Businessday 31 may 2018

Nigeria risks huge losses to hackers over lax mobile apps security Jumoke Akiyode-Lawanson

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ndustry watchers fear that the mismanagement and non-regulation of mobile application development in Nigeria’s multi-billion-dollar mobile app market can be highly prone to exploitation by software hackers and cyber criminals.

This comes as the nation has witnessed exponential growth over the years on the back of rising smartphone, tablet and wear-

able device ownership and significant improvement in broadband internet services.

They say that Nigerian software developers are more concerned about the acceptance and sale of innovations rather than about the perfection and more importantly protection of their Continues on page 34

See commodities on page 4

news you can trust I ** THURSDAY 31 May 2018 I vol. 15, no 66 I N300

L-R: Halima AlikoDangote, trustee, Aliko Dangote Foundation; Abdulraman Dambazau, minister of Interior; Aliko Dangote, chairman, Aliko Dangote Foundation; Vice President Yemi Osinbajo; Lai Mohammed, minister of Information, and Ibrahim Idris , Inspector General of Police, as the Aliko Dangote Foundation donated 150 fully kitted operational cars to the Nigeria Police in Abuja, yesterday.

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IMF outlines 3 major reforms needed to boost Nigeria GDP says 2.1% expansion feasible in 2018

Delay expected in GE’s Lagos-Kano rail concession June take-off date MIKE OCHONMA & IFEOMA OKEKE

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here are strong indications that the rehabilitation of the Lagos-Kano narrow gauge rail line by General Electric (GE), the preferred concessionaire, may not take off in June as announced by the Federal Government.

This is due to what a GE source described as preliminary operational precedent that must be adhered to by all parties involved.

While both parties are eager to see the narrow gauge project on Continues on page 34

DIPO OLADEHINDE

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he International Monetary Fund (IMF) has outlined three major reform areas needed to boost growth rates in Africa’s largest economy.

In an exclusive interview with BusinessDay yesterday, May 30, Abebe Aemro Selassie, Director, Africa Department of the Fund said he still expects that the country’s economic growth will hit the 2.0 percent mark this year.

Without fundamental reforms, the IMF has forecasted Continues on page 4

Inside

L-R: Adeyinka Adekoya, MD/CEO, Wapic Insurance plc; Aigboje Aig-Imoukhuede, chairman, and Mary Agha, company secretary, at the 59th annual general meeting of the company in Lagos, yesterday. Pic by Olawale Amoo

Former Taraba governor, Nyame, bags 14yrs imprisonment for fraud P. 35

Political re-alignment takes shape as Melaye resumes, technically ‘defects’ to PDP OWEDE AGBAJILEKE, Abuja & INIOBONG IWOK

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…Fayemi resigns to focus on Ekiti guber race

here was mild drama at the Senate on Wednesday, following the resumption of plenary by the embattled chairman Senate Committee on Federal Capital Territory (FCT), Dino Melaye, who technically defected to the opposition Peoples Democratic Party (PDP), on Wednesday.

The development happened a day Adams Jagaba, a member of the House of Representatives from Kaduna State, defected from the

Dino Melaye

Kayode Fayemi

governing All Progressives Congress (APC) to the PDP. Melaye’s resumption comes two weeks after he was granted bail by a Kogi State High Court sitting in Lokoja.

He was wearing a neck brace and holding a walking stick. Rising on Order 14 of the Senate Standing Orders, 2015 (as amended), the lawmaker said he was no longer comfortable sitting on the row of the All Progressives Congress (APC) and requested to sit on the People’s

Democratic Party (PDP) row.

He accused the police of attempting to kill him twice by administering chemical substance and injection on him. Although he thanked the National and Kogi State leadership of the People’s Democratic Party (PDP) for coming to his rescue during the failed recall exercise, he, however, did not mention his party - the All

Continues on page 34

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BUSINESS DAY

Thursday 31 May 2018

Thursday 31 May 2018

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BUSINESS DAY

that the country’s real GDP per capita, which is already declining, will continue to decline over the next few years, plunging more people into the poverty trap.

Selassie listed some of the deliberate policy actions he believes can help sustain economic growth. However, he admitted most of them are already well laid out in the Economic Growth and Recovery Plan (EGRP) prepared by the federal government.

“All the measures needed are already captured in the ERGP. What is needed really is to implement them to the fullest degree,” Selassie said.

He listed three reforms that he believes will help facilitate growth.

“The first is paying attention to and addressing the big resource needs that the government has.

The total revenue envelop for the government is about six percent of GDP. That is too, too low. That needs to go closer to 15 percent of GDP or even higher. Finding revenue handles to increase that so that the government can invest in the necessary infrastructure, in schools, in health is the first important requirement.

Second, will be dealing with the energy sector. The provision of electricity, I cannot state enough how important that is both for economic diversification and to facilitate higher productivity. So addressing, in a very lasting way, energy sector problems in Nigeria is fundamental. Third, there remains a need to continue to carry out a lot of structural reforms that facilitate economic diversification and address governance and corruption issues. Good progress has been made on this front under this administration but I think there is still more to be done.”

Selassie said that though growth in the first quarter was below the fund’s expectations, they do not plan to review their growth projections downwards.

“We still expect growth to accelerate to 2.0 percent. So we are holding our forecast,” Selassie said. Explaining the rational for optimism, he cited strong recovery in global economic growth and improved domestic conditions.

“Several factors go into this.

First the external environment has been improving. We have seen growth globally doing better than a year or two ago. Alongside this come certain factors, which are peculiar to Nigeria. First commodity prices have gone up quite a bit, relative to last couple of years.

That should help the revenue side and the export side and that will filter to the rest of the economy.

Also capital flows have picked up. So this external environment is helpful. Also domestically, we are seeing both the oil and nonoil sector beginning to recover from the 2015 and 2016 levels. So provided this continues, we see

Foreign Exchange Market

fgn bonds

Treasury Bills

Spot $/N

I&E FX Window 362.02 CBN Official Rate 305.95

3M

6M

5 Years

10 Years

20 Years

-0.79 11.73

-0.78 12.12

-0.10% 13.43%

0.08% 13.26%

-0.05% 13.43%

Thursday 31 May 2018

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IMF outlines 3 major reforms ...

Continued from page 1

FMDQ Close

growth hitting the 2.0 percent mark,” Selassie explained.

Nigeria emerged from its first recession in two decades in 2017 but the growth has largely been described as fragile.

The economy expanded by a mere 0.83 percent in 2017, though higher than -1.58 percent recorded in 2016.

In its regional economic report published in April, the IMF has forecasted that the country’s growth numbers would further expand to 2.1 percent in 2018, helped by improvements in oil production and prices, as well as full year impact of greater foreign exchange availability.

Nigeria will underperform average growth in the Sub-Sahara African region, which is projected to rise from 2.8 percent in 2017 to 3.4 percent in 2018, with growth accelerating in about two-thirds of the countries in the region aided by stronger global growth, higher commodity prices, and improved capital market access.

“The two largest economies in the region, Nigeria and South Africa, remain below trend growth, weighing heavily on prospects for the region,” the IMF stated in the report.

Even though the IMF said that external imbalances have narrowed in many sub-Saharan African countries, but that progress with fiscal consolidation has been mixed, with vulnerabilities rising.

About 40 percent of low income countries in the region are now in debt distress or assessed as being at high risk of debt distress.

Not all countries in the region are faced with slow growth as Côte d’Ivoire, Ethiopia, Ghana, Senegal are expected to maintain robust growth at about six percent or faster. At the other end of the spectrum, many countries that saw per capita incomes fall in 2017 like Nigeria could witness a further decline this year, the IMF noted.

The Fund warned of rising macroeconomic vulnerabilities in many countries as the required fiscal adjustment keeps getting delayed. The fund noted that 15 of the region’s 35 low-income countries are now rated to be in debt distress or at high risk of debt distress. In some countries, higher debt levels have translated into a sharp increase in debt service, diverting resources from much needed spending in areas such as health, education, and infrastructure.

The fund advised that “prudent fiscal policy, especially domestic revenue mobilization, is critical to make room for key infrastructure and social spending. On average, there is scope to raise tax revenues by 3-5 percentage points of GDP over the next few years. Reforms to nurture a dynamic private sector are needed to provide the foundations to raise the low level of private investment, for example by boosting intra-Africa trade and deepening access to credit.

Declining yields on FG securities may spur change in PFAs asset allocation Iheanyi Nwachukwu

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any Pension Fund Administrators (PFAs) may be moving to reduce allocation of assets under management to Federal Government securities as a result of declining yields.

PFAs investment in FGN securities was valued at N5.589trillion or 70.37percent of the N7.943trillion total pension assets. Of the amount, N3.861trillion was invested in FGN Bonds while N1.659 trillion was invested in Treasury Bills (T-Bills).

In the trading week to May 25, average T-Bill yield increased by 99basis points (bps) to close at 13.3percent. Yield on 91-day TBill went up 51bps to 12.9percent last week, 182-day was up 113bps to 13.1percent, and the 364-day was up 134bps to 13.9percent.

On the flip side, average bond yield inched lower by 5bps to end the review week at 13.4percent.

As at Monday, May 28, 2018, the FGN bond market was fairly active and yields contracted for several maturities across the curve.

Analysts believe sentiment in the fixed income (FI) space is tied to the stance the Central Bank of Nigeria (CBN) takes regarding fiscal paper supply.

Though the role of the PFAs in local debt markets remains pivotal, if the industry is to realise its full potential, forward-looking leadership from the regulator and new products to extend coverage across the economy are required.

Recently, the National Pension Commission (PenCom) replaced the “one size fits all” investment structure for PFAs with the MultiFund Structure (MFS) regulation which considers for age or risk profile of such contributors.

FBNQuest in a recent note

agreed that the decline in yields on FGN paper since mid-2017 could lead to a change in asset allocation by PFAs; adding that “the share of Asset under Management invested in equities has risen but we are not witnessing a sea-change.”

The industry’s holdings of FGN paper which amounted to 70.4percent of their AUM in March is less when compared with 72.8percent one year earlier.

Other analysts say a sea change in asset allocations by PFAs may take more time o materialise.

“It is unlikely that the implementation of the MFS framework will have an immediate impact on the equities market, especially with the 6 months transition period provided for PFAs, to restructure their portfolios in accordance to the framework,” according to United Capital Research analysts in their May 29 note to investors.

Godwin Obaseki, governor, Edo State (r), his deputy, Philip Shaibu (l), and Omua Alonge Oni-Okpaku, new commissioner for environment and sustainability, after the commissioner was sworn-in by the governor, at Government House, Benin City, yesterday.

Naira reverses loss, as BDCs decry delay accessing forex HOPE MOSES-ASHIKE

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he nation’s currency on Wednesday reversed its losses to exchange at N364 per U.S dollar from N367/$ traded last week at the black market.

Bureau De Change Operators (BDCs) across the country accessed dollar from the Central Bank of Nigeria (CBN) on Wednesday.

The BDCs in Lagos alone accessed a total of $32 million from the CBN. The breakdown of the auction shows that 1,600 out of over 3,000 BDCs accessed $20,000 each. However, the BDCs in Lagos experienced delay in accessing

… Trades at N364/$ dollar from the CBN. At about 6.30 pm the BDCs were still waiting for the disbursement. The CBN eventually started disbursing around 7pm.

Aminu Gwadabe, president, Association of Bureaux De Change Operators of Nigeria (ABCON) said they usually accessed dollar from the International Money Transfer Operators (IMTOs) by 12 noon.

“Due to logistics problem and the delays that is why we are saying the CBN should reduce the weekly allocation of foreign exchange to days,” Gwadabe told BusinessDay on Wednesday.

“Where are we going to get customer to sell to by this time,” Gwadabe queried.

The CBN had said all BDCs shall access forex from CBN on Mondays, Wednesdays and Fridays, saying it is compulsory that all BDCs access forex at least three times weekly.

“Any BDC that fails to access forex window at least three times weekly shall have its license reviewed by the CBN. Compliance is compulsory,” a statement signed

by Isaac Okorafor, CBN spokesman reads.

Continues on wwwbusinessday online

Wednesday 30 May 2018

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Why Nigeria’s cassava flour inclusion policy failed JOSEPHINE OKOJIE

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or 15 years now, Nigeria has been seeking ways to gain from its cassava production, a crop the country has comparative advantage in producing.

A report by the Food and Agricultural Organisation (FAO) on the constraints of substituting wheat with cassava flour, identified policy flip-flop, inadequate access to consistent supplies of high quality cassava, lack of good transportation network for conveying the fresh tubers to processing plants, and lack of power for processing equipment to process to high quality flour as factors limiting the initiative.

According to the report, these constraints have made cost of processing cassava tubers into flour high, making it less competitive with cheaper wheat imports from Argentina, Ukraine, Russia and other parts of the world.

The cassava flour inclusion initiative, which was a laudable project when it was initiated in 2002 by the Obasanjo-led government, has failed to achieve its objective in reducing the country’s wheat imports.

Then, the Obasanjo administration mandated flour millers to substitute 5 percent cassava flour in wheat flour meant for baking bread and production of other confectionaries.

While the initiative increased the country’s local cassava production and made Nigeria become the largest producing nation of the crop, it failed to take root among flour millers, as most of them were unable to get high quality industrial grade cassava flour for use.

This was as a result of the inadequate processing capacity to process fresh cassava tubers to high quality graded flour for industrial use.

Owing to this, research in-

stitutions such as the Federal Institute of Industrial Research (FIIRO), International Institute of Tropical Agriculture (IITA) and the National Root Crop Research Institute (NRCRI) in a combined efforts released improved cassava varieties to farmers for high quality cassava tubers, aiding the processing of high quality flour in the country.

In 2007, the policy, which was already gaining momentum, was abandoned as the Obasanjo-led government left office thus bringing the whole policy processes to a halt.

After five years of being abandoned, in 2012, former President Goodluck Jonathan re-introduce the policy to encourage the substitution of high quality cassava flour for wheat flour and the inclusion rate was expected to increase from 10 percent steadily to 40 percent by 2015.

On this promise, many investors made a lot of investments in cassava production and processing, which is very capital intensive. Yet again, the policy implementation was slow to take effect, as there was stiff resistance from the flour millers and consumers unwillingness to embrace cassava bread.

Since the Buhari-led government took over in 2016, nothing has been said or done concerning the inclusion policy.

“The commitment to see the cassava inclusion policy through is not there. It is also a function of the institutions which are supposed to see that the policy is efficient and sustainable,” Muda Yusuf, director-general, Lagos Chamber of Commerce and Industry (LCCI), said.

Similarly, another major factor the policy failed was the stiff resistance from strong interest groups in the wheat importing and processing industry who would suffer losses if the policy succeeded.

5 NEWS

BUSINESS DAY

Expansionary policies seen accelerating Nigeria’s economic growth MICHEAL ANI

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he slight contraction in the Gross Domestic Product (GDP) of the Nigerian economy, recorded in the first quarter of 2018, points to the need for an expansionary policy to stimulate inclusive growth.

The country’s GDP growth in real terms shrank 0.6bps to 1.95 percent in Q1 2018 from the 2.11 percent recorded in the preceding quarter, but showed a stronger growth when compared with the negative (-0.91%) that was recorded in the first quarter of 2017, according to data from the National Bureau of Statistics (NBS).

The deceleration in the recovery path of Africa’s largest economy in Q1 2018 has prompted analysts to reverse growth forecast that was earlier projected for 2018.

“Looking at the recovery path in Q1 2018, we have revised the GDP growth forecast for 2018 to 2.78 percent, down from our previous forecast of 3.16 percent,” analyst at FSDH Merchant Bank, said.

“The major sectors that will lead the recovery in 2018 are mining and quarrying, agriculture, manufacturing, trade, and information and communication. We believe there

are financing and investment opportunities in these sectors.

“However, the major downside risks to the recovery are the security challenge in some parts of Nigeria. The expected growth in government spending in the second half of the year once the 2018 budget has been signed into law, should increase economic activities, with positive impacts on the income of households and firms,” FSDH noted.

The data from the NBS show further that the oil sector contribution to the GDP saw an increase of 2.3bps to 9.61 percent in Q1 2018 compared to the 7.35 percent it contributed in the preceding quarter, thanks to rallying oil prices that averaged $66 per barrel alongside average daily oil production of 2.0 million barrels per day (mbpd), that is higher than the daily average production recorded in the fourth quarter of 2017 by 0.05mbpd.

However, this could not be said of the contribution from the non-oil sector, which contributes the bigger chunk of the country’s GDP. In the first quarter of 2018, contributions from the non-oil sector shrunk 2.3bps quarteron-quarter from 92.65 percent in Q4 2017 to 90.39 percent in Q1 2018, and this was largely

due to negative contractions that were seen in the, real estates, trade, public administration, construction, health and social service, administrative and support service, and the professional scientific and technical service sectors, as these sectors contracted -9.40, -2.57, -1.72, -1.54, -0.37, -0.52, -2.53, respectively.

According to the analyst at FSDH, it believes that a more fiscal and monetary policy measures are required to stimulate the recovery in the economy in order to generate employment opportunities, especially in these sectors.

The Monetary Policy Committee during its 216th meeting and the second for the year, voted to retain key interest rate at 14 percent for the 10th successive time since July 2016, in a bid to control the rate of inflation that has seen a downward trend for the past 15 months to 12.48 in April, election spending, effect of the delay in the implementation of the 2018 budget and the expected increase in minimum wage.

However, the committee said it would create more innovative ways that would help spur bank lending to the real sector of the economy.

“We will try as much as possible to come up with some

credentials that will relate loan deposit ratio with the level of cash reserve that the banks hold. For banks that have done a lot of work in increasing its loan deposit ratio we will be compensating them with cash reserve ratio (CRR) and penalise those who prefer to keep liquidity and trade on government securities or direct them to the FX market rather than grant loans to the real sector,” Godwin Emefiele, governor of CBN, said at the meeting.

Bank credits to the private sector declined by 2.5 percent (year-on-year) from N16 trillion in the first quarter of 2017 to N15.6 trillion in the first quarter of 2018, according to data from the NBS, as most banks saw it profitable to invest in treasury bills rather than lending to the real sector, a strategy used in reducing non-performing loans.

Yields on one-year government Treasury bills are currently a short crawl away from 10 percent, from as high as 22 percent last year, on the back of a supply cut backed by the Federal Government to manage its rising debt service costs and free up credit to the private sector.

Most analysts have agitated for a cut in the MPR, as this will encourage banks to lend and create more liquidity for the private sector.

7% mining contribution, N5bn funding for artisinal miners, top Fayemi’s achievements on resignation HARRISON EDEH, Abuja

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ll Progressives Congress (APC) flag bearer for the Ekiti State gubernatorial election in the forthcoming election in July 2018, Kayode Fayemi, had listed his achievements as minister of Mines and Steel Development.

His achievements include 7 percent mining sector contribution to the GDP, and the launch of N5 billion fund for the artisanal and small and medium scale miners.

Fayemi, in his valedictory address on Wednesday while resigning his position officially as a minister, said under his reign, the road map for the Growth and Development of the Mining sector, a template that guides the growth and development of the sector for the next two decades, was drawn.

Speaking further on the improved funding for the sector, he said, “The ministry sought for and obtained approval for N30 billion intervention fund from the

Federal Government, partly to help provide cheap loans and grants to industry participants. ”We also secured support from the World Bank for the funding of the Mineral Sector Support for Economic Diversification programme, a critical component of which is to provide technical assistance for the restructuring and operationalisation of the Solid Minerals Development fund.”

On the achievements, he explained that the ministry had reached an advanced stage in assembling a $600 million investment fund for the sector, working with the Nigerian Sovereign Investment Authority, the Nigerian Stock Exchange and other financial institutions.

The ministry, he said further had initiated engagements with SGF, a world renowned material testing company, to strengthen the capacity of NGSA Laboratory Facilities in Kaduna towards achieving IS0 17025 accreditation with the shortest possible period.

L-R: Frederick Mordi, corporate communications manager, Cadbury Nigeria plc; Patrick Atuanya, news editor, BusinessDay, and Bala Yesufu, director, corporate and government affairs (West Africa) Cadbury Nigeria plc, during the visit of Cadbury Nigeria team to BusinessDay corporate head office ‘The Brook ‘ in Apapa, Lagos, yesterday, in promotion of Tom Tom/Super Eagle World Cup Campaign.

Pic by Pius Okeosisi

Nothing to celebrate at Democracy Day - Olapade AKINREMI FEYISIPO, Ibadan

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lapade Agoro, national chairman and presidential aspirant on the platform of the National Action Council (NAC), has said that the government of All Progressives Congress (APC) is nothing else than a carryover of the ugly past of the People’s Democratic Party (PDP).

According to him, “after all, almost all of the key figures in the current APC administration were among those who shamelessly and uselessly used the rudderless political vehicle of the PDP to bring about the pillage of woes, ruins, poverty, kidnap-

ping, accidents and incalculable wastages of human and material resources the nation is currently wallowing in.”

In a statement signed by Olapade and made available to newsmen in Ibadan, he said: “One of the saddest moments of Nigeria’s pretentious celebration of 2018 Democracy day was the issue of blame game ball being played by Buhari, Osinbajo and the APC who having nothing good and tangible to show went swan song comparing their 3 years in office achievements with that of 16 years of the PDP. “However, if the fact must be faced squarely, it becomes pertinent to say loud and clear

which becomes highly disturbing and nauseating to see on the TV set on Democracy Day President Muhammadu Buhari rambling and drabbling on his government’s achievements in the past 3 years, forgetting to make mention of the rottenness pervading the nation’s strata, like the innocents getting killed on daily basis by Fulani herdsmen.

Kaduna –Abuja Road has now turned into the den of kidnapers where 31 travellers on that road were kidnapped this month of May alone; 20 burnt to death on the democracy day along Epinmi-Isua Akoko road and our Leah Sharibu, a christian girl is still inhumanly held in the

confines of Boko Haram, the devils in human uniforms, etc.”

President Buhari, Olapade stated also, forgot to mention months he and members of his family wastefully and expensively went on Medical tourism to the UK, thus bringing to question the parlous situation of the nation’s health delivery system.

He said: “The salient question at this juncture which Muhammadu Buhari needs to seriously ponder at is that if he as the leader of Nigeria, the largest black nation on earth, and he does not have faith in the health care delivery system of the nation, who else should?”

6 BUSINESS DAY NEWS

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Thursday 31 May 2018

Airfreight growth recovered slightly in April, up 4.1% IFEOMA OKEKE

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nternational Air Transport Association (IATA) released data for global airfreight markets showing that demand, measured in freight ton kilometres (FTKs), rose 4.1 percent in April 2018, compared with the same period the year before. This was up from the 1.8 percent growth in annual demand recorded in March 2018.

Freight capacity, measured in available freight ton kilometres (AFTKs), grew by 5.1 percent year-on-year in April 2018.

This was the second time in 21 months that capacity growth outstripped demand growth.

After a sharp fall in March 2018, to a 23-month low, global airfreight volumes recovered slightly in April 2018. The pace at which demand is growing, however, remains significantly slower than in much of 2017.

The weaker growth in air cargo is primarily due to the end of the restocking cycle, during which businesses rapidly increase their inventory to meet unexpectedly high demand.

This is consistent with demand drivers moving away from the highly supportive levels seen last year.

The Purchasing Managers’ Index (PMI) for manufacturing and export orders fell in April 2018 to its lowest level since 2016. A softening

of global trade is also evident with containerised freight demand slowing in tandem with airfreight demand. Seasonally adjusted freight volumes continue to track sideways.

“April saw a strengthening from the abrupt slowdown in growth experienced in March.

This is good news. We remain cautiously optimistic that demand will grow in the region of 4 percent this year. But the forecast appears to have increasing downside potential.

“Oil prices continue to rise as does protectionist rhetoric.

Borders open to people and to trade drive economic growth and social prosperity. We are all disadvantaged when they are closed,” Alexandre de Juniac, IATA’s director-general/ CEO, said.

African carriers saw freight demand grow 5.6 percent in April 2018 compared with the same month last year, after a decline of 3.4 percent in March. Capacity increased by 23 percent. After a surge in international FTK volumes last year, seasonally adjusted international freight volumes have trended downwards from a peak in late-2017 and are now at levels seen mid-2017.

European airlines posted a 2.4 percent increase in freight volumes in April 2018. This was over double the rate of growth of the previous month.

Capacity increased 4 percent.

Edo says in a hurry to transform environment sector … swears in Oni-Okpaku as commissioner

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overnor of Edo State, Godwin Obaseki, has sworn in Omoua Alonge Oni-Okpakuascommissionerforenvironment and sustainability, following her confirmation by members of the Edo State House of Assembly.

Speaking at the event that took place at the Government House, shortly before the weekly executive council meeting on Wednesday, Obaseki charged the new commissioner to adopt best practice in the management of the environment as his “administration is in a hurry to address challenges in the sector.”

The governor urged the environment commissioner to bring her wealth of experience to make the desired positive change in the ministry, and advised her to eschew acts that could derail the progress that had been recorded in the sector.

He assured that he was optimistic about the capacity of the

new commissioner to transform the sector, considering her background in the sector, saying, “We did not feel it was right that Owan West Local Government Area was not represented in our cabinet.”

He warned: “Your coming to join us is for service and not for self-enrichment.”

In her remark, Oni-Okpaku pledged her loyalty to the governmentandassuredthatshewouldlive uptotheconfidencereposedinher.

She said the Ministry of Environment and Sustainability under her watch would engage youths in the protection and preservation of the environment, in line with the state government’s Keep Edo Clean Project and other programmes.

Recall that the governor forwardedhernameascommissioner nominee to the state House for confirmation recently following the sack of Reginald Okun, former commissioner for the ministry.

L-R: Mike Okolo, lecturer, School of Media and Communication, Pan-Atlantic University; John Ugbe, managing director, MultiChoice Nigeria; Wangi Mba-Uzoukwu, regional director, M-Net West Africa; Femi Odugbemi, MTF, academy director for West Africa, and Cheryl Uys-Allie, MultiChoice Talent Factory (MTF) director for Africa, at the launch of MultiChoice Talent Factory (MTF) held in Africa Magic/ SuperSport Studios, Ilupeju, Lagos yesterday.

Pic by Pius Okeosisi

Poor implementation of FCTC slows HiFL kicks off July 28 Nigeria’s fight against tobacco ll is now set for the maiden edition of the Higher Institutions Football League (HiFL) scheduled to hold across Nigerian university campuses, as games in the league begin July 28, 2018, as planned.

HiFL is endorsed by the Nigeria Football Federation (NFF), the National Universities Commission (NUC), and Nigerian University Games Association (NUGA). The winner of HiFL will represent Nigeria at the International University Sports Federation games in Naples, Italy.

President of the Nigerian University Games Association (NUGA), Stephen Hamafyelto, who made the announcement in a statement recently, assured football lovers across the country of an interesting competition as the games kick off.

“We are happy we are finally kicking off the games. At the end of this maiden edition, we hope to have convinced our sponsors and indeed Nigerians that collegiate sports are ripe in Nigeria.

Then, we may be thinking of expanding the fixtures, as HiFL is a very good platform to achieve these objectives. With our level of preparation, we are sure of success,” Hamafyelto said.

He said, “HiFL will complement the efforts of NUGA to bring back the good old days of competitive inter-school games

with all the excitement therein.

Although, we are starting with football, which may be described as the pivot of Nigerian sports, we hope to expand to other sports later. This is firmly in our plans.”

In a bid to grow collegiate sports in Nigeria, HiFL was launched in February 2018 by PACE Sports and Entertainment Marketing as an international event in Lagos.

In his remarks on the objectives of the competition, Sola Fijabi, director, PACE Sports and Entertainment Marketing, said the league was part of attempts to engender youth development in Nigeria.

“HIFL is a part of the collective effort at youth development in Nigeria. We are prepared for this maiden edition and we are very hopeful that it will have positive impact on sports and education in Nigeria.

“We hope to place collegiate sports in Nigeria on the same pedestal obtainable in other countries that have recorded successes and built a strong network of young, home-grown football talents,” Fijabi said.

Speaking on the opportunities that HIFL opens up for participating schools, CEO, GWG Sports Centre Limited and technical consultant, HiSL, Ahmed Shuaibu Gara Gombe said, that the league would provide a viable platform to discover amazing football talents from the participating schools.

destroying our land,” they wrote.

The NCTL is a 97-kilometre, 150,000 barrels of oil per day pipelinesituatedintheNigerDelta region. It passes through several Niger Delta communities before terminating at the Atlantic Coast Thisisnotthefirsttimethisyear that Bille and other communities within the pathway of the NCTL will cry out over incessant oil bunkering activities along the pipeline.

In a report published by Vanguard Newspaper on May 15, 2018, communities in the area expressed their concerns about the activities being carried out by criminals in their area.

A few days ago, Bony, Kula, Bille and Nembe communities wrote an open letter published in

a newspaper. They complained that since the May 15 publication, illegal bunkering activities have increased tenfold.

A November 21, 2013, report from the Stakeholder Democracy Network and published in the Premium Times noted there was extensive evidence that some corrupt members of the Joint Task Force (JTF), actively participate and profit from oil theft and illegal oil refining.

Oil theft in the area continues to cost the country a lot of money at a time some states find it difficult to pay salaries and execute the budget. Due to leakages arising from oil theft, the NCTL has been shutdown eight times in the past two years.

ANTHONY NLEBEM

ANTHONIA OBOKOH

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cardiologist, Kingsley Akinroye, has called on the Federal Government to increase the rate of its implementation position to comply with the World Health Organisation Framework Convention on Tobacco Control (WHO/FCTC) guideline in other to enhance the fight against tobacco in Nigeria.

Every year, on May 31, the WHO and partners mark the World No Tobacco Day (WNTD), highlighting the health and other risks associated with tobacco use, and advocating for effective policies to reduce tobacco consumption.

The theme, ‘Tobacco and heart disease,’ focuses on the impacttobaccohasonthecardiovascular health of people worldwide.

Akinroye, who spoke with BusinessDay in commemoration of the ‘World’s No Tobacco Day,’ says the first step had been taken by recent review of tobacco and alcohol taxes, to be effective on June 1, 2018, but the FCTC is supposed to be implemented in the states of the federation.

“Four states have domesticated the anti-Tobacco Law. For example, Lagos State government enforcement of the law on penalising people smoking in smoke-free areas would be an encouraging start-off, but is not yet effective in the state,” Akinroye says.

However, “government must intensify its efforts in ensuring the anti-tobacco law to be effectively implemented with enforcement of the laws at the National level and also the involvement of the whole population, multi-stakeholders, CSOs, and industries these can be achievable,” he says.

Despite the known harms of tobacco to heart health, and the availability of solutions to reduce related death and disease, knowledge among large sections of the public that tobacco is one of the leading causes of cardiovascular diseases is low.

He urges that everyone should realise that tobacco is the number one poison that damages the heart, leading to reduction in lifespan through promotion of hypertension, stroke, premature death and disability.

“Tobacco is no friend to anyone, from the new born to the young and the elderly; therefore, everyone should choose health and not tobacco,” he adds.

According to the WHO, the aim of the campaign this year is to increase awareness on the link between tobacco and heart and other cardiovascular diseases (CVD), including stroke, which combined are the world’s leading causes of death, and feasible actions and measures that key audiences, including governments and the public, can take to reduce the risks to heart health posed by tobacco.

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Illegal bunkering: Community calls on Buhari to act … accuses security forces of complicity STEPHEN ONYEKWELU

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eople of Bille community in Rivers State have written an open letter to President Muhammadu Buhari requesting his intervention in combating illegal oil bunkering along the Nembe Creek Trunk Line (NCTL).

In recent time, illegal bunkering has posed serious threats to lives and properties in Bille, as the letter to the President, written by ‘Bille Youth Vanguard,’ a group representing the community, noted.

According to the youth vanguard, the crime has continued

unabated, despite the presence of a security base within the area.

“Every single day, oil bunkering and pipeline damage happen in Bille. Even though there are security officers in the area, this crime has increased more than ever before. Our community is normal in the day time but at night it will turn into a marketplace for crude oil, whereby oil is lifted openly like they are buying and selling in Aba Market, yet we have a security base around there,” they noted.

