrepreneurial Graduates, focus on high-value programmes for rapidly growing the economy, increased emphasis on research and development. He further added that Nigeria has to change her value system and invest on education, which is the intellectual laboratory of any nation and the engine that propels the economy. In his word, “It has been noted that ‘without a formidable intellectual base’ it is not likely that any society would move forward” Okebukola maintains that Education is the business of all stakeholders of the Project Nigeria adding that our future and survival depends on it. “I believe government is committed to improving the quality of education and must be seen to be taking steps in that direction, and must involve all the Stakeholders even where there are challenges in implementing policies or and agreements. Ahead of 2020, the current challenge should be seen as a learning curve by all, including parents and students”, Okebukola said.

Foundation commissions ultramodern schools complex

non-governmental organisation, Emeka Okwuosa Foundation, with focus on providing education, food, wellness and health facilities has commissioned an ultra-modern school complex in Anambra State. According to the Coordinator of the Foundation, Precious Obijuru, the project amongst others executed by the foundation is the construction of an ultra – modern 3-storey building school complex situated at Oraifite, Anambra State. The project named Dame Irene Nneka Okwuosa Memorial Convent was built in memory of her ardent belief in educating the girl child. The ground breaking ceremony of the ultra-modern building project was held on 8th July 2018 during the 8th synod of the Nnewi Diocese. It is worthy to note that the new school complex, has the capacity of housing 33 rooms including 16 classrooms, one ICT

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room, a fully equipped library, integrated studio and learning hub, crèche and kindergarten learning centre, a laboratory, Art studio, medical and sports room was completed in *12 months*. In July 2019, no fewer than 50 students of the Dame Irene Nneka Okwuosa Memorial Convent, Oraifite were awarded certificates, gift items and cash prizes for their outstanding performance by sir. Emeka Okwuosa Foundation. The presentation was done during the school annual prize giving day to mark the end of the academic session. Scholarships were given to four indigent students who emerged as the overall best in different subjects. Overall, over 200 students across board have benefitted from the foundation’s secondary school scholarship scheme. Emeka Okwuosa through his foundation, has also executed several other developmental projects in Oraifite @Businessdayng

and its environs. There are yearly merit awards to students of Oraifite Boys Secondary School with outstanding academic performance in different subjects, Skills Acquisition Programme and Engineer Training Programme carried out through Oilserv Limited and designed to train individuals in the field of engineering. Set up for the provision of local security to Irefi, Oraifite and outfitted with a patrol vehicle, radio communications systems, security gear and providing jobs for around 30 local men. The foundation has also completed the structure of the foundation’s secretariat at Oraifite and a multi-billion Naira specialist hospital in Oraifite, Anambra State (Dame Irene Nneka Okwuosa Medical Centre). The medical Centre will be equipped with the necessary medical facilities for dialysis to address kidney related problems.

Tuesday 31 December 2019

BUSINESS DAY

EDUCATION Madonna University Alumni association gets new president MODESTUS ANAESORONYE

huka Nwachukwu has emerged as the new president of the Madonna University Alumni Association (MUAA). Chuka, an established banker who has grown through the ranks at United Bank of Africa UBA, recorded a landslide victory at the just concluded national convention of the body held in Abuja recently. In his acceptance speech, he expressed gratitude to members of the body for their trust,” It is with great pleasure and humility that I want to thank members of our great alumni for electing me to serve as your 4th National President. I will like to thank the immediate past National President, Ifeanyi Rapu, for piloting the affairs of this association in the last 3 years. I also want to thank the former NEC members for a job well done.” Nwa-

chukwu equally proceeded to outline his vision for the body during his tenure; “The key thrusts of my presidency are centered around Membership Drive, creating tangible value for Alumni Members and Driving chapter growth. He posited that the body would work hard to ensure a harmonious relationship between the school and its members and most importantly ensure that the body gave back to its alma mater. Nwachukwu urged everyone who had passed through the school to come together in order to boost the platform which had been established primarily to create avenues that would improve the lives of alumni members and students of the Institution. He said “We are immediately going to work on a couple of low hanging fruits which we have identified as key to the growth of the body. These include creating a prop-

Oke Ogun poly lauds Makinde’s education agenda served as financial secretary to the Lagos State chapter of the association and the vice president to the erstwhile president, Ifeanyi Rapu, stated that he would bring all of his experience to bear on the Alumni. “My passion is centered around brand building and in this, I have learnt a lot from my Mentor Tony Elumelu. It has been a privilege to work as part of his team and I have been fortunate to learn a lot from him. The most important take away is his ability to touch lives through purposeful initiatives. This is what my team and I, intend to achieve with the Alumni. We want to touch the lives of everyone who has gone through Madonna University and those who are still in it. The Association equally appreciates the efforts of the Chancellor, Emmanuel Edeh who is an academician par excellence and we will work hand in glove to take the Institution and all that it represents to the next level.

erly structured database that will help connect Alumni members including those just graduating from school to their various chapters. This will help boost membership across the various chapters Nationwide. He also pointed out that the Alumni would work with the school to project the image of the school positively. In his words, “One of the fundamental things we are going to do is to build winning partnerships. We will partner with the school on initiatives that will rebrand the image of the Institution and change the mindset of people. Within our membership, we boast first-class professionals across various fields who are thought leaders in their profession. It is our intention to make these resources available to the school to drive areas like automating operations to build a tech-driven process as is obtainable in other worldleading higher Institutions. Chuka who had previously

Munachi Mbonu launches another book KELECHI EWUZIE

unachi Mbonu, a 12-year-old, JSS 2 Atlantic Hall student has launched yet another book in Lagos which was attended by distinguished personalities, led by His Excellency, Governor Babajide Sanwo-Olu; family, friends and well-wishers. The book titled: ‘Fathers Will’ is woven around a Super Cop who consistently solved earth shaking cases, that shook the country was yet another incisive book written after her previous books titled Concealed and Chidubem authored 2 years ago. The books which were products of leisurely exercise done while telling stories to her cousins, centered on a group of young friends in school learning what is valuable, moral values and love, was inspired by TV drama series, Friends; while Chidubem, which features a boy adapting to city life after relocating from the village, was influenced by her interactions with her cousins who had similar experience. The book quickly became a best seller in schools particularly among her peers and parents. A visibly impressed Governor Sanwo-Olu commended Munachi and encouraged her not to relent on her oars noting that she no doubt is on a path to greatness. According to him, very few people realises their chosen career path early. “Munachi has defined her own path and I must say without a doubt that beyond the sky is her limit”. “Speaking on how she realised her passion and gift

for writing. Munachi said, “I started by putting down my thoughts into a paper, when the house got noisy, my Mummy tells us to go to our rooms and read and do book reviews. So, from there what initially felt like punishment resulted into a fruitful passion” “The first book was from TV drama shows; the second book was inspired by my cousins who moved from the village to Lagos. They did not like some things we liked here but were willing to learn new things and adapt,” she said. Deputy Commissioner of Police and Commander IGP’s Intelligence Response Team, Abba Kyari, who inspired the book was full of praise for Munachi, noting that her zeal and determination to stand out at this age was one that should indeed be commended and supported by all. “If we start encouraging

young ones like this, the brain drain gradually experienced will become a thing of the past also crime will reduce drastically because our young ones will become more purposeful and aim for their personal growth. While giving the vote of thanks, Munachi’s Mum, Ifeoma Mbonu said, her daughter has been writing from seven. I got her first laptop at five. So, she would sketch some things and write about them. At age seven, she started writing. During the holidays I buy a lot of books and tell her to do a book review. She has written about five or six books. “I remember when she first started, she was scared at first but I encouraged her. We met with an editor who saw the manuscript and she was impressed,” said Mbonu. Advising other parents, Mbonu urged parents to invest in their wards, “I will ad-

vise parents to invest in their children first before investing for their children. Expose a child to multiple activities and through that you know what the child likes,” she said. Publishers of the book, Frank Momoh called on parents to support and always encourage their children whenever they notice similar zeal and passion in them, adding that they never can tell one might just be nurturing them to becoming great writers the world will come to look up to. “I want to say to Mum and Dad, this girl is doing something great; encourage her. I have travelled all over the world, and encountered very few young minds with this much zeal and willing to impart their society and by extension the world with her own creativity. This is indeed worthy of encouraging and should be supported”, he concluded.

REMI FEYISIPO, Ibadan.

he management of Oke Ogun Polytechnic, Saki has lauded the Governor of Oyo State, Seyi Makinde for placing premium on the delivery of quality education in the state. While praising his premium on quality education the management attested to the fact that the present administration believes in a prosperous future of Oyo State youth. In a statement signed and made available to journalists in Ibadan, the Institution also congratulated the Governor on his recent electoral victory at the Supreme Court

Strive to develop education sector, UNILORIN VC tasks old students

call has gone to all those who benefitted from the good old days of Nigeria’s educational system not to sit aloof but rather strive to always give back to the system. Making this call recently was the Vice Chancellor of University of Ilorin, Sulyman Age Abdulkareem, while speaking as the Special Guest at the Annual General Meeting of Government Secondary School Ilorin Old Boys Association. Abdulkareem in his lecture entitled ‘The Secret of Success’ rued the present decadence in the nation’s educational system and implored former students who had passed through the system to always see ways they could join hands to revive the school system. He specifically called on all the Old Boys of Government Secondary School, Ilo-

Pupils from The Foreshore School, Ikoyi during their maiden play held at Terra Culture Lagos. www.businessday.ng

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describing the apex Court’s verdict as “a confirmation of the Governor as having the overwhelming support of the good people of the State.” To this end, the management posited that the Institution had aligned with the laudable programmes of the administration and would continue to remain loyal and faithful towards the realization of the dreams of the Governor in the Education sector particularly at the Oke Ogun Polytechnic. The management then prayed that God would grant the Governor the wisdom, knowledge and understanding with good health to steer the ship of the State to an enviable height.

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rin which was his Alma Mata to contribute their quota in redirecting the system back to the ideals of academic excellence, diligence and integrity which stood the school out as one of the most outstanding in Nigeria. According to him, the value he personally imbibed while at the school inspired his strong belief that success in life should be pivoted on hard work, diligence and tenacity of purpose as against the wrong belief of many in the younger generation about success through fortuitous circumstances. In his speech, the National President of the Old Boys Association, Suleiman Alapansanpa, appealed to the Kwara State Government to assist the school through provision of core science teachers, laboratories and perimeter fence. During the AGM, election was held for new officers to pilot the affairs of the Association in the next two years. Sulaiman Yahaya Alapansanpa was reelected president; while Toyin Muhammed Olaseni Ibiwoye (SAN) and Rasheed Salako were returned as Ist, 2nd, and 3rd, Vice Presidents respectively. O larinoye Tunde emerged as the National Secretary while Tope Adaramola emerged as the Public Relations Executive with Toyin Yusuf as Assistant Secretary, Musa Mohammed as National Treasurer. Others are Abubakar Zubair as Legal Adviser, Aremu Funsho Mutiu as auditor, Olowojolu Francis Idowu became financial secretary

Tuesday 31 December 2019

BUSINESS DAY

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Tuesday 31 December 2019

BUSINESS DAY

AVIATION GUIDE

in association with

Dana Air bags ATQ’s Most Stable Domestic Carrier Award

SAHCO MD wins leadership award at 2019 LaPRIGA

Stories by Ifeoma Okeke

igerian carrier, Dana Air has won an award as the Most Stable Airline in Nigeria at the 2019 Air Transport Industry Awards held recently at the Prestigious Welcome Centre & Hotels, Lagos. Prince Supo Atobatele, the Editor-in-Chief of Air Transport Quarterly Magazine, while speaking during the ceremony said the award is in honor of some of the industry’s finest individuals and Corporate bodies whose penchant for hard work, innovation and capacity building has not only greatly improved the business of air transport but enhanced safety of the air space. According to him, Dana Air bagged the award as a result of her consistency and stable operations offering safe and reliable air transport in the past few years. Reacting to the airline’s award as the most stable domestic carrier, Kingsley Ezenwa, the Media and Communications Manager of the airline, said, ‘’the reward for hard work is more work. There is no better way to end the year 2019 than a recognition like this. “We have been here for the past 11 years doing what we know how to do best passionately and persistently. With a fleet size which we have

L-R: Fola Akinkuotu, managing director of Nigerian Air space Management Agency (NAMA), presenting the award of the most stable domestic airline to Kingsley Ezenwa, the Communications manager of Dana Air at the 2019 Air Transport Industry Award. With them are Chikodi Ofomata and Supo Atobatele, the editor in chief of Air Transport Quarterly magazine.

progressively grown to nine aircraft, our target is to hit about 7.2m flown passengers by the first quarter of 2020. “We are orderly and we like to take one step at a time. We are presently consolidating while sticking to our strategic fleet and route expansion project.’’ Kingsley dedicated the award to the airline’s customers for their loyalty and support for the

last 11 years and reassured them of the airline’s commitment to continue providing safe, comfortable, on time and reliable air transport. Dana Air is one of Nigeria’s leading airlines with a fleet size of 9 aircraft and daily flights from Lagos to Abuja, Port Harcourt, Uyo and Owerri. The airline is reputed for its innovative online product, world -class in-flight service and unrivaled on-time performance.

Stakeholders demand increased investment in Nigeria’s aviation sector

takeholders in the aviation industry have called for more investment in aviation sector in a bid to spur economic growth. The experts express worry that there has been a steady reduction of airline operations because the industry is not attractive to investors. They attributed, this to the low profit margin in the sector, amid high cost of investment and no assurance of long-term success. Since 2015 many airlines have gone under which include Discovery Air, First Nation Airways and recently Medview Airline, IRS Airlines and Associated Aviation; so currently Nigerian airlines on scheduled flight operate include Arik Air, Air Peace, Dana Air, Overland Airways, Azman Air and Max Air. Operating aircraft has also declined from about 90 aircraft in 2015, to 53 currently with Air Peace having 26, Arik Air, 11, Dana Air six, Overland six Azman Air two and Max Air, three. Some of these aircraft are currently on maintenance and therefore not operating. Adamu Abdullahi, the Director of Consumer

Protection, Nigeria Civil Aviation Authority (NCAA), said that the federal government was willing to offer incentives to investors because things are tough for the aviation industry right now. “The potential for profitability for investors is there. Government can give waiver if an investor comes with new ideas. Ethiopia Airlines was given concession when it agreed to operate to Kaduna airport during the reconstruction of Abuja airport runway. Government will be willing to give incentives because other countries are doing the same for their airlines,” Abdullahi said. John Ojikutu, the Secretary of the Aviation Round Table (ART) and former Commander of the Murtala Muhammed International Airport (MMIA), disclosed that passengers who planned to travel for the yuletide, had difficulty as some of them were delayed at some airports due to airlines’ inability to lift them to their destinations. “How many aircraft are in the fleet of the domestic operators and how many are flying?

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It does not appear up to 50 per cent of available aircraft are flying, hence the exploitation of the travelers. Air tickets have gone up to almost thrice the normal price,” he said. According to Ado Sanusi, the Chief Executive Officer, Aero Contractors, said “I think the industry needs a kind of re-organisation. It needs a kind of jolt because if you look at it this year, a lot of airlines have gone under. Medview has gone to one aircraft operation and a lot of other airlines have gone to one aircraft operation. “Despite the fact that the passenger growth has increased, but the amount of aircraft operating in the country has reduced. Now what does that goes to tell you? It tells you that the aviation industry is not growing. The aviation industry actually is shrinking. “Despite the fact that the passenger demand is high but the growth in the airlines are going down. The passenger growth is increasing; the market is expanding, but unfortunately the aircraft are reducing in numbers. And the reason is basically no investment coming in,” he added.