Thegroupalsoaccusedmembers of the security forces of being complicitintheongoingincessant oil bunkering activities in the area.

“You will be shocked that armed men who are supposed to protect the pipeline have changed their job to protector of thieves. They are guiding the vessels of people destroying pipelines and loading crude oil.

“Sometimes, in broad daylight, big vessels come in and out of Bille freely surrounded by escorts. We have heard that security officials are making millions from protecting these criminals and participating in illegal bunkering.

Some even fight for posting to Bille to make illegal money,” the letter read in part.

The youth vanguard then called on the President and the Chief of Army Staff to intervene, to stop the heinous activity, which

is destroying the pipeline and devastating their land through attendant oil spill. They called on the Federal Government to send in fresh troops, as the current ones in the area were already compromised. They also requested that the head of Operation Delta Safe should be questioned immediately.

“Bille Youths have decided to support peace but the head of Operation Delta Safe is putting our youths under pressure to join their stealing. We want the Federal Government to send fresh army to save us. The security officers in the area can no longer protect us; they are the ones stealing now. Oil thieves are destroying the pipeline and oil spill is

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NEWS The Wizkid effect … Nigeria to the world

Arese Ugwu his photo is iconic! It’s definitely going on my vision board. Nigerian musician, Ayo ‘Wizkid’ Balogun made history last weekend. He’s definitely a force to reckon with but I’m particularly interested in the production and structure that made this happen, Smade events because the execution was masterful.

Ten years ago many people would have said that it was impossible for a Nigerian artist to fill up London’s o2 Arena. This is a feat that has been reserved for the Beyoncés of the world not African artistes. Our music would have been considered too niche, they would have said there was no market potential for this because the target audience didn’t have the purchasing power.

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were reportedly forty pounds each on average; the audience was 20,000 people strong, which means this event generated an estimated revenue of eight hundred thousand pounds. This isn’t profit but even if you take away the cost of the venue, logistics and paying guest artists, there would still be a healthy profit margin.

These are interesting times to be African the generation behind us is extremely lucky because when I was in university there was no business model for this, there was no blueprint. Being an artist, a writer, a musician or club promoter in Africa effectively meant that you were not serious about life and you wanted to “faff’ around and be hungry.

This was an African production for Africans by Africans and it is obvious that the grind behind this is relentless. They didn’t just wake up and book the London 02 today; they started booking clubs, smaller venues etc. before they scaled to this level. This is Africa’s time but how are we taking advantage of it? How are we scaling Nigerian businesses for an African market? How are we positioning ourselves for a global market?

Wizkid’s achievements have inspired me greatly but it also made me think about a few things. So lets shake some tables Nigerian Youths are not lazy…

I heard a story once of how Wizkid used to go to radio sta-

tions everyday to beg them to play his music and sometimes they would send him to buy food.

Now doesn’t it blow your mind that a boy from ojuelegba can go from the streets of Lagos to being molded by the music executives of his then record label EME, to becoming a global superstar? But his like many Nigerians is a story of resilience.

We live in a country where as an entrepreneur you learn to eat problems for breakfast lunch and dinner and figure out your own opportunities. We are our own government because we are forced to provide our own basic amenities, generate our own power, provide our own security, become social security for our staff and with that burden we still thrive. We live in a country where there is no infrastructure to leverage on but whole industries have been created out of necessity.

I’ll use my personal experience as an example. I wrote and self-published a personal finance book in 2016 called ‘The smart money woman’. It sold over 10,000 copies across Africa. Before I succeeded, I was told, don’t bother Nigerians don’t read, there is a recession, there is no market potential for books, you can build a brand with a book but it is not going to be commercially successful. I took every negative that was pointed out and reverse engineered the problem.

2020: Nigeria racing against time on NCDs ANTHONIA OBOKOH

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or many decades now, Nigeria has been racing against time in curtailing rising cases of premature deaths arising from Non-Communicable Diseases (NCDs).

Diseases such as cardiovascular (hypertension, coronary heart, and stroke); cancer, diabetes mellitus, sickle cell, chronic respiratory diseases (COPD, asthma); mental, neurological and substance use disorders, among others, have been on the rise in the country for decades.

Efforts that have been made so far appear like water off the duck’s back, as the country still faces worst forms of NCDs. According to the World Health Organisation (WHO), the Global Action Plan for the Prevention and Control of NCDs 2013-2020 and the 2030 agenda for Sustainable Development Goals have set a target of 25 percent reduction in the overall premature mortality from NCDs by 2025 as well as 33 percent crash in overall premature mortality from NCDs. Its target is also to

promote mental health and well being by 2030.

The National Strategic Plan of Action by the Federal Ministry of Health on Prevention and Control of Non-Communicable Diseases documented since 2015 states that inadequate funding of NCD-related programmes and activities, poor legislation and enforcement of laws, linked to the prevention and control and a weak health system, have been major barriers to tackling NCDs. But experts say adopting an integrated and multi-sectoral approach involving whole-ofgovernment and whole-of society is one of the ways to remove this barrier.

With Nigerians population of about 198 million people, there are currently high probabilities of dying between the ages of 30 - 70 years from these four main NCDs: cancers, diabetes, cardiovascular diseases and chronic respiratory diseases.

This is estimated at about 20 percent, according to the WHO. “Achieving the global target of 25 percent lowering of premature death by 2025 is going to be

very difficult because there are so many things that need to go into it. We are near it, but we may not get the 25 percent,” Sonny Kuku, president, Nigeria NCD Alliance, said.

Kuku noted that to kick-start the process of bringing these epidemics under some control, the country needed properly planned concerted effort to prevent disease by creating more awareness and making management of NCDs free.

Proffering solution on further ways to check the alarming increases, he said: “One of the ways is to integrate NCDs into public health centres (PHCs), funding themandprovidingpersonnelthat will tell the people about NCD. We can use the same process used in driving the prevalence of HIV and Aids down for NCDs.” “We also want to put pressure on the ministry to create special fund for the national health insurance scheme to fund NCDs and communitybased insurances, which will be funded by budgeting especially local government funds,” Kuku said.

Sahara Group supports Mercy Ships’ Saving Lives Initiative in Geneva

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n keeping with its resolve to give “wings to aspirations” across the globe, Sahara Group, a leading energy and infrastructure conglomerate, joined Mercy Ships and other global partners to celebrate the Cargo Day 2018 in Geneva on May 17.

The Cargo Day is an initiative of Mercy Ships, a corporate responsibility organisation that works with host nations to help fill the gaps in healthcare systems, while serving the dire and immediate needs of their population.

Observed in several countries, Cargo Day is set aside to celebrate the partnership between Mercy Ships, shipping and trading communities in the pursuit of facilitating access to quality healthcare, especially in the remote and rural areas

of Africa.

Sahara Group’s affiliate in Geneva, Sahara Energy International Pte Limited, is one of the key partners of Mercy Ships and leading trading companies in Geneva. The company is also involved in other initiatives that are geared towards promoting enterprise, environmental protection, economic empowerment and transparency in business.

Since 1978, Mercy Ships has provided services and materials in developing nations valued at over $1 billion impacting more that 2.5 million direct beneficiaries, through 587 port visits.

Sahara Energy’s CEO, Valery Guillebon, said the company was delighted about its partnership with Mercy Ships and the impact of the Cargo Day on the quest to make quality healthcare

available to underserved and indigent populations in Africa.

“At Sahara Group, we are passionate about empowering lives and providing platforms to help people overcome challenges in order to live their dreams.

We continue to do this at our locations across the globe and we remain committed to supporting the Cargo Day project.”

Guillebon added:” Our partnership with Mercy Ships is quite special and we derive so much pleasure from seeing smiles on the faces of beneficiaries and hope restored to many beneficiaries with serious medical and surgical challenges.

“We salute the leadership of Mercy Ships, other partners and pledge Sahara’s willingness to support the organisation and similar life transforming initiatives in Geneva and beyond.”

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Reps back Commission to curb proliferation of small arms KEHINDE AKINTOLA, Abuja

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L-R: Valery Guillebon, CEO, Sahara Energy International Pte Limited (Geneva); Kola Motajo, vice president, treasury; Carole Trazie, vice president, accounting, and Alessandro Ravalli, COO, during the Cargo Day 2018 event in Geneva aimed facilitating access to quality healthcare, especially in the remote and rural areas of Africa.

Security: FG lauds Dangote over presentation of 150 patrol cars to Police

Obaseki assures of support structures for art, culture sector

n an unprecedented show of philanthropy, the Aliko Dangote Foundation Wednesday in Abuja, donated 150 fully kitted operational cars worth several millions of naira to the Nigeria Police Force.

The donation, the Inspector General of Police, Ibrahim Idris said was the single biggest donation ever by a private sector operator to the Police.

Speaking during the formal handover of the cars at an event attended by the Vice President Yemi Osinbajo, ministers, state governors as well as the entire police hierarchy, chairman of the Foundation, Aliko Dangote, explained that the gesture was informed by the fact that security is essential to economic development. Depending on how well the vehicles are maintained, Dangote promised that his Foundation might consider donating another batch of vehicles.

Meanwhile, the Federal Government, through Vice President Yemi Osinbajo, lauded the Foundation for the rare gesture and expressed the Federal Government’s appreciation to Dangote for his untiring support to the government, adding that the

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donation of cars patrol cars to the Nigerian Police would help the Force at combating crimes across the country.

According to Osinbajo, Dangote is a rare entrepreneur who has done so much to grow the economy of Nigeria. He said the Government needs people like Aliko to join hands with it to grow the economy and also provide jobs to the Youth.

There have been a lot of talks on private-public partnership, but as we can see Dangote is walking the talk.

Government’s role, according to him, is to provide the enabling environment while the private sector should take advantage of the opportunities that abounds in the country to grow and develop the economy.

“The donation of 150 cars to the Nigerian Police Force is laudable and we thank Aliko Dangote Foundation for this rare gesture, that is characteristic of the person of Aliko Dangote. He has shown over the years to be an entrepreneur with a difference, a man that gives willingly to the poor” Describing the donation as the single largest donation of cars by any private individual in the country, Osinbajo

urged other Nigerians to join hands with the Federal Government to effectively secure the country as well as develop the economy.

The Inspector-General of Police, Ibrahim Idris expressed the appreciation of the Police Force to the Aliko Dangote Foundation, with a promise that the cars will be well utilised for the purpose for which they were donated.

He urged Nigerians to go about their business lawfully, noting that The Police Force is now well equipped more than ever before to fight crime across the country. He assured that the Police Force will not disappoint Nigerians in the provision of adequate security across the country.

Dangote in his speech said the donation was aimed at strengthening the Nigeria Police and.

He said: “We are gathered here today to mark the formal handover of a total number of 150 GAC saloon cars to the Nigeria Police Force in order to help boost their operational efficiency. I am told that today marks the single biggest number of operational vehicles ever donated to the law enforcement agency by a private organisation.

Edo seeks proactive engagement to check tobacco consumption

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d o St at e G ov e r n o r Godwin Obaseki has called for synergy and partnerships among relevant stakeholders to check the consumption and reduce the health and other associated risks, especially cardiovascular diseases.

The governor said this in commemoration of the World No Tobacco Day marked by the World Health Organisation (WHO) and other organs to raise awareness and check the consumption of tobacco.

The governor proposed that collaborations should be built among health workers, civil society organisations and relevant Non-Governmental Organisations (NGOs) to raise awareness and sensitise the people on the dangers of tobacco consumption.

“Much as tobacco companies are in legitimate business

and have adopted health messaging to call attention to the associated risks of use of their products. As a government, we want to ensure that the people are better served with information on the cardiovascular dangers associated with its usage. Efforts should be made to sensitise people on the dangers of second-hand smoking, which also exposes people to similar dangers faced by active smokers.”

He said the state government is pursing health policies such as the statewide health insurance scheme, increasing the number of primary healthcare centres and improving the investment climate to attract investors, including private healthcare firms.

He said that this year’s theme for the day, ‘Tobacco and Heart Disease,’ provides a platform to interrogate the

implications of tobacco use and cardiovascular conditions, noting that stakeholders are being mobilised to spread the word on the dangers of tobacco consumption and the imperative to reduce its use.

According to the World Health Organisation, “World No Tobacco Day 2018 will focus on the impact tobacco has on the cardiovascular health of people worldwide.

Tobacco use is an important risk factor for the development of coronary heart disease, stroke, and peripheral vascular disease.

Despite the known harms of tobacco to heart health and the availability of solutions to reduce related death and disease, knowledge among large sections of the public that tobacco is one of the leading causes of cardiovascular disease is low.”

… lauds ‘Journey of An African Monarch’ exhibitor overnor of Edo State, Godwin Obaseki, has assured artists, curators, collectors and art enthusiasts of his administration’s support for the art and culture sector through a mix of marketoriented policies, promotion of Edo arts and crafts in the international market as well as the construction of a new museum in the state for the kingdom’s prized artworks.

Obaseki said this at a photo exhibition in Benin City, with the theme: “Journey of An African Monarch,” organised

by Omoregie Osakpolor.

According to the governor, “Edo State has continued to produce some of the finest artists in the industry and I urge our youths to take advantage of the enabling environment we are creating for them to express themselves.”

The organiser said the exhibition showcased a photography series re-enacting the great Benin kingdom’s coronation rites of the 40th Oba, Oba Ewuare Ogidigan II. “The series which tells the two-week coronation story of the Omo n’Oba n’Edo, Oba Ewuare II’s ascension to the throne of the King of the ancient Benin kingdom, goes beyond just a collection of pictures, but also the re-enactment of the Benin traditional rites of the coronation of the Oba and rich cultural heritage of the Edo people.”

He expressed his gratitude to the governor for identifying with the exhibition, and noted that the governor’s endorsement of the event will raise its profile.

Osakpolor explained, “The exhibition having witnessed a huge success in Lagos and Abuja, will be running in Benin at Ben Osawe Art Centre, till June 3.

He expressed his thanks to God for the success of the exhibition, which he said is “his first exhibition amongst other projects he has achieved in recent times.

Osakpolor is a documentary photographer and 2017 nominee for the Edwin George Prize for Photography at The Future Africa Awards.

igeria’s House of Representatives on Wednesday passed through second reading a bill seeking to establish National Commission on Small Arms and Light Weapons, charged with responsibility to regulate and prohibit proliferation of ammunitions and light weapons.

When passed into law, it is expected to sensitise the public on the dangers of small arms and light weapons in order to discourage their production and to combat the problem of the proliferation of small arms and light weapons in Nigeria in line with the Economic Community of West African States Convention on Small Arms and Light Weapons and for related matters.

The consolidated bill was co-sponsored by the speaker, Yakubu Dogara, and Nnenna Elendu Ukeje.

In her lead debate, ElenduUkeje explained that the establishment of the Commission became necessary on the heels of unabatedcommunalconflicts,religious crises, insurrection, terrorism, insurgency, militancy, revolt, electoral violence, robbery, cross border smuggling, kidnapping, sexualviolence,domesticviolence and other life threatening vices.

“In a recent meeting, the United Nations Centre for peace and disarmament held by the National Coordinator, Mrs. Okubo Ige, said West Africa had about 500 million small arms in circulation and that 70% of those arms reside in Nigeria, she put the number at about 350 million. Responsible for this she said were obsolete laws and ineffective stockpile management,” she noted.

According to Herz, the statistics from the office of the Senate President alone show that there have been over 80 reported incidences of armed conflict that had claimed over 877 between January 1 and April 29, 2018.

“A movement (Nigeria Mourns) broke down its national casualty figures from Benue State having the highest number at 534 deaths, Bornu state a close second with 361 deaths, Kaduna

218 deaths to Akwa Ibom the lowest with 16 deaths recorded in 2018. This statistics only represent killings as a result of herdsmen clashes. The numbers for communal clashes, armed robberies, domestic violence, criminal homicides are not included.

“Furthermore, former Head of State, Gen. Abdulsalam Abubakar in October 2016 gave grim figures of killings in four northern states: Plateau, Nasarawa, Kaduna and Benue. He stated that about 2,500 people were killed, 62,000 people displaced, $13.7 billion lost to clashes and 47% in internally generated revenue in the affected states lost.

While noting that Nigeria has been named as country of origin, transit and destination of small arms, the lawmakers recalled that the “Nigerian Army spokes person, Col. Sagir stated that there were well over 250 illegal routes mostlyfootpathsfromDamaturu/ Maiduguri axis that lead directly to Cameroon and Chad which borders Nigeria on the East.

“Libya and Malaysia rebels exchange money for arms along these routes. He also stated that Nigeria’s borders to the West, Idiroko and Seme are also very porous and fuel the transnational black market arms trade.”

She also alleged that the Gulf ofGuineawhichborderstheNiger Delta where crude is also being used for exchange of arms while the South Eastern part is noted for localmanufacturingofsmallarms as over 60% of locally made arms originate from that region.

“The Nigeria Custom Service intercepted a total if 2,671 proliferated arms between January and September 2017. In January (2017), operatives if the Customs Service intercepted 661 pieces of pump action riffles concealed in a 40ft container imported from China, in May, 440 arms and ammunitions imported from Turkey concealed behind POP materials, also in a 40ft container and in September, an additional 1,100 military grade ammunitions were further intercepted. A Russian plane fully loaded with arms was intercepted at the Kano Airport with claims that the arms were to be delivered in Chad,” Elendu-Ukeje lamented.

Cleric urges FG to address socioeconomic challenges SEYI JOHN SALAU

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ishop of the Diocese of Lagos West, Church of Nigeria Anglican Communion, James Olusola Odedeji, has urged the Federal Government to put measures in places to urgently addressthesocioeconomicsituation in Nigeria, saying “Nigerians are hungry,” and no longer feel save.

Odedeji, who was at the church dedication of Our Saviour’s Anglican Church, Egbe, on Sunday,said the security situation in Nigeria was unfortunate as it had reached a level where lives and properties were no longer saved.

“I can say that the orientation of people today is that the governmentisnotdoingenoughbecause the primary assignment of any president is to secure the lives and property of his people. This issue of killings, rituals and uncertainty everywhere; and I can tell you that there is hunger in the land and there is no food on the table for the people.

“Those of us who are leaders have the feelings: virtually when people want to see us, it is about we need help, and when you see them; they truly need the help. Children are dropping out of schools and those who have graduated have nothing doing, as

such,joblessnessistheorderofthe day,” Odedeji said.

Whilespeakingontheessence of dedicating a church to the worship of God, the Anglican Bishop said it is set apart for the use of blessed trinity, away from any other uses. “When you look at the OldTestament,whenasynagogue is newly built God is invited afresh to take his proper place. God said wherever my name is recorded; therefore God’s name will be recorded afresh here today: it just said it is set apart from common use,” he stated.

Ariire Ayo Kolawole, the vicar/ archdeacon, Our Saviour’s Anglican Church, Egbe, on his part, said God had proved himself that nothing was impossible for him.

“People of God, what we celebrate today is the practical demonstration of God’s faithfulness. I have seen God’s miracle before, I have heard it and I have preached it to others. Again I have experienced it in a new dimension,” Kolawole said.

Kolawole, who resumed duty as the Vicar of Our Saviour’s Anglican Church on August 15, 2013, saidhemetthechurchatzerolevel financially. “When we came in, it was in an old small church with new pillars surrounded by half roofed. We moved into the new building half roofed on the 13th yearsthatthefoundationwaslaid.”

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More investment options for pension contributors

OMAGBITSE BARROW FCA Barrow is an Abuja based Strategy and Innovation Consultant @gbitsebarrow me@omagbitsebarrow.com

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ith effect from July 2018, contributors to Nigeria’s contributory pension scheme (CPS) will now have options regarding how their contributions are invested and have the prerogative to direct their Pension Fund Administrators (PFAs) to invest their pension contributions in line with these options. Since 2004, when the CPS was introduced, the pension contributions of active contributors (those still in service) have been managed by their respective PFAs in a Single Investment Fund with the PFA choosing the actual portfolio composition and investment instruments in line with the Regulations for Investment of Pension Funds issued by the National Pension Commission (PenCom). With the new Multi-Fund Structure to be implemented from July 2018, three distinct Investment Funds will be available to active contributors called Fund I, Fund II, and Fund III, while the retirees managed by the PFAs will be placed in Fund IV. The core difference between the distinct Funds will be the

SOLA ONI Oni, Financial Journalist and Chartered Stockbroker is the CEO, Sofunix Investment and Communications

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n 2005, a senior colleague and I at The Nigerian Stock Exchange attended an Investor Education Training Programme at Stockhlome Stock Exchange, Europe, to tap into the exchange’s investor education policy and processes. The choice of stockhlome’s market by the management was partly informed by the euphoria that it had demutualized since 1993 and got listed in 2000, making it the first stock exchange to demutualize and listed in the world.

It was an engaging experience.

The Nigerian Stock Exchange was initially operating like silo under the obnoxious Exchange Control Act of 1962 which was later replaced with investor-friendly Acts to open the market to the international community.

But the organization has always been blessed with leaders that have foresight. In 1997 was a turning point in the history of our stock market as it joined the global markets by transiting from manual clearing, delivery and settlement system to electronic one with the commencement of its central depository called the Central Securities Clearing System (CSCS).

In 1999, The Exchange also transisted from manual system of trading called Open Outcry or Call-Over or Pit Trading to the Automated Trading System (ATS), the use of computers to

amount of risk inherent in each fund driven by the minimum and maximum amounts of variable income instruments that each Fund can contain based on the Investment Regulations.

Essentially, RSA holders will be allowed to choose from these three funds and decide the amount of risk that they are willing to take in the management of their investment portfolios, in line with the Regulations.

Typically, when it comes to pension fund investments, the global best practice is for portfolios of different risk characteristics to be created and for investors to select the portfolios that align their risk appetites often driven by their age; level of income; liquidity needs, overall stock of investments, the level of diversification of their wealth and of course their past experience with investments that generally affects their risk appetite.

So, for example, the younger people are, the more likely they would have a higher appetite for and ability to take on higher levels of investment risk. This ensures that younger contributors who have a longer gestation period for their investments up to retirement can exercise their prerogative to be more aggressive about their pension contributions and possibly earn higher returns on their pensions over this longer period. For example, a 25-year-old who just joins the CPS has in the minimum another 35 years to work and contribute, and so, should have the option to invest more aggressively than a 58-year-old who has just 2 years to retire.

Overall, the new multifund structure is a great innovation in our CPS and one that will ensure that our investment decisions are better aligned to the realistic needs of contributors In the old arrangement, both the 25-year-old and the 58-year-old, and everyone in between them was placed in a Single Investment Fund that was invested in the exact same without recognizing the different risk appetites of RSA holders based on their age and other considerations.

Our CPS has now adopted this global best practice after fourteen years of implementation. From inception in 2004, we had anticipated that this day will come, and even in my book “Pension Fund Administration in Nigeria”, published in 2007, the imperative of multi-funds was discussed.

The only impediments to its implementation back then which I highlighted in my book were three-fold – 1) The need for us to transition from the old pension system to the new without creating too many changes that could confuse participants; 2) the depth of the financial markets and the dearth of financial instruments to accommodate the realities of a multi-fund structure; and 3) the low-level of financial literacy of

most RSA holders that will affect their ability to make informed choices. The third impediment still remains an issue that the industry regulators and operators need to pay attention to – ensuring that RSA holders understand the workings of the financial markets and underlying investment instruments so that they can make appropriate choices regarding the options available to them. For this to happen, the employees of the PFAs, especially the customer-facing employees in Sales, Relationship Management and Customer Service roles also need to improve their working knowledge of the financial markets and investment instruments so that they can properly educate and guide their customers who will be making these enquiries. We all need a healthy dose of both pension literacy – understanding the workings of the CPS and the Multi-Fund Structure as well as a dose of Financial Literacy – a broader understanding of personal financial planning, financial markets, investment instruments and investment management.

The new multi-fund structure will commence in July 2018 and PFAs will have up to 6 months after the commencement to restructure their portfolios to be compliant with the new regulations. According to the Regulations, the maximum exposure to variable income instruments will be as follows – Fund 1: 75%; Fund II: 55%; Fund III 20% and Fund IV – Retiree Fund:10%. There will also be minimum exposures to variable income instruments – Fund I: 20%; Fund II: 10%; Fund

III: 5% and Fund IV – Retiree Fund: 0%. Both Funds I and II must have a minimum of 2.5% of their portfolio invested in Infrastructure Funds, Private Equity Funds and Real Estate Investment Funds. Variable income instruments are typically riskier than fixed income instruments like Treasury Bills, Government Bonds and Bank Placements and offer a higher potential reward. This means that Fund I is the most aggressive fund, while Fund IV is the most conservative fund. At the inception, RSA holders who are 49 years and below will be placed in Fund II, 50 and above in Fund III and retirees will be placed in Fund IV by default. Thereafter, Fund I will only be available on request

by RSA holders who are below 50 years old, and RSA holders can switch from one Fund to another subject to these restrictions and other regulations.

Overall, the new multi-fund structure is a great innovation in our CPS and one that will ensure that our investment decisions are better aligned to the realistic needs of contributors. However, from all the investment jargons that I have used, it is imperative that RSA holders are better educated about financial markets and instruments and that the client-facing staff of PFAs are also educated and equipped to also educate them. With the proper investment in education and enlightenment, the multi-funds will be no doubt a huge success!

Send reactions to: comment@businessdayonline.com

Nigerian Stock Exchange and demutualization phobia execute transactions on the market.

The initial manual trading system is the use of shouts and signals to convey trading information of bid and offer (buy and sell) on the trading floor. The trading method connects stockbrokers in a theatrical manner.

It is quite entertaining. Even electronic trading with all its speed and accuracy has never dislodged open outcry. New York Stock Exchange, Chicago Board of Trade (CBOT) and some other markets operate open outcry and ATS simultaneously.

Arguement still exiists wether liquidity is more enhanced in open outcry than electronic trading.

These technological transitions were made under the administration of Apostle Hayford Alile, the Director General and his successor, Professor Ndi Okere-Onyuike. The duo laid the global foundation on which the market stands today. They shall always remain relevant in the history of The Exchange.

Shortly upon her assumption of officie as the Director General and Chief Executive Officer, Professor Okereke-Onyuike exhibited another round of foresight. In 2001, she defied her exalted position and associated privileges and initiated the need to transform The Exchange from a private company limited by Guarantee to public one, called demutualization in stockbroking parlance.

The American trained First Class Finance Graduate knew that her decision would trigger dramatic changes

in The Exchange’s legal and goveriing structure, ownership,management, (including her position) and processes and procedures.

She strongly believes that demutualization could not be done in 48 hours, hence, her tactics was that all stakeholders including stockbrokers, Exchange’s staff, investing public and financial press should be engaged ahead of switch-over date apart from ensuring compliance with necessary regulatory approvals.

However, the on-going plan suffered a slight setback as Ndi the Amazon’s administration was ‘toppled’ in August 2010 in a phantom palace coup at the radiance of her retirement, leading to funny exit of many of us in the management and other cadres of staff, some of whom have passed on.

The matter has been resolved in her favour but the rest is history.

In 2011, another leader of foresight, Mr Oscar Onyema stepped into Professor Okereke-Onyuike’s big shoe and made a success of the position in his first tenure . This earned him a second round from the Exchange’s Govering Council. Onyema, the current Chief Executive Officer of The Exchange must be commended for upholding the tenets of demutualization project.

Like his predecessor, Onyema came to The Exchange with robust foreign experience and embarked on many policies, taking some tough decisions to sustain The Exchange’s brand positioning.

Nobody can fault Onyema on

market discipline. He wanted stockbrokers to become information technology sawvy. His policy on Minimum Operating Standard (MOS) was initially unpopular but has now become a status symbol for our dealing member firms. The quantum leap in minimum capital base for stockbroking firms, formerly regarded as corporate backbreaking , has further reinforced investor confidence in the system. The Exchange has recorded many innovations and won a catalogue of awards in the last couple of years.

However, the on-going demutualization of The Exchange is one singular project that is fast attracting the attention of all stakeholders in the financial market including foreign investors. Everyone is awaiting the new face of the market and how it will affect the management of the Exchange, the impending change in the status of stockbrokers from the current owners to clients in the name of shareholders and involvement of non-members as shareholders either now or later.

The Securities and Exchange Commission (SEC) has issued guidelines on the demutualzation. The Exchange’s National Council and Management have secured endorsement of the stockbrokers to go ahead.

But every progress report must be made available to the members and unilateral decision should not be taken by The Exchange.

The South African Bank, FirstRand

Bank Holding Company and Nigeria based financial firm, Chapel Hill Denham are working round the clock as advisers. The Nigerian Stock Exchange Demutualization Bill, 2017 has been presented at the Green and Red Chambers in Abuja and the Bill is awaiting presidential assent in a matter of time.

Onyema has what it takes to drive the demutualization process.

However, he must tame the elephant in the house. Market watchers are curious that the rate of staff turnover across the board at The Exchange is fast becoming unprecedented and causing minor panic. In our days, working at The Exchange was a status symbol. Turnover was almost nil. It is yet unclear if the current trend is demutualization phobia.

But we cannot ignore the fact that a staff who foresees uncertainty of job security may voluntarily opt out. Onyema needs to re-assure the staff who are on fasting and prayers that their job is secured and the fact that they have to re-apply is a mere paper work. It is essential to curb the trend of turnover as continuous resignation of staff may send wrong signal to the public. Capital market basically thrives on trust.

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

Send reactions to: comment@businessdayonline.com

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COMMENT Conversation beyond Optics

RASAK MUSBAU Musbau is of the Features Unit, Lagos State Ministry of Information and Strategy, Alausa, Ikeja.

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ow that the euphoria of this year’s Children Day’s celebration is over, we need to really take steps in eliminating all barriers to the overall development and growth of children in our nation. Universally, children represent the future, and ensuring their healthy growth and development ought to be a prime concern of all. A working child protection system is unarguably a prerequisite for any nation aspiring for growth and development. Regrettably, as the smallest, weakest and least powerful members of society, children are the most vulnerable to all forms of violence—physical, sexual, and emotional.

Violence against children is pervasive. Violations occur in the home, school, work place and online. The perpetrators often include the very people children are expected to trust: parents, caregivers and other family members, friends, teachers and intimate partners. Violence against children marks them – often for life. Sometimes the marks are visible: bruises and broken bones.

But the harm that violence causes

TEMITAYO LAWAL Temitayo Lawal is an analyst at WNT Capitas, a communications consultancy, and a member of The Peter Bauer Foundation (aka The Liberal Forum)

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igerians are apparently more politically aware than ever. Serious political discussions now form the core of our social conversations and interpersonal interactions. By just being within the earshot at casual gatherings or even official events, you’ll be surprised at how conscious Nigerians have, for various reasons, become and how excited they are to participate at different levels.

Interestingly, these nationwide political discussions have produced a new, favourite song, “Go and get your PVC!” Admittedly, this mass orientation and call to political participation is good in that it deepens democracy and widens the electorate base. I, however, hold that this is a dangerous trend that will only lead us back to square one or even worse if we don’t refocus our strategy.

To make a statement, we need do more than just sensitise people to simply perform their civic duty.

Voters need to do more than cast

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Creating safe spaces for children children also affects their mental and physical health and their ability to function in the world.

Going by reports of increasing cases of violence against children especially in the Nigeria mass media, this year’s Children’s Day’s theme: “Creating safe spaces for children: our collective responsibility” is very apt. It shows demonstration of clear commitment on the part of Nigeria’s government to end violence and also provides an excellent opportunity to speak up on behalf of all vulnerable children in the country.

Creating safe environments requires that adults take responsibility to ensure safety wherever young people spend time. This process starts with recognizing situations and behaviours that create unsafe environments and being committed to making the required changes. It means examining our personal and organizational values and determining the best interests of the child.

In Nigeria today, fundamental rights of children are being encroached upon on a daily basis without appropriate sanction. And this is so, not because we don’t have laws and policies on child protection but due to lack of social consensus and political will to successfully implement laws and policies.

According to global survey conducted in 2012 by The Economist Intelligence Unit, Nigeria is rated as one of the worst countries in the world for children or for a child to be born.