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he Managing Director/CEO of the Skyway Aviation Handling Company PLC (SAHCO), Basil Agboarumi has been presented with the Bob Ogbuagu Leadership Award at the 2019 Lagos PR Industry Gala and Awards (LaPRIGA) organized by the Lagos State chapter of the Nigerian Institute of Public Relations (NIPR) at the Civic Centre in Victoria Island, Lagos. The prestigious award is named after late Bob Ogbuagu who was one of the pre-colonial leaders and founding father of the media profession in Nigeria, a founding member of the Zikist movement and one of the nationalists who were in the frontline in the struggle to free Nigeria from colonial rule. Established in 1963 and Chartered in 1990, the Nigerian Institute of Public Relations(NIPR) is the non-governmental, not-for-profit professional association of Public Relations practitioners charged to determine the standards of knowledge and skills needed to be attained by persons seeking to become registered members of the Public Relations profession and reviewing same standards from time to time. It has functioning Chapters in the 36 states of the Federation including Abuja. The Lagos State Chapter, the leading and most populated branch of the institute accounting for nearly 60 percent of the Public Relations practitioners in Nigeria, inaugurated the LaPRIGA (Lagos PR Industry Gala and Awards), as the prestigious red bow-tie event that recognize excellence and celebrate practitioners in public and corporate organisations and stakeholders via awards dinner to boost professionalism and more investment in the practice. Basil Agboarumi who is a seasoned Public Relations practitioner was honoured for positively impacting the Public Relations profession and inspiring young Public Relations practitioners in the country through his leadership and professionalism in the communications sector. He has been in the Public Relations profession for decades and was responsible for establishing the Public Affairs unit of SAHCO when it was carved out of the defunct Nigeria Airways with a mandate to spearhead the re-branding of the new company. He did this successfully, showcasing SAHCO as the world class ground handling company that it is. He grew in the ranks to become the Managing Director/CEO of Skyway Aviation Handling CompanyPLC, a feat that is uncommon in Nigeria, showing that Public Relations practitioners can also be C-Suite professionals at the helm of affairs of their organisations. In his acceptance speech at the LaPRIGA, Basil appreciated the organisers and the Lagos chapter of NIPR for finding him worthy of honour and recognising his efforts at projecting the practice. He vowed to continue to do more to uphold the tenet and principles of Public Relations practice in the country so as to inspire more people.

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Tuesday 31 December 2019

BUSINESS DAY

Investments

ENERGY INTELLIGENCE

Market Insight Companies Commodity Tracker Policy

OIL

GAS

PETROCHEMICALS

POWER

Concerns for power sector stability as Minister suspends key officials ISAAC ANYAOGU

ithin the last four weeks, the Minister of Power Mamman Sale has suspended two top officials of agencies in the Ministry: Damilola Ogunbiyi, managing director of the Rural Electrifiction Agency (REA) and Marilyn Amobi, the managing director of the Nigerian Bulk Electricity Trader (NBET), decisions that may have damaging impact on the sector analysts say. Some analysts say the removal of both officials and the manner it was done, portends danger for stability in the troubled sector marked by fractious relations between operators and regulators and even the government. “No significant reasons have been given for the Minister’s request that the two individuals should step aside; although there was the suggestion that the suspensions were occassioned by some alledged infractions and also part of govenment’s broader attempts to resolve some of the issues facing the sector,” said Wolemi Esan, an energy lawyer and partner at Olaniwon Ajayi. In the case of Ogunbiyi, the Minister did not give reasons for why she was sent on indefinite suspension. Perhaps even more controversial is that she had already turned in her resignation since October accordng to some media accounts citing sources in the REA, and was suspended barely two weeks to the end of her notice period. According to the press release from the Minister, ‘infractions’ were cited in the suspension of Amobi. But these supposed infractions have been adjudicated by the Nigerian Electricity Regulatory Commission (NERC) and she had been cleared of any wrongdoing. Amobi was accused of overpaying two power generating plants – Olorunsogo and Omotosho power plants the sum of N2billlion in 2016. “The attention of the Nigerian Electricity Regulatory Commission (NERC) has been drawn to the allegationso f fraudulent payments to the Olorunsogo and Omotosho

power plants by the Nigerian Bulk Electricity Trader (NBET) as widely reported in the press and other news media. “The Commission initiated the conduct of an investigation of the alleged N2billion overpayment by NBET to Olorunsogo and Omotosho power plants pursuant to the powers of the regulator to approve Power Purchase Agreements NBET executes with generation companies and the imperative to maintain the integrity of the electricity market. “The findings of the Commission’s investigation are as follows: Payments made by NBET to the two Power plants were done in compliance with the NERC TEM Order pursuant to the provision that sanctity of existing agreemnts be maintained,” NERC said. However, the minister disregarded the Commission’s findings and proceeded to suspend and replace Amobi, a move that clearly undermine the Commission and confirms concerns that the Commission is succeptible to government interference when it should be independent. “As I see it, it is very doubtful that the suspensions would bring the much needed stability in the

power space, on the contrary, it could darken the cloud of uncertainty currently hanging over the sector,” says Wolemi. It also presents another thorny problem says Esan. “One queries whether the Minister’s suspension of Marilyn Amobi, the managing director of a company incorporated under Corporate and Allied Matters Act (CAMA), is not ultra vires. “This is particularly in the light of the provisions of CAMA, as well as seminal decision of the Supreme Court in Longe v First Bank, on the satus of a managing director and the process to be followed for the suspension/removal of Managing Directors of entities subject to the provisions of CAMA,” said Esan. Mamman’s suspension notice to Ogunbiyi has all the ingredients of the bizarre, because government was firing its personnel who had already issued a notice to leave – which has been accepted. But the irony will be lost on those who issued the query much as any hope that the ministry will be better managed. There are fears by power sector operators that the minister with very limited knowledge of the power sector, could worsen problems in the sector through decisions operators say may

Sale Mamman

not have been properly considered. Ogunbiyi resumes in January as the United Nations representative for Sustainable Energy and CEO of Sustainable Energy for All (SEforAll). As the UN official tasked with helping the world achieve the Sustainable Development Goals (SDSs) and bridge the energy demand gap with affordable, reliable and clean energy, Ogunbiyi would have needed the support of government officials help Nigeria cut energy poverty for over 100million people. This ministerial overreach threatens further cooperation. Across Africa, nearly 600million people lack electricity access accord-

ing to World Bank estimation and SEforAll tracking data showed that the world was off the pace to meet the 2030 goal and roll out clean electricity and cooking everywhere. The organisation’s recent report found that current investments levels were insufficient to meet the SDG goal with less than 1 percent of the estimated finance required to ensure clean cooking facilities for all by 2030. “Sub Saharan Africa is “at risk of getting left further behind in the energy transition, the report warned as population growth outstripped the increase of energy access. Nigeria with Africa’s biggest population and the largest number of people without access to energy, it’s tempting to assume the minister’s priority would be to deepen energy access for the people, but more often than not, the actions of government officials make mockery of the sanest of assumptions. As the managing director of REA, Ogunbiyi successfully negotiated the Nigerian Electrification Project enabling the construction of solar minigrids across markets and schools and new investments in solar home system solutions. ‘The whole exercise is confounding,” says one official who didn’t want to be named in order to jeopardise relations with the ministry, “In the case of Damilola, the notice seem to have ignored her accomplishments within the sector.” Before her departure, Ogunbiyi helped Nigeria secure over $300million world bank funding for the off-grid sector and has been instrumental in moving off-grid energy conversations to the front burner of public discourse. It is not clear if these multilateral agencies will continue to deal with the current Minister as the threat of political interference is a prime concern for them. Ayodele Oni, energy lawyer and partner at Bloomfield Law firm says an implication of these actions is that competent people will be less enthusiastic to join public service. “They will consider the fact that they have a reputation to protect and will not want someone to rubbish them,” Oni said.

DisCos records marginal improvement in Q2 2019 collections ISAAC ANYAOGU

he 11 electricty distribution companies recorded a modest improvement in their billings and collections in the second quarter of 2019, the regulator said in a sector report published on its website. According to the Nigerian Electricity Regulatory Commission (NERC), the commercial viability and financial liquidity of the industry continued to be a major challenge with slight improvement in the second quarter of 2019. “During the quarter under review, the total billing to electricity consumers by the eleven (11) DisCos rose

to N186.08billion with a total collection of N121.32billion. Thes e denote 80.18% and 69.10% billing and collection efficiency respectively, indicating 0.20% and 5.11% points

increases respectively from the first quarter of 2019. “The level of collection efficiency during the quarter under review indicates that as much as N3.09 out of every

N10 worth of energy sold during the second quarter of 2019 still remained uncollected as and when due NERC also said that during the second quarter of 2019, out of the total invoice of ₦180.08billion issued to the eleven (11) DisCos for energy received from NBET and for service charge by MO, the sum of N55.10billion of the total invoice was settled, representing 30.60% remittance performance, and 2.83 percentage points increase from the first quarter of 2019. The Commission said the average total remittance performance to the market for all DisCos was 30.60% and ranges from 13.12% (Jos) to 43.27%

(Eko). “Notwithstanding the slight progress recorded in the second quarter of 2019, the financial viability of the Nigerian Electricity Supply Industry (NESI) is still a major challenge threatening its sustainability,” the Commission said. NERC said the liquidity challenge is partly due to the nonimplementation of cost-reflective tariffs, high technical and commercial losses exacerbated by energy theft and consumers’ apathy to payments under the widely prevailing practise of estimated billing. The severity of the liquidity challenge in NESI was reflected in the less than 50% settlement rate of the energy invoice

Tuesday 31 December 2019

BUSINESS DAY

ENERGY INTELLIGENCE These Seven NNPC Subsidiaries made a cumulative operating deficit of N275 bn in 9m 2019 DIPO OLADEHINDE

frica’s biggest oil producer is bleeding money as seven state subsidiaries attached to Nigerian National Petroleum Corporation (NNPC) made a cumulative loss of N275 billion in the first nine months of 2019. Nigeria is dependent on oil for about two-thirds of state revenues and is among the countries worst affected by the plunge in international crude prices to below $30 a barrel in January — a level was last seen in 2003. A cursory review of September’s 2019 NNPC’s financial reveals seven subsidiaries such as Corporate Head Quarters (CHQ), Port Harcourt Refining Company (PHRC), Warri Refining Petrochemical Company (WRPC), Kaduna Refining Petrochemical Company (KRPC), Shipping and Nigeria Pipeline Storage Company Limited (NPSC) made a cumulative loss of N275 billion. The lion share of the loss was incurred by the Corporate Headquarters (CHQ) and ventures with an N137billion loss while Nigerian Petroleum Development Company Ltd (NPDC) emerged as a shining star in 2018 financial year with N217.8billion profits followed by Nigerian Gas Company with N60.9billion and Nigeria Gas Marketing Company (NGMC) with N24.3 billion profits. “These are basically the medium which lots of funds are stolen as they are basically used by the government to do political patronage,”

Adeoluwa Eweje, an International Energy Solution Consultant told BusinessDay. NNPC has struggled to keep the poorly-maintained state-owned oil refineries operating profitably with very little luck; in the first nine months of 2019 year these refineries in Kaduna, Port Harcourt and Warri incurred a cumulative loss of N111.5billion in nine month 2019. “In September 2019, the three refineries processed no crude but produced 967 MT of finished products; primarily from WRPC and PHRC. Similar to last month, combined yield efficiency is 0.00percent owing largely to on-going

rehabilitation works in the Refineries,” NNPC admitted in its latest monthly report. Further, drilling reveals the biggest expenditure uptick amongst NNPC’s subsidiaries in 2018 occurred with Nigeria Gas Marketing Company whose expenditure increased by 824.02 percent from N20.1 billion to N186.3 billion. Industry analysts said the federal government could have sorted itself out financially rather than resort to borrowing if it had mustered the political will to first and foremost address concerns of unbundling Nigeria’s oil sector. “What we need is a lean or-

ganization that simply regulates the oil industry. In terms of production and exploration, they are not cut out for it. “Austin Onuoha, a research analyst, and the Executive director of African center for corporate Responsibility told BusinessDay. “Let me give you another instance, why is it that the Nigeria National Petroleum Corporation (NNPC) is not quoted in Nigeria’s Stock Market (NSE), why?‎If anybody is expecting NNPC to be profitable, that is wishful thinking. This is why you see subsidy payments growing by the year, because of inefficiency that char-

acterized the sector” he states further. Ademola Henry Adigun an oil sector governance expert told BusinessDay that,”‎To address concerns of the sector, the NNPC must be made to run as a corporate entity. It must run like a corporation independent of undue interference. There must be full disclosure on the activities of the corporation in terms of crude importation, which was imported, among others, to enable Nigerians who are the rightful owners of the corporation to track investments in the sector. Henry insists that there must be a proper legal framework for the sector, adding that “The government should write its own version of the Petroleum Industry Governance Bill if the present one keeps getting less attention from the lawmakers.” Apart from the recorded losses in the refineries, due largely to lack of fiscal governance framework for the sector, several investments shift base to other neighbouring African countries that are mainly leapfrogging the Nigerian state with regard to oil production but has better fiscal governance for the sector. Buhari had in 2015 promised to stop NNPC from falling back into bad habits by transforming Nigeria’s national oil company into a cost-effective, profit-driven and transparent institution; however, data from NNPC reveals the perennial challenges confronting the organization still remain the same.

Nigeria generated N4.6trn from Petroleum Tax, Royalties in 11 months 2019-CBN DIPO OLADEHINDE

ccording to data obtained from the Central Bank of Nigeria (CBN), Africa’s biggest oil producer has exceeded its revenue target for 2019, racking in a total of N4.6 trillion from Petroleum Profit Tax (PPT) and Royalties in Nigeria oil and gas sector in the first eleven months of 2019, According to the proposed budget of the 2019 fiscal year, the Federal Government projects about N3.69 trillion as oil revenues. This figure was derived from two presumptions; first, that in the year, oil will sell at a projected $60 per barrel; second, that oil production will hit 2.3 million barrels per day. BusinessDay analysis of CBN’s latest Economic Report for the month of November revealed Nigeria collected an oil revenue of N4.62 trillion in the first eleven months of 2019, ex-

ceeding the 2019 oil revenue target by N93 billion. In the month of January 2019, Nigeria collected N479.5 billion which increased to N516.9 billion in February, but further dropped to N472.4 billion in April 2019. In May and June, oil revenue dropped down to $410.2 billion and N336.6 billion respectively while

July and August oil revenues stood at N387.7 billion and 484.8 billion respectively. In the month of August, the federal government collected oil revenue of N484.8 billion, while in September, October and November 2019, Nigeria racked in N467.6 billion, N577.3 billion and N489.1 billion respectively.

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According to the CBN’s report, the fluctuations stemmed from the pipeline leakages and maintenance exercises that occurred at some terminals of the Nigerian National Petroleum Corporation (NNPC). For example the N489.09 billion gross oil receipt fell short of the monthly budget by 38.8percent while consti-

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tuting 56.9percent of the total revenue of N858.9 billion. The report reads: “Oil receipts, at N489.08bn or 56.9 percent of total revenue, were below both the monthly budget of N798.83bn and the preceding month’s receipts of N577.3bn by 38.8 percent and 15.3 percent respectively. “The decrease in oil revenue, relative to the monthly budget estimate, was attributed to shut-ins and shutdowns at some NNPC terminals, due to pipeline leakages and maintenance activities.” The CBN stated that the nation’s crude oil production, comprising condensates and natural gas liquids translated to 1.91 million barrels per day or 57.3 million barrels in November 2019. It indicates a marginal drop of 0.02mbd or 1.04percent from the 1.93mbd produced in October 2019. Nigeria’s oil and gas industry remains it’s most lucrative and viable invest@Businessdayng

ment opportunities as stakeholders believe that the oil and gas sector offers consistent opportunities in solving Nigeria’s dwindling revenue. The economy, Africa’s largest, expanded by 0.17percent in the previous quarter and 0.47percent in the same period a year earlier. The country has struggled to shake off the effects of a 2016 recession that ended the following year. Experts in the oil and gas sector ranked reforming fiscal and regulatory terms by passing into law a competitive petroleum industry bill as the most urgent task needed to make an oil sector record a two digits growth rate. Next is domesticating the value chain and also ensuring the oil and gas sector provides linkages across the economy. With crude oil prices fluctuating recently, President Muhammadu Buhari’s administration has repeatedly promised to diversify the economy by developing its non-oil sectors.

Tuesday 31 December 2019

BUSINESS DAY

OFFGRID BUSINESS

China, others show Nigeria how to attract billion-dollar investment in clean energy DIPO OLADEHINDE

n the last decade, China and seven other countries have attracted doubledigit billion-dollar investments in renewable energy, a development that holds many lessons for Nigeria. Compare to other countries, Nigeria’s renewable energy resource potential has not been fully exploited, mainly due to the low investment levels as a result of several factors ranging from poor policy implementation to lack of knowledge by the policymakers and regulators and more specifically, the absence of an enabling environment. According to the 2019 report by research company BloombergNEF (BNEF), China has been the defining market for new clean energy asset finance over the last decade, attracting a gargantuan $700 billion which represents over two-thirds of all new clean energy asset finance for emerging markets tracked by BNEF from 2009-2018. BNEF report noted that India and Brazil recorded the second and third highest investments

of $79.9 billion and $56.3 billion, respectively while Turkey ($20 billion) and Mexico ($19.5 billion) followed well behind, trailed by South Africa ($17.2 billion), Thailand ($12.7 billion), and Chile ($11.5 billion). BNEF report acknowledged that only South Africa saw its annual investment level rise in 2018, to $3.8 billion, largely due to the success of an auction program for new clean energy delivery contracts.

“In April 2018, the government signed power purchase agreements with 27 projects that had won contracts under auction rounds after three years of delays. The move helped restore some confidence in the South African market among investors,” BNEF report noted. BNEF said Foreign direct investment (FDI) supporting clean energy set a new record in 2018 jumping from $22.4 billion in 2017 to $24.4 billion in 2018 with

EU-based organizations remain the key foreign capital provider. “Development banks represent the largest single foreign investor group and deployed a record volume of capital for clean energy in 2018. These institutions, which include the World Bank and others, invested $6.5 billion, up from $4.5 billion in 2017,” BNEF said. BNEF report said Italian utility Enel remains the top overall provider of capital to clean energy assets in developing countries with $7.6 billion invested to date. The World Bank, Germany’s KfW and the U.S. Overseas Private Investment Corporation remain familiar names in the top ranks of clean energy investors between 2009 and 2018. Nigeria, like other nations, has long recognised the potentials of renewable energy in the promotion of environmental sustainability. However, unlike countries such as China, Brazil, and Germany, Nigeria’s huge renewable energy potentials have not been fully utilised. Nigeria depends on nonrenewable energy despite its vast potential in renewable sources

such as solar, wind, biomass and hydro. The total potential of these renewables is estimated at over 68,000MW, which is more than five times the current power output. The exploration of these potentials and the production of renewable energy on a large scale would significantly increase Nigeria’s electricity grid and ease power shortages in the country. Electricity created from renewable sources is cleaner, more efficient and more easily replenished. Stakeholders have said given Nigeria’s status as a fossil-fuel dependent economy with a large climate-sensitive agricultural sector, the development of a climate change policy and response strategy is critical; as climate change portends a serious threat to poverty eradication and sustainable development in general. One of the key pillars of Nigeria’s Vision 20:2020 is investment in low carbon fuels and renewable energy which might fail to see the light of days due to challenges of effective implementation of policy.

Renewables in Cities can ignite global change

ities are responsible for 75% of emissions globally, yet according to a new report they can resolve most of those emissions by switching to renewables. Doing so will bring multiple other benefits along the way. Moreover, hundreds of cities are already doing this, fueling a global transition to sustainability. The Renewables in Cities 2019 Global Status Report is the first of this kind by REN21, a global network specializing in benchmarking renewables transitions. The report is a collaborative outcome of over 380 authors, providing inclusive and informed insights into the current status and trends. The document dives into drivers for renewables transition in cities, ranging from air pollution to energy security and sustainable transport. It also looks into the landscape of policies and targets adopted by cities. For example, targets vary from aspirational, simple and generic to binding, stepped-up and specific. The way those targets are set can have significant impli-

cations for the further progress of a city on achieving them. So far more than 250 cities and municipalities have adopted 370 100% renewable energy targets in either power, heating and cooling, transport or all sectors. Among key achievements, as of 2018, total distributed solar PV installations grew to 213. The authors also explore current urban renewable energy markets and finance. They particularly dive into mechanisms such as renewable energy

purchase agreements, peer-topeer energy sharing, crowdfunding, green and climate bonds, as well as leasing and pay-as-yougo schemes. Finally, the report elaborates on the role of citizen participation, including prosumption, participatory governance, and public ownership and other cases. It, however, notes that sometimes “consumer choice may not be the optimal solution – and instead has to be limited” to optimize social, economic and environmental outcomes.

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

The report also provides many real-life examples, from Aberdeen and Evora to Quito and Quelimane. For example, Copenhagen is on the road to becoming the world’s first carbonneutral city. Wind covers most of the city’s power needs. And biomass-based district heating covers 97% of its heating needs. Investing heavily in renewables, New York City requires the installation of Solar PV on all new buildings in the city. New Delhi in India implements an innovative virtual net metering

scheme for customers that want to use solar PV but do not have a suitable roof. And Zhytomyr in Ukraine is combining biomass heat and power plants with financial support to citizens installing solar PV systems. Cities are leading the global renewables transition, achieving some of the most ambitious energy targets. They also act as examples of embracing responsibility for the planet and employ it to do better for all. “Data on local- and citylevel renewable energy policies and achievements tend to be decentralized, limited and outdated,” observes Rana Adib, research coordinator at REN21. “Building on our international community and rigorous data collection processes, REN21 plays a unique role in compiling and consolidating disperse data to build awareness of the energy debate”. Dib believes that such an approach allows us to understand data gaps and build awareness while “advancing the story of cities’ role in the energy transition”. All this makes a clear case for a better future.

Feedback: 07037817378, 08137433034, 08135447789

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

Tuesday 31 December 2019

BUSINESS DAY

BDTECH

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Why it has become more important to secure mobile devices

Andrew Voges is the threat prevention sales leader for Middle East and Africa at Checkpoint Software Technology Limited, provider of cyber security solutions. In the interview with Jumoke Akiyode-Lawanson, he discusses the immediate need for mobile phone protection, offerings available to enterprises and the impeding generation five cyber security risks. Excerpts. Why has cybersecurity for mobile devices become so important? hat we are talking about today is something called Generation five (V) of cybersecurity. If you think about Generation one (1), it was more about viruses attacking the computers. This happened in the 80s and 90s. In the late 90s to the year 2000 we had the networks and they were more of internet based attacks and that was Generation two. What we see from a threat landscape, specifically around Nigeria and other parts of Africa and even globally, is that customers have anti-virus protection from a generation one perspective. So, they are protected on the basic level. Generation two was more on the perimeter gateway which was the network. We have noticed that 100 percent of our global customers are protected on generation one and two. Generation three was more on the application base and that is where IPs kind of protection comes into play and we only see about 50 customers in Lagos or Nigeria protected around that. The protection levels for generation three attacks is also very low globally. Generation four was more about expert level attacks and that is where the sandbox and anti box plays a roll. Only seven percent of Africa or globally is protected there. So, if you look at it from that perspective, there is still a lot of work to do, with regards to security, specifically around public, government and enterprises. Generation five is where you have got the mega type of attacks such as state owned type of attacks. That also happens on the enterprise level but if you look at the attack surfaces and how they come about, and you think of how we actually access resources to our corporate environment, you will see that this is usually accessed through mobile. Mobile has become the new perimeter and these types of attacks happen across all the surfaces and that is why you need those type of protections. Specifically, with mobile, most people use their mobile phones to access email, cooperate

In percentage terms, how high are the chances of mobile phone breach globally and what is Nigeria’s risk level? Only 7 percent are on sandboxing as I said earlier, so you can imagine that the number for mobile is much lower. Only about two percent of mobile phones are protected globally. From a checkpoint perspective, Nigeria should be at least 50 percent with regards to protecting the mobile, considering that the country is a mobile first nation and most people are accessing the internet through their mobile devices. We should be working towards 100 percent protection for mobile globally, because the amount of threats coming through the mobile channels are much higher because mobile has become a more accessible opportunity for attacks. Andrew Voges

resources, applications and all sorts. If the phone is vulnerable to attacks such as the ‘man in the middle attack’ which is highly likely when people join free Wi-Fi available in public spaces; the malicious code or application installed on your phone through that attack will give criminals full access to everything on your mobile. We normally use a capsule workspace, which is a capsulated, encrypted file storage on the phone to secure that portion of your corporate information, but if this phone is vulnerable, criminals will still gain access to it. That is why Checkpoint also says that you need to have some form of protection on the phone to make sure that it is not vulnerable. How do you intend to successfully create awareness and increase adoption of these types of security levels in the Nigerian market? Checkpoint has a local team in Nigeria and we also educate through channel partners. We also have cyber events, where we get customers involved to educate internally. Part of Check-

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point’s roadmap is to ensure that our customers are secure. Not just from a network perspective or desktop perspective, but also from a mobile and cloud perspective. So, the education is driven through channel partners, events and we also go face to face to customers and talk ab out the full scope of security. It doesn’t help just talking about what is currently relevant to the customer, you need to also make them aware of other benefits to them. So there is a drive on awareness on a Checkpoint internal perspective. Who are Checkpoint customers, are your security solutions developed only for government and large enterprises? Our customers vary. We have got financial service companies, we have got some government agencies, public sector and some commercial and SMBs. The focus for Checkpoint is not just from an enterprise or corporate perspective, because we also see that from a consumer perspective, it is also necessary.

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What is checkpoint doing to buy the cooperation of telecommunications operators to secure mobile channels? We are engaged with the telecoms providers in Africa and not just Nigeria. We also engage the local telecoms players wherever we are present and get them on how to do the enterprise type of protection for their customers, for themselves and from a consumer base perspective because we also believe that its important. On the enterprise, we have got the sandblast, which is protection for the mobile device to make sure that it is not vulnerable, also to protect the enterprise workspace and we sell that in conjunction to make sure that the data is protected and encrypted on the phone. From a consumer perspective, we have something called Zone alarm and it is more or less the same product, but to make sure that their data is not compromised. Apart from the Sandblast and Zone alarm, are there any other unique cybersecurity products that Checkpoint offers for mobile phone security? Our technology is quite vast, so we have

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end to end security products. Apart from the traditional firewalls and gateways which offer threat prevention, which includes the zero-day protection. Zero-day protection is for things that have never been seen, so any type of new malware or ransomware can be prevented with Checkpoint solution. If you think about the network, we have a blade architecture on the gateway. There is a firewall that allows access control, identity awareness and allows IPS in that blade architecture. Then we have a cloud service that actually has the sandbox, and it is not your traditional sandbox which is first generation and only inspects on OS level, we also inspect on central processing unit (CPU) level, which is patented to Checkpoint and is important, because the zero-days come through as expert type of malware and actually goes into the CPU. We have a 100 percent invasion resistant sandbox. On the end point, we have the sandblast agent, which allows you either to have the full end point, anti-ransomware forensics which allows you to see the full insight of the malware or attack and to mitigate quicker. From a cloud perspective, we have cloud guard, which is an offering to office 365, google apps suite, drop box and the likes. That gives the same type of protection that you have physically on the network or endpoint into the cloud space or the cloud workspace. Then we have public and private cloud and we can actually have the same type of protection into the cloud environment and that can mitigate or suspend into the public cloud environment. What are the solutions that checkpoint provides to rescue already breached devices? If a customer does not already have Checkpoint solutions in his organisation or as a security vendor, we have got incident response as a service. What will happen is that we can actually inspect what has happened with the customer and effectively mitigate for them. These are services that we offer to customers.

Tuesday 31 December 2019

BUSINESS DAY

BDTECH

E-mail: jumoke.akiyode@businessdayonline.com

Microsoft to reduce software piracy in Africa with affordability initiative Jumoke Akiyode-Lawanson

icrosoft has launched the Windows PC Affordability in Africa Initiative, a programme that aims to reduce the prevalence of Microsoft software piracy in Africa’s emerging markets. To implement the Initiative, the organisation is working with its major PC partners, Acer, Asus, Dell, Intel, Lenovo, SMD Technologies and Mustek to improve the uptake and affordability of genuine software across the continent. Providing consumers with an enhanced, authentic experience using genuine software, and in so doing, creating awareness around the topic at hand encompasses two key objectives of this initiative. Africa’s emerging market potential is unparalleled and business development and the growth of existing SME’s remains a key focus across the continent. To tap into this potential growth, access to affordable genuine software and hardware is necessary if the digital divide is to be closed. The future of Africa is reliant on entrepreneur’s ability to start and grow successful businesses, and access to genuine software, that guaranties comprehensive security and protections for devices and data, is critical to the long-term success of these businesses. The same applies for students, who rely heavily on access to devices, software and information to complete tasks and projects. If their devices or data are compromised by malware, viruses or cyber-attacks, they may not be able to communicate or access important information. This could limit people’s ability to learn

new skills or limit businesses ability to compete and grow. “For over 35 years, Windows has been on a mission to create software that gives people the power to realize their dreams and master their daily realities. Built on the belief that anyone can do anything—if they have the right tools, Windows delivers easy, familiar experiences that help people create, explore, connect and enjoy. Today, over a billion people around the globe login to Windows to pursue their passions, and we are amazed at what we have seen our customers accomplish. No matter how big or how small, our goal is to empower people to do great things on a Windows PC. However, a pirated version of Windows puts both PCs and people’s data at risk. Only with Genuine Windows 10 provides built-

in comprehensive security including ongoing detection and protection from threats, parental controls and many other safety features,” Microsoft said in a statement. From your business to your family to your files, your important assets are protected when a genuine version of Windows 10 is at the heart of your computer. “As per our estimates, only a third of PCs being shipped into Africa include genuine software. Because of this, data breaches and malware attacks have increased significantly, resulting in loss of important data and decreased productivity,” said Deniz Ozen, regional general manager, consumer and device sales, Microsoft Middle East & Africa. “At Lenovo, we want to build smarter technology that will equip

us with the right tools to improve our lives and the way we work in order to make an impact in the world we live in. We believe that smarter technology can solve problems, create opportunities and transform the way we all live, learn and work,” said Shashank Sharma, executive director and general manager, Middle East, Turkey and Africa, Lenovo. According to him, the Windows PC Affordability in Africa Initiative is aligned with Lenovo’s Smarter Technology for All vision which aims to deliver meaningful impact through technology and create a diverse and dynamic world that enhances the human experience. “Our partnership with Microsoft allows us to leverage the best in class software to create highly productive IT environments that can help busi-

L-R: Adeleke Adewolu, executive commissioner, stakeholders management, NCC; Olabiyi Durojaiye,board chairman,NCC; Clement Bayi, board comissioner, NCC; and Austin Nwaulune, director, spectrum administration, NCC; at the stakeholders’ consultative forum on the regulation of drones: The Spectrum Perspective and Presentation of the Reviewed Guidelines on 2.4 and 5.8 GHz Spectrum Bands, held in Lagos recently.

nesses and consumers achieve true innovation through the use of genuine products that do not compromise the security, reliability or efficiency of any of our devices,” he said. In its June 2018 report, The Software Alliance reported that the overall rate of pirated software across the Middle East and Africa was 56 percent, the region also has several countries that rate as the highest users of unlicensed software with Libya and Zimbabwe tipping the scale at 90 and 89 percent respectively. Pirated software is often installed without the end user’s knowledge, and it is those users who suffer the consequences including lost data and unusable PCs. “Through the Windows PC Affordability in Africa Initiative, we aim to educate consumers on the risks of using pirated software, and to work with our PC ecosystem partners including Acer, Asus, Dell, Intel, Lenovo, Mustek and SMD to make Genuine Windows 10 PCs more affordable across Africa,” said Bradley Hopkinson, Vice president, consumer and device sales, Microsoft. Speaking on the initiative, Dave Brooke, vice president, client solutions group, Dell Technologies, CEE & MERAT said, “It’s easy to take devices for granted in the digital revolution. But without people, there is no revolution and without the right devices, they can’t participate in it. The Windows PC Affordability in Africa Initiative can help close the digital divide and put that power into the hands of those whose lives will be transformed the most. Dell Technologies strives to close this digital gap through sharing understanding around different device and technology ecosystems and enhancing the value created by them. “