In September 2015, President Buhari launched a Year of Action to End Violence Against children and called on all Nigerians to join this battle. He renewed his commitment in October 2016 by launching a long-term campaign, aligned with

According to global survey conducted in 2012 by The Economist Intelligence Unit, Nigeria is rated as one of the worst countries in the world for children or for a child to be born the Sustainable Development Goals, to End Violence Against Children by 2030. The Presidential Campaign has been translated into a national modelling programme, spearheaded by the Federal Ministry of Women Affairs and Social Development, to strengthen child protection systems.

Nine states have already rolled out this programme.

Also, in a statement by the UNICEF Nigeria Deputy Representatives Isiye Ndombi, Nigeria was the first country in the West African sub-region and the 9th country in the world to conduct the Violence against Children survey in 2014. The survey provided the first nationally representative data on the prevalence of sexual, physical, and emotional violence among children in Nigeria. The findings, released at the end of 2015, highlighted that millions of Nigerian children are suffering violence every year and most are suffering in silence. 6 out of 10 children will suffer some form of emotional, physical or sexual violence before they reach the age of 18. Many of them encounter violence over and over. Yet, less than 5% of the children that seek help receive support.

But the sad reality is that child right protection policy in most states and at the federal level is adequate only on paper. It has been issue of conducting survey without corresponding

functional action plan backed by funding. This clearly explains reasons why violation of children persists. Sexual abuses, which include but not limited to child marriage is a form of child abuse that has become a scourge in our society.

Cases abound where fathers, uncles, guardians, male teachers, clerics etc have sexually molested under-age girls. Some engage in child violation for ritual purposes and most time this leads to mental disorder on the part of abused child with perpetrators escaping sanction.

Today, we still have many children whose habitation is on the streets and since they domicile in the streets, they are generally referred to as street children. These are children that have historically been labeled and considered as delinquents, street urchin and Almajiris among others. Some of these children were driven from home because of maltreatment by mothers, step mothers, fathers, and step fathers, as a result of death of either of their parents or as a result of broken homes. These children are denied their basic rights and are exposed to physical, sexual and all sorts of harm and abuses and also live in inhumane and deleterious conditions.

The United Nations Children Fund (UNICEF) distinguishes between two different groups of street children based on their family situations but both have a common characteristic in that they spend their lives on the streets. The first categories are of children “on” the streets.

These are children who work and maintain regular relationship with their families. The second category is of children who are “of” the streets and consider street their home. The streets are where they eat, sleep, play and make friends. Children in both categories have much in common;

they have unstable emotional relationships with adult world, a negative self image, social stigma, violence, exploitation and uncertain futures.

In other words, street children suffer physical abuse, psychological abuse, neglect and often sexual abuse.

The increasing spate of child abuse with its attendant consequences therefore calls for urgent assessment, prevention and mitigation in order to secure the future of Nigerian children. The truth is that our child protection system is weak and we need to strengthen it. We are all duty bound in this respect.

The change must start from home as innocent mistakes in many homes today is that of dysfunctional relationships between parents and children. Parents nowadays expect schools to do it all alone for them.

The point here is that most of the problems we expect governments and others to fix for us will never be solved if at the home front we refuse to buckle –up. It is also crucial for all stakeholders in the society to understand every infringement that constitutes child abuse and be involved in the effort to bring about change. It is also important for us to support our various State Child Right Protection Policies and make use of correctional centres when necessary rather than abuse our children.

On a final note, we must understand that safe spaces can only be created for children by tackling the issue of violence and abuse from all angles and at all levels. This includes developing protective laws and policies, promoting services, targeting programmes at those who most need them, and raising awareness to promote social change. And in all these, everyone has a role to play.

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Looking beyond the voter registration drive their ballots; this is the way to go if we must proceed.

At 186 million, the total registered voters in the 2015 elections was 68 million and those who voted eventually were 29 million.

This number of registered voters represents only 36.3% of the population while the voters’ turnout was 44% of the registered voters.

This indicates that there was (as always) a huge gap between the number of people who registered to vote and those who eventually voted. What this explains is that just some of us decide our future. This is the reality, but we must redirect it to achieve better results. Apart from making efforts to widen the electoral base, just a light thinking will reveal that more rigorous inputs must go into upping the quality of our votes. How about channeling the bulk of these efforts into educating the voting populace on the sanctity and significance of choosing a leader based on the structural, sustainable innovations rather than stomach infrastructure? Have we ever paused to evaluate how these pecuniary, transactional choices have cost us as a country? Isn’t it exigent to put under proper scrutiny what our voting choices are? I wager it is.

The definition of a preferred candidate to many Nigerians is a politician who could dash out some thousands or distribute rice in cups. This is a widespread political behaviour that must change. It doesn’t work. It cannot work. It is even saddening because these cash gifts are tokens and can never take anyone out of poverty. One then wonders how we do this every four years at the expense of our future and unborn generations.

Statistics show that our people wallow more in penury as new elections come by. Poverty indices have never looked dismal. According to a February 2018 IMF Country Report, “Latest publicly available data suggest that the poverty headcount is high, with 62.6 percent of the population living below the poverty line (HNLSS 2010). Poverty rates reached above 80 percent in one quarter of states in 2010—in these states, rates were double the ones observed …”It has always risen particularly since the advent of this democracy. Voting for myopic politicians for token in return is, in plain terms, worse than useless. It must stop.

Also, the self-centered, ‘myshare-is-paramount’ logic is crappy and must be ditched if we must move the trajectory to that of great

nations. Apart from shattering the merit system, what else have we achieved with it? The unemployment figures, for instance, have skyrocketed. The National Bureau of Statistics explained in their 2016 Unemployment/Underemployment Report that the country’s unemployment rate in Q3 2017 stood at 18.8%, representing an increase of 4.6% from Q4 2016.

It is not rocket science that Nigeria, after five elections in the Fourth Republic has not embarked on sophisticated, encompassing national health care reforms. Substantial inroads have not been made to fix our gaping infrastructure deficits. One then begins to wonder what exactly informs our voting choices. They must be ditched, whatever they are, because we are worse for it.

We must be a nation of political principles and values. These core principles should determine whoever gets our votes in whatever elections. This should be the lens through which we screen candidates regardless of the vague promises they make. We must take charge of the process. With this orientation, it means we won’t join the bandwagon just because it is the winning team. It means we won’t put our future in

the hands of old, corrupt politicians with self-acclaimed rebirth hoping for a good governance miracle. Doing this will be like a drunkard drinking alcohol from a coke bottle. It is simply self-deceit.

He will still get high. We must reject these old politicians who brought the nation to its knees.

We believe them as reformed messiahs at our own peril. They are simply wolves in sheep’s clothing.

We must also establish structures to hold our elected officials accountable. It is not enough to stimulate a mass PVC collection while we sit back and get inundated with politicians’ vague promises every four years. There must be some strategy. This is time for civil society organisations, NGO’s and professional bodies to build a strong, hybrid structure that will research the key structural problems we have in the country, aggregate sustainable policy solutions and produce an encompassing document- something akin to a People’s Manifesto. This could then form the basis for people’s specific, structural demands from politicians. It makes accountability straightforward.

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Editorial PUBLISHER/CEO

Frank Aigbogun EDITOR-IN-CHIEF Prof. Onwuchekwa Jemie EDITOR Anthony Osae-Brown DEPUTY EDITORS John Osadolor, Abuja Bill Okonedo NEWS EDITOR Patrick Atuanya EXECUTIVE DIRECTOR, SALES AND MARKETING Kola Garuba EXECUTIVE DIRECTOR, OPERATIONS Fabian Akagha EXECUTIVE DIRECTOR, DIGITAL SERVICES Oghenevwoke Ighure ADVERT MANAGER Adeola Ajewole MANAGER, SYSTEMS & CONTROL Emeka Ifeanyi MANAGER, CONFERENCES & EVENTS Obiora Onyeaso SUBSCRIPTIONS MANAGER Patrick Ijegbai CIRCULATION MANAGER John Okpaire GM, BUSINESS DEVELOPMENT (North)

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EDITORIAL ADVISORY BOARD

Thursday 31 May 2018

Still on state viability in Nigeria

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igeria claims to be a federation and even refers to its elf as the federal republic of Nigeria. But in reality it is not because most of its federating units are not and cannot be selfsustaining or financially autonomous. To be sure, one of the requirements for a federation is the existence of a constitutionally guaranteed source(s) of revenue to concretise and justify its existence as an order of government. This requirement is so important in a federation because without fiscal autonomy, there cannot be real autonomy, which is the very idea of federalism. In fact, federalism can trace its origin to the desire of the various independent states in the America to form a supranatural body to coordinate the activities of the various states without the states losing their autonomy. What is more, revenues usually move from the states to the centre to enable the centre perform its constitutionally assigned functions.

However, in Nigeria, we have succeeded in turning the idea and practice of federalism on its head.

Rather than being an order of government with coordinate powers and independent revenue source(s), we have contrived a system whereby the centre has become the pre-eminent government with the powers to create smaller, dependent and economically less viable or even unviable orders of governments.

This much was captured by the Economic Intelligence Magazine in its Annual States Viability Index (ASVI) which shows that 17 states are insolvent as their Internally Generated Revenues (IGR) in 2017 were far below 10 per cent of their receipts from the Federation Account Allocations (FAA) in the same year.

The index proved that without the monthly disbursement from the Federation Account Allocation Committee (FAAC), many states remain unviable, and cannot survive without the federally collected revenue, mostly from the oil sector.

We recall that the prob-

lem started with the civil war and the oil boom.

Nigeria’s productive and region-based federal system was restructured and redesigned to depend exclusively on revenues from the sale of crude oil for its survival not min d ing that cr u de oil prices, like those of most commodities, are volatile and fluctuate regularly.

The country is bound to be badly exposed to the shocks and volatility that always comes with trade in commodities. It is a shame and a diss er vice to the people of the country that its leaders set it up to be officially a ‘rentier’ state that lacks a productive outlook and always preoccupied with ‘allocation’ and ‘distribution’ of rents rather than with wealth creation.

But that is not all. A much worse bastardisation of our federation is the use of creation of states as instrument of extraction of resources/rents from the Nigerian state by the elite ethnic formations. With the current arrangement, it appears raison d’être for the existence of states in Nigeria is to receive the states’ elite share of the

national cake (oil money) and nothing more.

But that is all right in periods of boom. Now that the oil money does not flow as it used to, there is the need to rethink the nature of our inverted federation.

Already, most of the states are bankrupt and after about five bailouts, most are still unable to meet recurrent expenditure not to talk about capital expenditure.

We must c olle ctiv ely realise that our political authorities can no longer b e preo ccupied mainly with matters of ‘allocation’ and ‘distribution’ of rents.

They must now be concerned with how to generate wealth and ensure that the sub-national orders of government (states) are viable and fiscally independent.

This can only be done by undoing the damage done initially – creation of unviable units as states. That is why the political restructuring of the country is so essential and necessary to escape the coming doom.

We only wish the government will take a realistic view of the restructuring of the country!

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Thursday 31 May 2018

BUSINESS

COMPANIES & MARKETS

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Fidelity Bank assure shareholders of leveraging opportunities for better returns

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Co m pa n y n e w s a n a ly s i s a n d i n s i g h t

Deceased employees get N140bn as death benefits under CPS Modestus Anaesoronye

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ension industry r e g u l a t o r, t h e Nat i o na l Pe n sion (PenCom) at the end of fourth quarter 2017 approved for payment N9.20 billion as death benefits to beneficiaries of 2,038 deceased employees under the Contributory Pension Scheme (CPS) This figure moved the cumulative death benefits payments to a whopping N139.90 billion (including

life insurance) of 44,879 deceased employees from both the private and public sector (federal and states) since commencement of the contributory pension scheme.

The Contributory Pension Scheme (CPS) as provided in the Pension Reform Act 2014 recognises the importance of the contributor, his contribution and what happens to him while in employment and in retirement. This is both alive and in death. With this realisation that there is life and there is also death, the CPS has taken care of the contributor, directly or

indirectly, should either of the two happen as long as the person has made his contribution through his employer.

Section one part 3 of the Pension Reform Act 2014 states that where an employee dies, his entitlements under the life insurance policy maintained under section 4(5) of this Act shall be paid by an underwriter to the named beneficiary in line with section 57 of the insurance Act. That, upon receipt of a valid Will admitted to probate or a Letter of Administration, confirming

Nigeria to benefit from World Bank solar funding STEPHEN ONYEKWELU

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he World Bank has slated Nigeria as one of West African countries to benefit from solar funding as Africa’s most populous nation struggles with epileptic power supply.

The Bretton Woods institution will provide 19 West African countries $200 million in funding as part of the Off-Grid Electrification Project.

Implemented by the Economic Community of West African States’ (ECOWAS) Ecreae Center for Renewable Energy and Energy Efficiency, the initiative will enable the deployment of solar photovoltaic systems for households, utilities and production infrastructure. Its implementation will be in two phases that will span five years between 2017 and 2022.

The beneficiary countries of the project are Mauritania, Chad, Central African Repub-

lic, Cameroon, Benin, Burkina Faso, Cape Verde, Côte d’Ivoire, The Gambia, Ghana, Guinea, Guinea-Bissau, Liberia, Mali, Niger, Nigeria, Senegal, Sierra Leone and Togo.

Government policies may stall this initiative in Nigeria. Since January 2018, the Nigerian Customs has been demanding payment of 5 percent duty and an additional 5 percent value added tax (VAT) on solar panels imported into the country citing obedience to Federal Government’s fiscal policy, which contradicts the country’s power aspirations.

Babatunde Fashola, minister of Power, Works and Housing is implementing the Federal Government’s incremental power policy which basically seeks to utilise power wherever it can be found in whatever form it can be harnessed.

In this vein, Nigeria has developed its first public Energy Mix statement that seeks to achieve 30 per cent of renew-

able energy by 2030, Fashola said during a public lecture at the London School of Economics recently.

For now, Nigeria generates most of its electricity from hydro. The minster listed major hydro-electricity projects, either being aggressively pursued towards completion or imminent commencement, to include the 700MW Zungeru, 40MW Kashimbila, 30MW Gurara, 29 MW Dadin Kowa, all approaching completion, and the 3050 MW Mambilla, whose financing is now under consideration.

Pointing out that Government policy and action were stimulating consensus and action towards other sources of cleaner energy like solar, the Minister said that electric energy production capacity has increased from 5,000 MW to 7,000 MW and Distribution has increased from under 3,000 MW to 5,000 MW while work continues to expand the capacities with expected results in the short term.

the beneficiaries under the estate of the deceased employee, the Pension Fund Administrator(PFA) shall, with the approval of the Commission, release the amount standing in the retirement savings account of the decease to the personal representative of the deceased or to any other person as may be directed by a court of competent jurisdiction, in accordance with the terms of the Will or the personal law of the deceased employee, as the case may be.

In another case where an employee is declared missing

and if is not found within a period of one year from the date he was declared missing, a board of inquiry is set up by PenCom, which concludes that it is reasonable to presume that he has died, and in this case, the provisions of this section shall apply.

When either of the two happens, the following process will be taken to pursue the benefit of the deceased.

•The Next-of-Kin and/or employer should notify the PFA of death of the employee/ retiree •The Next-of-Kin will also be required to provide a satisfactory means of identification such as current Driver’s License, International Passport, National Identity Card or letter of confirmation of identity from his/her bank •A Next-of-Kin who cannot provide any of the means of identification stated above, may be identified by a 3rd party, who in addition to providing any of the satisfactory means of identification stated above shall also provide a sworn court affidavit identify-

ing the claimant •The PFA will forward a Death Benefit Withdrawal Application Forms to the survivor to complete. The forms are also available in all its offices nationwide, and can be downloaded from its website.

•The survivor will complete and return the Survivor Benefit Application forms to either head office of the PFA or to any of its branches nationwide. The completed application forms should be returned with a Letter of Administration or Will admitted to Probate and any of the listed documents below-Certificate of Death/ Cause of Death; Certificate of Registration of Death; Police Report (if death is by accident); Burial Warrant issued by a Local Government Council; Evidence of Death/ Burial issued by an Islamic Community Head or Judge of a Sharia Court; Evidence of Death/Burial issued by a Leader of a registered church; Copy of obituary poster (if any).

Tejas Networks unfold ICT products plan for Nigerian market CHUKA UROKO

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he Nigerian ICT market is in for good times as Tejas Networks Limited, a global optical and data networking company from Indian with over 400,000 products deployed in 65countries around the world, unfolds a grand plan for the market.

Tejas Networks is a publicly listed company in India that designs, develops and manufactures state-of-the-art telecommunication products for India and the world. It is currently number one in India’s highly competitive optical aggregation market and is rapidly expanding its international presence.

“When we started developing our international business, we realized that the products that we were selling in India were equally appealing in terms of their features and capabilities to telecom customers in Nigeria and other African countries.

“One of the reasons for coming to Nigeria, Africa and other emerging markets was the opportunity to actively participate and contribute to the development of these telecom markets which are currently growing at a scorching pace,” explained Arnob Roy, Co-founder, Tejas Networks, in a statement obtained by BusinessDay in Lagos.

Nigeria is an emerging economy like India, meaning that there is a growing demand for advanced communication technologies and high quality ICT products in the country.

Nigeria is today witnessing significant investments in broadband networks and digital infrastructure both by the government and private operators. Roy sees a strong connection between what is happening here and that of India, hoping that “with our strong experience in providing and implementing similar solutions in India, we saw significant synergies between the two markets.”

With over six years of op-

eration in the Nigerian market, Tejas Networks, which designs and develops market leading products in the optical networking and broadband access (4G LTE, GPON) segments, is already in discussions with the Nigerian government on its grand plan for the country.

“We already have an office in Nigeria with local employees for sales and support. But we would like to establish a much larger presence in the country and are in talks with the Nigerian government in this regard.

As a part of building these world-class networks, we’ll also develop ICT skill development centres and local manufacturing facilities”, Roy assured.

He assured further every Tejas product deployed in Nigeria would also be locally assembled here, promising that there will be trained people who know how to assemble, deploy and provide network support. All of these investments will come as part of their partnership with the Nigerian government that will help in growing the ICT sector.

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Thursday 31 May 2018

COMPANIES & MARKETS

Fidelity Bank assure shareholders of leveraging opportunities for better returns HOPE MOSES-ASHIKE

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idelity Bank says it will catalyze growing opportunities in the Nigerian economy, to deliver good returns to shareholders in 2018.

Speaking at the bank’s 30th Annual General Meeting (AGM) in Lagos, Nnamdi Okonkwo, CEO, said the bank would continue to focus on redesigning its systems and processes to enhance service delivery, just as it will deepen cost optimization initiatives to reduce operating expenses and cost-to-service.

Whilst shedding light on the evolving dynamics in the financial services industry, Okonkwo noted that the bank will continue to increase the adoption and migration of customers to its digital platforms and increase its retail banking market share through the delivery of innovative products and services.

“We will enhance our robust electronic banking processes and products thereby deepening our hold on the retail and commercial markets, small and medium scale enterprises and niche corporate clientele” he stated.

Whilst business operations were challenged by limited foreign currency liquidity in the banking industry, low financing opportunities especially in the public sector space and high cost of business operations, Fidelity Bank delivered very strong results in 2017, a performance he attributed to balance sheet optimization and a focused execution of its medium-term strategies “Clearly, our success in 2017 financial year has set a strong pedestal for sustained growth in revenue. We are optimistic about a favorable operating environment and we look forward to delivering decent set of numbers at the end of 2018 financial year” Okonkwo said.

Meanwhile enthused shareholders at the AGM who

spoke against the backdrop of the banks FY2017, which saw profits rise by nearly 100 percent, poured encomiums on the Board, Management and staff, acknowledging the tremendous strides it has made in strengthening its corporate governance policies and deepening its retail play with technology.

Faruk Umar, president of Association for the Advancement of the Rights of Nigerian Shareholders lauded the bank for declaring dividend of N3.1billion which translated to 11 kobo per share. He said this was very delightful coming at a time when a number of other institutions are unable to pay dividends.

O n h i s p a r t, Mo s e s Ogundeji, Member Independent Shareholders Association of Nigeria, pointed out that shareholders appreciated the efforts of the Board, Management in the transformation that is on-going at the bank and assured of the continued support of the

L-R: Deji Johnson, chief operating officer, Lagos State Government Water Corporation; Taibat Lawanson, lecturer, department of urban and regional planning, University of Lagos; Lookman Oshodi, project director, Arctic Infrastructure; Ijeoma Nwagwu, faculty, strategy and sustainability, Lagos Business School, and Clem Ugorji, director, public affairs and communications, West, Central Africa and Indian Ocean Islands, The Coca Cola Company, during the Sustainability Development symposium held at the Lagos Business School in Lekki, Lagos.

shareholders.

Also speaking to the enthused shareholders, Chairman, Fidelity Bank, Ernest Ebi, said the bank was strategically

Momas Electricity targets increased capacity for power sector KELECHI EWUZIE

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omas Electricity Meters Manufacturing Company Limited (MEMMCOL) as part of efforts to bridge the gap of professional manpower in the power sector especially in the metering sub sector has commissioned the new Momas Metering School in Mowe, Ogun State.

The Momas Metering School is the first of its kind world-class training school in Nigeria to provide requisite training and practical exposure to eligible candidates in the areas of Meter Installation, Inspection as well as Repair & Maintenance.

Adekunle Mokuolu,

President of the Nigerian Society of Engineers, speaking during the commissioning of the training school, described the school as a novel and a unique innovation to that would contribute immensely to training and capacity building for professionals in the metering sector.

Mokuolu says it is only the training and re-training of those who would manage and maintain any facility or infrastructure that underpins the hidden strength of the facility and guarantees that it delivers optimum value.

He observed that with the introduction of the new Meter Access Provider Regulations (MAP), Nigerians can not only access meters

themselves but can now also get training on how to install and audit and maintain them, or they can now have more individuals to deliver these services professionally.

According to him, “The entire engineering industry is particularly impressed by the achievements and contributions of MEMMCOL to nation building through the establishment of the training school, which serves as a critical intervention in the Nigerian power sector,” Kola Balogun, chairman, Momas Electricity Meters Manufacturing Limited while explaining the rationale for establishing the school, said, the school comes as a result of the wide gap in the industry in terms of manpower requirement. To him, “You will dis-

cover that many people, after they finish school, they do not have the practical knowledge of how a meter can be installed, audited or prepared.

This is why MEMMCOL had decided to take the bulls by the horn to establish an institution that would train the required manpower to fill this gap,” he said.

Balogun further said that now that MAP is coming, this is an opportunity for many Nigerians to key into the vision of the government and for many Nigerians to benefit from it by getting trained, adding that the school will be of immense benefit to young engineers, technicians and regular individuals who have passion for meter installation and such electrical executions.

EATECH gets sector recognition on technological innovations

A

n indigenous eng i n e e r i n g f i r m, Engineering Automation Technology Limited (EATECH) has won the Best Instrumentation, Mechanical and Process Automation Engineering Award for 2018 for its various technological innovations and products designed to boost safety in Nigeria’s petroleum and aviation industries.

The award was presented to EATECH by the Institute of Oil and Gas Research and Hydrocarbons Studies at the African Oil and Gas Globe

Awards held in Abuja.

Moses Essien, director general of the Institute of Oil and Gas Research and Hydrocarbons Studies, lauded the company for its commitment in making huge investments in growing the local engineering manpower capabilities to undertake some of the most technical and difficult jobs in Nigeria’s oil and gas industry that were hitherto performed by expatriates.

EATECH was also commended for recently launching some products into the

Nigerian market to assist detect adulterated aviation fuel (Jet A-1) and poor quality lubricants which had wreaked havoc on some aircraft and vehicles in the country.

Charity Emaviwe, deputy Chairman of Council, Institute of Oil and Gas Research and Hydrocarbon Studies, who presented the award to EATECH said the Nigerian government must do everything at its disposal to enact the requisite laws that would encourage the growth and prosperity of local firms doing business in the oil and

gas sector.

In her response after receiving the award, Ugochi Alisi, chief operating officer of EATECH, thanked the board of the Institute of Oil and Gas Research and Hydrocarbon Studies for taking pains to recognise professional organizations that believe in best practises and good governance noting that the award would serve as a great source of inspiration for the management and staff of EATECH to put in greater efforts in recording more successes in the years ahead.

poised to successfully navigate the business environment in 2018. Ebi expressed optimism that the expected improvements in the global landscape

would trickle down to the domestic economy to consolidate the comforting business climate witnessed towards the end of 2017.

LCCI urges caution as debate on African Trade Treaty rages ODINAKA ANUDU

T

he Lagos Chamber of Commerce and Industry (LCCI) says some of the issues raised by Nigeria for not signing the African Continental Free Trade Area (AfCFTA) are genuine.

The chamber, just like the Manufacturers Association of Nigeria (MAN), urges caution to ensure the country makes no mistakes in this regard.

Speaking at a stakeholders’ forum in Lagos, Babatunde Ruwase, president of the chamber, said the high point of argument for Nigeria not signing the AfCFTA was its fear of numerous bilateral trade agreements of some AU countries with the rest of the world and Nigeria’s underdeveloped industrial and infrastructural sector.

“It has been argued that this will potentially make Nigeria a dumping ground due to our uncompetitive manufacturing profile, market size and population.

“To us at LCCI, these are legitimate concerns. It is therefore imperative to deepen consultation across all sectors, in order to address these genuine concerns from stakeholders,” Ruwase said.

After agreeing to sign AfCFTA, Nigeria’s President

Buhari pulled out of the treaty arguably on the concerns of the private sector and the labour unions.

Negotiations on the free trade agreement started in 2012 with an ambitious longterm goal of deepening trade among African Union countries, creating bigger and integrated regional markets for African products and achieving economies of scale among African manufacturers.

The agreement removed tariffs on 90 percent of goods and liberalised trade in services to allow African consumers to have access to cheaper products from other African countries.

Apart from allowing domestic firms to access bigger markers, the trade deal aims to remove tariffs and quotas to lower import and consumer prices and increase intra-African trade, which is scratching 15 percent.

According to Chiedu Osakwe, Nigeria’s chief trade negotiator / director-general Nigerian Office for Trade Negotiations (NOTN), Stage 1 of the AfCFTA would create a single market, progressively reducing restrictions to trade in goods and services, based on the agreed modalities of a 90 percent level of ambition, a 10 percent exclusion and sensitive list, as well as identified priority sectors for trade in services.

Thursday 31 May 2018

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BUSINESS DAY

15

COMPANIES & MARKETS Freshworks plans expansion into African market

Business Event

...targets bigger investment in Nigeria Olusola Bello

F

reshworks Inc recently announced expansion into the African market. It plans to substantially increase its commitment with specific investments in marketing, sales and partner resources to better serve its customers in the region.

According to Arihant Jain, director for Middle East & Africa “The opening of Africa is an important milestone for us, as it demonstrates our expanding commitment to the region and strengthens our position as a leading software provider.

“The combination of our industry-leading solutions

along with a growing customer base in the region will augment our local operations. Our aim is to build rich, meaningful engagement with enterprises of all sizes that are looking for new cutting-edge solutions to power their customer and employee experiences.”

He said IDC predicts the overall African IT spending to reach $33.4 billion in 2018, with nearly $1.9 billion of that spend coming from Nigeria alone.

The year 2017 saw Freshworks building their African foundation with the company’s flagship ‘Partner Program’ receiving immense interest from regional resellers and adding Beaupun and GoTech to their partner ecosystem.

Freshworks is paving way

for the future of IT service management in Africa to keep pace with growing customer and market demands. The company is a leading provider of cloud-based business software, With a mission to reimaging and transform IT experiences. Freshworks, along with select c-level executives and IT leaders, would be discussing the ‘Consumerization of IT: From a Service to an Experience’ at an exclusive invite-only Breakfast & Networking event organized on 31st May at the Lagos.

With the company’s strategic focus on the African market, this event is a step forward in building Freshworks’ credentials as a front-runner in the experience era.

L-R: Olumide Osundolire, partner/representative of the company secretary, Banwo & Ighodalo; Greg Jobome, chairman, CRC Credit Bureau Limited/executive director, Access Bank, and Tunde Popoola, MD/CEO, CRC Credit Bureau Limited, during the CRC Credit Bureau Limited annual general meeting held in Lagos, recently.

Sterling Bank partners Tata Africa for auto loan HOPE MOSES-ASHIKE

S

terling Bank Plc has partnered with Tata Africa Services Limited to unveil a revolutionary auto loan scheme which offers free spare parts and attractive discounts to business owners.

The novel financing scheme, which has a maximum tenure of three years, will sort out the logistic challenges facing business owners as they strive to get products to customers, complete projects, and transport employees.

First of its kind in the Nigerian market, the commercial auto loan scheme covers the acquisition of trucks, semitrucks, compactors, buses, delivery vans, and others. It was envisioned to empower Micro, Small & Medium Enterprises (MSME) to acquire operational vehicles which will in turn accelerate their growth through timely and hitch free delivery of products and services to customers.

Speaking during the unveil-

ing ceremony by senior officials of Sterling Bank and Tata Africa Services, Executive Director, Retail & Consumer Banking, Grama Narasimhan said, “We are delighted to partner with Tata Africa Services Limited to improve access to commercial auto loans and best-in-class operational vehicles to business owners in the country.

This scheme is close to our heart at Sterling Bank because the efficient delivery of goods and services as well as the development of every aspect of the transport value chain will elevate SMEs, boost trade, create jobs and economic opportunities.”

Encouraging business owners to take advantage of the commercial auto loan scheme to enhance profitability, Narasimhan disclosed that interested customers are expected to contribute a minimum of 20 percent and/or a maximum of 80 percent of the cost of the vehicle while Sterling Bank’s funding is subject to change based on the borrower’s capacity.

He added that the financing

arrangement has a maximum tenor of three years depending on the warranty on the vehicle and comes with a discount.

Tata Africa Services is expected to provide a discount on every vehicle financed by Sterling Bank and deliver the financed asset to the borrower within 24 hours of receipt of advice from the lender,” Narasimhan explained.

Commenting on the initiative, Suraj Prakesh, Auto Head, Tata Motors Limited said, “We are partnering with Sterling Bank to offer one of the best value propositions in commercial auto finance through our wide product range of cars, buses, semi-trucks, trucks, delivery vans and after sales services.

This proposition covers ease of acquiring operational vehicles on credit to meet business needs in 72 hours, discount on every automobile financed through Sterling Bank, free spare parts for all the automobiles and opportunity to acquire a maximum of three units of the different vehicle brands that are part of the scheme.”

L-R: Lolu Akinwunmi, member board of Trustees Association of Advertising Agencies of Nigeria; Bola Thomas, member board of Trustees Association of Advertising Agencies of Nigeria; Ayo Owoborode, chairman board of Trustees Association of Advertising Agencies of Nigeria; Udeme Ufot, member board of Trustees Association of Advertising Agencies of Nigeria, and Kayode Oluwasona, president, Association of Advertising Agencies of Nigeria (AAAN) At the inauguration of New Members into the Board of Trustees of AAAN in Lagos.

President Muhammadu Buhari presenting the 2018 National Productivity Order Merit (NPOM) Award Ziad Maalouf, managing director, Seven-Up Bottling Company Limited, in Abuja recently.

ReadyBargains unveils online platform for easy shopping Josephine Okojie

R

eadyBargains, an online business has launched a platform that allow users buy products from various online stores using a single shopping cart and get them delivered to any location of their choice.

“ReadyBargains has unveiled a reliable platform to provide online solutions for Nigerians to easily shop in foreign stores. Our goal is to meet the needs of different classes

of people looking for good bargains,” says Don Okhuofu, chairman, ReadyBargains.

“Customers using our platform have access to different UK and US stores using a single cart and a $10 off cart coupon available to the first basket checked out by every customer.

“The products are delivered to our customers across the country at their door steps or collection points of their choice,” Okhuofu said during the launch of the product.

According to him, one shopping cart unique of-

fering gives users a 10 - 15 percent less cost than that of their competitors.

He noted that all users have access to an additional $10 off every purchases of above $100 made from Walmart, Tesco, Carters and Mothercare.

“The risks of getting fake products from our services are remote because users shop directly from the foreign stores themselves. We assure users of quality products because they deal directly with the producers themselves,” he further said.