How KongaPay’s card-less withdrawal, USSD features are changing market dynamics Jumoke Akiyode-Lawanson

-commerce company, Konga has recorded another feat with the roll-out of card-less withdrawal and unstructured supplementary service data (USSD) features on its payment platform, KongaPay, transforming the way digital payment is viewed in the e-commerce market. KongaPay is a secured payment platform licensed by the Central Bank of Nigeria (CBN). It is imbued with features that allow customers to hold funds in escrow, complete peer to peer transfers, purchase digital goods, pay for Digital Satellite Television (DStv) subscription and airtime at discounted rates. Explaining how the card-less withdrawal feature works, Joshua Fatoye, vice president, KongaPay said that the feature allows any account holder to withdraw cash from any Automated Teller Machine (ATM) nationwide, without using any debit card. “The card-less feature works this way. All the customers are required

to do is to sign up on Kongapay.com and ensure that their KongaPay wallet is funded using any of the funding options. Then, the account holders need to log into their wallets via web or app. Then, click on cash out from the wallet, and next on cardless cash out feature and input the amount and the beneficiary mobile number,’’ Fatoye said. Explaining further how digital payment is being transformed, Fatoye said that by default, the customer’s mobile number will be on display. The customers can, however, input any valid mobile number of any recipient they wish to send money to. The beauty of the process is that the mobile number does not have to be registered on KongaPay wallet. ‘’Next, the customers will then input their personal identification numbers (PINs) and One True Pairings (OTPs) to complete the transaction. Next, the customer who initiates the transaction will receive a message thus: “Your pay code request was successful”, and the beneficiary will get a short message service (SMS) notification with the withdrawal code www.businessday.ng

details,” he said. On how the recipient could process the cash at the ATM, Fatoye said: “The recipient should go to any ATM, tap on any of the keys on the keypad to get the screen active and select card-less withdrawal / pay code cash out, depending on the bank’s ATM. Next, he or she is expected to input the 8 to 14-digit withdrawal code, earlier sent via SMS, and input the cash out PIN (sent via SMS). Lastly, the customer will then input the amount (in multiples of one thousands) and wait to collect the cash.” On the USSD feature, Fatoye said KongaPay launched the USSD channel as an alternative to the web and mobile channels. Further, he said that the USSD channel will boost financial inclusion for millions of unreached and under-served Nigerians. “This means that users who do not have access to smart devices or live in areas where there is no data coverage, can still carry out their financial services on the go by dialing the KongaPay USSD code, which is *574#,” he said. Meanwhile, Fatoye explained that

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KongaPay has the best competitive pricing in the fintech industry, even as he revealed that the platform offers discount to customers who patronise it. “On KongaPay, we offer very competitive pricing to our customers. For instance, on KongaPay, customers can transfer funds to any bank account in Nigeria at a price much lower than the industry pricing. We also offer our customers discounts when purchasing airtime. We even go as far as absorbing the convenience fee costs and also offer a discount to our customers when they pay bills on KongaPay. ‘‘What this implies is that our customers do not need to pay the convenience fee, while paying for DSTV subscription. Also, they not need to pay the full amount for the subscription as KongaPay will offer them a further discount,” Fatoye said. Equally important, the KongaPay vice-president added that customers can do a lot with their KongaPay wallet, including peer to peer transfers (transfers to a KongaPay wallet as well as any bank account in Nigeria) @Businessdayng

as well as airtime purchase at discounted prices. “Account holders can pay for their DStv subscription as well as other bills on the platform without a convenience fee and still enjoy a discount on their payments. Customers can also use their wallets as a payment tool online on e-commerce platforms like Konga.com, Konga Travel as well as at physical stores. With KongaPay, there are no limits to access to financial services. Now customers can have their wallet in hand and enjoy the comfort of banking with their phone,” Fatoye said. To register for the platform, customers are expected to download KongaPay app on Google Play Store or sign up on kongapay.com to create an account. To fund KongaPay wallet, customers need to link their bank card to top-up or transfer from an internet banking app to KongaPay account. Customers can also fund their KongaPay account at any KongaPay designated agent nationwide or through a KongaPay wallet transfer from a third party.

Tuesday 31 December 2019

BUSINESS DAY

property&lifestyle Poor infrastructure, lack of growth enablers top real estate sector challenges in 2019 …but experts see sector in stabilization mode as year wears off CHUKA UROKO & ENDURANCE OKAFOR

or the real estate sector in Nigeria and those who make investments in it, the outgoing year, 2019, was a sobering moment. It was a year in which joy had a slender skin for the sector and the investors. Though hit by challenges from slow economic growth, lack of liquidity and dampened purchasing power, the sector was able to pull through a three-year recession, recording 0.93 percent positive growth in the first quarter of the year. But the joy of that recovery was momentary as the second quarter growth as reported by the National Bureau of Statistics (NBS) was negative. In the third quarter growth report, the sector recorded growth contraction that brought it down by 2.31 percent. “The sector in 2019 witnessed a very difficult season with decline in most of the major segments - commercial, retail and residential which also impacted negatively on not only the sector’s contribution to GDP, but also returns on investment,” said MKO Balogun, CEO, PFI Global. Some properties in a couple of estates were taken over by AMCON, while there was continued low rental yield on residential properties as more estates

Onwuanibe

Ashiru Balogun

MKO Balogun

Olurogba

Ibaru

were built but remained unoccupied. Notably, there was an increase in development of 1 and 2 bedroom units (BRUs) and conversion of existing 3 and 4 BRUs to 1 and2 BRUs. Ba l o g u n n o t e d t hat commercial properties had the greatest impact with major developments running into their third year without reaching optimal occupancy levels. Despite this, a couple of new commercial developments are still coming up that may lead to more poor returns. Retail has always seen major changes when the economy is under-per-

forming. But grocery retailers will continue to make it big while existing hardware retailers are going into grocery retailing to survive. “It is still a tough industry business,” Kola Ashiru-Balogun, managing director, Mixta Nigeria, told BusinessDay in an interview, saying that numbers don’t lie. According to him, the sector underperformed in the year under review. “It is still in negative growth in terms of GDP. That is a pure reflection of how serious we have taken the industry. I think that, as a country, if officially we are in recession, it means that,

individually, we are also in recession. Individual or personal wealth is next to nothing,” he emphasized. He noted further that, looking at personal balance sheet in relation to assets, real estate asset today is zero and the money in the bank is also zero. So, Nigerians are technically in recession, meaning that individual GDP has been going down Though there were some positives in the economy in the outgoing year which Paul Onwuanibe sees in reduction of bank interest rates and the CBN policy forcing banks to lend a

greater portion of their balance sheet, lending to this sector from banks still dropped considerably by N122 billion. But Onwuanibe was quick to point out some low points which, he said, revolved around lack of clarity and transparency in the regulatory environment, coupled with the extremely poor infrastructure to support real estate development. According to him, good roads, beautification and security are the biggest real estate growth enablers, but these were not seen playing out in the sector in the

outgoing year. Nigeria lacks good roads. The country has the largest road network in West Africa and second largest in Sub-Saharan Africa (SSA). Its total road network is estimated at 200,000 kilometres. About 2,627 kilometres are dualised while only 35 percent of the network is motorable. Apart from opening up communities, linking cities and facilitating trade and commerce, roads encourage and enable real estate investment. It reduces cost of construction and houses

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Lessons UK first time home buyers mortgage holds out for Nigeria CHUKA UROKO

he over 70 percent homeownership level in the UK is not a happenstance. It is the product of a well structured and functional mortgage system that ensures people don’t have to ‘steal’ government money or starve in order to save to buy their first homes. Unlike Nigeria where first time home buyers who are predominantly low income earners do not have any kind of support from government to enable them to own homes, first time home buyers in the UK and others with small deposits draw attention from government. Not long ago, first time home buyers took a greater share of the housing market than in the previous month, with overall approval levels also up. While there were 66,704 mortgages approved during the month of September, the market may have been af-

fected by continued impact of the Bank of England’s base rate rise in August as there were fewer borrowers with large deposits. According to the mortgage market monitor from residential chartered surveyors e.surv, large deposit borrowers, defined as having a deposit of 60 percent or more, accounted for 30 percent of the market, lower than the 32.5 percent recorded in August and the 33.8 percent seen in July. In Nigeria, none of the built environment professionals, not even the estate surveyors and valuers, keep record of mortgage transactions in the country and, again, because mortgage transactions are in fits and starts, nobody cares to know who takes mortgage loans and from who. The primary mortgage banks (PMBs) are challenged in so many fronts, especially with low capital base, low clientele base, non-performing loans and low housing stock on which

mortgages could be provided. They hardly lend to home seekers and the few that do make impossible demands from borrowers. But in the UK, small deposit borrowers saw a growth in market share month-on-month from 22.8 percent to 24.2 percent between August and September. Meanwhile, mid-market bor rowers also saw an increase in market share to 45.8 percent of the overall market, compared to 44.7 percent the previous month. Propertywire, an online residential property platform, quotes Richard Sexton, director at e.surv, as saying that September was the first month many home owners would have received their new, higher mortgage bills if they are on a standard variable rate (SVR). “But first time buyers were not affected by such matters, and there was a strong increase in the proportion of the market occupied by these bor-

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rowers. Young buyers may have been helped onto the ladder by the fact that house price growth has slowed across many areas of the country. Lower prices mean that would-be buyers can achieve their dream of home ownership much sooner, and this appears to have been borne out by these figures,” Sexton said. “With existing home owners trapped on expensive standard variable rates (SVRs) now feeling the cost of higher mortgage rates, the remortgage market cannot be under-estimated and activity was up compared to last month and September 2017,” he explained. He added that despite the rate rise, new mortgage borrowing was still very competitive and home owners would continue to be tempted by cheap fixed rates which would protect them against future base rate rises. When broken down on a regional basis, the figures

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show that every part of the UK saw a smaller proportion of loans given to large deposit borrowers than a month ago. London continued to be the market most dominated by these borrowers with 40.5 percent of all loans going to this segment of the market. Close behind was the South East on 37 percent and then the South and South Wales on 32.7 percent. In contrast, some 20.3 percent in Yorkshire had a large deposit. This was ahead of the North West and the Midlands, which both saw 24 percent in the month. Four regions, Northern Ireland, the North West, the Midlands and Yorkshire, saw a greater number of loans go to small deposit borrowers than their large deposit counterparts. In Yorkshire, some 33.5 percent of loans were to first time buyers and others with small deposits. Elsewhere, in the North West some 30.4 percent of @Businessdayng

all loans went to this part of the market while in Northern Ireland this ratio was 28.9 percent. The final region to have more small deposit borrowers than those with large deposits was the Midlands, with 28 percent of loans going to the former category. London, once again, was the market with the fewest small deposit buyers. Just 13.8 percent of all loans went to this part of the market during September, ahead of the South East at 19.4 percent. “Every single region reflected the national trend and saw a greater number of smaller deposit borrowers, while those with larger amounts of equity were squeezed. Those with small deposits in London and the South East still face a much harder time than those in the north and Northern Ireland. However, the slowdown in the capital will help more get onto the ladder in future months,” Sexton hoped.

Tuesday 31 December 2019

BUSINESS DAY

property&lifestyle Why time is now for REITs investors to reconsider residential properties CHUKA UROKO

s the curtain falls on 2019 today and individual as well as institutional investors strategise for the incoming year, one area of real estate investment that needs a rethink is the Real Estate Investment Trusts (REITs) and its strong leaning on residential properties. Besides the slow growth of the REITs market in Nigeria despite a significant increase in the global market capitalization which an Ernest & Young report puts at approximately US$1.7 trillion, up from US$734 billion a few years ago, low yield from residential properties remains a major challenge. Inthedevelopedeconomies of the world, especially in the US where it started in 1960, the REITs market has grown by almost 150 percent, while the market capitalization of non-US REITs has more than doubled. Oscar Onyema, CEO, Nigerian Stock Exchange (NSE), says the two fastest-growing markets the last five to eight years are Australia and Japan, both of which have now overtaken France and the UK to be the second and third-largest global

REITs markets respectively. There have, however, been attempts to grow this market in Nigeria as could be seen in the modest N2 billion Skye Shelter Fund floated in 2007. Others are Union Homes and Sun Trust which followed with N12 billion and N20 billion offerings respectively. UAC Property Development Company’s (UPDC’s) 2013 offering of N30 billion which declined to market capitalisation of N26.7 billion in May 2017 is the largest and most successful offering so far. But experts note that the return on investment, particularly from residential properties, is not encouraging, hence the need for portfolio diversification by investors in this market instrument. A recent survey by Estate Intel, a data-focused and research-based real estate firm says, though it represents the largest property sector in any country, Nigerian residential assets typically produce the lowest income and rental yields between 5 and 6 percent. The survey shows that residential properties are no longer attractive in relation to REITs yield, citing UPDC REIT which recorded the highest

average rental yield at 5.19 percent between 2015 and 2018. It dominates the Nigerian REIT industry by controlling 71.8 percent of the total investment properties owned and 52.4 percent of Nigeria REIT market capitalisation. Union Homes REIT and Skye Shelter Fund own only residential properties, recording similarly unimpressive rental yields of 4.75 percent and 2.91 percent respectively between 2015 – 2018. UPDC REIT, however, has a well-diversified property portfolio cutting across different sectors including residential, office, student housing, industrial and mixed-use developments and that explains the difference it makes in the market in terms of capitalization and investment yield. The total value of investment properties and total market cap for Nigerian REITs was N40.8 billion as at December 2018 andN24.9 billion by October 2019 respectively. This attests to the slow growth of this otherwise rewarding investment asset class. “To give you some context, Ikeja City Mall in November 2015, sold for a price higher than the current market cap

of Nigerian REITs. The market cap of all Nigerian REITs accounts for 0.09 percent of the entire stock exchange much less than other REIT regimes across the world,” explained Dolapo Omidire, Founder/ CEO, Estate Intel, in Lagos. Omidire was of the view that there should be a deliberate approach towards stronger property diversification away from the residential sector. He noted that UPDC REIT’s lowest-performing assets were residential properties namely Abebe Court and Victoria Mall Plaza 1 (VMP). These assets, according to him, have rental yields of 4.19 percent and a disappointing 2.04 percent while the company’s student housing project is now their highest yielding asset in 2019. “We tried playing around with the portfolio and found that if UPDC REIT’s portfolio had no residential properties, its average yield will increase by 105bps to 6.79 percent. This is a marginal but meaningful increase, creating a case for a deliberate approach towards stronger property diversification away from the residential sector,” he said. Omidire affirmed that

Apapa Oshodi Expressway: This is a strategic economic intervention —Fashola … Dangote assures expressway to be completed before end of 2020 CHUKA UROKO

inister of Works and Housing, Babatunde Fashola, has described the reconstruction and expansion of the Apapa-Oshodi Expressway in Lagos as a strategic economic intervention, saying that beyond the primary aim of easing traffic flow, the expressway is also providing jobs and growing the economy. “Everyone else sees a road being reconstructed, but we on this side see economy—a strategic economic intervention,” the minister said, explaining that besides the 650

direct jobs the reconstruction work has created, the materials used are locally sourced. Fashola who spoke during an inspection tour of the reconstruction work on the expressway at the weekend, pointed out that instead of importing bitumen for the work, Nigerian cement was being used. “Thatkeepscementfactories going, employing more Nigerians; we produce the cement, bag and transport it to areas of need. There is an economy going on there,” he noted. The minister noted further that about 5000 tones of aggregate have moved from the quarry to the construction site. This requires labour, drivers,

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trucks, tyres etc which he said are the underlying economy. In terms of prosperity and poverty, he said, he cited both Liverpool and Creek roads in Apapa where businesses have started coming back because the roads have been reconstructed. He hoped that more of the businesses that were short down would be coming back, expecting to see property redevelopment and renewal once the roads areompleted. “Once the economy of Apapa returns, all the clearing, forwarding, shipping, and other business activities will come back and that will mean shared prosperity for the whole community which will in turn mean a significant departure from poverty,” he said. The reconstruction of the Apapa Oshodi Expressway is being undertaken by the Dangote Group under the federal government’s infrastructure tax credit initiative. The reconstruction work starts from the Apapa Port gate to Oworonshoki and that will cost the group about N72.9 billion. “We expect that by the end of 2020, the entire road network will be finished and we will have a road that will last for 40 years. By that time, we expect that the rail facility that will run from Lagos to Ibadan shall begin some level of operation and the roads will last their actual designed lifespan,” he assured. Aliko Dangote, President/

CEO of the Dangote Group who accompanied the minister on the inspection tour, hoped that when the work was finished, people who had deserted Apapa Oshodi expressway would come back to their homes and businesses. “We assure you that the road will be finished before the end of next year. Residents and businesses have been very friendly to the contractor because they are looking forward to the completion of the construction work. Once that is done, their businesses will thrive much better than now,” he said. Dangote disclosed that his group is also part of the pain congestion inflects on businesses in Apapa as a result of poor port access roads. “We also operate inside the port. Two of our companies have made losses,” he said. Continuing, he said, “looking at our income between 2017 and 2018, you will see that we lost over N25 billion because of congestion. We were able to produce but we were not able to get out of the ports. With the opening up access roads we hope things will be better. This is why we are working day and night to ensure that the road is delivered on schedule with the highest quality standard.” The business mogul assured further the road, on completion, would be one of the best road networks not only in Nigeria, but also in Africa.