L-R: Lawrence Agbaegbu, national store coordinator, SOS Village; Gboyega Fadowole-Aje, National Fund Development and Communications Coordinator; Ifeoma Okoye, public affairs and communications manager, Nigerian Bottling Company (NBC Ltd), and Jolomi Fawehinmi, senior talent acquisition and identification expert, NBC Ltd, during a visit to SOS Village by Nigerian Bottling Company Ltd in Lagos recently.

16

BUSINESS DAY

Thursday 31 May 2018

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Investor

In association with

Helping you to build wealth & make wise decisions NSE All Share Index

Year Open

38,243.19

Market capitalisation

N13.609 trillion

NSE Premium Index

The NSE-Main Board

NSE ASeM Index

2,564.13

1,713.69

1,087.32

Week open (18 – 05–18)

40,472.45

N14.660 trillion

2,920.40

1,793.39

958.52

Week close (25 – 05–18)

39,323.62

N14.244 trillion

2,861.24

1,729.39

949.59

Percentage change (WoW) Percentage change (YTD)

-2.84 2.83

-2.03 11.59

NSE Lotus II

NSE Ind. Goods Index

NSE Pension Index

330.69

2,560.39

1,975.59

1,379.74

975.01

350.07

2,655.08

2,059.19

1,555.38

939.74

349.40

2,637.23

2,059.19

1,475.34

NSE Banking Index

NSE Insurance Index NSE Consumer Goods Index NSE Oil/Gas Index

1,746.68

475.44

139.37

1,836.52 1,775.78

513.13

144.39

490.66

141.79

NSE 30 Index

-3.57

-0.93

-3.31

0.92

-12.67

1.67

-4.38 3.20

-1.80 1.74

976.10

-3.62 -3.73

-0.19

-0.67

-0.01

-5.15

5.66

3.00

4.22

6.93

PFAs invest 9.25% of N7.94trn pension asset in domestic ordinary shares HEANYI NWACHUKWU

P

ensionFundAdministrators (PFAs) invested only N734.515billion or 9.25percent of record N7.943trillion total pension fund Asset under Management (AuM) in domestic ordinary shares, according to the National Bureau of Statistics (NBS) data for the first-quarter (Q1) of 2018.

INVESTOR check shows investment in FGN Bonds is the highest with percentage of 48.61percent of the total pension fund assets and closely followed by Treasury Bills (T-Bills) with 20.89percent weight and domestic ordinary shares with 9.25percent weight while agency bonds has the least with 0.07percent weight. PFAs invested N60.805billion in foreign ordinary shares.

According to the NBS data, PFAs investment in FGN securities is valued at N5.589trillion or 70.37percent of the total pension assets; of which N3.861trillion or 48.61percent is invested in FGN Bonds while N1.659trillion or 20.89percent is invested in Treasury Bills.

PFAs invested N5.796billion or 0.07percent is invested in Agency Bonds such as those of the Nigerian Mortgage Refinance Corporation (NMRC) and Federal Mortgage Bank of Nigeria (FMBN); N55.565billion or 0.70percent of the total pension fund assets under management is invested in Sukuk Bonds; while N8.016billion or 0.10percent of the total pension fund assets is invested in Green Bonds.

In medium-to-long term, a major trigger for equities is the recent multifund structure regulation to PFAs, which is expected to increase their equity holding significantly from the current levels.

The Multi-Fund Structure (MFS)

Data source: NBS

regulation by the National Pension Commission (PenCom) replaces the “one size fits all” structure that puts all active contributors into one Retirement Savings Account (RSA) Fund without consideration for age or risk profile of such contributors.

The NBS pension asset and membership data for Q1 show that participants within the age distribution 30-39years have the highest percentage composition closely followed by participants within the age bracket of 40-49years and 50-59years while participants above 65years have the least percentage composition.

Also in Q1’18, Pension Fund Administrators invested N161.426billion or 2.03percent of the total Asset under Management in State Government Securities; while N390.844billion or 4.92percent of total

pension AuM is invested in Corporate Debt Securities –details of which are: N384.77billion or 4.84percent in Corporate Bonds and N6.067billion or 0.08percent in Corporate Infrastructure Bonds.

O t h e r a s s e t s w h e re P FA s invested are: Supra-National Bonds (N7.36billion or 0.09percent) and Local Money Market Securities (N651.733billion or 8.20percent) which shows Banks (N577.600billion or 7.27percent) and Commercial Papers (N74.133billion or 0.93percent).

Further check on the NBS data showed PFAs invested N19.224billion or 0.24 percent of total AuM in Mutual Funds; Real Estate Properties (N219.242billion or 2.76percent); Private Equity Fund (N27.586billion or 0.35percent); Infrastructure Fund (N7.989billion or 0.10percent); while

N73.153billion or 0.92percent are held in Cash and Other Assets.

“It is unlikely that the implementation of the MFS framework will have an immediate impact on the equities market, especially with the 6 months transition period provided for PFAs, to restructure their portfolios in accordance to the framework”, according to United Capital Research analysts in their May 29 note to investors.

While justifying their outlook, the analysts said that “By the provision of the Multi-Fund Structure (MFS) framework –comprising of four Fund types, differing by age and risk profile – for PFAs, set to take off by July 1st, 2018, our analysis showed that 11.4percent and 1.2percent RSA funds, qualified to be classified into Fund I-III and Fund IV, are currently invested in variable

income instruments (Equities, Mutual Funds, REITS, and Private Equity Funds) respectively.”

“Based on MFS, PFAs will have a minimum exposure of 10percent for Fund II (default for age 18-49) and 5percent for Fund III (default for age 50+ except retirees) to variable income assets. If this minimum is strictly followed and assuming no request is made for Fund I (strictly by request), our analysis indicates that PFAs current exposure to Fund II and III is already in line with the minimum requirement”, according to United Capital analysts.

The multi-fund structure is a new system of fund management that allows the splitting of the RSA ‘Active’ fund into three different funds; Fund I, Fund II and Fund II. The ‘Retiree’ fund remains and it is called Fund IV. There is increasing investor’s preference for equities amid declining fixed income yields. Yields on fixed income securities have fallen dramatically this year as the Central Bank of Nigeria (CBN) shows commitment to single-digit inflation.

“The decline in yields on FGN paper since mid-2017 could lead to a change in asset allocation by PFAs. The share of Assets Under Management (AUM) invested in equities has risen, but we are not witnessing a seachange. The generally average results of listed companies other than tier-one banks militate against such a change,” the Gregory Kronsten-led team at FBNQuest Research had noted.

According to NBS, “The Pension Asset and RSA Membership Data Q1 2018 reflected that 7,975,976 workers are registered under the pension scheme compared to 7,823,911 registered workers in fourth-quarter (Q4) of 2017 while the Pension Fund Asset under Management as at Q1 2018 stood at N7.943trillion as against N7.515trillion in Q4 2017.”

Thursday 31 May 2018

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BUSINESS DAY

17

Investor

Helping you to build wealth & make wise decisions

United Capital investment views

Investor’s Square

ASI at 4-month low …down 2.8 percent w/w

D

o m e s t i c e q u i t i e s depreciated further in the week to end 25th May 2018, falling sharply to a 4-month low after shedding 2.8percent week-on-week (w/w) to 39,323.6points.

This happened despite the Monetary Policy Committee’s (MPC) vote to keep all policy rates constant and the publication of Q1-18 GDP report released during the week. The market was broadly bearish throughout the w e ek w ith b ear ish sentiments dominating on all five trading days of the week. Market capitalisation diminished N548.5billion to N14.1trillion while yearto-date (YtD) return sank to 2.8 percent.

P e r f o r m a n c e a c ro s s sector indices tracked the dull theme in the market as all indices declined except the Agr iculture (+3.9percent) index due to appreciation in OKOMUOIL (+8.4percent). The Financial S e r v i c e s ( - 4 . 9 p e rc e n t ) index bore the brunt of the declines as declines in FBNH (-12.2percent), FCMB (-15.4percent) and WEMA (-10.9percent) dragged the index.

The Consumer Goods (-3.3percent), Oil & Gas (-3.5percent) and Industrial Goods (-0.4percent) indices trailed along consequent on sell-offs in NB (-6.3percent), UA C N ( - 2 . 9 p e rc e n t ) , ETERNA (-22.2percent), OANDO (-12.1percent) and DANGCEM (-0.4percent).

Investor sentiment remained underwhelming as market breadth closed at 0.3x (formerly 0.4x); 14 stocks advanced while 56 declined.

Activity levels weakened further as average volume traded declined 5.8percent w/w to 274.3million units while average value traded diminished 32.2percent w/w to N3.2billion. This week, we anticipate bargain hunting activities even as technical indicator (RSI) hover around the oversold region.

Money Market: Money Market rates ease on OMO inflows Compared to the preceding week, last week’s liquidity profile was more robust as money ma rke t rat e s av e ra g e d 15.7percent (Previous week: 43.8percent). The weeks’ liquidity profile was kept afloat by OMO maturities to the tune of 267.0bn, despite provisioning’s made by banks to cover their wholesale FX bids and two OMO auctions carried out to the tune of N150.5bn at an average stop rate of 11.8percent.

O n We d n e s d a y , t h e Debt Management Office (DMO) conducted its monthly auction of FGN bonds, wherein it raised a total of N50.5bn compared to the 70.0bn it was seeking to raise. The 2023 and 2025 tenors were grossly undersubscribed at 0.4x and 0.7x respectively, while the 2028 tenor saw a bid-to-cover ratio of 2.2x. The auction was carried out at an average marginal rate of 13.5percent versus 12.8percent in the last auction. In terms of liquidity profile, N305.6billion maturing bills are expected to hit the system this week (N99.2billion from primary issuance maturities and N206.4billion from OMO issuance maturities). The CBN is also scheduled to hold its bi-monthly NTB auction with a total offer amount of N49.6billion.

Yields: Bears rule the roast in the T-bills market Av e ra g e T- b i l l y i e l d

forward market.

Global Market Review and Outlook Mixed sentiments as political tensions weigh The week ended 25th May 2018 was laden with geopolitical developments as equities performance remained mixed across the globe. While jitters surrounding trade talks between US and China appeared to have simmered, the US/North Korea relations went south as the historic meeting initially scheduled for 12th June got canceled.

Also, new sanctions were laid on Iran. On the other hand, the minutes of the US Fed meeting held earlier in the month of May, indicated the possibility of a rate hike in June and less focus on rising inflation. Amidst all of these, US equity benchmarks recorded modest gains as the NASDAQ, S&P 500 and DJIA appreciated 1.1percent, 0.3percent and 0.2percent

RSA fund price of PFAs as at May 25, 2018 S/N 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21

PFAs CrusaderSterling Pensions Premium Pensions ARM Pension Mgrs.

Stanbic-IBTC Pensions Legacy PFA PAL Pensions NLPC PFA First Guarantee Pension Trustfund Pensions Leadway Pensure PFA SigmaVaughn Pensions AIICO Pension Managers APT Pensions Fidelity Pensions AXA Mansard FUG Pensions OAK Pensions Investment One Pension Mgrs.

IEI Anchor Pension Managers Radix Pension NPF Pensions

increased by 99basis points bps w/w to close the week at 13.3percent (91-day (up 51bps to 12.9percent), 182-day (up 113bps to 13.1percent) and the 364-day (up134bps to 13.9percent).

On the flip side, average bond yield inched lower by 5bps to end the week at 13.4percent. Generally, we believe sentiment in the fixed income (FI) space is tied to the stance the CBN takes regarding fiscal paper supply.

Currency Market: Naira depreciates across all FX windows The Nigerian naira depreciated against the dollar across all foreign e x c ha n g e w i n d ow s w e track. Particularly, the naira shed 55bps, 2bps, and 20bps to close at N365.0/$1, N305.9/$1 and N361.6/$1 in the parallel market, official and I & E FX windows respectively. Looking ahead, the outlook of the naira is expected to remain tied to the spate of CBN’s intervention in the spot and

CURRENT PRICE 3.9693 3.9191 3.8882 3.7424 3.5897 3.4350 3.4188 3.2717 3.2425 3.1223 3.1045 3.0185 2.8000 2.7168 2.6853 2.6267 2.5385 2.4616 2.3176 2.0244 1.4600

respectively.

In Europe, investors weighed political uncertainty in Spain and Italy, as well as fears surrounding decline in economic expansion as Eurozone composite PMI fell to its 18-month low.

Consequently, Spanish’s IBEX (-2.2percent), France’s CAC (-1.3percent), Pan-European STOXX (-0.9percent) and UK’s FTSE (-0.6percent) declined w/w.

All emerging markets indices across BRICS classification trended southwards except India’s SENSE X (+0.2percent).

Brazil’s IBOV (-5percent), C h i na’s S C H O M P (-1.6percent), South Africa’s JALSH (-1.5percent) and Russia’s RTSI (-0.3percent) all trailed along.

Additionally, global crude prices took a downturn as reports that OPEC and Russia are preparing to ease output cuts dampened prices. Accordingly, crude prices tumbled 2.6percent w/w to $76/barrel.

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Let us know and investor will help you investigate and report back.

E-mail: iheanyi.nwachukwu@businessdayonline.com

CSCS pays N3.5bn total dividend

A

fter an impressive f i n a n c i a l performance in the year ended December 31, 2017, t h e C e n t ra l S e c u r i t i e s Clearing System (CSCS) Plc paid a total dividend of N3.5billion representing a 2 3 3 p e rc e n t i n c re a s e over last year’s dividend pay-out of N1.05 billion.

The company declared 70kobo dividend for the year ended December 31, 2017 and the Board of Directors received approval of shareholders at its 24th Annual General Meeting (AGM) held in Lagos on Monday.

Speaking on the 2017 financial scorecard, Oscar Onyema, Chairman, Board of Directors of CSCS Plc, said that despite the economic realities that were not encouraging in the light of plunging oil revenues and sustained shortage of hard currency in the nation’s foreign exchange market leading to a tough economic experience at the beginning of 2017, CSCS emerged w ith a strong performance for the year across all metrics.

According to Onyema, “We attribute our performance to better economic macro story, the Investors’ and Exporters’ FX Window, our sound corporate governance model, focus on implementing strategic initiatives, skilled workforce and technology.”

Speaking further, he said “the Group’s gross e a r n i n g s g re w t o N 8 . 7 billion in 2017 from N6.2 billion in 2016, which accounts for 41percent Year-on-Year growth. This e a r n i ng wa s d r i ve n by decent revenue numbers from our core business and proper management of our investment portfolio.”

“At the end of the year, Profit-before-tax stood at N5.66 billion in 2017 from N3.72 billion in 2016. Total assets stood at N32 billion in the year under review from N27 billion in 2016, representing a 18% growth Year-on-Year.”

In order to ensure competitiveness in the capital market and remain

the foremost Central Securities Depository (CSD) in Africa, the Chairman said CSCS made significant investment in infrastructure by changing their core CSD platform, the Equator, to a more technologically advanced and state-of-the-art CSD platform, the TCS BaNCS which was successfully deployed on October 2017.

In the same view, Haruna Jalo-Waziri, the Managing Director/Chief Executive Officer, CSCS Plc commenting on the year under review, said though 2017 was considered the year of hope, CSCS adapted very quickly to ensure attainment of decent financial results and other achievements in the course of the year.

securities of quoted companies.

“The importance of this achievement is that it brings into effect the existence of a unified and comprehensive record of issued shares and the aforementioned companies’ shareholders.

As is applicable in other markets, this puts CSCS in the position of bona fide Custodian of the golden record of securities and a sub registry for all quoted companies” Jalo-Waziri added.

C o m m e nt i n g o n t h e future of the company, the Chief Executive Officer assured shareholders that the future is bright as opportunities abound and that the company has

Oscar Onyema, Chairman, Board of Directors of CSCS Plc

Jalo-Waziri said, “CSCS had a profit before tax budget of N3.86 billion but surpassed this target to finish the year with a profit before tax of N5.66billion (a 46.63percent favourable variance). This was driven by the confidence which returned to the capital market. Hence, actual earnings from our depository, clearing and settlement services, which constituted 49.63percent (2016: 42.48percent) of our total revenue increased by 64.49percent in the current year.”

O n n o t a b l e achievements, JaloWaziri said CSCS, working with the Securities and E x c ha n g e C o m m i s s i o n (SEC) and Registrars of Companies, successfully achieved 100percent dematerialisation of

developed 51 initiatives which will reposition the company for optimal service delivery.

The Central Securities Clearing System (CSCS) Plc was incorporated on July 29, 1992 as a Financial Market Infrastructure (FMI) for the Niger ian Capital Market. It commenced operations in April 14, 1997. On t h e 1 6 t h o f May 2 0 1 2 , C S C S be came a Public Liability Company (PLC) by a special resolution.

C S C S has made visible str ides in the Niger ian Capital Market and will continue to respond to the needs of the securities and commodities market to further enhance transparency and speedy settlement of transactions.

18

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Thursday 31 May 2018

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Eterna, Japaul, Dangote Flour, Transcorp, May & Baker eyes 57 other stocks cause N400bn market loss N3bn authorised share capital IHEANYI NWACHUKWU

T IHEANYI NWACHUKWU

I

n the trading week to May 25, 2018, stock investors in Nigeria equities market lost N416billion as 61 equities depreciated in price, higher than 54 equities in the preceding week.

The value of listed stocks which opened last week at a high of N14.660 trillion declined to N14.244trillion at the close of trading week in review.

Stocks that contributed majorly to the record loss are Eterna Plc which declined from week-open level of N6.78 to N5.27 at the close of review trading week, representing N1.51 or 22.27percent dip.

Japaul Oil & Maritime Services Plc came second on the top laggard lists last week after its share price decreased from 30kobo to 24kobo, representing 6kobor or 20percent decline. In the same vein Dangote Flour Mills Plc stock price lost N1.80 or 16.82percent last week, from N10.70 to N8.90; while Transnational Corporation of Nigeria Plc which opened last week at N1.59 per share decreased to N1.33, after shedding 26kobo or 16.35percent.

Aiico Insurance Plc joined the league of big losers after its share price declined from 68kobo to 57kobo, representing 11kobo or 16.18percent loss; while its counterpart Equity Assurance Plc lost 4kobo or 16percent, from week-open level of 25kobo to 21kobo.

Other stocks that recorded remarkable decline are Flour Mills Nigeria Plc which lost N5.45 or 15.59percent, from N34.95 to N29.50; FCMB Group Plc which

also recorded dip from N2.60 to N2.20, after losing 40kobo or 15.38percent; Dangote Sugar Refinery Plc stock price declined from N18.80 to N16.50, down

by N2.30 or 12.23percent; while FBN Holdings Plc which opened the review trading week at N11.05 lost N1.35 or 12.22percent to close at N9.70.

Aside these laggards, 14 equities appreciated in price during the review week; lower than 20 in the preceding trading week; while 94 equities remained unchanged lower than 95 equities recorded in the preceding week.

On the gainers table, I ke ja Ho t e l P l c s t o ck price recorded the biggest spread of 80kobo

or 44.94percent after its share price increased from N1.78 to N2.58. It was followed by MRS Oil Nigeria Plc which gained N6.30 or 21.18percent last week after its share price increased from N29.75 to N36.05.

Law Union and Rock Insurance Plc increased by 17kobo or 20.99percent, from 81kobo to 98kobo; Niger Insurance Company Plc stock price increased from 21kobo to 25kobo, representing 4kobo or 19.05percent increase.

Consolidated Hallmark Insurance Plc joined the league of top gainers last week after its share price which opened at 27kobo closed at 30kobo, an increase of 3kobo or

5.03percent gain.

The stock market recorded total turnover of 1.372 billion shares worth N16.022 billion in 21,099 deals in contrast to a total of 1.457 billion shares valued at N23.666 billion that exchanged hands the preceding week in 19,674 deals.

The Financial Services Industry (measured by volume) led last week activity chart with 1.010 billion shares valued at N 8 . 6 7 0 billion traded i n 1 2 , 0 4 9 d e a l s ; t hu s contributing 73.62percent and 54.11percent to the t o t a l e q u i t y t u r n ov e r volume and value respectively.

The Services Industry followed with 107.246

On the gainers table, Ikeja Hotel Plc stock price recorded the biggest spread of 80kobo or 44.94percent after its share price increased from N1.78 to N2.58.

It was followed by MRS Oil Nigeria Plc which gained N6.30 or 21.18percent last week after its share price increased from N29.75 to N36.05.

11.11percent; Okomu Oil Palm Plc advanced from N78.40 to N85, up by N6.60 or 8.42percent.

John Holt Plc stock p r i c e i n c re a s e d f ro m 52kobo to 56kobo, up by 4kobo or 7.69percent.

Royal Exchange Plc stock price gained 2kobo last week, which represented 6.25percent increase from 32kobo to 34kobo.

Mutual Benefits Assurance Plc also garnered 2kobo or 6.06percent, from 33 kobo to N35; while Forte Oil Plc stock price advanced from N38.75 to N40.70, representing N1.95 or

m i l l i o n s h a re s w o r t h N229.715 million in 712 deals ; and Consumer Goods Industry with a turnover of 71.946 million shares worth N5.506 billion in 3,818 deals.

T ra d i n g i n t h e t o p thre e e quities–Z enith Bank International Plc, African Alliance Insurance Company Plc and Ikeja Hotel Plc (measured by volume) accounted for 276.876 million shares worth N2.939 billion in 2,112 deals, contributing 20.18percent and 18.35percent to the total equity turnover volume and value respectively.

he Board of May & Baker Nigeria Plc will today at the company’s 67th Annual General Meeting (AGM) seek the approval of shareholders to increase the authorised share capital of the Company to N3billion.

If approved by shareholders of the company, the N3billion authorised share capital will be done by creation of 2.200billion ordinary shares of 50 kobo each ranking in all respects pari passu with the existing ordinary shares of the Company.

According to revised notice of the annual general meeting sent to the Nigerian Stock Exchange, the authorised capital raise will form part of the special businesses at the annual general meeting holding at the Muson Centre, Onikan, Lagos.

Also, the Board of May & Baker will be seeking the authority of shareholders to sell or lease as the Board may deem fit any one of the Company’s two properties located at 3/5 Sapara Street, Ikeja, Lagos on the terms and conditions determined by the Board.

The Unaudited Consolidated Financial Statements of May & Baker Nigeria Plc for the first-quarter (Q1) period ended March 31, 2018 show group revenue of N2.375billion, a slight increase from N2.362billion as at March 31, 2017.

The group reported gross profit of N747.368million in Q1’18 from N683.731million in Q1’17. First-quarter 2018 operating profit of the company increased to N321.39million, from N232.817million in Q1’17.

Profit before tax (PBT) increased to N208.762million in Q1’18, from

N35.502million in Q1’17; while profit for the Q1’18 period increased to N141.95million from N24.141million in Q1’17.

The share price of May & Baker Nigeria Plc closed Monday at N2.66kobo from a 52-week high of N6.07. Listed on healthcare sector (pharmaceuticals subsector) of the Nigerian Stock Exchange main board, May & Baker Nigeria Plc has market capitalisation of N2.606billion and outstanding shares of 980million units.

In the first-quarter to March 31, 2018, the company’s earnings per share (EPS) increased to 14.49kobo from a low of 2.46kobo in Q1’17.

As part of the ordinary business at the company’s annual general meeting, the board of directors will lay before the meeting the financial statements for the year ended December 31, 2017 and the reports of the Directors, Auditors and the Audit Committee thereon. The Board will seek shareholders’ approval to pay declared dividend on Monday June 4, 2018 to the shareholders whose names appear in the Register of Members at the close of business on Friday April 20, 2018; and to re-elect directors.

The company said in the revised notice of the annual general meeting sent to the NSE that “Special notice has been received by the Company that it is intended at the meeting to propose the following resolution as an ordinary resolution namely: That T.Y. Danjuma be re-elected a Director of the Company pursuant to Section 256 of the Companies and Allied Matters Act CAP C20 LFN 2004, notwithstanding that he attained the age of seventy (70) years on December 9, 2007.”

Thursday 31 May 2018

C002D5556

BUSINESS DAY

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‘SAA is restructuring for profitability, growth’ Vuyani Jarana is currently the Chief Executive Officer of South African Airways. During his visit to Nigeria, he shares plans of how South African Airways (SAA) is restructuring for profitability and growth. In an interview with Ifeoma Okeke, Jarana speaks on these plans.

How adequate are the funds provided for you to restructure SAA? n August last year, the commercial banks had stopped providing credit to SAA notwithstanding the government’s guarantee, largely because they think there has to be a plan to turn SAA around. They wanted to know if there is a date in the future when the airline will be able to pay back and be profitable. In that context, one of the critical things now is dealing with working capital management. Since I joined in November, the area of focus for us is for us to work with lenders, get them interested in SAA and get them to provide loans. We managed to get them to do these by November, within my first month as the CEO of SAA. What is important was to get them interested in continuing to invest in SAA as partners.

We have had to rework the strategy, rework the plan, complete the corporate plan and present to the shareholders. They are quite comfortable that our partners are not overly ambitious but are quite pragmatic and focused.

The kind of funding required is one that is going to support the airline from January, the beginning of the year, till September or October. So, this is the supporting working capital requirements and that is the investment the government is putting in as a shareholder.

Part of it is to continue to support working capital programme until September or October.

What we have done is to set up a joint committee with government and the Equity Finance Minister, focused on finalising the capital structure including the funding mechanisms for SAA. So, the committee by September must have done its work and finished. Today we have 9.2billion rand of debts that are historic and this need to be addressed as part of the capital structure. We have also indicated clearly that the turnaround plan in 2021, where SAA will break even and start delivering results needs a working capital funding of about 12.5billion rand over the next three years, keeping in mind that we want to grow revenues as well as take out cost. So, turning around the airline, a 24 to 36 months work programme is required in the process of aligning both the revenues and cost. The five billion rand that were issued is part of the plan but effectively what we need is to address the 9.2billion rand and the 12.5billion rand going forward.

So, there is a combined figure of 21.7billion grants. The lenders have said to us that they want a

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Vuyani Jarana i

plan to profitability, which we have put in place. Secondly, they have said that they want a plan to debt reduction. Which means the current debt profile of SAA is a bit high, so we need to address it and that is what we are working on.

So, we have started taking decisions in terms of executing our plans. So many people also say SAA had put up many strategies and what is going to be different now? The difference now is that we are executing our plans. We have created a change hub, which is a nerve centre for execution. We talk about the fit for growth plan. Fitness of growth means strengthening our base so that we can build capacity to grow and that is what is top for us.

This year marks 20years of SAA’s operations into Nigeria.

How profitable is the Nigeria route for the airline?

The Nigeria route is very important to us as it gives us good load factors, we have got consistent services and we have the right mix of profile of customers in terms of business class and economy class.

So, it is one of the profitable routes that we have, that is why we want to continue to support it, grow it and make sure we improve the customer experience in the route to be able to defend our market position. We do have market leadership in Nigeria, therefore we need to protect it and make sure we listen more to customers in ensuring that our partners

continue to support us.

In specific terms, what changes are you bringing in to ensure the airline returns to the era of profit?

There are about four issues to address in our plans to restructure. First, you have to look at the balance sheet restructuring, the funding structure of SAA; which requires getting the right construct of capital structure. Secondly, we have to look at the network and the market aspect of the business; making sure we serve the right market with the appropriate tools, so that there is no mismatch in the way you address the market, otherwise you make losses. We have partners which give us different types to portfolios and tools to actually address the market. We have to also look at the ratios; it is about taking out costs. We need to look at productivity ratios, whether it’s the pilots or all of us, we have to look at everything. Most importantly is how we simplify the organisational processes, we need to bring a lot more simplicity in building a strong commercial organisation that will be focusing on profitability as well as customer experience.

So the five key things are customer experience, balance sheet restructuring, revenue management in terms of the network design as well as how we address the market and a fit for growth commercial organisation, while we continue to hold on to our safety records. In each of these areas, there are work

streams that are focusing on making sure we do the right things, and that is being managed through the change hub. So, we are not leaving this to chance. We watch these every week.

In this turnaround plan, how many aircraft will you be acquiring?

We have built a plan based on the current fleet profile. We are also aware that it is unthinkable that we will stay as we are into the future. But to do this, we need to apply a lot of science and analysis. So we are doing the analysis of the network, which talks to a fleet strategy that we are going to unleash. That analysis will come out in about September. That will tell us what kind of fleet profile we should have, bearing in mind that we have to re-engineer the strategy, since we need to do something different that will be communicated in the second half of the year.

We need to fly aircraft, more than what we are flying today, which is a good thing. We will share the future plan once we have a sense of what the possibilities are.

Are there plans to return to Abuja route which was suspended few years back and how many frequencies will you be operating on this route, if you eventually return?

What we did was to suspend operations in Abuja in the gauge of the aircraft that we are using.

We are bringing in our franchise partners in the same way that we are bringing them in the central African routes to be able to address this with the right products and the right economics. It is between two authorities to approve the start off of the route. So, it is in our agenda to support that through our partners, in terms of

We will go into it. We have also consolidated on our operations by trying to make the ease of travel better for the West African travellers

the franchise.

What is SAA’s contribution to tourism?

There are number of drivers for economic value addition for SAA, not only in South Africa but proudly in the continent because for many decades, we have facilitated the intra-Africa travel by far and strengthened the economies through bi-lateral trade, bringing about ease of travel. We know there are still lots of work that the continent must do in terms of air travel because some of the travel between Africa countries still go through outside the continent.

Part of the things South Africa needs to look at is the alignment of the state aviation policy to make sure that it is balanced and begin to promote the local travel market and also promote intra-Africa travel market.

Describe the West African market in the eyes of SAA? SAA is a catalyst to economic development. SAA facilitates trade, tourism and investment in the different economies. What we have decided to do is to look at how we are able to serve other West African markets by our operations. Before the restructuring, we were on-line to about nine countries in West Africa and Central Africa, starting all the way from the Democratic Republic of Congo, to Senegal, Dakar, Abidjan, Accra, Cotonou, Brazzaville, Kinshasa, Lagos and so on. As a result of the restructuring and the fact that some of the routes were not entirely profitable, we are not able to sustain them.

With the restructuring, we have had to strategize on the central Africa and have pulled away from Brazzaville, Cotonou and Duala for now. Once we are able to get the right gauge of equipment to service these markets, we will go into it. We have also consolidated on our operations by trying to make the ease of travel better for the West African travellers. So, we are partnering with regional carriers like Africa World Airlines to be able to feed our operations either in Lagos or Accra. So, we are strengthening our operations in Accra. We have flights originating from Accra to Washington and that has proven to be a very sustainable operation. We also have flights originating out of Dakar to Washington as well. We have a lot of expansion plan for Dakar, Accra and Nigeria. SAA will like to ease travel in West Africa because it is very difficult to travel within West Africa. We cannot do it on our own because of the location of our hub but we will do it by partnering with local and regional carriers.

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BUSINESS DAY

Thursday 01 June 2018

CityFile Lalong reduces jail terms for 2 prisoners

AbdulHakeem AbdulLateef (r), commissioner, ministry of home affairs, receiving award from Musa Ojiefo, member board of Muslim Alumni Association, Yaba colleague of Technology, Lagos, during Ramadan Lecture.

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Insecurity: Army opens operational base in Epe …as Ambode pledges more support JOSHUA BASSEY

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s part of measures to address insecurity along the eastern coast and rebuild the confidence of residents who have several times been attacked by kidnappers and cultists, the Nigerian Army has opened an operational base in Epe, one of the five divisions that make up Lagos State.

The army base was opened on Monday 28, with Tukur Buratai, a lieutenant general and chief of army staff, saying it would also help to facilitate the movement of other military formations to the area. Buratai, who acknowledged the support of the Lagos State government in the establishment of the military base, was joined at the event by Governor Akinwunmi Ambode and other officials of the government.

Speaking at the event, Ambode described the security of lives and property as a key driver of development which was why his administration has accorded it priority in the last three years.

He said the combined investment of his administration in the security architecture of the state and efforts of security agencies had resulted in peaceful atmosphere for residents and visitors.

The governor, who recalled the days of kidnapping, cultism and other security challenges in Ikorodu and Epe axis, said it was satisfying that the activities of criminal elements such as militants, among others had been decimated.

“I can say significantly that if there is anything that I have actually achieved in these three years is the security and safety of lives and property. There is no way that could have been possible without the support and cooperation of all the security agencies and most significantly the efforts of the Nigerian Army which is actually hidden underground but visibly seen by everything that is going on here,” he said.

Recalling his early days in office, the governor said his first major task was how to address kidnapping and other nefarious activities perpetrated by militants in Ishawo axis, leading to the setting up of a military operation code-named “Operation Awatse.”

“At the beginning, the issue of kidnapping and cultism was in this eastern axis between Epe and Ikorodu but with the efforts that we have made, it has become a thing of the past and we are very grateful to the Nigerian Army.

Ambode acknowledged that crime rate has reduced in the state, stressing that no

efforts would be spared in sustaining the peace.

Alluding to how a military barrack in Epe was closed, Ambode described the commissioning of the new base as historic and significant considering the fact that it was witnessed by traditional rulers and community leaders in the area. He said the development was a new dawn for community relationship with the army in the axis.

The governor lauded the General Officer Commanding (GOC) in charge of 81 Division of the Nigerian Army, Enobong Udoh, a major general, for steadfastness in promoting peace in Lagos, and reiterated the commitment to continually support the military and other security agencies in the state.

“I want to say that I will support the second FOB that is coming up in Ikorodu and if there is any need for us to give further support for gunboat engines or infrastructure, you can count on us that we would support anything that will keep the lives and property of our people safe at all times.

“Our support for “Operation Awatse” is continual and we would support every other thing that is necessary and also beyond this, we would also support the welfare of all the security agencies that are operating in Lagos so that we can continue to have peace.

Plateau to begin production of motorised wheelchairs

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lateau State government is to commence the production of motorised wheelchairs, as part of efforts to revamp the state-owned science and technology equipment production centres.

Dan Manjang, the commissioner for science and technology disclosed on Tuesday in Jos. Manjang said the wheelchairs would be produced by the Plateau State Relevant Technology Centre and the Technology Incubation Centre (TUC), and alleviate the sufferings of the physically challenged people.

“We are having consultations with the Plateau State Disability Commission to produce locally-made motorised wheelchairs for them instead of travelling outside the

state. We would make the required facilities available and we would soon commence production in these centres.

“Consultations are also ongoing with ministries like education, health to patronize test tubes, school furniture and hospitals beds produced in these centres,” he said.

Manjang said there were many untapped potentials in the science and technology centres like the jathropa plant where the oil produced in TUC Jos has different health benefits and can even be used as aviation fuel.

The commissioner, however, expressed worry that government agencies seldom patronise the state-owned production centres, saying the gesture would boost productions,

facilitate their sustenance and generate more revenue for developmental projects.

He said the Plateau Assembly has passed the information technology bill, which seeks to set up an agency to be headed by a Director-General, saying when signed it would galvanise ICT issues in the state.

“We want to have a functional website and other social media handles like the twitter, instagram, facebook and many others where all activities of the state could be uploaded and existing information updated as required.

“The ministry of education has provided computers to 40 public secondary schools to facilitate internet access for research and other academic purposes.

overnor Simon Lalong of Plateau has reduced the jail terms of two prisoners; one from life sentence to 21 years and the other from 10 years to two years.

Lalong made the announcement to mark his third term anniversary, on Tuesday but he did not give the names of the prisoners.

He said: “In exercise of the powers conferred on me in section 212 of the constitution of Federal Republic 1999 (as amended), I have granted prerogative of mercy to two prisoners.

“One criminal conviction of 10 years is now committed to two years and one life imprisonment is now committed to 21 years, effective from different dates of sentences. This is a mark of our appreciation and thanksgiving to God for guidance, protection and successes recorded.”

The governor appealed to youths to reawaken their consciousness and refuse to be used as agents of destruction and mayhem. He added that the future belongs to the youth and they should not take part in destroying the legacies that destiny shall one day call upon them to protect.

Lalong said that his administration was striving to employ, engage and empower youths in the state.

The governor called on politicians to avoid unnecessary bickering, false propaganda and conscientious ignorance over issues they were not sure of.

He said: “In the coming months, politics and campaigns should be based on issues not lies. We should strive to inform, not to inflame sensibility, this way, we will be able to eschew violence and embrace peace in all our dealings.

Lagos pilgrims’ board assures hitch-free hajj

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agos State Muslim Pilgrims Welfare Board (LAMPWB) has assured intending pilgrims for the 2018 hajj of a hitch-free exercise.

Muftau Okoya, executive secretary of the board who gave the assurance said that the board had taken steps to ensure that pilgrims were comfortable and able to perform the hajj rites with ease.

“The challenge for the pilgrims usually is that they miss home. We have taken steps to ensure that they do not miss home too much by engaging them in spiritual activities whenever they are free.

“We also ensure that we serve them home made meals, which goes a long way to make them feel at home,” he said.

Okoya said that his board had also concluded arrangements for befitting accommodation and transportation facilities for the comfort of the Lagos pilgrims.

He said that the Lagos contingent would also consist of about 20 clerics to educate the pilgrims about the requirements of Hajj and other spiritual benefits.

“We have also made arrangement for befitting accommodation in and effective transport facilities for their comfort.

“We also operate our Qur’anic school during Hajj, with about 20 clerics from Lagos, who will teach the pilgrims all they need to know about Islam during their spare time,” he said.

The executive secretary advised the intending pilgrims to be of good good ambassadors and shun acts that will erode the spiritual essence of exercise. NAN

Innovation

Apps

Fin-Tech

Start-up

Gadgets

Ecommerce

IOTs

Broadband Infrastructure

BUSINESS DAY

Thursday 31 May 2018

EU GDPR: Why Nigerian companies are not rushing to update privacy FRANK ELEANYA

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he European Union General Data Protection Regulation (EU GDPR) which was adopted two years ago came into effect officially on 25 May, 2018.

Despite its threat to sanction all businesses within and outside the Euro zone that are not compliant to its new privacy protection guidelines, many Nigerian companies seem not to mind as most are yet to update their data privacy policies.

At the basics, the GDPR compels organisations to secure clearer consent for using people’s information and introduces tougher fines for failing to protect people’s data.

The GDPR which replaces the 1995 Data Protection Directive brings new dimension to data utility and protection. One of the things it is meant to achieve is universality, by creating a common set of rules and

practices that apply across the European continent, and possibly with time, in the world. It also focuses on enforcement, the capacity for regulators to fine any company in breach of GDPR as much as 4 percent of its total worldwide sales.

The GDPR applies to any organisation using or processing the personal data of EU residents, imposing tough penalties on those that fail to protect such information adequately.

Before it became official, a lot of organisations including technology companies like Facebook, WhatsApp, Google, LinkedIn, Twitter, SnapChat, Instagram, Amazon and many others had all announced unprecedented updates to their privacy policy that recognises the new guidelines in the EU GDPR. But the same cannot be said of over 90 percent of Nigerian-based companies whose business transactions might be exposed to the rules one way or the other.

To be fair, thousands of businesses based in Europe also missed the deadline. In

the United Kingdom which is next door to Europe, only about 60 percent of businesses were prepared for GDPR’s May 25 timeline, according to Spiceworks

French president announces $75m investment for African tech startups FRANK ELEANYA

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rench president, E m m a n u e l Ma cron, has pledged to support innovat i v e s t a r t- u p s i n A f rica with a €65 million ($75,651,745) investment programme.

Macron made the announcement at the third edition of the French Tech Conference themed “Viva Tech” which held in Paris, May 2018. The conference b ro u g h t t o g e t h e r t e c h company founders and professionals, innovators.

Speakers included Satya Nadella, CEO of Microsoft, Dara Khosrowshahi, CEO of Uber, as well as Mark Zuckerberg, CEO of Facebook.

According to the French President, the over $75 million funding will come through the French Development Agency (AFD). Macron acknowledged the energy for innovation in African startups which are not being efficiently harnessed by “big

Bank IT Security

providers of development aid and financiers.”

The French agency will set up €65 million fund to “to fill the gaps in the support with small sums ranging from €30,000 to €50,000 per startup, which is what the startups need,” Macron said.

Rioux Remy, director general of AFD explained that as part of the new programme called Digital Afr ica, the agenc y w ill provide €10 million to suppor t the ecosystem of African entrepreneurs, €5 million to help young startups gain access to finance, and €50 million for the growth of promising African startups.

“The goal of digital Africa is to become a digital bridge between France, Europe and Africa,” Remy said.

African startups featured prominently at the third edition of Viva Te ch 2 0 1 8 . A si d e f ro m attracting funding from the French government, the segments of the con-

ference saw debates and presentations from African startup founders, Angel investors and tech professionals.

Among the Niger ian startups that pitched at the event include Medsaf. com, a digital medical solution that aims to overcome the challenges with fake drugs with a curated medication marketplace for hospitals and pharmacies. There was also Blue Sapphire (IT solution provider), Efiko Freelance (an edutech startup); Helium Health (Medtech) and Marvis Computel (elearning platform).

“This opportunity afford them a platform to pitch to venture capitals, corporate organisations, but more important, to network with peers and sector experts and leaders with an aim to exchange ideas and collaborate,” said Lanre Osibona, Senior Special Adviser to President Buhari who was part of the presidential delegation to the conference.

study released May 24. Just a quarter of US businesses were also expected to meet the deadline as well.

There are quite a number of Nigerian companies,

including banks which services are accessible via the internet to anyone in any part of the world, including the European region. Nigerians living in the EU region also contribute significantly to remittances in their home country and they carry out most of the transactions through financial institutions based in Nigeria.

Interestingly, the GDPR affects everyone living within the European Union.

Thus, if Nigerian companies desire to continue their transactions with customers within the continent, they would have to comply or face sanctions.

LegitNG, a Nigerianbased online legal services provider, noted in a ‘Quick Guide to the GDPR for Nigerian Companies’ that “GDPR awareness in Europe has reached a frenzied pitch and companies will be looking to not only protect data within their control but ensure that they do not share important data with partners who have no structure for data protection. The fact that Nigeria still has no enforceable

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data protection law till date places Nigerian companies as risky partners for the purpose of data sharing with EU entities.”

Some of the businesses that spoke to BusinessDay cited lack of time and resources. One of the companies said their team were still studying the new rules and will respond accordingly. It should be noted that successfully complying with a law that promises severe penalties could come with its own expense as companies will need to engage the services of lawyers, consultants and advisers on dataprotection. Some experts say it favours companies that are organised and capable of great expenditure.

A senior manager in one of the commercial banks in Nigeria told BusinessDay that the banks may not fully embrace the GDPR. “At a time when we are talking about open banking and opening up bank APIs to different counterparties for consumption, we may suffer a temporary setback,” he said.

$1m Seedstars contest opens applications for tech start-ups CALEB OJEWALE

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ech startups with cutting edge innovations can now pitch their ideas on a global platform where the winner could get up to $1 million in investment and other prizes, as Seedstars commences this year’s contest.

Seedstars World, described by organisers as the largest startup competition for emerging markets, is back in Africa to scout for the top high growth startups and entrepreneurs and accelerate them on their path to global scaling.

Local winners will be invited to represent their country at the Regional Summit in Africa and win an all-inclusive trip to Switzerland, to introduce their startup to some of world’s most prominent investors and executives and enjoy the opportunity to win up to $1mn in equity investments and additional prizes.

The company in a statement, said in the 2018 edition of the tour, Seedstars Africa regional team will visit over 20 cities across Sub-Saharan Africa, hosting bootcamps and pitch competitions. Countries

such as Mauritius and Zambia, amongst others, will host local competitions for the first time, enlarging the impact of Seedstars mission in the continent.

Seedstars says it has done five successful tours so far, placing the spotlight on entrepreneurs from fast growing economies, and one can say African startups have had significant successes with 3 of its entrepreneurs having won the global prize in the past: SimplePay (Nigeria: 2013), Giraffe (South Africa: 2015) and Agrocenta (Ghana: 2018).

In the lastest Seedstars Global Summit edition, held on the 12th of April in Lausanne, Africa broke new records having three startups amongst the finalists (besides Agrocenta), two of them awarded with important prizes: GiftedMom, finalist startup from Cameroon; Medsaf, from Nigeria, winner of Best Women Entrepreneur Prize, by TAG Heuer; EMGuidance, South Africa, winner of the Health Tech Prize by Merck. Solar Freeze, Kenya, was also winner of Africa Energy prize, by Enel; and EDVES, from Nigeria, was awarded Transforming

Team: Frank Eleanya, frank.eleanya@businessdayonline.com; Caleb Ojewale, caleb.ojewale@businessdayonline.com

Education Prize by TRECC (Transforming Education in Cocoa Communities) and School of Management Fribourg (HEG Fribourg). With hopes of repeating this success for African startups in the upcoming summit, Seedstars World is kicking off this year’s tour on the 29th of June in Harare, Zimbabwe.

The companies selected to pitch at the Seedstars local events need to be less than 2 years old, have raised less than USD 500,000 in funding and have built a minimum viable product, ideally with existing traction. The Seedstars World team is searching for one additional criterion - the startup’s regional and global scalability. With a strong network of regional partners such as Merck, SPECo, Enel or Continental, Seedstars World is looking for smart startups that are addressing underlying social challenges in their home countries and developing profitable products for the global market, to support their regional businesses and growth.

Eligible start-ups can sign up for the contest through Seedstars’ website at https:// www.seedstarsworld.com/

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Luxury

BUSINESS DAY

Malls

Companies

Deals

C002D5556

Thursday 31 May 2018

Spending Trends

Smartphones are in town, here is what you need to know …phones between N50, 000 and N100, 000 BUNMI BAILEY

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obile phone penetration in Nigeria is headed northwards, as the number of subscribers grew astronomically in 2017 resulting in 84 per cent penetration from 53 per cent in 2016 for both features and smart phones.

There are different brands of phones to buy within the prices of N50, 000 -N100, 000 that fit a consumer’s taste and preference.

BusinessDay did an analysis of the different prices of brands of which included Tecno, Infinix, Gionee, Samgung and Injoo phones from three tech stores, Microstation, Mchub and Slot.

The Tecno phones within the ranges of N50, 000 - N100, 000 are Tecno Camon whose price currently in the market is N58, 900, Tecno Camon Pro whose price is N77, 500 and Tecno L9 plus which N50, 000 is.

Let us starting with the lowest price is techno L9 plus which is priced N50, 000 and was launched in the first quarter of 2017. The major highlights of the device are its enormous display size and battery hence why it was marketed as a ‘bigger and longer’ device compared to its predecessor.

According to Tecno, the Tecno L9 Plus smartphone is bigger and longer. Though, it also depends on how you want to view the ‘bigger and longer’ thingy. The smartphone offers a 6.0 inches screen, so if you actually want a tablet, but also want something Tecno phone is well packed with a 5000 mAh battery.

Despite the battery capacity, it still allows the phone to be slim and sleek. At the moment, Tecno L9 Plus is the Slimmest Battery King. It has a fingerprint sensor for easily device unlocking and protection.

The Fingerprint Sensor is said to be very fast as it unlocks the mobile phone in 0.3 seconds, which is awesomely fast. It also comes with Android OS; 7.0 (Nougat) which means an even more seamless use of the phone as well as a better browsing

experience.

Then another Tecno phone is Tecno Camon X, its price is N58, 700. This phone is obviously a camera-focused Android smartphone from Tecno Mobile; its major selling point is in the camera aspect and in the front camera region precisely. The Camon X packs a 20MP front camera with dual brightnessadjustable selfie flash.

Aside the astounding camera functionalities, the Tecno Camon X also features an elegant body design. It is built with the 18:9 aspect ratio (infinity display) and comes with Face ID unlock system for more convenient phone accessing.

The Camon X Pro another type of tecno which costs N77, 500 comes with bigger RAM and ROM sizes, sharper screen display and beefed up front camera (24MP).

Finished with a solid 6-inch FHD+ screen with 2.5D glass display, the Android 8.1 Ore-powered device impresses even more in its internal memory configurations and camera sensors.

It has an OS: HiOS V3.3 based on Android 8.1 Oreo, a Dual sim (Nano) 4G LTE, Screen Size 6.0inch FHD+ display. Screen Resolution: 2160*1080 pixels, Processor Type: Octa-core 2.0GHz MediaTek Helio P23 Processor, RAM: 4GB, Internal Storage: 64GB, External Storage: microSD, up to 128GB, Back / Rear Camera: 16MP Back Camera with Quad-Ring flash,Front Camera: 24MP front camera with dual LED flash and Batteryof 3750 mAh (non-removable) Then there is Infinix Note 4 which is priced N54, 000 currently in the market. The smartphone

was launched in August 2017. The phone comes with a 5.70-inch touchscreen display with a resolution of 1080 pixels by 1920 pixels at a PPI of 387 pixels per inch.

The Infinix Note 4 is powered by 1.3GHz quad-core processor and it comes with 3GB of RAM. The phone packs 32GB of internal storage that can be expanded up to 128GB via a microSD card. As far as the cameras are concerned, the Infinix Note 4 packs a 13-megapixel primary camera on the rear and 8-megapixel front shooter for selfies.

The Infinix Note 4 runs Android 7.0 and is powered by a 4300mAh non removable battery. It measures 159.00 x 78.80 x 8.40 (height x width x thickness).

The Infinix Note 4 is a dual SIM (GSM + CDMA and GSM + CDMA)

smartphone that accepts MicroSIM and Micro-SIM. Connectivity options include Wi-Fi, GPS, Bluetooth, USB OTG and 4G (with support for Band 40 used by some LTE networks in India). Sensors on the phone include Compass/ Magnetometer, Proximity sensor, Accelerometer, Ambient light sensor and Gyroscope.

Another phone within the range of N50, 000-N100, 000 which is Samsung Galaxy J7 Neo which is N70, 000.This smartphone was released in 2017. It is powered by Exynos 7 Octa 7870 chipset, 2 GB of RAM and 16 GB of internal storage.

The Samsung Galaxy J7 Neo runs on Android OS v7.0 (Nougat) out of the box. It comes with a Li-Ion 3000 mAh, non-removable battery. It features a 5.5 inches AMOLED display with 720 x 1280 px resolution. The AMOLED technology is widely used for smartphones because of their gorgeous color reproduction abilities and very deep blacks.

Gionee A1 Lite smartphone which is priced N65, 000 was launched in August 2017. The phone comes with a 5.30-inch touchscreen display with a resolution of 720 pixels by 1280 pixels.

The Gionee A1 Lite is powered by 1.3GHz octa-core processor and it comes with 3GB of RAM. The phone packs 32GB of internal storage that can be expanded up to 256GB via a microSD card. As far as the cameras are concerned, the Gionee A1 Lite packs a 13-megapixel primary camera on the rear and a 20-megapixel front shooter for selfies.

The Gionee A1 Lite runs Android and is powered by a 4000mAh non removable battery. It measures 150.50 x 74.40 x 8.00 (height x width x thickness).

The Gionee A1 Lite is a dual SIM (GSM and GSM) smartphone.

Connectivity options include WiFi, GPS, Bluetooth, USB OTG, FM, 3G and 4G (with support for Band 40 used by some LTE networks in India). Sensors on the phone include Proximity sensor, Accelerometer, Ambient light sensor and Gyroscope.

Eight shopping tips that might save you time, money STEPHEN ONYEKWELU

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very shopper it appears wants to get the best deal for their Naira especially during this tough economic recession? There is an abundance sale ad from retailers who want your business. Here are some useful shopping tips: Shop around. A “sale” price is not always the “best” price. Some retailers may offer a sale price on

an item for a limited time; others may discount the price on the same item every day. Having an item’s manufacturer, model number, and other identifying information can help you get the best price for the item you want.

Read sale ads carefully.

Some may say “quantities limited,” “no rain checks,” or “not available at all stores.” Before you step out the door, call ahead to make sure the retailer has the item in stock. If you are shopping

for a popular or hard-to-find item, ask the retailer if he would be willing to hold the item until you can get to the store.

Take time and travel costs into consideration. If an item is on sale, but it is way across town, how much are you really saving once you factor in your time, your transportation, and parking?

Look for price-matching policies. Some retailers will match, or even beat, a competitor’s prices — at least for a limited time. Read the

retailer’s pricing policy. It may not apply to all items.

Go online. Check out websites that compare prices for items offered online. Some sites also may compare prices offered at stores in your area. If you decide to buy online, keep shipping costs and delivery time in mind.

Calculate bargain offers that are based on purchases of additional merchandise. For example, “buy one, get one free,” “free gift with purchase,” or “free shipping with

minimum purchase” may sound enticing. If you do not really want or need the item, it is not a deal.

Ask about sale adjustments. If you buy an item at regular price and it goes on sale the next week, can you get a credit or refund for the discounted amount? What documentation will you need?

Ask about refund and return policies for sale items. Retailers often have different refund and return policies for sale items, especially clearance merchandise.

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Global retail update Growing empire in Europe rivate equity firm Bridge point, the owner of Pret a Manger, is set to sell the UK-based sandwich shop chain for GBP 1.5 billion to JAB Holdings, the Luxembourg-based investment company owned

by German billionaire family Reimann. The deal will add another asset to JAB’s prospering coffee business.

Action on plastics The European Commission proposed banning single-use plastics such as cotton buds and plastic straws and putting the burden of cleaning up waste on manufacturers in an effort to reduce marine litter. Retailers support the action but are concerned over practicalities.

Dealing with debts Croatian retail group Agrokor will be taken over by a Dutch-based company, owned by creditors, under a proposed debt settlement plan. Agrokor was put under state-run administration in April last year, crippled by debts built up during an ambitious expansion drive.

Cross-border expansion British chain Iceland is seeking further sites across Norway, following the opening of its first outlet in the country, in the Greater Oslo region. Meanwhile, Tesco has announced the opening of a GBP 30 million environmentally-friendly Tesco Extra store in Dublin, which will create over 175 jobs.

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Delivery options American e-commerce heavyweight Ebay has announced a new membership delivery service, Ebay Plus, in Australia. After completing its acquisition of Uber’s Southeast Asia business, ride-hailing firm Grab has launched food delivery business GrabFood in the region.

Southeast Asian alliance Vietnam’s supermarket operator Saigon Co-op and Singapore’s NTUC FairPrice grocery network have opened the third Cheers convenience store in downtown Ho Chi Minh City. It features dine-in areas and is open 24 hours.

The joint venture plans to open 50 outlets this year.

Merger challenged An Indian trader body has raised objections to Walmart USD 16 billion acquisition of the Indian e-tailer Flipkart, claiming it would create unfair competition and result in predatory pricing. However, lawyers said the complaint to the country’s antitrust regulator is unlikely to threaten the deal.

Healthy addition In line with its strategy to shift toward healthier options, Pepsico will acquire Bare Foods, an American maker of baked fruit and vegetable snacks. It is the latest effort of the beverage giant toward the more natural, lessprocessed foods required

by an increasingly healthconscious public.

Solid results Cencosud, a leading South American retailer with operations in Chile, Argentina, Brazil, Peru and Colombia, delivered a good performance in the first quarter according to its financial boss Rodrigo Larrain. This was mainly driven by improved activity and profitability in Argentina.

Big stakes in Asia China’s three biggest internet conglomerates – Alibaba, Tencent and Baidu – will become major shareholders in Foxconn after the technology firm’s upcoming USD 4.3 billion initial public offering.

To drive its luxury business, Alibaba has taken a minority interest in virtual showroom start-up Ordre.

Initiatives in India Amazon appears to be restarting its investments in the country as India-based digital insurance start-up Acko confirmed that the online retailer led a new round of funding for its business.

Private equity firm Samara Capital is in advanced talks to buy Aditya Birla’s supermarket chain More.

Spirits in Myanmar Pernod Ricard and Yoma Strategic Holdings have joined forces to produce and distribute whisky in Myanmar. The French beverage giant is the first global producer of wine and spirits that has established a formal presence in the Southeast Asian nation.

Postal growth in Europe Magnit plans to expand its reach by launching shops in thousands of Russian Post offices. The first five stores will open at the end of June.

The country’s second biggest grocer also hopes to save on transport costs through the joint use of logistics infrastructure.

Spar announcements The Amsterdam-based international retailer has launched a new flagship store in the UK with partner Blakemore Retail. In the Netherlands, Spar is set to develop a distribution centre in Heerenveen in order to support the current growth of its logistics processes.

Merger pressure Sainsbury’s has admitted it will cut management jobs as part of its tie-up with Asda.

The British grocer is already under fire from the union and could face legal action as it was pressing ahead with a plan to cut paid breaks, annual bonuses and premium pay for Sundays.

E-commerce engagement United Supermarkets, a unit of retail giant Albertsons, has upgraded its online platform to improve customer engagement and enhance metrics for the mobile shopper app. Wholesaler Spartan Nash announced that its Family Fare Supermarkets will offer same-day grocery delivery via Instacart.

Grim outlook Walmart’s Massmart subsidiary recorded a massive loss on the Johannesburg stock exchange last week after the retailer announced that its profits for the six months to end June would drop nearly 70% due to restructuring and constrained consumer spending in South Africa.

Positive progress Partnerships with key partners and a focus on premium products helped sportswear retailer Foot Locker to beat analysts’ estimates for its first quarter.

During the period, the company, which operates in 24 countries, opened 11 new stores, remodelled or relocated 43 stores, and closed 37 stores.

Living under poverty line

How Nigerians are struggling to survive

If you want to contact the writer of this story call: +234(0) 803 889 1567, +234(0) 8155184838 chinwe.agbeze@businessdayonline.com

Patient in dire need of funds to complete radiotherapy Name: Joseph Ugbeh State of Origin: Cross River State Dependents: Wife and four children Occupation: I was working as a distributor before I was diagnosed of cancer which has gulped all my saving leaving me bankrupted.

I had this lump on my neck that appeared and disappeared. I was in Port Harcourt then, so, I went to University of Port Harcourt Teaching Hospital, UP TH in 2015 and after spending so much money, I was referred to Federal Medical Centre, Bayelsa. When the hospital embarked on strike, a consultant in the hospital advised me to go to Na-

tional Hospital, Abuja for radiotherapy.

I got to National Hospital Abuja and did all the tests I had done before. I paid N90,000 to use the machine but after using the machine for three days, the machine broke down and I was told to go home. I started vomiting blood at home and was taken back to hospital where I was given four courses of chemotherapy at N163,000 per course and another four courses of chemotherapy when I started vomiting blood again some months later.

When the hospital got a new machine in December 2017, I went back to complete my radiotherapy but was told the cost had gone up to N300,000. By

Joseph Ugbeh

this time, I had everything I had apart from my new refrigerator I bought for N175,000. I travelled home and was able to sell the fridge for N75,000. I told them at the hospital that i was expecting some money and pleaded with them to accept N160,000 which was all I had and they did.

Now, they are threatening to stop my treatment if I don’t balance up. I have sold all my property including my bus and my wife sold her wrappers and jewelleries to pay my bills while I was on admission.

House rent: My rent expired while I was taking chemotherapy last year and my landlord sent my wife and children packing. A friend of mine volunteered to offer

Analysts: Chinwe Agbeze, Stephen Onyekwelu, David Ibemere, Graphics: Fifen Famous

them shelter and he did but his landlord said my wife and children should leave because the occupants in my friend’s house are too much.

School fees: My children have not been in school for two years now because I could not afford to pay their school fees and my wife does not have a job.

This sickness has dealt with me but I’m pained that my innocent children had to quit school. I want to send them back to school and get a place for us to stay but I cannot do that if I’m still in this condition. I appeal to benevolent Nigerians to help me with funds to complete my radiotherapy treatment.

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Harvard Business Review

Thursday 31 May 2018

Global Business Perspectives CONNEC TING

THE

WORLD

ONE

BUSINESS

AT

A

TIME

Electoral Tsunami for Malaysia PHILIP BOWRING

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UALA LUMPUR, Malaysia — An electoral tsunami swept away Malaysian Prime Minister Najib Razak, ending 60 years of rule by the United Malays National Organization. The outcome was welcomed at home as well as abroad; it was viewed as a democratic system asserting itself against corruption and perhaps presaging the decline of racebased politics.

Enthusiasm, though, is tempered by questions about the new ruling government — a disparate four-party coalition headed by 92-year-old former Prime Minister Mahathir Mohamad, a former physician with a limited record of compromise.

Will the coalition hold? Will it attack corruption generally or focus on the ousted government?

Will economic policies be populist or pragmatic? Will racial and religious harmony improve?

Will foreign policy, particularly toward China, change?

The tsunami resulted from a mixture of factors, including Mohamad’s personal appeal; economic grievances expressed

by Malay, Chinese, Indian and other racial groups; a desire for more inclusive politics particularly among urban Malays; and resentment of the UMNO leadership’s greed and arrogance.

Any of these elements could guide the future. Race- and religion-based politics remains alive and are represented by Mohamad himself as the creator of the Malay Parti Pribumi Bersatu Malaysia, a breakaway from the UMNO he led for two decades.

Although his party has only 12 of the coalition’s 113 seats, Mohamad’s personality dominates for now.

The coalition’s cohesion and durability will be determined in large part by relations between Mohamad and his former deputy, Anwar Ibrahim. The party

In this photo released by Malaysia Information Ministry, Singapore’s Prime Minister Lee Hsien Loong, center left, walks with Malaysia’s Prime Minister Mahathir Mohamad, center right, at the Perdana Leadership Foundation in Putrajaya, Malaysia Saturday, May 19, 2018. (CREDIT: Malaysia Information Ministry).

Ibrahim founded, Parti Keadilan Rakyat, or PKR, won the largest number of coalition seats and is currently led by his wife. The king pardoned Ibrahim, who was recently released from jail after being found guilty of dubious charges of sodomy. Ibrahim will not return directly to politics in the short term, stating he is content for Mohamad to lead so long as the government prioritizes reform issues, including corruption and the administration of justice.

Mohamad has promised to pass leadership on within two years — a long time in Malaysia’s now volatile politics — and Ibrahim and his team may try to bring their policies to bear soon.

In principle, the PKR should be able to work with the second largest party, the Democratic Action Party, which is predominantly Chinese. But PKR must also protect its position among the Malays as well as a potential UMNO revival. PKR may have to contend with policies favoring majority Malays who are overwhelmingly Muslim, while nonMalay expectations of a shift away from racial preferences must also be met. Growing social and educational divides and religious intolerance require re-

versal.

The racial question relates directly to an economy held back by an exodus of capital and talent caused by preferential treatment. In turn, government spending financed by borrowing has boosted economic growth.

The pattern could continue, at least in the short term, as the government has already fulfilled a promise to abolish the unpopular goods and services tax.

Addressing this problem now falls to leader of the Democratic Action Party, Lim Guan Eng, though he must first face corruption charges brought by the ousted government. As a successful chief minister of Penang state, Lim is well regarded by the business community as a reassuring figure. He must also fend off pressure for more spending and replace lost revenues.

Current high oil prices will help, and so may new scrutiny of huge infrastructure projects, including rail and port projects financed by massive Chinese loans as part of the “Belt and Road” program. However, critics have accused Razak of kowtowing to China.

Infrastructure projects provide fat contracts for some local firms. Others complain that

China’s state companies get the bulk of benefits and that they import Chinese workers. While the money is welcome, some Malays express concern about an influx of migrants. More generally, Malaysia wonders whether, as a capital surplus country, it should rely on foreign money for projects like housing, for which foreign technology is not needed.

Malaysian Chinese also have mixed feelings about China’s rise and its “Belt and Road” projects. The economic spur offers a potential antidote to “bumiputra” policy of giving preference to ethnic Malays, but the display of wealth and power stirs Malay resentment. The new government will likely continue welcoming Chinese money while being more discriminating.

Suspicions of China are unlikely to have much impact on foreign policy. Although Malaysia’s maritime area comes well within China’s claims in the South China Sea, the government has kept a low profile.

China, while taking military action against Vietnam and the Philippines, has left Malaysia alone. This will not change so long as the Philippines remains supine in the face of Chinese encroachment, and the Trump administration continues to undermine regional confidence in the United States.

Waters subject to Chinese claims are off the east Malaysian states, Sabah and Sarawak.

Neither is predominantly Malay, and Sarawak does not have a Muslim majority. The election showed a sharp rise in the appeal of parties demanding more local autonomy and a fair share of state resources. Once in the UMNO pocket, they may flex their muscles.