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Nigeria’s REIT industry was still very much nascent and needed as much support from the macroeconomic and regulatory environment as it could get. The industry still faces problems such as improper taxation structure, expensive assets and much more. Ayo Ibaru, Director, Real Estate at Northcourt , also affirmed that there were, evidently, issues regarding the quality of assets available and

concerns around the tax implications, suggesting that to reach performance levels of national economic significance, adjustments need to be made. “Outside the macroeconomic challenges that need to be addressed, Nigerian REITs keen on generating higher rental yields need to make deliberate efforts towards the diversification of their portfolios, especially away from residential properties,” Omidire advised.

Poor infrastructure, lack of growth enablers... Continued from page ?? prices which are at the core of the burgeoning housing demand-supply gap in the country. In the same vein, though technology is gaining traction in the property market, the challenges of expensive, cumbersome and long titling and registration processes remain and investors had this also to contend with in 2019. In all of these however, some experts told BusinessDay that the sector was, in actual fact, stabilizing in the outgoing year. “The industry as a whole is stabilizing and it has the potential to fully stabilize and report growth in 2020,” Ayo Ibaru, COO /Director, Real Estate Advisory at Northcourt said, explaining that this was largely because the sector was recovering from the effect of recession. Olurogba Orimalade, former chairman, Nigerian Institution of Estate Surveyors and Valuers (NIESV) Lagos State Branch, described the performance of the sector as adjustment. “The property market has come to its reality, as such there is a lot of adjustment; stakeholders are now giving more flexible terms,” he said. He noted, however, that the readjustment wasn’t so successful before now because of factors like high @Businessdayng

cost of finance and scarcity of the US dollar as these were among other challenges that impacted negatively on the sector. A b d u l m a l i k Ma h d i , managing partner at Modern Shelter Systems & Services, Abuja, was of the view that the sector has shown remarkable resilience in spite of the general slowdown of the economy. “In part, I think this is because the housing gap is still wide and demand is greater than the supply,” Mahdi said. The situation in the sector is not however hopeless. Onwuanibe 2020 bringing more government responsibility to infrastructure such as roads and traffic control. Balogun agrees, adding that affordable and student housing would, in 2020, be major market drivers while conversion of existing units to 1 and 2 BRUs will also gain momentum and new builds would focus more on that segment. He said that cost of home ownership has also come to the fore as most companies are relooking at their portfolio and optimizing through rationalization or redesigning for cost effectiveness while others, especially in retail banking, are looking at outsourcing the entire brick and mortar components so that they can focus on the experience.

Tuesday 31 December 2019

BUSINESS DAY

FEATURE Why the cap fits Ummi El-Rufai as Ambassador of Fistula Nabilah Hassan Umar

Ummi El-Rufai

partments and Agencies that have a role to play in nutrition and infant health care, such as Health, Education, Water Resources, Agriculture, Finance, Budget and Planning and State Primary Healthcare Development Agency, amongst others. That was how KADENAP was born. With the deliberate efforts and regular engagements with stakeholders, the number of admissions of malnourished children in the 11 LGAs where KADENAP operates rose dramatically from 352 in 2016 to 24,185 in 2019. Of the over 64,000 cases of malnutrition reported for treatment from 2017 to 2019, 85.6% attained full recovery. Thus, the fight against Fistula in Kaduna has certainly gained momentum after Hajiya Aisha Ummi Garba El-Rufa’i accorded it priority attention since 2017. Vesico Vaginal Fistula is a condition that allows for the continuous and involuntary discharge of urine and faeces. According to the UNFPA, early child bearing before the age of 18, poor access to emergency obstetric care and poor utilisation of reproductive health information services in addition to harmful traditional birth practices are some of the causes of the disease. This has led women and girls www.businessday.ng

to lose their babies. To compound their misery, they are shunned by their husbands and families due to the constant wetness and odour from leaking urine or faeces. Some women have narrated how a hut is built from them to isolate them from the rest of family, where they are restricted to and are left to their misfortune, untreated. They become outcasts, unable to lead normal lives, or contribute in any meaningful way to the society, rendering them permanently dependent on others. The programme Coordinator, UNFPA, Northern Nigeria, Ms Mariama Darboe, says between 400,000 to 800,000 women live with VVF in Nigeria with 12,000 to 20,000 new cases each year. In Kaduna, there are currently 12,000 recorded cases of patients with Vesico Vaginal Fistula (VVF).

Despite the large number of patients living with this disease, care for these patients was not commensurate with the magnitude of the challenge. In Kaduna, only 200 patients were treated annually in the single designated centre in the state, which allocated just one ward for these special cases. Going by this, it would have take over a decade to clear the backlog of patients that have piled up; not to mention the new cases that occur regularly. Imagine waiting 10 years for your turn for this life changing surgery. These disturbing statistics caught the attention of Hajiya Ummi El-Rufa’I and spurred her into action. Since 2017 she has paid numerous visits to the hospital, providing care packs for them and serving as a beacon of hope to the patients that they have not

“

With the deliberate efforts and regular engagements with stakeholders, the number of admissions of malnourished children in the 11 LGAs where KADENAP operates rose dramatically from 352 in 2016 to 24,185 in 2019

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“

hen I heard that Hajiya A isha Ummi Garba El-Rufai, wife of the Kaduna State Governor, Malam Nasir ElRufai, was honoured with the title of Ambassador of Fistula, it came as no surprise to me. I have seen first-hand how passionate she gets on a cause that strikes her. I first met Haj. Ummi in 2017, after she was named the chairperson of Kaduna Emergency Nutrition Action Plan, KADENAP. My first impression of her was humility. She welcomed me like we had known one another for years and I felt very much at home around her. But I learnt very soon that she did not joke when it came to delivering on a task she was assigned. She was a well-focused and results-oriented person and she would push every wall down, if necessary, to see that she achieved the desired results when it came to delivering on KADENAP. You see, KADENAP is not the usual “Pet Project”, as was the norm in the past where wives of heads of executives initiated a charity-like project funded by the Government to impact on the people. KADENAP is an emergency task force, created by the Governor, Malam Nasir El-Rufai, to reverse the disturbing statistics of malnourished children in Kaduna State. KADENAP came about after Haj. Ummi came across a certain report on the statistics of malnourished children in the State. She was shocked, and brought it to the attention of her husband, the Governor. I recount her saying they both couldn’t sleep that night. She took it upon herself to investigate and, lo and behold, she was faced with the most unbelievable sight before her. She said to me: “The kind of images you only see on TV, in wartorn countries like Syria, Somalia, is looking us right in the face, in our backyards.” That was the life-changing moment for Haj. Aisha Ummi Garba El-Rufai. She took it upon herself to use whatever influence she had to curb the scourge of malnutrition in Kaduna. KADENAP was created in January 2017 and she was to serve as Chairperson, facilitating the activities of other Ministries De-

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been forgotten. Through the Ministry of Human Services and Social Development, Ummi El-Rufai and the Commissioner, Hafsat Baba, brought the plea of the victims to the executive council of the Kaduna State Government, chaired by the Governor, Malam Nasir El-Rufa’i and requested a sum of 30 million naira to be provided for in the 2020 budget for the VVF cases. But the executive council, after hearing their plea, saw the need to increase the amount to 50 million naira, which has been successfully included in the budget, under the ministry of Human Services and Social Development. The ministry will also provide food for patients in the hospital on a quarterly basis, to cater to their needs during the 4 to 8 weeks they spend in the hospital. The Kaduna State Government under the El-Rufai administration is now committed to the prevention of new fistulas from occurring and combating the huge backlog in fistula repairs, reducing by 98% (12,000) the number of women requiring fistula repair in Kaduna State by 2022. To raise more funds in support of the Government’s effort, Kaduna State Government, in collaboration with UNFPA and Fifth Chukker Country and Polo Cub, organised the first ever high-level Fistula conference in Kaduna. At the High-level conference and fund raising event, Fifth Chukker donated a sum 5 million naira and pledged to give the same amount every year for the next five years. Wrapping up the event, the title of Ambassador of Fistula was conferred on Aisha Ummi Garba El-Rufai for her tremendous contribution to the ‘End Fistula’ campaign in Kaduna by UNFPA. This has not been her only recognition by an international body. Unicef awarded her “Ambassador for Children’s Education”. Following the giant strides and antecedents of her husband in the areas of Education, Health, infrastructural development in Kaduna State and the FCT, nothing less is expected of his wife. She has shown, times without number, her commitment towards improving the status of the most vulnerable in the society. Nabilah Hassan Umar wrote this from Kaduna

Tuesday 31 December 2019

BUSINESS DAY

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Tuesday 31 December 2019

BUSINESS DAY

POLITICS & POLICY Sacked Oyo chairmen warn newly inaugurated caretakers, civil servants, banks over LG funds REMI FEYISIPO, Ibadan

yo State chapter of Association of Local Governments of Nigeria (ALGON) has urged bankers and finance heads of the local government councils against approval of funds to the just inaugurated Caretaker Chairmen by Governor Seyi Makinde in the state. In an open letter to the local government caretaker chairmen, bankers to all Oyo state local government councils and LCDAs, HLAs/DAGs/ DFAs/F&GPCs, all local government council staff and all oyo state civil servants, the association said they “strongly avoid being put under duress by the Oyo State Government to partake in another man’s sin, by not allowing themselves to be used to further and foist what is clearly an illegal and fraudulent administration over our Local Government Councils and LCDAs in Oyo state”. Relying on dictates of the constitution and Supreme Court rulings as recognising only elected local government Chairmen, the ALGON stated that any approval or disbursement was illegal and tantamount to an attempt to defraud the revenue of local governments. “Over the past few months , we had consistently warned the Oyo State Government, and the Governor of Oyo State to respect the rule of law and desist from the path of illegal-

ity he was treading and being railroaded onto by politicians who are hellbent on dividing our Local Government Councils and constituencies as their political fiefdoms and their spoils of war”. “It is no longer news that Governor Seyi Makinde has demonstrated no iota of respect for the rule of law and our courts, hence his serial breaches leading to an illegal appointment of an unlawful contraption called Caretaker Chairmen. We emphatically restate that there is no law in Oyo State creating a Caretaker Chairman’s office over any Local Government Council and LCDAs, hence the recent purported appointments of

Caretakers is a flagrant display of irresponsibility, and mere jokes for public grandstanding with no force of law. “It is therefore follows that any operation, directives, approvals, disbursements, decision or step taken by such usurpers occupying a nonexistent office can only be tantamount to an attempt to defraud the revenue of the Local Councils and LCDAs for which such persons and their collaborators shall be prosecuted. We expected the State Attorney General would have attempted to publicly rebut our emphatic position if it were legally rebuttable, but clearly rather than offer legal advice to guide the state,

L-R: Dare Kadiri, deputy speaker; Olakunle Oluomo, speaker; and Governor Dapo Abiodun signing Ogun State N449.97bn 2020 Appropriation Bill into Law at the Governor’s Office, OkeMosan in Abeokuta on Monday, while Suhaib Salisu, chief of staff and Tokunbo Talabi, secretary to the State Government watch.

Land revocation: Aremu warns Abdulrazaq against paying evil with evil SIKIRAT SHEHU, Ilorin

ollowing the revocation of land belonging to the late Olusola Saraki by the Kwara State government, the governor has been warned against paying evil with evil. Issa Aremu, the vice president of Industrial Global Union, who gave the warning yesterday while speaking with journalists on the sidelines of the 30th anniversary of Pakata Patriots, also cautioned Abdulrazaq from engaging in actions that may draw the people apart. According to the labour leader, godliness is forgiveness and that is when one rewards evil with good deeds. Aremu, who was part of the Otoge Movement in the last elections in the state; affirmed

the learned professor seems to have outsourced his role as legal adviser to politicians who speak ignorantly on air about what they know nothing of. The management, administration and financing of Local Councils and LCDAs according to the constitution and the Supreme court in cases variously cited and now in the public domain, can only be validly approved, authorized, authenticated by documents executed by elected Local Government Chairmen. No authorization from any Caretaker Chairman of any Local Government Council or LCDA Caretakers nor their appointors is recognized under the current

that the governor has the right to compel accountability in the state, but the land allocated to late Saraki shouldn’t be invoked upon since the said owner is no more. The governorship aspirant in the 2019 gubernatorial election had while noting that the same spirit at which Kwarans united to send bad leadership out of power is needed to ensure the success of the administration, saying, he did not want anything that would create sympathy for those who have already created problems for the state. Aremu, equally encouraged Abdulrazaq to live like Nelson Mandela who despite the oppression and magnitude of land acquired by the white, never looked back, instead took South Africa to a greater height. The labour leader, howevwww.businessday.ng

er, expressed happiness with the achievement of Abdulrazaq in the last seven months which includes the payment of counterpart found, prompt payment of salary, as he even says the governor is teaching other governors in the country that governance is about serving the people. While hoping that Kwara will not be part of the loaming national industrial crisis, Aremu appealed to the governor to quickly set machinery in motion for the implementation of the new minimum wage. He, commends the Pakata Patriots’ Ilorin for blazing the trail, saying that communities should be able to contribute their quota to the advancement of the various communities without waiting for the government at all the time as exemplified by the Pakata Patriots’ Ilorin.

legal regime in our country. Any civil servant, bank or local government staff that honours such illegal approvals, directives or authorization from such persons therefore renders himself/herself liable to criminal prosecution for conspiracy and fraud. “We recognize that the Governor continues to act illegally hiding behind a cloak of constitutional immunity, while his political collaborators outside government who may be urging you all to embark on serial illegalities, will not be signatories to any official council document that may incriminate you and form the subject of investigations of this orchestrated fraud on the administration of Councils. Let us be clear that the revenue of our Local Government Councils and LCDAs for wages and emoluments are only payable to legally recognized employment positions and staff of Councils. Caretaker Chairmen are not legally recognized under our laws anymore and therefore are not staff of councils, nor are they entitled to collect any wage, emoluments or allowance from our Councils under any guise . It should be strongly noted that under our jurisprudence ignorance of the law has never been an excuse to criminal culpability. “A claim of ignorance, or self imposed duress will not avail anyone of our bankers nor Local Government staff and civil servants who act in defiance of established laws to conspire with usurpers not

provided for under any law in our land to rob our councils or pass themselves off as chairmen of offices that are both in law, and to your public knowledge not vacant nor conferred by law on any usurping caretaker. Any voucher signed by or authorized by Caretakers will be tantamount to attempted fraud. The letter jointly signed by Ayodeji AbassAleshinloye,ALGON Chairman and Jesutoye Oluyinka,ALGON Secretary Oyo State noted “As you are aware, the office of Chairmen of our Local Government councils and LCDAs are neither vacant nor available under our constitution for any caretaker to justifiably occupy either in law or fact. Therefore any individual who passes himself or herself off as Caretaker Chairman or seeks to issue directives to Local Government/LCDAs staff or civil servants or our bankers will along with such banker or civil servant, be acting fraudulently and in breach of clear legal pronouncements for which such persons and their stooges shall be prosecuted . Make no mistake about it, an armchair pronouncement of a Governor in a constitutional democracy, and a showmanship swearing in , are unknown to our law as currently constituted. It does not, and cannot by any stretch of political spin or imagination legalize what has been pronounced an illegality by the Supreme Court and the High Court of Oyo State.