Malaysia’s neighbors have varying perspectives. Singapore had good relations with and is wary of Mohamad, but was well aware of corruption’s threat to

2017 Harvard Business School Publishing Corp. Distributed by The New York Times Syndicate

Malaysia. Prime Minister Lee Hsien Loong will be the first foreign leader to meet Mohamad as prime minister. Singapore may worry about the new government’s stability, but it hopes for a more balanced ethnic composition.

Thailand’s ruling generals may see Malaysia as reason to delay long-promised elections.

Mass discontent can overwhelm even the stoutest constitutional barriers to free and fair democracy. Alternatively, they may assume that an early election could cement their power before the opposition gains momentum.

Hopes for a return to the rule of law and judicial independence in Malaysia were well-received in the Philippines by critics of President Rodrigo Duterte.

Indonesia’s President Joko Widodo, facing an election in 2019, may feel most comforted.

His personal popularity may be overwhelmed by big-money backed opponents mobilizing Islamic and anti-Chinese sentiment. But Malaysia has shown that such tactics may not work and that anti-corruption efforts win votes.

UMNO’s fall may lead to fundamental changes in the structure of politics, a revival of state institutions or reshuffling of the party pack. Much depends on harmony between Mohamad and Ibrahim, which in turn hinges on whether Mohamad acknowledges that seeds of corruption and abuse of the judicial system were sowed during his previous premiership. The new coalition’s name, Pakatan Harapan — Alliance of Hope — sums up popular expectations that the electoral tsunami sweeps away not just UMNO leadership but systemic sleaze.

(Philip Bowring is a journalist who has been based in Asia since 1973.)

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LegalBusiness BD Business Law Industry Report Practice Intelligence Partnerships

Mitigating Private Equity Risks - a commercial, legal and regulatory perspective

INSIDE Development Finance Institutions In Nigeria: need for a consolidated development finance institution

26 Something BIG is happening to data and you should know it!

27 IBAHRI report emphasises global need for juvenile justice systems that comply with international norms

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Outlook on Democracy

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GABRIEL FATOKUNBO

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rivate equity (PE)’s increasing global influence can be gleaned from the rise of global PE assets under management US$2.49 trillion as at June 2016; whilst the ‘dry powder’ held by PE funds rose from US$755 billion in 2015 to US$820 billion in 2016, according to 2017 Preqin Global Private Equity & Venture Capital Report. The 2017 Deloitte Africa Private Equity Confidence Survey established that Kenya and Nigeria are the top investment gateways to East and West African regions. This is premised on Nigeria’s stronger return from the 2016-2017 economic recession, and Kenya’s positive economic outlook.

Significant PE activity in Sub-Saharan Africa (SSA), Gulf of Guinea and Nigeria have included fundraising by African resident or focused funds, international PE firms’ entry into SSA, major investments and exits. Home grown firms (even if their funds are based outside Nigeria, most commonly Mauritius) include African Capital Alliance (ACA) (which recently closed and have been investing its US$570 million CAPE IV Fund), Synergy (manages US$65.9 million FAFIN Fund, committed to promote agricultural small and medium scale enterprises), MBO Capital’s US$100 million MCM Growth Fund in microfinance and agro-processing, Adlevo an investor in technologyenabled companies like Solo Phone

Holdings Limited, Paga etc.). Other Nigerian firms like Verod Capital, Sahel, Alitheia etc., are also making their marks.

African firms include Convergence Partners (promoted US$250 million CPCIF-an ICT fund aimed at developing telecommunication sector in West Africa); whilst International firms such as Actis (US$7.8 billion investment and realized US9.3 billion from 160 full and partial exits), Abraaj Group (which as at February 2018, manages US$13.6 billion assets in sectors like healthcare, clean energy and real estate), and so many others like - TPG, Vectis, Helios Investment Partners, Emerging Capital Partners etc. have made tremendous investment in the PE space.

Nigeria’s recent recession and salient country risks have not deterred

the PE industry. A recent transaction was Helios and Vitol’s US$276 million acquisition of Oando’s downstream business effective, July 2016.

Within this myriad of opportunities lies PE business risks - political, currency, operational and transactional risks - which could cripple investments. Preventing potential losses from these related risk exposure is therefore of major interest to PE firms, and this piece identifies and discusses these issues.

PE Investment Risks Generally, businesses are prone to macro risks and PE funds enjoy no special immunity from such risk exposure. These risks - political, currency, market, operational, funding, and transactional - may arise at different phases of the deal namely: pre-investment evaluations, entry/ operational (monitoring), and li-

quidity (exits). For instance, PE risk occurred during Nigeria’s economic recession caused by the fall in oil prices, and the government’s poor policy choices which negatively impacted exchange rate, resulting in massive Naira devaluation constituted PE risks. For entrants, it may mean that assets can be purchased cheaply, whilst those seeking exits realize lower value in dollar terms.

Also, investee companies become more challenged to deliver dividends at pre-recessions returns, and even to meet foreign currency obligations like debt servicing, payment of management fees, etc.

Another is Political Risk (PR), which also constitutes a major threat for PE investments. Even developed countries such as the US are not exempted. For instance, after President Trump’s election, many investors pulled out their investment from the US for fear of Trumps’ ‘America First’ campaign. However, recent events including exceptional stock market performance and the pro-business tax reform legislation reflects or have engendered increased investor confidence in the economy. For instance, Nigeria’s PR in 2017 was largely related to government and regulatory actions, like CBN’s foreign exchange (forex) policy inconsistencies, but on the positive side, there were concerted efforts to improve ease of doing Gabriel Fatokunbo is a commercial lawyer and practices with LeLaw Barristers and Solicitors Continues on page 26

PERSPECTIVE With Ayodele Oni An evaluation of the Nigerian Electricity Regulatory Commission Meter Asset Provider Regulations 2018 (In this edition, Oni continues his critique of the MAP Regulations from the last edition of this piece.)

I. Local Content Requirements ot less than 30% of the contracted metering volumes sourced by the MAPs shall be from local meter manufacturing companies in Nigeria. The implication of this directive encapsulates the NERC’s underlying objective of encouraging competitive metering services within Nigeria, especially considering the wide gap between demand and supply of electricity meters in Nigeria; whilst simultaneously encouraging the participation of foreign investment (as there is an allowance for 70% of meters that may be manufactured by non-Nigerians).

At this point, it is germane to quickly consider the provisions of the NERC’s Local Content Regulations regarding local content. By virtue of the NERC Regulations, all licensees shall give first consideration for Nigerian goods and services in award of contracts. The implication is that Nigerians shall generally be awarded contracts for the provision of goods and services in the power sector, be-

N

fore non-Nigerians are considered.

Another interpretation of this provision implies that non-Nigerians will only be considered, when utilization of indigenous operators in the domestic power market is exhausted.

The writer notes the seeming contradiction between this provision and the MAP Regulations which has restricted and streamlined the application of local content to a 30%

minimum. Meaning that, in procuring the MAP services, foreign participation of up to 70% is allowed, as long as the metering volumes sourced is not below 30% local content. The writer is not unaware of Paragraph 24 of the Local Content Regulations which empowers NERC to make Orders in furtherance of the objectives of the Local Content Regulations.

This Paragraph gives fillip to the argument that NERC should not be reducing local content limits in the MAP Regulations as making Orders in furtherance of the objectives of the Local Content Regulations will mean providing further support to it and not reducing its effectiveness, which the 30% threshold stated in the MAP Regulations appears to do.

II. Contractual Framework In a bid to further regulate the operations of the DisCos and the MAPs and to subject them to legally enforceable principles, the MAP Regulations introduce a compulsory legal requirement which mandates the

distribution licensee and the MAP to enter into a Meter Service Agreement (“MSA”) and a Service Level Agreement (“SLA”). The requirements of the MSA include the number of meters to be installed by the MAP and the licensee; recovery of the Cost of Meter Asset plus a reasonable return over a period of 10 years; securitization; meter specification and other provisions on indexation to cater to the variation in the macro economy.

The SLA on the other hand would specify the timeframe for installation; maintenance; meter reading; meter replacement among others.

Furthermore, the Distribution Licensees shall include a metering service charge as a clear item on the billing of its customers provided with meters under an MSA with MAPs and shall be separate from the energy charge. It is important for Distribution Licensees and MAPs to consider and adequately address deal breakers such as financing and operational risks in these agreements to guard against unprecedented circumstances and liquidity crisis.

III. Meter Ownership

The Map Regulations vests legal ownership of the meter asset on the MAP until fully amortized through payment of a metering service charge by beneficiary customers. Also, by virtue of the MAP Regulations and in line with guidelines for asset enumeration

by Distribution Licensees, customers’ meters are associated with feeders and distribution transformers and shall not be moved by customers.

It is germane to consider here, the seeming difficulty this particular provision will pose to electricity customers. The implication is that the amortization process may impose payment for electricity consumed on customers who may have just moved into the premises where the meter was installed. More so, customers may be subjected to paying for electricity for meters which eventually they might not own. There is also the risk of paying the meter service charge and cost of installation all over again where such a customer moves into any premises that is unmetered. On this note, it is paramount that electricity customers comply with a recent Continues on page 26

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LEGALINSIGHT Development Finance Institutions In Nigeria: need for a consolidated development finance institution ESOMCHUKWU AZIKE

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ecently several bills proposing to establish various sector-specific development banks have been introduced by the Federal Government.

Some of these proposed banks include the Nigerian Solid Minerals Development Bank, Nigerian Marine Development Bank; Education Development Bank Bill and so on.

Although it is a brilliant notion to establish a bank whose primary aim is the development of a key sector of the nation’s economy, this concept is not the first of its kind in Nigeria. This article proposes the abolition of the several Development Finance Institutions (DFIs) that exist in Nigeria and the consolidation of the nation’s resources to establish a singular development bank that will cater to the various sectors that constitute the Nigerian economy. It will also provide a concise overview of the previously established special purpose banks. Furthermore, it will shed light on the current state of the legislative arm of government regarding DFIs. Lastly, this article will consider the effects of a singular development bank as exemplified through other progressive nations.

OVERVIEWOFDEVELOPMENTFINANCE INSTITUTIONS IN NIGERIA According to the Central Bank of Nigeria, there are currently six operational DFIs in Nigeria namely the: Bank of Industry (BOI); Federal Mortgage Bank of Nigeria (FMBN); Bank of Agriculture (BOA); Nigeria Export Import Bank (NEXIM Bank); The Infrastructure Bank (IB); and the National Economic Reconstructions Fund (NERFUND).

Since inception, these banks have attained varying degrees of success with regard to achieving their mandate and maintaining financial solvency.

However, not all DFIs are buoyant, the National Economic Reconstruction Fund (NERFUND) is underperforming.

Due to the initial effectiveness of the NERFUND, it was excluded from the 2002 merger of the Nigeria Industrial Development Bank (NIDB) and Nigeria Bank of Commerce and Industry (NBCI) to form Bank of Industry (BOI). Furthermore, in 2015, the Federal Government expressed its intention to shut down the NERFUND because of mismanagement of resources and non-performing loans in excess of N17.5 Billion Naira.

2.0 THE FEDERAL GOVERNMENT AND DFIs It is currently unclear which direction the legislature is attempting to steer the public in terms of the regulations that will guide and establish a new DFI. On the one hand there is a Bill is to abolish the existing DFIs and merge them to establish a new DFI, on the other hand the Federal Government is simultaneously contemplating Bills to establish several special purpose DFIs. The Bill to establish a National Development Bank of Nigeria (NDBN Bill) seeks to repeal the Bank of Industry Act, the Nigerian Bank for Commerce and Industry Act, and the National Economic Reconstruction Fund Act. Although the NDBN Bill has not been signed into law by the President of the Federal Republic of Nigeria, in 2015, the Central Bank of Nigeria granted an operational license to the Development Bank of Nigeria (DBN). The bank is expected to revolutionize the operation of Small and Medium Scale enterprises (SMEs) in the country through the implementation of the following corporate best practices: Lack of political interference In a bid to generate awareness and confidence in the DBN, the Ministry

of Finance has assured the public of a financial institution devoid of political interference. The Federal Government will only occupy one seat as a Director on the Board and the bank is anticipated to be governed according to private sector best practices.

Wholesale Financing To curb the emergence of a bank ridden with non-performing loans, the DBN will undertake a wholesale financing model. This essentially means that the bank intends to loan its resources to institutions such as commercial banks co-operatives e.t.c.

Loan with Guarantee The DBN is anticipated to target low prices of funds and provide long-tenured loans for as long as 10 years with a moratorium period. The DBN is required to also take measures to moderate the risk of granting loans to SMEs exposure by de-risking its finances and providing up to 50% guarantee on loans given out by the participating finance institutions.

Nonetheless, Nigeria is in dire need of a multi-faceted development bank that influences every sector, not only the SMEs. To strengthen the position canvassed in this article for a single National Development Bank, it will be apt to comparatively examine the structure of DFIs in the People’s Republic of China and South Africa as case studies. These countries which are frontier markets have achieved growth in their economy that Nigeria is yet to attain; therefore, reference to them for the adoption of some of their practices will be beneficial to the Nigerian economy.

THE SUCCESS OF A SINGULAR NATIONAL DEVELOPMENT BANK USING CHINA AND SOUTH AFRICA AS A CASE STUDY. Development, research and innovation are the foundation of most successful economies and the relevance of a financial institution driving this purpose cannot be overstated. China and South Africa are examples of two countries that facilitate one major development bank for the execution of their nation’s growth objectives.

China boasts of the world’s largest development finance institution known as the China Development Bank (CDB).

The CDB was riddled with debt twenty years ago but today it has surpassed the World Bank as the biggest international lender to developing countries. However, the CDB did not achieve this grand feat overnight. Most of its RMB 7.5 Trillion (which equals to $1.2 Trillion USD) in asset stems from the returns on their investments in their nation’s growth.

Due to the proven success of the CDB, it has become a reliable bank for foreign investments and finance cooperation, long-tern lending and bond issuance. It also has offshore branches

in other countries such as Hong Kong, Cairo, Moscow, Rio De Janeiro, Caracas and London.

The Development Bank of Southern Africa (DBSA) was established in 1997 by the Development Bank of Southern Africa Act. The DBSA has a development strategy on the advancement of municipalities; state owned enterprises; public- private partnerships; and the private sector within South Africa and the wider African continent. Since its establishment, South Africa has experienced improvement across various sectors such as infrastructure, agriculture, energy, water supply and development of it human capital through it healthcare and educational institutions.

According to its 2016/ 2017 Annual Report, the DBSA delivered R28 Billion (i.e USD 2.4 Billion) across the total infrastructure value chain, with development assets now standing at R77 Billion and total assets at R82 Billion. In addition, the bank completed 70 infrastructure projects in the electricity, water, sanitation, roads and storm water sectors for secondary and under resourced municipalities, benefitting more than 63 000 households. In addition, R3.5 Billion was disbursed to projects outside South Africa and its cost to income ratio improved to 29% from 34% the previous year.

CONCLUSION The establishment of a full-service National Development Bank would propel the nation to greater heights. A key ingredient that led to the success of the aforementioned banks was the creation of a detailed strategy for the operation and implementation of the banks’ mandate. Another major takeaway was the focus of the respective nations on investments in their country before the banks’ started receiving loans from external parties. In closing, it is the position of this article that the existing DFIs should be merged into one well-structured organization to facilitate the development of all the sectors of the economy including oil and gas; agriculture; aviation; maritime; small and medium scale enterprises e.t.c. This effectively means that there will be no need for a Bill to establish a sector-specific DFI but rather it will be prudent for the Federal Government to expand the scope of the current Development Bank of Nigeria (DBN) as a single National Development Bank (NDB) by an omnibus legislation which will repeal other existing DFIs and merge or consolidate their roles with the NDB. Esomchukwu Azike is a young lawyer eager to make an impact in the energy and financial sector in Nigeria.

She graduated with an LLB Law degree from the University of Essex in 2015. She was subsequently called to the Nigerian Bar in November 2016, and is currently an Associate in George Etomi and Partners, one of the foremost commercial law firms in the country.

Esomchukwu Azike is a young lawyer eager to make an impact in the energy and financial sector in Nigeria. She graduated with an LLB Law degree from the University of Essex in 2015.

She was subsequently called to the Nigerian Bar in November 2016, and is currently an Associate in George Etomi and Partners, one of the foremost commercial law firms in the country.

An evaluation of the Nigerian Electricity Regulatory Commission Meter Asset Provider...

Continued from page 25 directive from NERC that enjoins customers to apply to their respective DisCos for reconciliation of charges and services transfer, where they are relocated.

Prohibited Activities Towards achieving a transparent procurement process is an embargo placed by NERC on the Distribution Licensee, its directors, directors’ spouses and children from owning shares and holding directorship and senior management in MAP companies. This is a crucial protection afforded the industry, to prevent MAPs and DisCos from colluding in the MAP services which ultimately will bring about conflict of interest. The writer also notes the significance of this provision in ensuring that transactions are dealt at an arm’s length.

However, this provision is vague to the extent that it did not specify the senior management positions that is applicable to Distribution Licensees. Furthermore, in line with the provisions of the Companies and Allied Matters Act (CAMA), it is the writer’s recommendation that such a Distribution Licensee who holds any management position in the MAP declares his nature of interest in any transaction or contract where he directly or indirectly has interest.

In Conclusion The MAP regulatory framework no doubt will in no small measure, significantly improve the power sector situation in Nigeria by putting in place certain necessary measures to curb arbitral electricity billing of customers and by ushering in a new direction to private sector participation.

Crucial to this motive is the attention the MAP Regulations draw to NERC; mandating NERC within Ninety (90) days of approving the MAP Regulation to “cap” unmetered customer bills as a gateway to addressing the issue of estimated billing in the NESI. The foregoing notwithstanding, the writer notes certain issues which may predominantly pose problems and delay investments in the sector in the future. One of such identified issues is the wide discretionary powers given to the DisCos. The Regulation

expressly provides that the DisCos would first declare a “gap” in metering before the other processes follow.

The implication of this provision is that there is little room for a private investor to effectively and directly participate in metering unless a DisCo deems it fit that a MAP is needed, hence placing the MAPs at the mercy of the DisCos. This may be very restrictive and considering that the DisCos are also private entrepreneurs, there might be conflict of interest and the declaration of metering gap may take a very long while.

A more efficient procedure might be where a prospective MAP may apply directly to NERC, with an approval or some form of certification from the DisCo in charge of the area where the meter is to be provided.

On another note, the Regulation provides that its applicability shall not affect metering contracts entered into

by DisCos prior to its coming into effect and that the provisions of all other Regulations, Rules and Codes of the NERC shall only be applicable to the extent of their relevance. It is unclear whether the technical advantages and amortization benefits in the MAP Regulations will continue to apply to new meters installed as a replacement to old meters, subsequent to the commencement of the MAP Regulations.

It is not also clear the extent of the relevance contemplated by the MAP Regulations, with regard to other NERC Regulations already in existence and which Regulation would override the other where there is an inconsistency.

Some of these pertinent issues if addressed, will balance the objective of the MAP Regulation and ensure that the inadequacies of estimated billing, is reversed for all end users in the NESI. It is also very germane to note that the efficacy of the Regulation depends on the willingness and ability of the NERC to follow through with licensing of these activities.

Ayodele Oni, (ayodele.oni@ bloomfield-law.com), a commercial lawyer, specializes in international energy investment law & policy and is currently advising a number of electric power and gas projects developers.

Mitigating Private Equity Risks...

Continued from page 25

business. Political risks included sectarian and religious violence typified by Boko Haram insurgency and herdsmen/farmer clashes.

There may also be heightened forms of ‘distracted governance’ as the 2019 elections approach. Other countries like South Africa, Zimbabwe, Egypt or Kenya, have their own PRs which investors have to factor into the calculations in taking near term, medium term and long term positions.

Preqin’s Analysis of PE Risk/Return by Region-(May 2017) revealed that North America carry the lowest risk (14.6%) compared to Europe’s 16.3%, Asia’s 16.8%, and Rest of World (17.0%) vehicles.

North America’s favourable risk/ return profile are due to the region’s established capital markets, with a comparatively secure legal and regulatory environment that offers lower investment risk. This analysis was confirmed by McKinsey’s Global PE Review February 2017. The challenge with emerging

markets, especially in Africa, is how to facilitate both foreign and local investment by lowering PR risks.

Mitigating the Risks An example of risks to mitigate is currency risk which can affect both entreprise value and net returns on investments. This can be achieved inter alia, by diversifying the revenue streams and investment portfolio (especially avoiding overconcentration on sectors prone to forex fluctuations), hedging investments (by using instruments in the market to offset the risk of any volatile prices), and buying insurance cover (transactional risk cover). For example, the Multilateral Investment Guarantee Agency (MIGA) provides political risk insurance and credit enhancement guarantees which help to protect investors’ foreign direct investments against political and non-commercial risks in developing countries. Minimizing currency risk also involves reducing hard currency for PE deals.

To be continued next week

Thursday 31 May 2018

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THE YOUNGBUSINESS LAWYER

GREYMATTER

Something BIG is happening to data and you should know it!

Lagos state small claims Court: A Milestone in dispute resolution

f you checked your emails or engaged any of the major social media platforms in the past one week, you may have seen a pop up notification (stating that certain data policies have been changed) requesting your review and acceptance of new terms of use.

If you did review these terms, you may have seen references to a certain legislation issued by the European Union which came into force on the 25th of May 2018. This body of regulations which have been described as revolutionary is the General Data Protection Regulation (GDPR), a legislation on data privacy issued by the European Union (EU) in 2016 but which will now be enforceable against persons in breach of its provisions. The GDPR is designed to harmonize data privacy laws across Europe, to protect personal data of European citizens and to reshape the way organizations approach data privacy. The GDPR is however peculiar because it also mandates extra- territorial compliance by persons not resident in the EU when handling date of European citizens and introduces stringent sanctions for breach or misfeasance. It is expected that the GDPR will ultimately induce change in other jurisdictions as by virtue of interaction with EU data subjects, counterparties would be held accountable to the standards imposed by the GDPR. The GDPR defines ‘personal data’ as any information relating to an identified or identifiable natural person (‘data subject’); an identifiable natural person is one who can be identified, directly or indirectly, in particular by reference to an identifier such as a name, an identification number, location data, an online identifier or to one or more factors specific to the physical, physiological, genetic, mental, economic, cultural or social identity of that natural person”.

In plain terms, for every like, click, update, search and buzz on your phone/smart device, there is a corresponding record lodged in some remote server, somewhere, say in America, outlining your history, inclinations, preferences, etc. and that information can be milled, transferred or even sold to third parties without recourse to you (well, the long windy terms and conditions that most of us never read, apply).

The GDPR seeks to expand the rights EU citizens/residents can exercise with respect to the use and protection of such data. According to the GDPR, “Rapid technological developments and globalisation have brought new challenges for the protection of personal data. The scale of the collection and sharing of personal data has increased significantly. Technology allows both private companies and public authorities to make use of personal data on an unprecedented scale in order to pursue their activities.

Natural persons increasingly make personal information available publicly and globally.” and regulation is necessary.

Scandals such as the Cambridge Analytica scandal where it was reported that personal information shared with social networks were used to “rig” voters’ choices in the most recent American elections, are at the heart of what the GDPR seeks to prevent. The GDPR seeks to induce a more coherent and unified regulatory framework for EU member states, encourage strict enforcement against breach and induce control of personal data by individuals who are the subject of the data stored and

Instituting a Case ccordingly, an action for the determination of a dispute between litigants could henceforth be commenced in a designated Small Claims Court in Lagos State where: • The Claimant or one of the Claimants resides or carries on business in the State; • The Defendant or one of the Defendants resides or carries on business in the State; • The cause of action arose wholly or in part in the State; • The claim is for a liquidated monetary demand in a sum not exceeding N5,000,000 (Five Million Naira), excluding interest and costs; and The claimant has served on the Defendant, a Letter of Demand, in the prescribed form.

Given the objective of the Small Claims Court and the target-class of claims and litigants, the procedure has essentially been simplified by reducing same into standard forms, which the Claimant or Defendant/ Counter-claimant, as the case may be, can simply fill out and file at the Registry of a Magistrate Court having jurisdiction to hear small claims suits.

These include Form SCA 1 for Letter of Demand; Form SCA 2 for Complaint Form; Form SCA 3 for Summons; Form SCA 5 for Defence/Counterclaim; Form SCA 7 for Order of Substituted Service; and Form SCA 8 for Appeal Form, among others.

Defence/Counterclaim, Representation and Hearing of Cases A Defendant duly served with Summons from a Small Claims Court Registry is required to file his Defence/ Admission or Counterclaim, in the prescribed form, within seven (7) days. Where a Defendant fails to file an Answer to the Claim, he may be held to have admitted such. A Claimant who wishes to respond to a Defendant’s Counter-claim has within five (5) days to file a Reply to same. The filing of the Claimant’s Reply marks the close of pleadings.

At the proceedings before the Small Claims Court, parties are at liberty to represent themselves. Partnerships and Registered Companies can be represented by a Partner, the Company Secretary or any other Principal Officer of the Partnership or Company. While parties may testify on their own behalf and tender all necessary documents, they may also call other witnesses to give evidence at the hearing.

The Magistrate is obliged to promote, encourage and facilitate amicable settlement of a dispute among the parties by mediating and providing

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Continued from last Week

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transmitted. This piece of legislation is critical because it introduces a higher standard of accountability for data handling, expands the rights of data subjects and given that it is issued by a major world economic block, the European Union, it is inevitable that at some point, third parties who are non-resident in the EU but conduct business with its citizens (whether for profit or non-profit) will adjust the provisions of their commercial contracts and ultimately, legislation, to suit the standards set by the GDPR for personal data processing.

Key Features of the GDPR Extra-territorial application: it applies to the processing of personal data of data subjects in the EU by persons or organizations not in the EU for activities involving the (a) the offering of goods or services, irrespective of whether a payment of the data subject is required, to such data subjects in the EU; or (b) the monitoring of their behaviour as far as their behaviour takes place within the EU. Improved transparency and the right to be notified of breach: Any processing of personal data is to be lawful and fair. It should be transparent to data subjects that personal data concerning them are collected, used, consulted or otherwise processed and to what extent the personal data are or will be processed.

Data subjects are now entitled to being informed of breach e.g. unauthorised or inadvertent transmission of their data within 72 hours of first having become aware of the breach.

They also have a right to request a report on the information gathered from their personal data and the purpose for which such information was used.

Requirement for consent: the conditions for consent of data subjects to the use of their data are reinforced and long windy terms and conditions that are not readable no longer suffice. The consent must be sought from all data subjects and the consent must be in such readable form that enables full understanding of implications of indicating approval. The data subjects are also able to request information on the use and transfer of their personal data.

OYEYEMI OYEYEMI ADERIBIGBE is a Senior Associate at Templars. She is also the current Vice-Chairman of the Young Lawyers’ Forum of the Nigerian Bar Association -Section on Business Law and the Young Lawyers’ Committee Liaison Officer of the African Regional Forum of the International Bar Association.

Feedback – Oyeyemi.aderibigbe@ templars-law.com; yemiimmanuel@ yahoo.com.

To be continued next week

settlement options to the parties as he deems fit, at the first appearance of the parties before the Court. It should be noted that the Magistrate’s role in mediating and facilitating amicable settlement between parties is limited to “Facilitated Negotiation”. In order words, the Magistrate is neither a Mediator nor an Arbitrator.

Judgement, Enforcement and Appeal A Magistrate of the Small Claims Court is required to deliver judgment in a dispute before it within fourteen (14) days of the completion of hearing.

This is required to include the Court’s determination of issues raised in any interlocutory application(s) filed by any of the parties. Notably, the Practice Directions provide that the entire period of proceedings from filing till judgment shall not exceed sixty (60) days). A judgment debtor in a small claims dispute is obliged to comply with the judgment of the Court and pay the judgment sum within fourteen (14) days of delivery of judgment and where there is default in compliance, the relevant judgment shall be enforced in like manner as a judgement of the Magistrate’s Court for the payment of money.

A party who is aggrieved with the judgement of the Court shall file an Appeal by filling the prescribed form within 14 (fourteen days) of the delivery of the Judgment, stating the reasons for the Appeal. The records of appeal are required to be compiled, within fourteen (14) days of the submission of the Appeal Form, by the Small Claims Registry and thereafter forwarded to the Fast Track Registry of the High Court, where it is then assigned to a Judge of the Fast Track Court designated to hear appeals from the Small Claims Court. The Practice Directions state that the whole appellate process, from the assignment of the Appeal to judgment, shall not exceed thirty (30) days.

COMPARISON WITH OTHER JURISDICTIONS The concept of the Small Claims Court has over the years developed into a standard global practice. Whilst there are manifest similarities in the practices and procedures applicable in many jurisdictions across the globe, there exist also differences caused by local peculiarities and national aspirations. Notably, the jurisdictional limit of the Small Claims Court in Lagos is higher than the limits set in other African countries and only lower than the thresholds in the more developed emerging economies and the advanced nations of the world. This is understandable, given Nigeria’s position as Africa’s most populous nation

and largest economy.

REMARKS The establishment of the Small Claims Court in Lagos State, the first of its kind in the Nigerian judicial system, is without doubt a watershed. Notably, “enforcement of contracts” through introduction of specialized small claims commercial courts, was part of the reform initiatives recommended by the Presidential Enabling Business Environment Council (“PEBEC”), through its organ, the Enabling Business Environment Secretariat (EBES), in the National Action Plans on the Ease of Doing Business in Nigeria (NAPs). Lagos State and Kano State are the two pilot States in the country, selected by PEBES/EBES in association with the World Bank, for the purpose of implementing the reform initiatives of the NAPs. Whilst the Small Claims Court has its pros and cons, it has indeed worked in many jurisdictions the world over and there is no doubt that with hard work, commitment and determination, it will equally work in Lagos State.

We note that while parties are encouraged to represent themselves before the Small Claims Court, businesses and corporations are still likely to engage the services of lawyers in establishing their claims before the Court. The same goes for illiterate litigants, who in spite of the aid of an interpreter and court registrars, may find it extremely difficult to properly gather and file their documentary evidence as well as present their oral submission before the Court. This can put an unrepresented Claimant at a disadvantage.

Finally, we submit that adequate and periodic training in the practice and procedure of the Small Claims Court for Magistrates, Registrars, Clerks, Sheriffs and other relevant judiciary staff, would be critical to the successful working of the small claims commercial disputes resolution in Lagos State, and by extension, Nigeria.

This is an abridged version. The full article can be read on the author’s website.

The Grey Matter Concept is an initiative of the law firm, Banwo & Ighodalo DISCLAIMER: This article is only intended to provide general information on the subject matter and does not by itself create a client/attorney relationship between readers and our Law Firm. Specialist legal advice should be sought about the readers’ specific circumstances when they arise.

GLOBALREPORT

IBAHRI report emphasises global need for juvenile justice systems that comply with international norms

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n a report published on Tuesday, the International Bar Association’s Human Rights Institute (IBAHRI) asserts that, in order to protect the rights of children alleged as, accused of or recognised as having infringed penal law, specialised juvenile justice systems must be established or improved to conform with the United Nations Convention on the Rights of the Child (UN CRC). Titled The Role of the Universal Periodic Review in Advancing Children’s Rights in Juvenile Justice, the report will be launched during the World Congress on Justice for Children, being held at UNESCO House in Paris.

IBAHRI Co-Chair Ambassador (ret.)

Hans Corell commented: ‘All countries, with the exception of the United

States, have ratified the UN CRC. However, the reality faced by children is far from the model of rehabilitative and restorative justice required by the Convention. Unfortunately, around the world, the abusive resort to detention, inhumane sentencing and dangerously low minimum ages for criminal responsibility steer national systems away from the objective of rehabilitation. The Universal Periodic Review’s call for states to prevent

further risk and harm to children by establishing or improving their juvenile justice systems, in line with their obligations under international law, is a vital appeal, and echoed by the IBAHRI.’ The report highlights the key challenges encountered worldwide in the daily protection of children within criminal justice systems and examines the juvenile justice-related recommendations emanating from the first two cycles of the Universal Periodic Review (UPR) - a unique international peer-to-peer mechanism, through which each state is reviewed by all other UN Member States.