EDHA suspends council boss over alleged unremitted IGR IDRIS UMAR MOMOH, Benin

do State House of Assembly on Monday suspended the chairman of Esan West Local Government Council, Patrick Aguinede over alleged unremitted Internally Generated Revenue (IGR) to the coffers of the state government. Frank Okiye, speaker of the House, announced the suspension at an emergency plenary session yesterday. Okiye said the suspension was sequel to the consideration of the report of the panel of enquiry constituted by the state Governor Godwin Obaseki to investigate allegations of fraud levelled against the chairman.

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It was learnt that the report of the panel of enquiry was forwarded to the house by the governor yesterday. He alleged that the report indicted the council chairman of presenting fake figures to the panel. He explained that the panel also found the chairman wanting for under remitting the council’s IGR into the state government coffers. According to him, the panel found out that the chairman was remitting N4.5 million while within the period he was suspended, the council remitted N7.6 million to the coffer of the state government. “The report, however, noted that the Acting Chairman of the council, between October 7 and October 30 @Businessdayng

remitted N9.1 million IGR to the state government. “The report stated that the difference in the amount generated in the council revealed that Aguinede was under remitting the council IGR. “The panel therefore recommended that the chairman be removed from office having been found culpable of the allegations,” he said. He however, directed that clean copies of the resolution be sent to the governor for ratification. The house, however summoned the chairman of the the Edo State Internal Revenue Service (ESIRS), lgbinidu Inneh and the commissioner for Finance, Joseph Eboigbe to appear before the House committee of selection on January 6, 2020.

Tuesday 31 December 2019

BUSINESS DAY

FINANCIAL TIMES

World Business Newspaper DON WEINLAND

i Mingjian will step down as chief executive of state-backed CICC after helping revive the equity capital markets and securities broking businesses of China’s first investment bank. The head of investment banking at CICC, Huang Zhaohui, will replace him, according to a company statement, taking a role previously held by some of China’s most powerful political elite. David Bonderman, the American billionaire and founding partner of US private equity group TPG Capital, will also step down as a non-executive director, in one of seven personnel changes to CICC’s board. Founded in 1995 as a joint venture between Morgan Stanley and China Construction Bank, CICC was for many years considered the investment bank of choice for China’s state-owned enterprises. With Wang Qishan, China’s vice-president and a right-hand man to President Xi Jinping, serving as its first chairman, and Levin Zhu, the son of former premier Zhu Rongji, as a former chief executive, the bank had a direct line to the country’s highest reaches of power. Private equity groups KKR and TPG later bought Morgan

CICC chief executive Bi Mingjian steps down

Outgoing head credited with reviving revenues at China’s first investment bank

Stanley’s stake following management clashes. More recently, while the bank has managed to pick up roles on many overseas transactions carried out by government-controlled groups, it has faced increasingly strong competition from state-

Countries ban exports in attempt to protect environment as consumption is set to soar

Asset manager conducted $40bn in futures trades over 11 years without right licence

ong Kong’s financial regulator has rebuked Fidelity for conducting about $40bn in futures trades over 11 years without the right licence and for not reporting the breach to authorities quickly enough. The city’s Securities and Futures Commission fined the US asset manager HK$3.5m ($450,000), pointing out that the misconduct was not deliberate, and adding that clients did not lose money as a result of the failure. The SFC said that between August 2007 and July 2018 Fidelity dealt in futures contracts without a “Type 2 licence”, relying on certain exemptions. Fidelity, which manages about $2.5tn worldwide, then found out when it conducted a licensing review in May 2018 that there were incidences where the trades did not qualify for exemptions. The Type 2 licence is used for dealing in futures contracts, oversees trading or broking and buying and selling contracts for clients. The asset manager did not report the incident — which involved 6,738 trades for affiliated entities worth $39.7bn — to the SFC until August later that year, “after it had obtained external legal advice on the matter”, according to the regulator. These sorts of incidents must be reported immediately on discovery, the SFC said. The regulator also criticised Fidelity over paperwork mistakes the fund made in 2017.

“The SFC is of the view that [Fidelity] failed to . . . put in place satisfactory and effective systems and controls to ensure the accuracy of information submitted to the SFC,” the regulator said. The company’s management said in a statement that it was “disappointed” by the incident and felt “regret” that it took place. “We reported the licence issue to the SFC and we have co-operated fully with them during their investigation. We have taken all steps necessary to improve our internal controls,” the statement said. The SFC has previously come down hard on international investment banks over due diligence failings. This year the regulator hit UBS, Morgan Stanley, Bank of America Merrill Lynch and Standard Chartered with fines worth a total of about HK$786.7m, and blocked UBS from sponsoring initial public offerings for a year. The SFC’s decision was influenced by the fact that Fidelity approached them, no investors lost money and that the trades were not viewed as fraudulent. The regulator said it took into account that the company had engaged an independent reviewer to look at its internal controls, that it co-operated with the regulator and that it had “an otherwise clean disciplinary record with the SFC”. In 2012, a former fund manager at Fidelity in the US was banned from trading in Hong Kong for two years, and in 2011 the SFC criticised Fidelity over breaches of the takeovers code. www.businessday.ng

revenues with the acquisition of onshore broker China Investment Securities in 2016, a deal that bolstered CICC’s onshore broking operations. “Before Bi became CEO, CICC suffered a period of market loss,” said Karen Sui, an analyst at CMB

Global sand trade boom fuels conservation fears

Fidelity rebuked by Hong Kong’s financial regulator PRIMROSE RIORDAN AND DANIEL SHANE

owned rivals such as Citic Securities. Mr Bi did not offer the bank an elite profile comparable to his predecessor, Mr Zhu, when he took control in 2015. But he is credited with helping CICC transition towards more sustainable

International Capital Corp in Hong Kong. “He helped change the whole revenue structure of the bank.” The bank claimed the number two spot for equity capital markets revenues in Asia excluding Japan in 2019, according to data from Dealogic, climbing back from fifth position between 2015 and 2018, and beating western rivals such as Morgan Stanley and Goldman Sachs. Only Citic Securities brought in more revenues in that line of business this year. Mr Bi, who is 64, also introduced China’s largest internet and technology groups, Alibaba and Tencent, as shareholders in the bank. Tencent bought a 4.95 per cent stake in CICC in 2017 and Alibaba followed with a similar investment in 2019. The incoming chief, 55-yearold Mr Huang, has been CICC’s head of investment banking since 2013. He joined the bank in 1998, three years after it was founded, according to an official biography. Before he joined CICC, he worked for China Construction Bank, one of the country’s big four stateowned commercial lenders.

CHELSEA BRUCE-LOCKHART

ncreasing demand for the world’s most-used natural material, sand, is fuelling mining in fragile natural habitats and prompting a growing number of countries to ban exports. The construction industry’s use of sand, gravel and crushed rock outstrips total global consumption of all fossil fuels and metals combined, when measured by weight, according to the OECD. It forecasts that in the next four decades construction demand for sand and gravel will almost double to cater for the world’s growing population and rising living standards. “Emerging economies are playing catch-up. They need [sand] to build infrastructure, roads and houses,” said Jean Chateau, senior economist at the OECD. “There’s absolutely no substitute. You need rocks and sand to build the world. You cannot build a world in plastic.” The sheer scale of sand and gravel extraction is creating what the UN Environment Programme has called “one of the major sustainability challenges of the 21st century”. “The amount of infrastructure coming down the pipeline for urbanisation is so gargantuan that unless there are sustainable solutions . . . [sand mining is] going to have more and more of an impact on our rivers and coastlines,” said Richard Lee from conservation organisation WWF.

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A graphic with no description Urban expansion One of the main ingredients of concrete is sand; the other is cement. China is by far the largest producer of cement in the world. In the three years to 2014 it produced more cement than the US did in the entire 20th century, according to the US Geological Survey. And that means China is using a lot of sand, too. China’s Poyang Lake is thought to be the largest sand mine operating in the world. According to one academic study, miners are estimated to have extracted 236m cubic metres of sand per year in just a two-year period, dramatically changing its shape. Around the world, about 28bn tonnes of sand is extracted each year, according to the OECD. But this may be an underestimate. Research cited in a recent UN report estimated that one tonne of cement can require up to 10 tonnes of sand to make concrete. Globally, 4.1bn tonnes of cement is produced each year, according to the US Geological Survey. This implies that the construction industry could be using more than 40bn tonnes of sand each year. The disparity between the two figures demonstrates how opaque the supply chain is, environmental campaigners say. “[Trade] is really difficult to track,” said Dave Tickner, chief freshwater adviser for WWF. “We know who’s digging this stuff out . . . and where it ends up, but we don’t know what happens in be@Businessdayng

tween. It’s a complete black box.” Reclaiming land Many of the world’s largest cities are located on the edge of water. As they expand, land reclamation is increasingly being used to extend cityscapes into the seas and oceans, requiring huge volumes of concrete, and, therefore, sand. By far the greatest demand for sand for land reclamation comes from Singapore, which has extended its land mass by almost 25 per cent since 1965. Its local geology lacks places to extract sand, and the city relies on neighbouring countries such as Malaysia and Cambodia for supplies. Growing trade Growing demand means a growing trade. Although Singapore’s sand imports continue to rise, dwarfing those of any other country, demand for foreign sand is also increasing elsewhere. Belgium, the Netherlands and France are among the world’s largest importers of sand, while some of the biggest increases in imports came in countries with substantial population growth. Bahrain imported more than 570,000 tonnes of sand last year according to UN Comtrade data, the largest amount on record. India imported more than 520,000 tonnes of sand in 2018, up from an annual average of about 50,000 tonnes in the eight years previously. Thailand’s sand imports have also shot up in the past few years.

Tuesday 31 December 2019

BUSINESS DAY

NATIONAL NEWS

Panasonic says Tesla gigafactory plant labour shortages resolved Joint venture electric battery project in Nevada had suffered from lack of engineers KANA INAGAKI

anasonic says it has resolved a labour shortage that has hampered production efficiency at the “gigafactory” in Nevada, its joint-venture electric battery plant with Tesla. The Japanese company made a $1.6bn investment in the $5bn plant to become the exclusive supplier of lithium-ion electric battery cells for Tesla’s Model 3 car. But the gigafactory has struggled to raise its production yields since it launched in 2017. Originally designed to be able to produce the equivalent of 54 gigawatt hours a year, it is only now finally nearing 30GWh. Panasonic said it has faced an industry-wide shortage of battery engineers after a construction boom in lithium ion battery megafactories to address the shift towards electric vehicles. “Even today, demand is far outstripping supply when it comes to chemical engineers with lithiumion experience,” said Allan Swan, the head of Panasonic’s US battery manufacturing unit based inside the gigafactory, in an interview. To build its team, Panasonic recruited chemical engineers from non-battery sectors and trained them to handle lithium-ion batteries. Now it has 3,000 people who operate the machinery and about 200 technical assistants from Japan to keep the plant running 24 hours a day, 365 days a year. “For us to move to [54GWh] should not be so hard. We now have the knowhow to do it in quite a high volume environment,” said Mr Swan. Securing engineers is a critical

step as Tesla plans to use batteries produced at the US gigafactory for its Model Y sport utility vehicle when it launches next summer, according to people with knowledge of the plan. Panasonic declined to comment on battery plans for Model Y. Tesla could not be reached for comment. The skills gap in engineers was one of many problems that led the Tesla chief executive, Elon Musk, to blame his Japanese partner for constraining Model 3 production in April. But whether the Japanese company, whose $1.6bn commitment only covers capacity to 35GWh, will make an additional investment is far from certain. In November, Kazuhiro Tsuga, its chief executive, said the company’s focus was in reaching the 35GWh target and that it had no plans to build a new battery plant for Tesla in China even despite the US company’s deepening relationship with local battery producers. Part of the frustration for Panasonic has been the mismatch between sales of Tesla electric vehicles and Mr Musk’s aggressive plans to build new plants in China and Germany, according to people close to the Japanese group. In addition to the capacity at Gigafactory 1, declining sales of Model S and Model X vehicles mean that Panasonic could also use production lines at its plant in Osaka without making investments in new factories. Mr Swan played down perceived tensions between the two companies, saying there was no barrier between the two teams working inside the gigafactory. “Our whole job is to make sure that Tesla wins,” Mr Swan said. “If Tesla wins, Panasonic wins.”

China boosts lending to small businesses despite risk Concerns grow that campaign is driving up bad loans rather than supporting economy SUN YU IN BEIJING

government-led campaign to boost small business financing by 30 per cent has prompted Chinese banks to relax lending standards and lower interest rates even though the sector is known for high numbers of defaults on loans. The lending spree makes small companies the latest beneficiaries of Beijing’s efforts to rescue the nation’s ailing economy after GDP growth fell to a 30-year low. However, concerns are growing that a surge in lending to subprime borrowers could result in an increase in bad loans rather than a boost to the real economy. Chinese banks lent a record Rmb2tn ($286bn) to small companies with limited access to credit in the first 10 months of this year, the China Banking and Insurance Regulatory Commission announced this month. That is up from Rmb1.7tn in the whole of 2018. Average interest rates paid on small business loans fell from 7.4 per cent to 6.8 per cent over the same period. Large banks are leading the wave. The Industrial and Commercial Bank of China, the nation’s

largest lender by assets, reported a 48 per cent jump in outstanding small business loans in the first 11 months of the year, according to a press release. ICBC currently charges small companies as little as 3.9 per cent interest, compared with the benchmark lending rate of 4.35 per cent. However, by the end of May, Chinese banks were also reporting a 5.9 per cent non-performing loan ratio for small businesses, according to the People’s Bank of China, against 1.4 per cent on loans to large companies. Even if the borrowers do not default, the increase in lending to small companies is often unprofitable. Many lenders are pricing small business loans at below the 8 per cent average cost of funds for small business loans, according to Ji Shaofeng, a former official at the China Banking and Insurance Regulatory Commission. “The Chinese government is sacrificing banking profits to rescue small firms,” said Mr Ji. The ICBC Branch in Dezhou, a city in Shandong province in China’s east, provides such a large subsidy on its small business loans that it is equivalent to a cut of 60 basis points in its lending rate.

Former Croatian PM convicted of corruption in privatisation case Ivo Sanader accepted bribe in sale of state-owned energy group, court rules VALERIE HOPKINS

ormer Croatian premier Ivo Sanader and the head of Hungarian oil group MOL have been found guilty of corruption by a Zagreb court, in a case that has lasted for nearly a decade. The case relates to the privatisation of Croatian state energy group INA in 2009. A court in Zagreb ruled on Monday that Mr Sanader was guilty of accepting a bribe of €10m from MOL chief executive Zsolt Hernádi in exchange for MOL being awarded a substantial stake in INA and more seats on its management board. MOL now owns 49 per cent of INA, while the Croatian state owns 45 per cent. Mr Sanader received a prison sentence of six years, while Mr Hernádi received two years. Neither of the men were present in court to hear the verdict, Mr Sanader due to illness and Mr Hernádi because he lives in Hungary and has fought extradition to Croatia despite Interpol — the body that facilitates international

police co-operation — issuing a warrant for his arrest. The ruling is the first step in a series of court stages and neither man will have to start serving their sentences until the appeals process has been exhausted. Both Mr Sanader and Mr Hernádi deny wrongdoing. MOL Group said in a statement that Mr Hernádi “continues to have the full support and confidence of the MOL Group boards”. A previous conviction against Mr Sanader for bribery and illegal profiteering in relation to the INA privatisation was overturned by Croatia’s constitutional court in 2015 due to procedural errors. This is the first time Mr Hernádi has been brought to trial. His lawyer Michael O’Kane called the verdict a “travesty” and said that a team of “senior independent trial monitors concluded that this case was riddled with unfairness, bias, incompetence and possibly worse”. In a statement, MOL Group noted that an investigation by the Hungarian public prosecutor in 2011 had cleared Mr Hernádi, and that a UN trade arbitration panel had decided

in favour of MOL and “explicitly concluded” that allegations of bribery were false. The question of INA’s ownership is politically sensitive in Croatia. It was one of the largest companies in the former Yugoslavia before its collapse and even after the war in the 1990s it was a big employer in the newly independent country. But since then the privatisation scandal has become an emotive issue for Croatians who are fed up with the country’s tumultuous transition to capitalism, and a cause of diplomatic tensions between Croatia and Hungary. The Hungarian government owns 25 per cent of MOL Group. Hungarian premier Viktor Orban has previously suggested that Croatia should buy back its INA shares to end the protracted cross-border row between the two EU members. Delivering the judgment on Monday, president of the Zagreb court Ivan Turudic condemned Budapest’s refusal to honour the arrest warrant for Mr Hernádi, saying: “There is an active European arrest warrant for Hernádi and Hungary should act accordingly.”

Trump’s financial records battle: what will happen in 2020? US Supreme Court decision likely to have far-reaching implications for future presidencies KADHIM SHUBBER

he US Supreme Court will rule in 2020 on a set of historic cases involving Donald Trump that will define the presidency for decades to come and determine whether he can continue to keep his tax and financial records secret. Mr Trump is battling Democrats in Congress and a New York City prosecutor to stop them investigating his business affairs with subpoenas to his accountant and two lenders, Deutsche Bank and Capital One. Though the president has been defeated in the lower courts, in March his lawyers will try to persuade nine justices on the conservative-majority high court to endorse Mr Trump’s expansive argument that he has immunity from investigation while in office. Here’s what you need to know: What cases will the Supreme Court hear? Two involve House Democrats, who are investigating Mr Trump’s

business affairs and possible Russian influence, and the third involves the Manhattan district attorney, Cyrus Vance, who is investigating alleged hush money payments. In all three, investigators issued subpoenas for copies of Mr Trump’s financial records to various companies that have worked with the president and his businesses. The president sued the companies — accounting firm Mazars USA and banks Deutsche Bank and Capital One — to stop them from complying with the subpoenas. What is Mr Trump arguing? In the US, both parties have long argued that the president occupies a unique role in the constitutional structure. The president is the only elected official in the entire executive branch — one of three coequal branches of government — and therefore requires some protection from interference and distraction while fulfilling his or her duties. Mr Trump has advanced two separate but connected arguments that rest on this foundation: that he is

absolutely immune from any form of criminal investigation while in office, and that House Democrats do not have a valid legislative reason to look into his affairs. Rather, Mr Trump claims, the requests are just efforts to harass him. The immunity line extends a longstanding justice department policy that considers the president immune from indictment by federal prosecutors while in office. But that has never been affirmed by the courts, nor has it ever applied to investigative steps before indictment. Taken together with the president’s defiance of the impeachment inquiry, the arguments amount to a broad declaration that Mr Trump, as head of the executive branch, cannot be investigated by anyone as long as he remains in the White House. How have courts ruled so far? Most of the judges who have heard Mr Trump’s arguments have responded with scepticism, even apparent disdain at times, as they have repeatedly ruled against him at the district and appeals court level.

Tuesday 31 December 2019

BUSINESS DAY

news

Multimedia campaign to help youths make informed migration-related decisions Odinaka Anudu

orried about the challenges faced by illegal migrants seeking better future outside Nigeria, the International Organisation for Migration (IOM) and other stakeholders in Edo State have launched a multimedia campaign to help youths make informed migration-related decisions. The campaign is targeted at addressing the growing dangers migrants face on their irregular journeys to Europe, given that many young Nigerians do not have access to what could be life-saving information. The IOM, community members in Oredo and Ikpoba Okha, two local government areas (LGAs) in Edo State, and local authorities, recently launched WAKA Well by IOM X (WAKA a pidgin word meaning move). The campaign aims to prevent exploitation associated with irregular migration by empowering Nigerian youths to make informed migrationrelated decisions. “WAKA Well by IOM X in-

cludes a video highlighting migration experiences and individual definitions of success,” said Abraham Tamrat, IOM Nigeria programme manager. “The videos were created and validated through a process which brought together relevant stakeholders, including government and civil society partners from Oredo and Ikpoba Okha between August and December,” Tamrat said. An IOM study conducted in September 2019 in Oredo and Ikpoba Okha, reveals that 58 percent (out of 419 respondents) aged between 13 and 40 have not heard or seen information on the dangers of irregular migration in the last year. Additionally, 58 percent indicated that friends were their primary source for information about migration and 66 percent said they generally got information about job opportunities through word-of-mouth. A lack of access to accurate and trustworthy information, both online and in-person, on regular migration options and the available opportunities in Nigeria was identified as key knowledge gaps.

Bauchi denies rift with Gombe over oil well James Kwen, Abuja

auchi State government has denied that there is no conflict, quarrel or rancour with Gombe State government over the ownership of an oil well discovered recently in the border communities of the state. This is as the Gombe State government had recently raised an alarm, claiming that the boundary community where an oil well was discovered in Bauchi actually belonged to Gombe. However, the Bauchi State governor, Bala Mohammed, while speaking with journalists after a courtesy visit to the FCT minister, Muhammad Bello, in Abuja said there was no altercation between the two states over the ownership of the oil well. He said: “There is no difference between Gombe State and Bauchi State. Wherever the oil well is found, we will embrace it

and we will thank God for his blessings, and there won’t be any quarrel. There won’t be any fighting, and there won’t be any conflict. “The oil well is for God’s glory and for the benefit of Bauchi State and Gombe State. Anything on the border communities is for both sides. We are brothers and sisters and we have lived together from time immemorial. So, anybody talking about division and rancour is just a figment of imagination.” The former FCT minister said his visit to the incumbent minister was to congratulate him for his good work and to appreciate him over the continuity of the projects initiated by the previous administration. Mohammed expressed delight that Belllo had not only continued to the complete projects he inherited from his predecessors but added more glamour to them.

2019 was 3rd safest year for commercial aviation – reports

he total deaths due to commercial aviation accidents in 2019 were 293, according to preliminary data making it the third safest year on record. The Germany-based Jet Airliner Crash Data Evaluation Centre (JACDEC) reports that over half of the fatalities occurred in the March 10 crash of an Ethiopian Airlines’ Boeing 737 MAX 8 in which all 157 people on board died. It was the second deadly crash in less than six months of a 737 MAX and led to the worldwide grounding of the jetliner. JACDEC said the disaster in March was an outlier, adding that no fewer than 48 per-

cent of people died in 2019 as compared to the previous year, when 559 people perished. It said only 2013 and 2017 were safer years for commercial aviation since the Second World War. Air safety expert Jan-Arwed Richter, who heads JACDEC, said the number of fatalities likely would have been higher if not for the grounding of the 737 MAX 8. Richter believed the continued operation of the aircraft would have put passengers at risk. JACDEC has analysed civil aviation accidents for around three decades. Accidents involving aircraft with a weight of over 5.7 tons or over 19 seats are recorded. www.businessday.ng

L-R: Dalu Ajene, deputy CEO/head IBD, RMB Nigeria; Remi Soyannwo, principal, commercial finance, Shell Nigeria, and Brian Marcus, head, corporate finance, Seplat Petroleum, at the recently concluded bonds, loans and sukuk conference Nigeria 2019 sponsored by RMB, in Lagos.

‘Penchant for cash transactions, bane of digital payment system’ Jumoke Akiyode-Lawanson

akeem Adeniji-Adele, the deputy managing director (DMD), eTranzact International plc, has identified the Nigerian culture and penchant for cash transaction as the bane of digital payments in the country. He made the assertion as recent figures from the Nigeria Inter-Bank Settlement System (NIBSS) put the total value of transactions on automated teller machines (ATMs) at N1.5 trillion in Q1 2019, while mobile money operations and web payments were N810.1 billion and N107.6 billion, respectively. The figures point to the fact that Nigeria is still predominantly a cash-based economy, Adeniji-

Adele said. He mentioned that interestingly, in Q1 there were more transactions on electronic transfer like ACH - (NIBSS Electronic Fund Transfer) - and NIBSS Instant Pay (NIP) than there were on ATMs, even though both options had bank branches as part of their channels. “So far, the Central Bank of Nigeria (CBN) has granted 79 licences to players in the payment system while another 26 have approvals in principle; this calls into question the level of cash circulating in the country. “Nigerians love to handle tangible money, it’s a mindset thing,” he said. He pointed out that the total value of transactions using ATMs in Q1 2019 and the fact that it was almost impossible to go

Deloitte’s Masterclass advances steps to achieve listing via IPO for private companies KELECHI EWUZIE

etermined to provide needed insights for private companies to consider in advance of a listing via an IPO either on the Nigerian or London stock exchanges, Deloitte Nigeria recently organised an IPO Masterclass in Lagos. The session, put together to enlighten senior executives of private companies on key matters, addressed the main advantages of being a listed business, together with the hurdles and key management challenges of the listing process. In attendance were specialists from Deloitte’s Equity Capital Markets team in London and Lagos, along with guest speakers from the Nigerian Stock Exchange (NSE) and London Stock Exchange (LSE), Standard Bank, White & Case, as well as the Nigerian Securities and Exchange Commission (SEC). Temitope Odukoya, partner and West Africa Financial Advisory leader for Deloitte, in his welcome address, gave an overview of the Nigerian economy with highlights on key performance indicators including foreign portfolio investments, foreign direct investments, the all share index,

Business Confidence Index and Consumer Confidence Index, among others. Simon Olsen, partner, Equity Capital Markets, Deloitte UK, in his presentation stated that there were over 112 African companies listed or trading on the London Stock Exchange with a total market capitalisation of over $166 billion. He noted that in the last 10 years, these companies have raised more than $22 billion in equity capital. Some of the benefits of listing on the LSE according to Gokul Mani, head of Primary Markets (MiddleEast,Africa&India)ofthe London Stock Exchange Group, includes: access to the deepest pool of international capital in the world, a reach to a broad and stable investor base and worldclass market surveillance. On his part, Godstime Iwenekhai, head of the Listing Regulations Department, Nigerian Stock Exchange in his presentation, provided insights on the guidelines for getting listed on the NSE. Also speaking at the workshop, Sa’ad Abdulsalam, deputy director/ Head (Securities Offering Division), SEC, explained the role of SEC and provided insights into the regulation and the listing rules of the SEC.

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a day without cash in Nigeria, lent credence to the claim that the country was predominantly a cash-based economy. Also, the eTranzact DMD believes the culture is being eroded as this aligns with NIBSS’ recent figures in comparison with Q1 2018 where ATM transactions with a total value of N1.57 trillion was higher than Q1 2019 by N70 billion. For inclusion, he says players in the digital payment system need to develop products and services according to people’s culture. “The people that should be enabled are not because the ecosystem hasn’t really grown that much to service the underbanked and unbanked,” he affirmed. According to Adeniji-Adele,

there is need to understand that a culture is in place and technology has to be built to fit it, also that the future of digital payment in the country should be collaborative. He pointed out that in October 2018, the CBN had published an exposure draft of the new licensing regime for payment system providers in the country. The draft somewhat puts a barrier on businesses, preventing companies that don’t have enough financial capabilities from playing in the payment system. For instance, the minimum shareholders fund for a mobile money operator is N3 billion ($8,273,400), which is definitely a great barrier to entry for start-ups.

Edo Assembly suspends council boss over alleged unremitted IGR IDRIS UMAR MOMOH, BENIN

do State House of Assembly on Monday suspended the chairman of Esan West Local Government Council, Patrick Aguinede, over alleged unremitted Internally Generated Revenue (IGR) to the coffer of the state government. Frank Okiye, speaker of the House, announced the suspension at an emergency plenary session Monday. Okiye said the suspension was sequel to the consideration of the report of the panel of enquiry constituted by the state governor, Godwin Obaseki, to investigate allegations of fraud levelled against the chairman. It was learnt that the report of the panel of enquiry was forwarded to the House by the governor Monday. He alleged that the report indicted the council chairman of presenting fake figures to the panel, explaining that the panel also found the chairman wanting for under remitting the council’s IGR into the state government coffers. According to Okiye, the @Businessdayng

panel found out that the chairman was remitting N4.5 million while within the period he was suspended, the council remitted N7.6 million to the coffer of the state government. “The report, however, noted that the Acting Chairman of the council, between October 7 and October 30 remitted N9.1 million IGR to the state government. “The report stated that the difference in the amount generated in the council revealed that Aguinede was under remitting the council IGR. “The panel therefore recommended that the chairman be removed from office having been found culpable of the allegations,” he said. He however directed that clean copies of the resolution be sent to the governor for ratification. The House however summoned the chairman of the Edo State Internal Revenue Service (ESIRS), lgbinidu Inneh, and the commissioner for finance, Joseph Eboigbe, to appear before the House Committee of Selection on January 6, 2020.