Continues on pages 28

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BUSINESS DAY

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Thursday 31 May 2018

INDUSTRY OUTLOOK Outlook on Democracy

On Tuesday May 29, 2018, Nigerians the world over marked 19 years of unbroken democratic governance, albeit with some reservations and misgivings. Here are some quotes from key stakeholders in the industry that best captures the thoughts of the legal community in Nigeria.

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emocracy day is a day that has been set aside for us to reflect on the activities of the government and how much they have been able to promote the rule of law and continue the act of good governance as laid down by the heroes of this Nation who fought for the return of democracy after years of Authoritarian regime. It is also a day for Nigerians to celebrate freedom, leadership based on the will of the people, enforcement of fundamental human rights and democratic advancement

across the country.

“For Lawyers, Democracy day is not just a day to celebrate uninterrupted civilian rule in the country, it is a day to review the extent to which the rule of law has been promoted through the Judiciary and how well the judgments have been executed in light of having a society devoid of injustice and irregularities.”

-A B U B A K A R B A L A R A B E MAHMOUD, PRESIDENT OF THE NIGERIAN BAR ASSOCIATION (NBA),

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ur young democracy seems to be on the verge of a complete collapse especially as our judiciary renowned as the hope of the common man appears to be defenseless and exposed to oppression by political actors who have continued to act

with endless impunity to the detriment of the overall welfare of the state.”

JOSEPH BODUNRIN DAUDU, SAN FORMER PRESIDENT, NIGERIAN BAR ASSOC IA TION

“Nigeria is an extremely favoured country. Even though we are poles away from our Promised Land, yet nineteen years of unbroken democratic experience is no mean feat. Notwithstanding our wobbles, the literal sense of freedom cannot be compared to what obtained under the jackbooted reign of the military. While I congratulate the government and the good people of Nigeria on this occasion, I cannot but admit that very many aspects of our national life still leave a sour taste in the mouth.

“Unless we eschew violence, greed, favouritism, enthronement of mediocrity, elective aspiration without blueprint, governance without planning, commercialisation of votes, suppression of the electors’ free will etc., we may remain undeveloped for a long time.” K-Rad admonished.”

KUNLE RASHEED ADEGOKE (K-RAD) OSUN STATE GOVERNORSHIP ASPIRANT UNDER ALL PROGRESSIVES CONGRESS (APC).

s we celebrate 19 of democratic governance, I congratulate our colleagues of the Nigerian Bar Association who played pivotal roles in ensuring that our country is returned back to the path of democracy. It is no doubt an achievement worthy of celebration, taking into consideration the fact that ours has been a chequered history of military intervention, since 1965 when military adventurists derailed our then nascent democratic rule.

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“ “It is however important the we ensure that our democracy grows and every citizen enjoys its dividends. It is fundamental that those in government realise that by virtue of the offices they occupy, they are into a social contract with the people and must ensure the security of their lives and property, while promoting the rule of law, good governance and social justice.”

ARTHUR OBI OKAFOR, SAN NBA PRESIDENTIAL ASPIRANT

i t h o u t doubt, our democracy is plagued with various challenges in spite of which we are still forging ahead as a country.

It bears restating that despite nineteen years of democratic government, many of our hopes are still far from being realized. The challenges of our past still rear their ugly heads. We still face the unrelenting monsters of impunity, injustice, non-inclusiveness in governance, declining infrastructures, waste in governance.

Today is a reminder of how strong we are as a country and how stronger we

can be together if we do the requisite things that will foster good brotherly relations among the different peoples of this country. Democracy is essential for national development hence we must reflect on how we can strengthen our hard-earned democracy and lend our support towards same. As we celebrate today, in the season of Ramadan, let us take out time to pray for our great nation and those that God has entrusted with leadership at various levels.”

MAZI AFAM OSIGWE NBA PRESIDENTIAL ASPIRANT

PHOTOFILE Roundtable on ‘Challenges of financing Infrastructure in developing countries organised by the Lagos Chamber of Commerce & Industry International A4bitration Venter (LASIAC)

L-R: Funmi Iyayi (CEO LASIAC); Adetokunbo Akinsola, Group Head, Oil & Gas, Large Enterprises Directorate, Bank of Industry; Chantelle Abdul (CEO, Mojec International), Lanre Afolabi, Homebase Mortgag; Tolu Aderemi Co-Chairman, Manufacturing Committee/Partner Perchstone & Graeys/Convener; Navjeet Virk Partner, Pinsent Masons/ Speaker; Elisabeth Ekpenyong, Partner, Perchstone & Graeys; and Abiye Membere, Fmr Group Executive Director, NNPC.

NOTABLE INDUSTRY EVENTS • Consultative Stakeholders Forum on the African Continental Free Trade Agreement (AfCFTA) The Nigerian Office for Trade Negotiations (NOTN) held a Consultative Stakeholders Forum on the African Continental Free Trade Agreement (AfCFTA) yesterday May 30, 2018 a at the Civic Center, Victoria Island, Lagos. The Consultation was in accordance with the Presidential directive to consult Stakeholders in the six Geo-political zones.

• 1st Alliance Law Firm Series

• 3rd ICC Africa Conference on International Arbitration

Alliance Law Firm today holds its inaugural Public Lecture Series and Luncheon. According to the organisers, the series themed, ‘Contemporary Corporate Governance Issues in Nigeria’ will be a platform to promote national and global dialogues, which may sometimes assist in policy formulation and nation building. It would also an opportunity to host the firm’s high profile clients, colleagues and others to a luncheon.

The 3rd ICC Africa Conference on International Arbitration will take place on Monday June 18th and Tuesday June 19th, 2018 at the Civic Centre, Ozumba Mbadiwe Street, Victoria Island, Lagos.

The conference is an annual event at which the African arbitration community updates itself on developments in the region and is also a great opportunity for participants to network and develop excellent business and professional relationships.

• 12th Annual Business Law Conference The Nigerian Bar Association Section on Business Law holds its 12th Annual Business Law Conference from Wednesday JUNE 27 through to the 29th at Transcorp Hilton, Abuja.

The Theme of the conference, which is ‘Bringing Down the Barriers: The Law as a vehicle for Intra- Africa Trade,’ will cover inter country relations, movement of labour, finance, e-commerce, competition, standardization and regulation, transport connectivity, dispute resolution and of course the legal profession.

The theme and timing of the conference could not have been better in view of the proposed Continental Free Trade Agreement which attempts for the first time to forge a Pan African trade bloc.

BUSINESS DAY

Thursday 31 May 2018

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GARDEN CITY BUSINESS DIGEST Echoes at REIF-EU Business Lunch in PH: Boon to agric investment and an economy outside oil/gas •••Bayelsa fights to close N183Bn fish import gap ••• NDDC develops alternative to harmful fertilizer IGNATIUS CHUKWU

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ayelsa State is working to close Nigeria’s $2.4Bn annual import gap in fish to close out at least $600m or N183Bn; in doing so, create 15,000 agro-entrepreneurs in the fish chain alone.

The state has also identified cassava as a viable product within its land area that could create an economic chain and investing to grab chunk of the $500m starch import market per year.

On the other hand, the Niger Delta Development Commission (NDDC) says it has produced inorganic fertilizer and soil booster to save the Niger Delta soil from harmful fertilizers and boost farm yields. The Commission says it is deploying $90m or N27Bn to create rice, cocoa, fish, poultry and other livestock hubs in the oil region according to each state’s area of comparative advantage.

These wee the highpoints at the Rivers Investors Lunch Hour Network attended by officials from the UK and EU and organized by the Rivers Entrepreneurs and Investors Forum (REIF) in conjunction with the European Union.

In a panel discussion anchored by Chris Newson of Social Democratic Network (SDN), the Bayels State Commissioner of Agriculture, Doodie Week, said studies show that Nigeria would hit a population of 387m by 20150, just some 32 years ahead, and that about 50m youths are unemployed.

He told the investors and public sector practitioners that

Governor Seriake Dickson of Bayelsa State

in Bayelsa State, the Seriake Dickson administration decided to plot a way out of oil dependency and adopted a tripod period: Capacity Building, Critical infrastructure in Agriculture, and Linkages. “We looked at commodities that can thrive in Bayelsa: Fish and Cassava as focus. We realize that Nigeria imports over two million metric tons (mmt) of fish per year with $2.4Bn. The Bayelsa Aquaculture Village Initiative (BAVIP) focuses on cutting down one quarter ($600m or N183Bn) of this bill per year as well as create15,000 entrepreneurs who would become employers of labour in the fish chain”.

So, he said, Bayelsa State resolved to develop aqua-cultural economy built around the fish chain; setting up aquaculture villages, field mills, hatcheries, smoked fish, etc. The pilot is in Yenagoa with 500 ponds of 7000 fingerling each. The state found out that the cooperative model does not work in south-east and

south-south regions of Nigeria where people want to be chief executives and decision-makers in their businesses. “So, we introduced the collaborative model for people to be independent but find areas of cooperation”.

The aim, he said, is to s to create a local economy on agriculture, outside oil and gas.

“We are also doing the Cassava Industrialisation Scheme because Nigeria spends $500m per year to import starch but at the same time, Nigeria is highest producer of cassava in the world. Bayelsa is now building a starch factory based on 1500 cassava out-growers of 2 hectares per person. We need 220 mt of cassava per day or equivalent of seven hectares per day.”

He said the private sector is to drive this project while the state government is to provide massive infrastructure. “In about seven months, we want to see results. The target is to help move our economy over agriculture from oil. We need the support

Nsima Udo Ekere, managing director, Niger Delta Development Commission (NDDC)

of the private sector to actualize this objective especially in investments and viable management of the projects. We are ready to help with security because Bayelsa is one of the safest states in the Niger Delta right now. We are ready to offer tax relief and tax holiday. The place is capable of producing 7.5 mt per day. We want to concession it to a viable outfit.”

He said a Danish firm has shown interest but they were keen on exporting the products but Bayelsa wants to meet local demand first.

Week said; “For those who say government should not dabble into setting up agric facilities but should be restricted to provision of ‘enabling environment’, we say that every society defines what ‘enabling environment’ means to their people and how they want to boost economic participation. In Bayelsa, we interpret enabling environment to also include providing facilities that

entrepreneurs would leverage on; it includes providing the market, linkages, input, security, even subsidizing credit so that the interest rates can b accommodated in the agric sector. That is what we have done in the two focal products we want to promote; fish and cassava chains.’

NDDC unveils unique schemes In his presentation, the NDDC Director of Agriculture; Marcel Eshiogu, said the Commission is only an interventionist agency and is trying to play the role of a catalyst in the agric sector and set up a framework to make agriculture attractive and profitable. “We did a research and found out that application of inorganic fertilizer has harmed the soil in our region. So, NDDC has introduced organic fertilizer and soil booster as alternative.

We are now working with a US firm to put down 51,420 littres of organic fertilizer and 51,420 littres of soil booster which

must be mixed to fertilizer the soil without harm. All the Niger Delta states have got their allocations.”

Eshiogu went on: “We expect bumper harvest this farming season as a result of this.

Also, we note that drudgery in farming discourages the youth, so we have introduced handheld tractors for swamp areas.

It is starting as a pilot scheme in each state of the oil region.

Credit is important and we are now working with Fidelity Bank as a partner in our commercial farming programme. We once worked with Bank of Industry (BoI) but we noted that direct disbursement does not work with our people because they see it as government largesse but if a bank gives out the loans with their experience and network, they can recover it. The interest rate is a mere five per cent.”

He said the NDDC is working with IFAD (a UN agency), to boost farming in the oil region.

Under this partnership for a period of six years, the IFAD would bring $60m while the NDDC would bring $30m, totaling $90m investment. It would deployed in a scheme we call ‘Train Me to Train Others’. This would be in fishery, poultry, livestock, etc.”

He said NDDC has agreements with some states such as Ondo and Cross River on cocoa; Rivers and Bayelsa in fishery.

The idea is to teach a successful farmer who would teach other mentees to become successful too. The aim is to create an army of successful farmers in the oil region by building on success upon success, hoping to create a new but viable economy outside oil/gas .”

Amnesty: Militants say those who made Boro fail are at work again

Port Harcourt by Boat With IGNATIUS CHUKWU

T

he amnesty scheme of the FG is for militants and militants a l o n e. S o, w h e n t h e y speak, the leaders must listen. They warned before the fall of the General, Paul Boro, from being the head of the Amnesty Programme for the FG.

Now, they have raised alarm again.

In a statement made available to the Boatman, the group which calls itself the Joint Revolutionary Council (JRC), saying it is a coalition unit of all agitating groups in the Niger Delta, said the Presidential Amnesty Programme is currently under siege, as it has continued to be in the past three years. “ The Amnesty Programme, which was designed to cater to the expectations of former agitating units of the struggle for the liberation and emancipation of the Niger Delta, has now become the hotbed of political rent-seekers, shadow

workers and hundreds of other non-related Niger Delta interests.

“Billions of naira meant for stipends for former members of agitating groups is being diverted to the private pockets in a ruthless, careless and fraudulent scheme pursued by dubious so-called stakeholders in the amnesty rank and file.

“Billions of Naira meant to drive the ideals of the Amnesty Programme may be diverted to soothe the egos of overzealous politicians and workers of devious schemes without recourse to the initial objectives for which the programme was inaugurated

and established. “ The Amnesty programme was not designed to be a slush fund for agents of government, benefit captors and political apologists of government.”

The JRC went on: “The same group of people who misled, misguided and then turned around to blackmail and disgrace Brigadier Gene ra l Pa u l B o ro h h av e again returned to the corridors of the Amnesty programme to prey upon the new Coordinator of t h e P ro g ra m m e, P ro fessor Charles Quaker Dokubo.

“Emotions are on the rise and there is growing disenchantment amongst

the rank and file of former agitating groups in the Niger Delta. Something may just be about to give way.

“In spite of the increase in price of oil, and the relative peace that we have guaranteed in the Niger Delta that has enabled the Nigerian state meet its obligations in crude oil production; there is nothing to show in the Niger Delta.”

The group said poverty has been on the rise in the Niger Delta.

“Environmental degradation has become the order of the day. Young people have begun to resort to crude ways of fractionating crude oil to make ends meet so that

they can cater for their families. The Nigerian state has continued to show increasing measures of ungratefulness to the Niger Delta and its people.

“It is left to us to see how long this malady and malfeasance will continue. We believe it will not be for long. Those who think they can undermine the struggle for the liberation and emancipation of the Niger Delta should begin to have a rethink. Nothing is impossible.”

The group seems highly connected and has capacity to get sensitive information. The FG can do well to listen.

30

BUSINESS DAY

Live @ the Stock exchange

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Thursday 31 May 2018

Prices for Securities Traded as of Monday 28 May 2018 Company

Market cap(nm)

Price (N)

Change

Trades

Volume

Company

Market cap(nm)

Price (N)

Change

Trades

Volume

PRICES FOR MAIN BOARD SECURITIES (Equities) BANKING ACCESS BANK PLC. 309,529.30 10.70 -0.47 259 27,413,685 UNITED BANK FOR AFRICA PLC 355,673.98 10.40 -1.89 267 10,167,585 819,448.49 26.10 -2.06 397 9,139,905 ZENITH INTERNATIONAL BANK PLC 923 46,721,175 OTHER FINANCIAL INSTITUTIONS FBN HOLDINGS PLC 332,031.46 9.25 -4.64 480 26,534,513 480 26,534,513 1,403 73,255,688

BUILDING MATERIALS DANGOTE CEMENT PLC 4,174,924.31 245.00 0.41 28 82,547 LAFARGE AFRICA PLC. 333,926.99 38.50 -4.94 33 246,681 61 329,228 61 329,228

EXPLORATION AND PRODUCTION SEPLAT PETROLEUM DEVELOPMENT COMPANY LTD 432,330.22 734.70 - 6 1,145 6 1,145 6 1,145 1,470 73,586,061 CROP PRODUCTION FTN COCOA PROCESSORS PLC 440.00 0.20 - 0 0 81,082.35 85.00 - 8 18,424 OKOMU OIL PALM PLC. PRESCO PLC 75,000.00 75.00 - 5 6,254 13 24,678 FISHING/HUNTING/TRAPPING ELLAH LAKES PLC. 511.20 4.26 - 0 0 0 0 LIVESTOCK/ANIMAL SPECIALTIES LIVESTOCK FEEDS PLC. 2,430.00 0.81 - 4 72,000 4 72,000 17 96,678

DIVERSIFIED INDUSTRIES A.G. LEVENTIS NIGERIA PLC. 1,561.90 0.59 - 2 1,800 221.82 0.57 1.79 16 296,416 JOHN HOLT PLC. S C O A NIG. PLC. 2,111.93 3.25 - 1 10 51,622.95 1.27 -4.51 79 8,399,487 TRANSNATIONAL CORPORATION OF NIGERIA PLC U A C N PLC. 42,066.93 14.60 -2.99 29 288,590 127 8,986,303 127 8,986,303

BUILDING CONSTRUCTION ARBICO PLC. 711.32 4.79 - 0 0 0 0 INFRASTRUCTURE/HEAVY CONSTRUCTION JULIUS BERGER NIG. PLC. 36,366.00 27.55 - 26 114,086 ROADS NIG PLC. 165.00 6.60 - 0 0 26 114,086 REAL ESTATE DEVELOPMENT UACN PROPERTY DEVELOPMENT CO. LIMITED 5,560.57 2.14 - 11 122,050 11 122,050 REAL ESTATE INVESTMENT TRUSTS (REITS) SKYE SHELTER FUND PLC 2,000.00 100.00 - 0 0 UNION HOMES REAL ESTATE INVESTMENT TRUST (REIT) 11,300.89 45.20 - 0 0 26,682.70 10.00 - 0 0 UPDC REAL ESTATE INVESTMENT TRUST 0 0 37 236,136

AUTOMOBILES/AUTO PARTS DN TYRE & RUBBER PLC 1,431.80 0.30 -3.23 2 130,000 2 130,000 BEVERAGES--BREWERS/DISTILLERS CHAMPION BREW. PLC. 15,658.99 2.00 0.50 16 566,876 GOLDEN GUINEA BREW. PLC. 242.22 0.89 - 0 0 GUINNESS NIG PLC 219,038.28 100.00 - 74 173,401 INTERNATIONAL BREWERIES PLC. 445,265.65 51.80 - 6 10,192 NIGERIAN BREW. PLC. 919,643.74 115.00 -0.35 179 641,598 275 1,392,067 FOOD PRODUCTS DANGOTE FLOUR MILLS PLC 42,750.00 8.55 -3.93 81 3,098,285 DANGOTE SUGAR REFINERY PLC 198,600.00 16.55 0.30 116 2,507,859 FLOUR MILLS NIG. PLC. 123,421.43 30.10 2.03 92 835,231 HONEYWELL FLOUR MILL PLC 17,922.25 2.26 -4.64 15 340,195 MULTI-TREX INTEGRATED FOODS PLC 1,489.00 0.40 - 0 0 N NIG. FLOUR MILLS PLC. 1,220.67 6.85 - 0 0 NASCON ALLIED INDUSTRIES PLC 52,988.77 20.00 -1.23 58 1,308,897 UNION DICON SALT PLC. 3,676.41 13.45 - 0 0 362 8,090,467 FOOD PRODUCTS--DIVERSIFIED CADBURY NIGERIA PLC. 23,477.53 12.50 -4.80 32 446,788 NESTLE NIGERIA PLC. 1,268,250.00 1,600.00 - 80 93,116 112 539,904 HOUSEHOLD DURABLES NIGERIAN ENAMELWARE PLC. 1,680.31 22.10 - 0 0 VITAFOAM NIG PLC. 3,439.82 3.30 - 5 57,750 5 57,750 PERSONAL/HOUSEHOLD PRODUCTS P Z CUSSONS NIGERIA PLC. 86,754.92 21.85 - 11 117,567 281,505.27 49.00 - 16 73,271 UNILEVER NIGERIA PLC. 27 190,838 783 10,401,026

BANKING DIAMOND BANK PLC 30,108.51 1.30 -5.11 57 2,566,050 ECOBANK TRANSNATIONAL INCORPORATED 376,165.80 20.50 - 48 104,539 FIDELITY BANK PLC 52,444.38 1.81 -4.74 113 12,537,999 GUARANTY TRUST BANK PLC. 1,206,678.35 41.00 -2.26 228 3,150,520 JAIZ BANK PLC 18,562.48 0.63 -3.17 12 565,870 SKYE BANK PLC 9,438.60 0.68 -2.86 37 1,547,111 STERLING BANK PLC. 37,715.45 1.31 -2.96 59 5,136,295 UNION BANK NIG.PLC. 168,900.37 5.80 -4.92 34 826,887 UNITY BANK PLC 10,403.51 0.89 -4.30 20 629,287 WEMA BANK PLC. 27,002.13 0.70 -4.11 29 1,801,916 637 28,866,474 INSURANCE CARRIERS, BROKERS AND SERVICES AFRICAN ALLIANCE INSURANCE COMPANY PLC 4,117.00 0.20 - 1 5,000 AIICO INSURANCE PLC. 3,950.22 0.57 1.75 32 40,750,282 AXAMANSARD INSURANCE PLC 25,200.00 2.40 - 3 21,100 CONSOLIDATED HALLMARK INSURANCE PLC 2,240.00 0.32 6.67 15 580,500 CONTINENTAL REINSURANCE PLC 15,351.66 1.48 - 7 82,100 CORNERSTONE INSURANCE COMPANY PLC. 5,155.33 0.35 - 1 500 EQUITY ASSURANCE PLC. 2,800.00 0.20 -4.76 3 154,500 GOLDLINK INSURANCE PLC 2,411.47 0.53 - 0 0 GREAT NIGERIAN INSURANCE PLC 1,913.74 0.50 - 0 0 GUINEA INSURANCE PLC. 2,456.00 0.40 - 0 0 INTERNATIONAL ENERGY INSURANCE COMPANY PLC 539.32 0.42 - 0 0 LASACO ASSURANCE PLC. 2,782.90 0.38 -2.56 76 6,552,286 LAW UNION AND ROCK INS. PLC. 4,210.40 0.98 - 2 2,000 LINKAGE ASSURANCE PLC 6,320.00 0.79 -4.82 26 1,619,007 MUTUAL BENEFITS ASSURANCE PLC. 2,800.00 0.35 -2.86 19 4,205,105 N.E.M INSURANCE CO (NIG) PLC. 13,518.09 2.56 1.56 19 1,423,940 NIGER INSURANCE CO. PLC. 1,857.48 0.24 -4.00 56 4,344,042 PRESTIGE ASSURANCE CO. PLC. 1,832.36 0.48 - 0 0 REGENCY ALLIANCE INSURANCE COMPANY PLC 1,733.88 0.26 - 4 19,700 SOVEREIGN TRUST INSURANCE PLC 2,252.02 0.27 3.85 36 5,963,196 STANDARD ALLIANCE INSURANCE PLC. 5,422.63 0.42 - 0 0 4,483.72 0.48 - 1 500 STANDARD TRUST ASSURANCE PLC UNIC DIVERSIFIED HOLDINGS PLC. 516.46 0.20 - 7 415,260 UNIVERSAL INSURANCE COMPANY PLC 8,000.00 0.50 - 0 0 VERITAS KAPITAL ASSURANCE PLC 4,714.67 0.34 - 2 7,500 WAPIC INSURANCE PLC 6,423.71 0.48 -7.69 33 1,536,294 343 67,682,812

MICRO-FINANCE BANKS FORTIS MICROFINANCE BANK PLC 11,799.67 2.58 - 0 0 NPF MICROFINANCE BANK PLC 4,413.21 1.93 - 24 480,565 24 480,565 MORTGAGE CARRIERS, BROKERS AND SERVICES ABBEY MORTGAGE BANK PLC 5,460.00 1.30 - 0 0 7,370.87 0.50 - 0 0 ASO SAVINGS AND LOANS PLC INFINITY TRUST MORTGAGE BANK PLC 5,922.05 1.42 - 0 0 RESORT SAVINGS & LOANS PLC 5,664.87 0.50 - 0 0 2,949.22 3.02 - 0 0 UNION HOMES SAVINGS AND LOANS PLC. 0 0 OTHER FINANCIAL INSTITUTIONS AFRICA PRUDENTIAL PLC 7,600.00 3.80 -5.00 96 3,065,002 CUSTODIAN AND ALLIED PLC 28,232.95 4.80 - 13 51,716 720.00 0.48 - 1 50,000 DEAP CAPITAL MANAGEMENT & TRUST PLC FCMB GROUP PLC. 39,605.42 2.00 -9.09 69 7,686,912 411.91 552.20 - 0 0 NIGERIA ENERYGY SECTOR FUND 1,749.43 0.34 - 0 0 ROYAL EXCHANGE PLC. SIM CAPITAL ALLIANCE VALUE FUND 3,312.39 103.20 - 0 0 477,349.62 47.50 - 18 83,218 STANBIC IBTC HOLDINGS PLC UNITED CAPITAL PLC 17,160.00 2.86 -4.67 116 5,704,006 313 16,640,854 1,317 113,670,705

HEALTHCARE PROVIDERS EKOCORP PLC. 1,680.29 3.37 - 0 0 1,563.38 0.44 -4.35 3 600,000 UNION DIAGNOSTIC & CLINICAL SERVICES PLC 3 600,000 MEDICAL SUPPLIES MORISON INDUSTRIES PLC. 544.04 0.55 - 0 0 0 0 PHARMACEUTICALS EVANS MEDICAL PLC. 366.17 0.50 - 0 0 FIDSON HEALTHCARE PLC 8,925.00 5.95 - 16 382,718 24,156.71 20.20 - 9 22,284 GLAXO SMITHKLINE CONSUMER NIG. PLC. MAY & BAKER NIGERIA PLC. 2,606.80 2.66 - 17 284,822 1,139.49 0.66 - 0 0 NEIMETH INTERNATIONAL PHARMACEUTICALS PLC NIGERIA-GERMAN CHEMICALS PLC. 556.71 3.62 - 0 0 PHARMA-DEKO PLC. 477.00 2.20 - 0 0 42 689,824 45 1,289,824

COMPUTER BASED SYSTEMS COURTEVILLE BUSINESS SOLUTIONS PLC 710.40 0.20 - 4 305,000 4 305,000 COMPUTERS AND PERIPHERALS OMATEK VENTURES PLC 1,470.89 0.50 - 0 0 0 0 IT SERVICES CWG PLC 6,413.06 2.54 - 0 0 NCR (NIGERIA) PLC. 680.40 6.30 - 0 0 435.56 0.88 - 1 100 TRIPPLE GEE AND COMPANY PLC. 1 100 PROCESSING SYSTEMS CHAMS PLC 1,784.50 0.38 - 0 0 E-TRANZACT INTERNATIONAL PLC 19,110.00 4.55 - 1 150 1 150 6 305,250

BUILDING MATERIALS BERGER PAINTS PLC 2,608.41 9.00 - 4 5,500 25,760.00 36.80 - 8 61,608 CAP PLC CEMENT CO. OF NORTH.NIG. PLC 30,160.27 24.00 - 40 154,201 FIRST ALUMINIUM NIGERIA PLC 886.35 0.42 - 2 31,000 MEYER PLC. 361.24 0.68 - 3 710 PAINTS AND COATINGS MANUFACTURES PLC 467.82 0.59 - 1 200 PORTLAND PAINTS & PRODUCTS NIGERIA PLC 1,626.50 2.05 - 2 2,900 PREMIER PAINTS PLC. 1,279.20 10.40 - 0 0 60 256,119 ELECTRONIC AND ELECTRICAL PRODUCTS AUSTIN LAZ & COMPANY PLC 2,256.91 2.09 - 0 0 CUTIX PLC. 2,641.98 3.00 - 3 47,000 3 47,000 PACKAGING/CONTAINERS BETA GLASS PLC. 43,672.55 87.35 - 7 3,382 GREIF NIGERIA PLC 388.02 9.10 - 2 44 9 3,426 72 306,545

CHEMICALS B.O.C. GASES PLC. 1,927.21 4.63 - 2 250 2 250 METALS ALUMINIUM EXTRUSION IND. PLC. 2,023.60 9.20 - 2 2,794 2 2,794 MINING SERVICES MULTIVERSE MINING AND EXPLORATION PLC 852.39 0.20 - 1 5,000 1 5,000 PAPER/FOREST PRODUCTS THOMAS WYATT NIG. PLC. 77.00 0.35 - 1 100 1 100 6 8,144

ENERGY EQUIPMENT AND SERVICES JAPAUL OIL & MARITIME SERVICES PLC 1,377.79 0.22 -8.33 16 1,648,500 16 1,648,500 INTEGRATED OIL AND GAS SERVICES OANDO PLC 85,776.75 6.90 -4.83 169 3,997,838 169 3,997,838 PETROLEUM AND PETROLEUM PRODUCTS DISTRIBUTORS 11 PLC 59,317.92 164.50 - 29 16,090 CONOIL PLC 22,067.68 31.80 - 17 21,146 7,211.92 5.53 4.93 59 1,465,146 ETERNA PLC. FORTE OIL PLC. 53,010.98 40.70 - 34 90,068 MRS OIL NIGERIA PLC. 8,699.11 34.25 -4.99 49 236,803 TOTAL NIGERIA PLC. 71,978.63 212.00 - 22 33,086 210 1,862,339 395 7,508,677

ADVERTISING AFROMEDIA PLC 2,219.52 0.50 - 0 0 0 0 AIRLINES MEDVIEW AIRLINE PLC 20,866.39 2.14 - 0 0 0 0 AUTOMOBILE/AUTO PART RETAILERS R T BRISCOE PLC. 564.65 0.48 - 1 100 1 100 COURIER/FREIGHT/DELIVERY RED STAR EXPRESS PLC 3,536.98 6.00 - 2 17,200 TRANS-NATIONWIDE EXPRESS PLC. 384.45 0.82 - 4 6,335 6 23,535 HOSPITALITY TANTALIZERS PLC 1,156.19 0.36 -2.70 1 500,000 1 500,000 HOTELS/LODGING CAPITAL HOTEL PLC 4,878.66 3.15 - 3 2,200 IKEJA HOTEL PLC 5,612.75 2.70 4.65 86 3,777,227 7,862.53 3.50 - 1 250 TOURIST COMPANY OF NIGERIA PLC. TRANSCORP HOTELS PLC 56,623.01 7.45 - 1 1,000 91 3,780,677 MEDIA/ENTERTAINMENT DAAR COMMUNICATIONS PLC 5,760.00 0.48 - 0 0 0 0 PRINTING/PUBLISHING ACADEMY PRESS PLC. 302.40 0.50 - 0 0

Thursday 31 May 2018

BUSINESS DAY

31

32

BUSINESS DAY

C002D5556

Thursday 31 May 2018

Live @ The Stock Exchange Top Gainers/Losers as at Wednesday 23 May 2018 GAINERS Company

Market Statistics as at Wednesday 23 May 2018

LOSERS Opening

Closing

Change

FLOURMILL

N30.1

N31.6

1.5

DANGSUGAR

N16.55

N17

0.45

DANGFLOUR

N8.55

N8.95

FBNH

N9.25

FIDSON

N5.95

Company NESTLE

Opening

Closing

Change

N1600

N1540

-60

NB

N115

N110

-5

0.4

INTBREW

N51.8

N49.25

-2.55

N9.6

0.35

DANGCEM

N245

N242.5

-2.5

N6.24

0.29

WAPCO

N38.5

N36.6

-1.9

ASI (Points) DEALS (Numbers)

4.739

MARKET CAP (N Trn

N

recorded highest gain of N1.5 or 4.98percent, from N30.1 to N31.6; followed

by Dangote Sugar Refinery Plc which gained 45kobo or 2.72percent, from N16.55 to N17.

Dangote Flour Mills Plc also advanced from N8.55 to N8.95, up by 40kobo or 4.68percent; while FBN Holdings Plc gained 35kobo or 3.78percent, from N9.25 to N9.6. Fidson Healthcare Plc also gained, from N5.95 to N6.24, up by 29kobo or 4.87percent.