Tuesday 31 December 2019

BUSINESS DAY

news The Lagos hospital wards of deadly... Continued from page 1

Tuesday, November 12, to Thursday, November 14. When patients face these sorts of unnecessary delays, they seek succour in dangerous directions, including the quarters of quacks and herbalists. The awful impact of emergency department’s waiting times increases patient mortality and morbidity, in some cases leading to readmission in less than 30 days. According to a 2015 systematic review of emergency care in 59 low-and-middleincome countries, about 15 percent of 1.6 million deaths recorded annually in Nigeria are estimated to occur in emergency departments. “We made a rough calculation for Nigeria, where we identified relevant studies in 21 facilities and mean annual patient volume of 3,000 and 5 to 7 percent mortality. If we assume that the approximately 1,000 teaching and general hospitals in the country have the same mean annual patient volume and mortality, then out of the 1.6 million deaths recorded annually in Nigeria an estimated 10 to 15 percent occur in emergency departments,” the review stated. “It is likely that relatively simple interventions to facilitate triage and improve patient flow, communication and the supervision of junior providers could lead to reductions in mortality associated with emergency,” it said. Waiting time elsewhere In May 2014, the median wait time to be treated in the emergency department in the US was about 30 minutes, and slightly more than 90 minutes for treatment wait time, reported the US Centres for Disease Control and Preven-

tion. This adds up to roughly two hours in the emergency ward. The shortest median wait time was 12 minutes for patients who had an immediate need to be seen. In March 2018, patients in Accident and Emergency unit in the United Kingdom spent an average of 64 minutes awaiting treatment, according to the National Health Service A&E data. At its worst level on record, 74.5 percent of people who sought care at the Accident and Emergency unit in England as of October 2019 were treated and discharged, admitted or transferred within four hours, falling short of 95 percent of patients targeted to be sorted within the period. Between January and March 2019, 85.1 percent of patients were dealt with in four hours. The median waiting time for patients who required admission to hospital was four hours as of February 2019. For non-admitted patients, it was significantly lower at 146 minutes. Moving down to African peers, patients spent approximately 51 minutes from arrival to triage and two hours 14 minutes from triage to first healthcare provider between 2013 and 2014 in South African hospitals, a report by the South African Medical Journal shows, implying the total time spent beforebeingseenbyaphysician was three hours five minutes. Wait time is defined as the difference between the time of arrival in the emergency department and the time the patient had initial contact with a physician, physician assistant, or nurse practitioner, according to a National Hospital Ambulatory Medical Care Survey, United States 2010-2011. The treatment time is con-

These 7 themes shaped Nigeria’s economy... Continued from page 1

petrol, have stalled and

that cost the economy in 2019 in terms of attracting local and foreign investment as well as stimulating growth. The economy probably expanded 2 percent in 2019, which remains below population growth rate of 2.6 percent annually. Foreign Direct Investment (FDI) will slide to a six-year low of $848 million, according to analysts’ estimates. Even Ghana, which is roughly the size of Lagos, is expected to triple that. The economy remains largely undiversified with the oil sector retaining its stranglehold on government finances, and there’s been little or no improvement in infrastructure whether it’s power supply or transportation. Unemployment rate has surged and a big jump in government borrowing, which has more than doubled in five years, has had no impact on economic growth. Investor apathy Another theme that

shaped the Nigerian economy in 2019 was the lack of interest by foreigners in local assets other than debt instruments. The stock market provides the best proof of that apathy exhibited by investors. The market had a year to forget in 2019 as listed stocks turned in a loss of 17 percent on average. This follows from the 17.8 percent decline recorded in 2018 and implies that the All Share Index, which tracks movement in listed stocks, has lost 35 percent in just two years, making Nigerian stocks some of the worst performers globally and the worst compared to African peers surveyed by BusinessDay. Despite South Africa’s many economic troubles, the Johannesburg Stock Exchange posted a 2.9 percent increase in 2019. Kenyan stocks returned 17 percent in a late rally driven by investors who cheered Nairobi’s move to dump a controversial interest rate cap on bank lending in November. www.businessday.ng

New Commissioners taking oath of office before Governor. Nyesom Wike of Rivers State (l), during their inauguration at NAN the Government House in Port Harcourt, Rivers State, yesterday.

sidered as the difference between the time the patient had initial contact with a physician, physician assistant, or nurse practitioner and the time the patient was discharged from the ED to another hospital unit or to the patient’s residence. Tackling ED delay Long waiting time is indisputably a widespread problem in public health management around the world. But hospitals in improved medical climes are increasingly adopting custom means to tackle overcrowding, by modifying normal processes, for instance. When Abu Dhabi realised that 90 percent of patients visit emergency care units of Abu Dhabi hospitals for nonemergency cases, it instituted 48 urgent care centres across the emirate to tackle unnecessary overcrowding. The Department of Health Abu Dhabi categorised emergency departments into two: Emergency Units and Urgent Care Centres. Through this

system, they ensure only patients suffering from acute, life-threatening conditions are in the emergency care department, while patients with minor illnesses and injuries have to visit Urgent Care Centres, which will provide initial assessment, diagnostic treatment and referral as appropriate. In an article published in Harvard Business Review, Nicos Savva and Tolga Tezcan, associate professors of management science and operations at London Business School who have worked with hospitals and emergency departments, suggest waits could be reduced if the emergency departments invest in additional beds, employ a surplus of physicians, and use faster diagnostic technology. They also proffer financial reward system for hospitals based on average waiting time of patient. “Our research shows that such financial and outcomesbased incentives create indirect competition on waiting times

and have the same effect on outcomes as direct competition has on other service points, without patients needing to exercise choice,” they said. For Nigeria: better coordination, health insurance needed, not new centres Babayemi Osinaike, head of emergency at LUTH, said Nigeria does not need to build emergency centres to resolve the problem of efficiency. Rather, the system requires improved coordination of referral network from hospital to hospital. The country needs to be able to insure the population against health challenges, as out-of-pocket expenditure is the biggest problem of emergency delay in Nigeria. Finally, hospital officials and consultants must do better with early reviewing of patients. “One of the first challenges you have with emergency care in the country is lack of coordination. It is irresponsible of a doctor to refer a patient to a hospital you have not made contact with. You can’t refer

to LUTH when you have not verified if there is space. LUTH Emergency Room is about 35 beds, and [you can’t] expect everybody from federal medical centres and private hospitals to find a space,” Osinaike said. He said for him, expanding emergency rooms was not the solution, but getting the existing ones running efficiently is key. “Apart from coordination, health insurance has to work. Some of them have chronic conditions that they could have sought care for without having to come into LUTH. These are things that general hospitals should do,” he said. “And the hospital has its own fault, too. They can do better with how quickly some of the consultants review patients in the emergency room. If a consultant doesn’t do it quickly enough and it is the junior staff that does it and keeps asking them to do test that they don’t need, patients finish their money before the main consultants come to ask for the requisite tests,” he added.

Egyptian stocks returned 6.6 percent as a raft of market reforms that started in 2016 continues to come good for Cairo. The only other African country surveyed by BusinessDay that posted a negative return in 2019 was Ghana following an 8.4 percent slide. Frontier stock markets returned 9 percent, emerging markets did 14 percent and developed markets posted a 17.9 percent growth. It’s particularly worrisome that developed markets recorded 34 times the return of the Nigerian stock market despite offering less risk. That could lead to heightened investor apathy towards Nigerian stocks which have fallen out of favour since that 42 percent rally in 2017 that saw them rank one of the best performers. This is because it makes little business sense to invest in a risk- laden market only to earn far less than you would have if you invested in a developed market where your investment is much safer.

Presidency appraises self on economy in ...

He said year-on-year headline inflation rate declined steadily from 15.1 percent in January 2018 to 11.9 percent in November 2019. Year-on-year core inflation rate slowed from 12.1 percent to 9 percent between January last year and November this year while year-on-year food inflation rate decreased from 18.9 percent in January 2018 to 14.5 percent in November 2019, he said. Verdict: Headline inflation is currently at 19-month high and will close 2019 higher than it was at the beginning of the year. Rate of increase in food prices is also at a 19-month high while core inflation is highest since May. Price level had generally trended downwards in the earlier part of the year (except from March to May) until September when the closure of the border pushed the price of goods and services up. Combined with seasonal factors, inflation is expected to close at least 12 percent this year.

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the economy to show what

is true and worth celebrating and what is not true so the government can improve upon it in 2020. On the economy “The economy continues to witness a strong performance, building on the steady recovery seen since the last recession,” Mohammed said. He said in 2019 the Nigerian economy grew at an average rate of 2.2 percent over the first three quarters, compared to 1.7 percent over the same period in 2018. Both the oil and non-oil sectors performed considerably better in 2019 than in 2018. The oil sector grew at an average of 4 percent over the three quarters, compared to 2.4 percent in 2018, while the non-oil sector grew by 2 percent, compared to 1.7 percent in 2018. The average daily oil production level rose to its highest in the last three years, reaching 2 million barrels per day (mbpd) in 2019, compared

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to 1.8 mbpd in 2016, and 1.9 mbpd in both 2017 and 2018. Mohammedalsosaidthatin particular, in the third quarter of 2019, the major growth drivers were information and communications, agriculture, mining & quarrying, transportation & storage as well as manufacturing, all of which have seen considerable focus by government. In the third quarter of 2019, a total of 34 economic activities witnessed positive expansion, same as in 2018. Verdict: The economy in the third quarter of 2019 saw its fastest expansion since the fourth quarter of 2018, with each quarter in 2019 exceeding corresponding quarters of the prior year. However, growth is not strong because it is still lower than pre-recession levels (above 3 percent) and slower than population expansion of 2.6 percent. On inflation Mohammed said trends indicate that overall macroeconomic stability is being achieved, with inflation rate steadily trending downwards. @Businessdayng

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Paul Gbededo: Providing business leadership to take Nigeria closer to food security CALEB OJEWALE

chieving food security has been a priority of successive governments in Nigeria, and food-processing companies have in recent years also tried to key into this objective in different ways. Over the last six years, Paul Gbededo has led the charge to make food more readily available to millions of Nigeria, through Flour Mills of Nigeria (FMN) Plc where he has been CEO since April 2013. “I believe that we have to come to the realisation that we can’t continue to depend on just the revenue from oil as a nation,” Gbededo told BusinessDay in a recent interview. “Likewise, the era, when we had to rely on the importation of food and raw materials, is gradually passing.” According to him, Nigeria’s agriculture sector is witnessing increasing support in the forms of enabling policies. The Agriculture Promotion Policy and the Economic Recovery and Growth Plan, for example, have both focused heavily on improving food security and achieving selfsufficiency in food production. The growth in this sector, though marginal, is incremental, and for Gbededo “is a good sign”. For Nigeria to see the type of development that is expected in food production there is also need for commensurate investments that will in turn lead to increased production and create value in the long run. The longterm sustainability of Nigeria’s agriculture depends on its linkage to industry, he said. FMN, which he leads as CEO has to an extent, been living up to the requirement of massive investments to drive agricultural and industrial productivity across Nigeria. The company’s over N60 billion investments in Sugar production, in particular, recently won the praise of Niyi Adebayo, minister of Industry, Trade and Investment. “I am quite impressed with the level of investment and planning that has gone into this enterprise, also because of the number of people that are employed here,” said Adebayo. “Efforts like these go a long way in reducing the number of unemployed Nigerians” The Sunti Golden Sugar Estates, owned by FMN’s Golden Sugar Company, is described by the company as Nigeria’s only Greenfield Sugar investment under the Sugar Masterplan that is currently producing raw sugar. Since the implementation of the Sugar Masterplan, the Gold-

Gbededo

en Sugar Company (a subsidiary of Flour Mills PLC) has invested heavily and productively towards the goal of helping Nigeria achieve self-sufficiency in sugar production. When the National Sugar Development Council (NSDC) had its mid-term review in 2017, Sunti Golden Sugar scored 58 percent in the targets set in the backward integration plan, including number of projects, new sugar factories, land developed, land under cane, outgrower farms, sugar produced and job creation. It came ahead of Dangote, which scored 45.8 percent and BUA, which scored 17 percent. Under Gbededo’s leadership, FMN’s recent giant strides have not been limited to Sugar. There have been efforts to become a major player in the palm oil value chain as well where like many other commodities, Nigeria has a significant deficit. Flour Mills of Nigeria (FMN) a c c o rd i ng t o i n f o r mat i o n gleaned from a factsheet, is stepping up its position in the oil palm space, with an ambitious plan for a tenfold increase of its current production within about seven years. Crude Palm Oil (CPO) production by the company, which is currently 2,700 tons, is projected to increase to 22,000 tons by 2027, an almost tenfold increase within seven years (2020 – 2027) once the mill is commissioned and projected

to grow to 52,000 tons by 2030. Located in Edo state, the palm oil investment by FMN currently sits on 11,600 hectares spread across three locations; Iguobanor and Iquiye (Agri Palm 1) and New Land (Agri Palm 2), which are 25 kilometers apart. In 2014, the company unveiled what it describes as one of the biggest, automated edible oil refineries and the first margarine plant in the country. The operation of the refinery is supported with palm oil from a 4,500-hectare oil palm plantation in Edo State together with soybean sourced by its aggregation teams across the country. In 2017, as part of a strategic plan to develop a centrally located grains hub in Nigeria, the company commissioned one of the biggest and modern Sorghum milling plants in Kano. The mill has an installed capacity of 100,000 metric tons per annum and engages a network of about 10,000 farmers in an out-growers scheme, creating jobs for at least another 40,000 people, and small-scale businesses. For Gbedeo, the 2018 commissioning of Sunti Sugar Estates remains “a shining example of the magnitude of investments” level of activities by the company in aiding food security. Professional Background Gbededo’s 37-year career with FMN Group started at Nigerian Bag Manufacturing Com-

pany Plc (1982 – 1998). There, he acquired extensive experience serving in various managerial positions as Process Control Manager, Production Manager, General Manager Production and became the first Nigerian Production Director in 1993. A Fellow of the Polymer Institute of Nigeria and former Managing Director of FMN’s Agro-Allied Business, Gbededo was appointed the Group Managing Director /Chief Executive Officer of Flour Mills with effect from 1st April, 2013. According to his profile on the company’s website, he was educated at the Polytechnic of North London, UK, where he obtained Graduateship of Plastic and Rubber Institute and Associateship of National College of Rubber Technology in 1980, and holds MSc. Degree in Polymer Technology (1981) of Loughborough University of Technology, UK. An alumnus of the Lagos Business School’s Advanced Management Programme 3, he attended Pasta Machinery Use, Maintenance and Operation at FAVA, Italy in 2005. Gbededo who is credited for his pioneering role in fertilizer, pasta and rice production, in 1998, became General Manager/Director in charge of fertilizer operations, pioneering development of the product, “Golden Fertilizer”. He also served as a pioneer General Manager/Director for Golden Pasta Company Limited, a former subsidiary (now a division) of Flour Mills. In July 2012, Paul was elevated to the position of Managing Director, Agro-Allied business with responsibility to implement FMN Group’s backward integration policies, programmes and initiatives. Less than two years later, he was appointed the company’s GMD/CEO. Minor upsets, but future remains brighter FMN has grown its revenue by 61.88 percent since 2014 (the first full year after Gbededo assumed leadership). The consumer goods firm posted a revenue of N527.4bn in 2019 business year compared to N325.79bn five years ago. However, profit declined by 25.48 percent when the 2019 business year is compared with 2014. The decline first occurred around 2016 when Nigeria’s economy entered a 5-quarter recession, and could be attributed to the effects of recession. On a year-on-year basis, revenue declined 2.81 percent from N542.67bn last year. However, the future appears to look better. With Nigeria’s land borders shut, the shift rice, a staple food

many consider a favourite, to a substitute means pasta makers like FMN could gain. For FMN, “Shifting demand to pasta suggests stronger earnings in 2020,” noted analysts at Lagosbased Chapel Hill Denham. According to the analysts, the renewed demand for pasta is expected to boost food turnover in 2020, as the recent border closure has impacted rice importation, inducing a shift in demand to Pasta (Spaghetti, Macaroni etc). Chapel Hill Denham’s market price survey indicates that FMN’s Golden Penny Spaghetti retail price has increased to an average of N235/500grams stock keeping unit (from an average of N200). This is expected to lead to a higher sales volume in the consumer good firm’s food segment within the first half of next year. The analysts also expect the Sugar and Agro-Allied segments to maintain current growth trajectories (grow by 15.1 percent year-on-year and 5.1 percent year-on-year respectively to N44.94bn and N49.40bn in H120) pushing 2020 turnover to N548.32bn, up 4.0 percent yearon-year from N527.41bn in 2019. However, weaker wheat and CPO input prices are likely to marginally support gross margin to 11.8 percent in 2020 from 11.7 percent in the first half of next year and 10.1 percent in 2019 as revenue rises by 4.0 percent year-on-year. While Chapel Hill Denham’s projection shows a 0.4 percent growth in FMN revenue and a decline in the company’s topline in the period, they however expect profit to grow 16.4 percent to N5.9bn in the first six months of next year. Chapel Hill Denham said in its report that it retains a buying rating on the stock and raised its target price to N25.58 from N17.99. The new TP represents a potential total return of 38.7 percent (capital gain of 32.5 percent and a dividend yield of 10.3 percent). The FMN Group’s mantra, “Feeding the Nation, every day,” is according to the company, at the heart of its strategic decisions on what to produce, how and where factories are set up, the level of care that is put into products, and how they interact with host communities and the wider environment. “Our goal to be involved in all stages of the food value chain has over the years continued to inspire our investments in the development of critical infrastructure that is required to support our target value chains,” Gbededo told BusinessDay.

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