World stocks World stocks gained 0.38 percent on Wednesday, and European shares made

342,046,570.00

VALUE (N billion)

Stories by Iheanyi Nwachukwu

Plc followed after its share price dropped from N51.8 to N49.25, down by N2.55 or 4.92percent. Dangote Cement Plc also declined from N245 to N242.5, down

by N2.5 or 1.02percent; Lafarge Africa Plc lost N1.9 or 4.94percent, from N38.5 to N36.6.

In 5,057 deals, stock traders at Custom Street, Lagos exchanged 342,046,570 units valued at N4.739billion. Access Bank Plc, Transcorp Plc, Zenith Bank Plc, GTBank Plc, and UBA Plc were actively traded stocks on the Nigerian Stock Exchange (NSE).

Flour Mills Nigeria Plc

5,057.00

VOLUME (Numbers)

Investors book N153bn loss as Nigeria stocks tumble further igeria stocks t u m b l e d further by 1.08percent on Wednesday May 30 while snapped global equity selloff sparked a rebound.

As most investors remain cautious increasing wagers in Nigerian stocks, its yearto-date (YtD) returns lowered further to 0.95percent.

Only 23 stocks gained at the close of trading as against 25 losers led mostly by largely capitalised stocks.

Selling in Nigerian equities picked up pace after one day public holiday for the celebration of Africa biggest economy democracy day.

As Lagos-listed stocks failed to snap losing streak, the value of listed equities declined to N13.984trillion compared to N14.137 trillion recorded Monday, which implies a loss of N153billion.

The NSE All Share Index (ASI) declined by 1.08 percent to 38,606.41 points from preceding trading day level of 39,028.51 points.

Nestle Nigeria Plc recorded biggest loss of N60 or 3.75percent, from N1600 to N1540; followed by Nigerian Breweries Plc which recorded a dip of N5 or 4.35percent, from N115 to N110.

International Breweries

38,606.41

tentative gains after falling almost 4 percent in the past five days. Wall Street opened higher.

The Dow Jones Industrial Average (DJIA) rose 199.21 points, or 0.82 percent, to 24,560.66, the S&P 500 gained 25.37 points, or 0.94 percent, to 2,715.23 and the Nasdaq Composite added 60.50 points, or 0.82 percent, to 7,457.09.

The recovery was partly driven by news that Italy’s two anti-establishment parties were renewing efforts to form a government, rather than force the country to the polls for the second time this year.

13.984

Reports says use of behavioural insights may help educate investors

F

inancial regulators, public authorities, and other organisations are increasingly using behavioural insights to educate investors to make more informed financial decisions, according to a report published Wednesday May 30, 2018 by the International Organisation of Securities Commissions (IOSCO) and the Organisation for Economic Co-operation and Development’s International Network on Financial Education (OECD/INFE).

The accelerated growth of new and innovative technologies, an excessive amount of available financial information, and increasingly sophisticated financial products make it progressively more difficult for retail investors to navigate today’s complex financial markets.

Although many organisations offer education and financial literacy programs, investors often fail to make rational financial choices because of their own cognitive, social and psychological biases—all of which can act as barriers to sound financial decision making.

The IOSCO-OECD report, The Application of Behavioural Insights to Financial Literacy and Investor Education Programmes and Initiatives, examines how findings from behavioural sciences can be used

to develop investor education and financial literacy initiatives that may be more effective than traditional programs, largely by mitigating the effects of behavioural biases.

Behavioural sciences focus on the way individuals think and behave, based on empirical evidence from a range of social sciences, such as economics, psychology, and social marketing, as well as from other fields like neuroscience.

The report draws on an extensive literature review of strategies that use behavioural insights to help break down the barriers to satisfactory or rational decision making and nudge consumers towards better financial planning and investment. The report also builds on the input from more than 80 IOSCO and OECD/INFE member institutions and includes a wide variety of practical applications of behavioural insights, ranging from “debiasing” applications for educational purposes (e.g. online comparison and simulation tools) to the development of campaigns and targeted messaging.

The report also provides various approaches for regulators, policy-makers, and practitioners to choose from when considering whether and how to apply behavioural insights.

SEC asks Partnership Investment Company, subsidiaries to officially submit repayment plan for investors

T

he Securities and Exchange Commission (SEC) has directed Partnership Investment Company Plc and its subsidiaries to officially submit their investor repayment plan to the Commission.

The directive by SEC is contained in an “Investor Alert” notice it issued on Wednesday May 30, 2018 regarding activities of Partnership Investment Company Plc and its subsidiaries.

The SEC which said its

aim is to protect affected investors, recalled that following the hearing of the complaints against Partnership Investment Company Plc and its subsidiaries in June 2017, the Administrative Proceedings Committee (APC) of the Commission cancelled the registration of the Partnership Investment Limited and Partnership Securities Limited and banned the Principal Officers/actors from participating in the capital market.

In the public notice, SEC said its attention has been

drawn to an electronic message being circulated to investors on behalf of Part-

nership Investment Company Plc and its subsidiaries captioned “Re Partnership

Investment Company Plc. Restructuring and Re-organisation: A Plan to Pay All Creditors/Customers”.

“The electronic message indicates a proposal to investors who lost monies to Partnership Investment Company Plc and its subsidiaries, especially Partnership Securities Limited to sign up to participate in a repayment plan with two options namely: Option A, which is 3 years’ repayment plan. This includes taking a cash payment or accepting

equity in a company to be registered and listed on the Nigerian Stock Exchange; or Option B, which involves the investors accepting payment of only 50percent of their investment payable within 12 months.”

“Please be further informed that the conduct of the Partnership Investment Company and its subsidiaries on restructuring is very suspicious and appears to be an attempt to scuttle the directives of the APC”, SEC said.

Thursday 31 May 2018

C002D5556

Investors have $4.5bn green building opportunity to latch on - IFC CHUKA UROKO

I

nvestors and property developersinNigeriahave,atleast, $4.5 billion investment opportunity to latch on within the next seven years to 2025, InternationalFinanceCorporation (IFC),amemberoftheWorldBank Group, has projected.

This is the largest opportunity the corporation sees in sub-Saharan Africa (SSA) apart from South Africa,andassuresitishereinNigeria to help investors with technical and even financing solutions.

Building green is the ‘new normal’ in the building industry at the moment because of its numerous advantages and benefits. Green

buildings are smart buildings that guarantee about 35 percent lower carbon emissions and decrease in water use by 30 to 50 percent.

Green buildings become all the more desirable considering thatglobalwaterconsumptionhas grown at more than twice the rate of population increase in the last century and, in developing countries, this will increase by another 50 percent by 2025.

“By 2025, 1.8 billion people will be living in countries or regions with absolute water scarcity, and two-thirds of the world’s population could live under water stress conditions,” according to the IFC. Green buildings are also 50 to 90 percent cost saving in waste

Industrial court gives JOHESU 24 hours to call off strike OYIN AMINU, Abuja

N

ational Industrial Court (NIC)onWednesdaygave a 24-hour injunction to the Joint Health Sector Union (JOHESU) to call of its strike, reaffirming its earlier judgment.

Thisisfollowingtheearlierruling given by the NIC to JOHESU to call off their strike, which it refused to obey resulting in the extension of the injunction till June 1 in the plight of the health seeking public.

A non-governmental organisation, the Incorporated Trustees of the Kingdom Human Rights Foundation (KHRFI), had obtainedacourtorderagainstJOHESU, mandating the health workers to suspend their industrial action onMay21,2018,inwhichJOHESU in its constitutional rights filled an appeal at the Appellate Court.

Recall that the minister health, Isaac Adewole, had earlier in the

CHANGE OF NAME

I, formerly known and addressed as Miss Bamidele Temitayo Precious now wish to be known and addressed as Mrs Abayomi Temitayo Precious. All former documents remain valid. General public please take note.

CHANGE OF NAME

I, formerly known and addressed as Yekini Muhydeen Aremu Amechi now wish to be known and addressed as Yekini Muyideen Biodun Amechi. All former documents remain valid.

General public please take note.

CHANGE OF NAME

I, formerly known and addressed as Olorunfemi Oluwatoyin Abiodun Grace now wish to be known and addressed as Ojewumi Oluwatoyin Abiodun Grace. All former documents remain valid.

General public please take note.

week gave a strict warning to the striking health workers under the auspices of JOHESU to sheath their sword or risk the no work no pay action of the Federal Government.

JOHESU hence decided to sheath its sword and direct the members of the union to resume duties since the NIC, as a neutral and impartial organ of the Judiciary, hasmandateditsmediation centre to take over the negotiation and reconciliation processes within the next 24 hours in the interest of the public.

Yesterdaymarkedthe44thday the strike commenced.

CHANGE OF NAME

I, formerly known and addressed as Miss Chidinma Angel Okpala now wish to be known and addressed as Mrs Chidinma Angel Egbunu. All former documents remain valid. General public please take note.

CHANGE OF NAME

I, formerly known and addressed as Okechukwu Collins Nwafor now wish to be known and addressed as Okechukwu Ashibuogwu collins. All former documents remain valid. General public please take note.

CHANGE OF NAME

I, formerly known and addressed as Saudat Abiola Shittu now wish to be known and addressed as Saudat Abiola Mustapha. All former documents remain valid. General public please take note.

CHANGE OF NAME

I, formerly known and addressed as Margaret-Mary Ugonnaya Yewande Nwosunow wish to be known and addressed as Margaret-Mary Ugonnaya Owie. All former documents remain valid.

General public please take note.

generation; they are more comfortable, healthier, return higher productivityratesandhaveahigher resale value.

“Buildinggreenleadstoreduction of operating and energy costs (lower utility bills), higher valued real estate and profits (greater returnoninvestment),improvement ofemployeeproductivity(reducing sickbuildingsyndrome),extended life of buildings, optimization of life-cycle economic performance andlessvulnerabilitytofluctuating energyprices,”ChiiAkporji,executive director at Nigerian Mortgage Refinance Company (NMRC), explains.

But IFC says there is bad news, which is that there are few green buildings in this country. This means that investors have a large green field to play on. So far in Nigeria today, there are only two or three known and certified green buildings-TheHeritagePlace,The Wings Towers and Nestoil Towers.

The corporation insists building green is impossibility, but something that is doable. “Green and affordable are not tradeoffs; both are possible and we have a large body of experience to show that,” Eme Essien Lore, IFC’s country manager, who spoke at workshop on green building in Lagos, said.

“Wedonotneedtodoanything drastic; buildings are being built as we speak and financing is being

arrangedforthenextgenerationof buildings.Whatweneedisawayto put buildings onto a greener path with solutions that are sensible to the Nigerian context,” Lore said.

IFC in collaboration with NMRC launched an EDGE programme in Lagos recently. EDGE, whichstandsforExcellenceinDesign for Greater Efficiencies is part of IFC’s creating markets strategy.

According to Lore, EDGE is part of a holistic intervention to steer construction in rapidly urbanizing economies onto a more low-carbon path. It’s an example of IFC’s commitment to creating markets that are competitive, sustainable,inclusiveandresilient.

The corporation has a long history of investing in green buildings and its global investment portfolio is over $3 billion, out of which $386 million was invested in SSA through its own account and syndicated loans.

“We have expanded that reach through the EDGE programme, which now celebrates more than two million square metres of certified space globally,” Lore disclosed, explaining that EDGE was an online platform, a green building standard and a certification system for nearly 140 countries, tailored for emerging markets, and taking into account local context such as Nigeria.

33 NEWS

BUSINESS DAY

RenCap records excellent performance in 2018 Financial Mail Top Analyst Awards

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enaissance Capital, a leading emerging and frontier markets investment bank, has delivered a strong and improved performance in the 2018 Financial Mail Top Analyst Awards, conducted by South Africa’s leading weekly business and financial magazine, with excellent team results and outstanding individual rankings across a wide range of categories.

The Firm was ranked fourth for overall equity research at the Financial Mail Awards ceremony, a significant improvement on last year’s sixth position. This very strong team result was underpinned by continued excellence in individual categories, with three analysts in Renaissance Capital’s sub-Saharan African research team in first place in their respective categories on a brokerage-weighted basis, and top-three positions recorded across 12 categories.

Johann Pretorius, head of research, Africa, ranked number one in General Mining, up from second in 2017; Yvonne Mhango, head of research, sub-Saharan Africa, retained her top position in the Africa Ex-SA Non-equi-

ties category from last year; while David Ferguson was named the leading analyst in the Media category. Kabelelo Moshesha was among the top three in the Young Analyst of the Year category.

The RenCap team also achieved top-six ratings in the following sectors: Platinum and Precious Metals; Commodities; Gold Mining; Oil & Gas; and Innovative Research.

Johann Pretorius, managing director, head of Research for Africa and head of Metals & Mining Research, Renaissance Capital commented: “We are delighted with Renaissance Capital’s outstanding performance in this year’s Financial Mail Awards. On behalf of the Firm, I would like to congratulate all of our awardwinning analysts and the African research team.

“We have significantly built up our research offering in Africa, with over 25 analysts covering more than 130 stocks. This year’s Financial Mail ranking is another true reflection of the market-leading product that we offer across our coverage universe, and we look forward to continue pioneering African capital markets

34 BUSINESS DAY NEWS

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Thursday 31 May 2018

Delay expected in GE’s Lagos-Kano rail...

Continued from page 1

track and the return of rail services to the golden age – between 1961 and 1980s, when the Nigeria Railway Corporation (NRC) had 47,000 employees against the current estimated abysmal 9,000 employees on its pay roll, checks by Business Day reveals that before the project will take off fully, there are certain conditional precedent to be sorted out by the Federal Government and GE. An industry player who does not want his name in print described GE as being fully committed to inject some of the best technology and processes in the course of the rehabilitation work.

Over the decades, the Nigerian decrepit rail system, which was supposed to serve as the artery of any economy, had given rise to man-hour losses due to its bad condition. In a telephone interview, Patrick Adenusi, CEO, Safety Beyond Borders, commended the move between the Federal Government and GE, describing it as one of the best ways to go.

According to Adenusi, connecting the rail to major airports and seaports in the country will make road fatalities reduce, while travellers will have choices beside air travel.

Adenusi expressed worry that Nigeria had lost enormous resources by not investing in the rail network, spending huge sums in building roads that cannot be maintained, and spending money on importing rickety trucks that constitute safety hazards.

He blamed past administrations for their failure to treat the rail system as a multimodal transport framework as obtainable in other parts of the world.

“If you ask transport economists, what is it that have been lost to road network by not having a functional rail system. There are different dimensions to it, such as social condition, economic under development, failure of the road network, inability to maintain locomotives, time wasted, man hours lost and so on,” Adenusi said.

In 2006, President Olusegun Obasanjo made efforts to focus on the rail, but based on a wrong approach, he said, saying, “You don’t look at a rail system by itself, because it is only one piece in Continued from page 1

intellectual property.

In 2013, when the Nigerian mobile app market was valued at $1 billion at the mobile app summit, James Rutherford of Nokia Corporation, said, “The sub-$100 smartphone is steadily becoming a reality globally. Low-end smartphones are increasingly available and these types of mobile phone will likely grow at a compound annual growth rate (CAGR) of 15 percent over the coming years.”

This forecast became even more evident in reports by GFK Retail and Technology Nigeria, which listed Nigeria as the third highest tech device growth market globally in 2015, with a 13 percent growth between 2014 and 2015.

According to the report, sales of technology devices rose from $5.1

the entire transportation jigsaw.

Instead, you look at rail as part of what the Americans call a multimodal transport framework.”

Former President Goodluck Jonathan embarked on the ambitious plan of rail rehabilitation when $1.7 billion from the excess crude account was handed over to a Chinese contractor, unmindful of the fact that building infrastructure is not the same as operating it.

Rail is often strategically tied to the sea and airports, and connected to the road as part of the integrated multimodal transport system. No modern airport is built without rail connectivity.

Even those that are without such infrastructure have been redesigned to include rail mass transit right underneath the airport, as there are no major airports that have a rail link over land.

The South Africa government, for instance, built the Gautrain to connect the O.R. Tambo Airport in Johannesburg to Sandton in 15 minutes, when the country won the bid to host the World Cup. As of the time of filing this report, there are currently 26 airports in Nigeria, but only Nnamdi Azikiwe International Airport, Abuja, has a railway line linked to it.

John Ojikutu, member, Aviation Round Table (ART) and chief executive, Centurion Securities, told BusinessDay that in Federal Government plan, there was an intermodal transportation systems developed by the National Transportation Infrastructure Integration Committee 2013, for integration in the national transportation infrastructure.

“The light rail system is part of the plans for mega city of Lagos and Abuja. Abuja has one now and I believe it has been in the plan of the Lagos State government before now. But why it is not being implemented is a question for the state government to answer.

Last April, the Federal Government GE, APM Terminals, and other consortia signed a $45 million agreement to carry out rehabilitation of the country’s railway narrow-gauge rail line. The interim phase of the Lagos-Kano narrowgauge railway concession contract includes light remedial civil and track repair works on the narrow gauge rail line.

L-R: Abdulkadir Muazu, permanent secretary, ministry of mines and steel development; Kayode Fayemi, minister of mines and steel development, and Abubakar Bawa Bwari, minister of state for mines and steel development, during Fayemi’s valedictory press briefing in Abuja, yesterday.

Political re-alignment takes shape as Melaye...

Continued from page 1

Progressives Congress (APC).

His words: “I want to say I am alive because God defended me.

But I want to say that the Nigerian police attempted to kill me twice.

One, through the application of a chemical substance and the second time through injection. They actually came with an injection to inject me but God intervened. And to Him alone be the glory forever and ever.

“And that is why I quote this part of the Holy Book that ‘He who sits in the sacred place of the Most High shall abide under the shadow of the almighty’.

“I thank the Almighty God for being alive and I want to promise Nigerians that because of the love I have seen, I will not derail. I will stand by the truth. No amount of intimidation, harassment, arrest, name-calling, blackmail planted will detract my attention from championing this cause. The battle to salvage this country from financial scavengers and economic cancerworm is a battle of no retreat, no surrender.

“We must salvage this country together. We have no other country to call our own but this country. So, I want to say as I get better, my voice gets better, it will become better. And

I shall not cease to continue to ask questions where necessary.

“But I want to conclude that by saying that we must not allow this to discourage us or get us disenchanted. We must be emboldened to ask questions. The Executive cannot cow the Legislature. We must be bold at all times and speak truth. Like I have always said, ‘if you speak the truth, you die. If you lie, you die. It is better to speak the truth and die’.

“I have a special request to you, Mr President. That because of the trauma I went through and I am still going through, I want to seek your indulgence that you will call on the sergeant-at-arm to look for a comfortable seat for me on this side (pointing at PDP row) of the divide because I am no longer comfortable sitting here. So I want to ask Mr President that you mandate the sergeantat-arms tomorrow to look for a seat for me on this other divide of the chamber. And that before you do that today, through help of my walking stick, I will take a comfortable seat close to Papa General Senator David Mark, pending when you get me a comfortable seat on this side.”

The embattled senator has been on a running battle with his state governor, Yahaya Bello; President

Nigeria risks huge losses to hackers over lax .... billion in 2014 to $5.7 billion in 2015. Today, according to 2018 figures from Jumia’s mobile report, mobile phone penetration stands at 84 percent of Nigeria’s population, and 53 percent (97.2m) of those are smartphone users.

Analysts say that the increase in popularity of smartphones creates an open avenue for hackers and cyber criminals to move from the traditional desktop and laptop online fraud to mobile online space, which virtually has a more open access to personal and financial information such as mobile banking apps, social media apps and the likes.

Femi Fadairo, head, industry security, Nigeria Inter-Bank Settlement System (NIBSS), said at a Cyber security and Banking Fraud Summit, “That Nigerians

are becoming too comfortable transacting on electronic channels through their phone without taking pre-cautionary measures, and so it has become necessary for software/app developers to protect their apps.

“Online fraud is moving to mobile because so many people do not have anti-virus or anti-malware installed on their phones. We are so lax with our mobile phones compare to all the steps we take to make sure that our desktops and laptops are safe.

“There are so many apps that we download without even knowing what we are downloading.”

The decline in prices of gadgets has opened access to cheap smartphones for all, including ICT illiterates, and fuelled the speedy adaptation of mobile ap-

plications.

With app developers earning 50-70 percent of retail price via the app store platforms of Apple, Windows, Google, Blackberry, Nokia and others, incubating young genuine developers could have significant multiplier effect domestically.

“Online fraudsters find the easiest channels to operate on and cannot be bothered with spending so much time trying to hack into protected web portals.

Currently, the mobile phones seems to be the easiest channel, especially with most people having their banking apps, emails, contacts, pictures and other important information on their smartphones,” Tunde Ogunniyi, head of Card and E-banking Ecobank, said.

Muhammadu Buhari; APC national leadership and Inspector General of Police, Ibrahim Idris.

His request was granted by Senate President Bukola Saraki, despite stiff opposition from APC lawmakers including Senate Leader, Ahmad Lawan; Chief Whip, Sola Adeyeye; Chairman, Senate Committee on Petroleum Downstream, Kabir Marafa as well as Jibrin Barau.

He was then accompanied by PDP senators who supported him with his walking stick to relocate to the opposition row.

Meanwhile, Minister of Mines and Steel Kayode Fayemi, has resigned his appointment as minister to concentrate on campaigning ahead of the July 14 Ekiti governorship election in which he is candidate of the ruling All Progressives Congress (APC).

Fayemi tendered his resignation letter to President Muhammadu Buhari three weeks ago, but it officially takes effect from Wednesday, May 30. He emerged the candidate of the APC having won a rescheduled primary of the party on May 12, to become the Ekiti APC candidate, polling 941 votes.

While the closest aspirants Segun Oni had 481 votes, Kayode Ojo (281), Olufemi Richard Bamisile (179), Oluyede Oluwole (121), and Aluko Daniel Olugbenga (86).

In the same vein, David Isiavwe, general manager, Union Bank, said online fraudsters were moving to newer and easier portals to conduct criminal activities, and the traditional web fraud was gradually dying. NIBBS statistics show that “ATM recorded the highest volume of frauds in 2015 followed by POS. This relationship may not be unconnected to the fact that fraudsters leverage on both platform to utilise the proceeds of fraud. The third most utilised channel is the web,” Isiavwe said.

Global mobile app store revenues are projected to reach $90 billion by 2018, primarily driven by growth of mobile subscriber base, strong mobile broadband penetration band rising sales of smartphones. Hence, industry watchers are concerned about the security and regulation of

Politics & Policy Thursday 31 May 2018

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Fasheun raises alarm over worsening insecurity … Calls for sack of service chiefs INIOBONG IWOK

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ounder of the Oodua People’s Congress (OPC), Federick Fasheun, has raised the alarm over worsening security situation in Nigeria, especially the North East which has resulted in loss of thousands of innocent lives.

Fasheun disclosed this at a press briefing in Lagos yesterday to commemorate the Democracy Day celebration in the country, lamenting the continuous killing of Nigerians by Fulani herdsmen without any proactive response by the Federal Government, while further accusing the Muhammadu Buhari administration of shielding and fuelling the killings.

Fasheun, who is the national chairman of the Unity Party of Nigeria (UPN), urged President Buhari to urgently declare Fulani herdsmen as a terrorist organisation and sack the service chiefs, who, according to him have failed, while charging the President to urgently arrest and prosecute the perpetrators of the killings.

Speaking fur ther, he lamented the state of the country nineteen years after the return of the country to democratic rule, stress-

Fasheun

ing that the current Buhari administration has been the worst since 1999.

“Government must emulate Iraq’s termination of ISIS and produce a workable roadmap to end Boko Haram insurgency. Report from soldiers and officers on the field indicate that Boko-Haram could be wiped out easily, but for colluding military commanders who want the campaign prolonged for selfish commercial benefits.

“President Buhari should sack military officers in charge of the Boko-Haram campaign and mandate the defence team to end Boko

Haram insurgency within six months,” he said.

“The government must continue to show a total disregard for the activities of the equally dangerous killer herdsmen in several parts of the country, including southern Kaduna, Plateau, Taraba and Benue states.

The Nigerian government has continued to shield these killer herdsmen, excusing their killings as clash between farmers and herdsmen,” Fasheun said.

The OPC leader, accused security agencies in the country of lacking focus, adding that instead of focusing on

Sit-at-home: Onitsha, Nnewi, Aba record compliance GODFREY OFURUM, Aba, & EMMANUEL NDUKUBA, Awka

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he sit-at-home order declared by the Indigenous People of Biafra (IPOB) and Movement for the Actualisation of the Sovereign State of Biafra (MASSOB) witnessed a total compliance by residents of Onitsha the commercial city; Nnewi, the industrial town of Anambra State, and Aba, a commercial hub of Abia State.

Driving from Onitsha to Nnewi, no vehicles, tricycles nor motorcycles were seen on the roads, particularly, the Oba New and Old roads, the Onitsha Owerri road and Obosi Nkpor roads, as shops, filling stations, schools and banks were all under locks and keys, while people were seen in clusters discussing.

Residents of Aba complied fully to the order to

mark this year’s Biafra Day. This was despite Abia Police Command’s warning for IPOB to suspend the sit-athome protest, which it said was contrary to the law.

Biafra Day is set aside by IPOB to commemorate the anniversary of the declaration of the sovereign State of Biafra, by Dim Chukwuemeka Odimegwu Ojukwu (late) in 1967.

The Edo Ezemewi Road, Nnewi, where almost all the banks in Nigeria have branches, was deserted as banks were under lock and key and the popular Nkwo Nnewi Market was shut, with stern looking security men mounting guards at the entry and exit gates.

In Onitsha all the markets, schools, shops and other business outfits were all locked, while all the Federal and state government establishments, banks and other financial institutions were shut for business.

Even the shops on the smallest streets in Onitsha were closed, while bean cake (Akara) bakers were busy making brisk business as people clustered round them at Upper New market road, eating and discussing the activity of the day.

The Onitsha Owerri expressway, the Asaba Onitsha expressway and the Onitsha Enugu expressway were all ghost of themselves as all vehicular movement, movement of tricycles, motorcycles, and human traffic were not seen there.

Security agents in their patrol vehicles, particularly, the Nigerian Police Force, Nigerian Army, Nigerian Navy, Nigerian Security and Civil Defense Corps, Federal Road Safety Corps, were seen patrolling round the streets of Onitsha and Nnewi, while many Police men were seen with their vehicles at some strategic points in Onitsha.

fighting crime and escalating insurgency they were busy focusing on extorting innocent Nigerians.

“Today Nigeria appears to be under siege; from the North to the South, from the east to the west, all parts of the country is militarised and turned into a virtual police state. The federal special Anti-Robbery Squad has lost focus, instead of implementing primary objective of curtailing armed robbery it has turned itself into an army of occupation, harassing and pilfering money from innocent citizens,” he further observed.

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2019: Benue people can still vote for Buhari, if… - Ortom BENJAMIN AGESAN, Makurdi

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enue State Governor, Samuel Ortom, has said that people of the state would support the re-election bid of President Muhammadu Buhari, only if the president’s policies and interests were in line with the yearnings and wishes of the people of the state.

Ortom disclosed this during an interactive session with journalists at the Government House in Makurdi the state capital.

He re calle d that the herdsmen crisis predated the present administration, assuring that the people of the state would still support the President in the coming 2019 general election despite the losses and pains they suffered as a result of the herdsmen incursions in the state.

“Buhari will definitely come here for campaigns; I cannot preempt what he will say or what Benue people will say.

“But as you know in politics, there are no permanent enemies or permanent friends but permanent interest.

“If President Buhari’s interest is in tandem with the interest of the people of Benue and he asks them for their vote, they will vote him likewise my own, if my interest is also in tandem with the wishes of the people they will vote for me,” he emphasised.

“But one thing I want you to know is that the herdsmen/farmers’ clashes predate this government, so it will be a fallacy to conclude that herdsmen killings in the state is linked to President Buhari.

“That the herdsmen are killing Benue people do not mean it is Buhari who is responsible. There are still reasonable herdsmen who still live here in peace with their neighbours.

“There are some who support the anti-open grazing law but the real enemy is Miyetti Allah Kautal Hore, they are the ones we hold responsible because they addressed the media and stood up against our anti-open grazing law.

“They vowed to resist the law and they went ahead to do it. They are a violent group, we know them and we are holding them responsible and have also gone a step further to institute a criminal case against them in the court,” he said.

The governor said at least 198 herdsmen were facing trial in various courts for gross violation of the antigrazing law.

There are 180, 000 Internally Displaced Persons (IDPs) in eight camps covering Guma, Logo and Makurdi Local Government Areas, 500, 000 others living with relatives or in uncompleted buildings, 80, 000 displaced children with 2, 442 pregnant and 2, 766 nursing mothers.

Former Taraba governor, Nyame, bags 14yrs imprisonment for fraud FELIX OMOHOMHION

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former Taraba State governor, Jolly Nyame, has been sentenced to 14 years in prison without an option of fine.

A High Court of the Federal Capital Territory, Wednesday, found the former governor guilty of 27 out of 41 counts levelled against him by the Economic and Financial Crimes Commission (EFCC).

He was arraigned on allegations of alleged diversion of public funds while he served as Governor of Taraba State.

Nyame was alleged to had diverted N1.64 billion while he served as governor between 1999 to 2007.

The trial judge, Justice Adebukola Banjoko, in sentencing Nyame, said he found him guilty for receiving gratifica-

tion, obtaining public funds without due consideration, criminal breach of trust and gratification.

The court sentenced Nyame to 14 years for criminal breach of trust, 2 years for misappropriation, 7 years for gratification and 5 years for obtaining valuable public properties without consideration.

However, they are to run concurrently.

The court discharged the defendant on 14 counts of the charge.

Justice Banjoko, who sentenced him after she turned down Nyame’s plea for leniency, said she was “morally outweighed by facts of the case”.

“Citizens of Taraba had elected the defendant, a clergyman, in three separate occasions to govern them, which shows constant level of trust.

The expectation must have been so high.

“As a Reverend, he must have been seen as an epitome of morality, piety and everything good. How will Reverend Nyame begin to explain to people of Taraba State his actions and inactions?

“How can he justify causing such a collosal loss to the state?” the Judge queried.

The Judge who maintained that the defendant committed “catalogue of crimes” a month before he vacated office “while under intense searchlight from security agencies”, said the court would be failing in its responsibility “if it fails to impose the full sanction”.

According the judge, evidence before the court showed that while officials that served under the defendant were returning their loot to the EFCC after they were questioned, he said Nyame “was still busy committing more crime”.

Thursday 31 May 2018

FT

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BUSINESS DAY

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FINANCIAL TIMES

World Business Newspaper

EU plans €30bn fund to help crisis-hit eurozone countries Loan scheme for single currency members is less ambitious than idea proposed by Macron JIM BRUNSDEN AND MEHREEN KHAN

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russels is to propose a €30bn loan plan for countries hit by economic shocks, as it responds to French calls for a eurozone crisisfighting budget.

The European Investment Stabilisation Function is far less ambitious than ideas put forward by French president Emmanuel Macron, who last year called for a fund amounting to several percentage points of eurozone gross domestic product.

But the European Commission will argue that its plan to be presented on Thursday is a “first step”, saying differences among eurozone governments and EU budgetary restraints prevent more ambitious proposals at this stage.

The commission’s plans, seen by the Financial Times, would allow it to borrow on capital markets to lend to countries facing one-off problems such as a natural disaster or a localised banking crisis. Countries could borrow to invest in infrastructure and other programmes to cushion an economic blow.

Interest on loans made to governments would be covered by a share of the profits that national central banks in the eurozone earn from issuing banknotes — a demand that is likely to stoke tensions with fiercely independent institutions such as Germany’s Bundesbank.

Total loans would be limited to €30bn with no country allowed to receive more than 30 per cent of available lending capacity. The scheme would be open to eurozone countries and aspiring members in the European exchange rate mechanism.

The creation of more joint eurozone spending power is a core strand of a reform plan for the single currency area being pushed by Mr Macron ahead of a

summit of EU leaders in June.

Brussels acknowledges that a fullblown eurozone budget would require “strong political will and consensus” that does not yet exist among EU governments. France and southern eurozone countries are facing resistance from northern capitals, which rule out the need for more common spending pots in favour of governments taking greater responsibility for their national spending.

“The recipe for a larger cake is not centralised bailout funds and printing more money, but structural reforms and sound budgets,” Mark Rutte, the Dutch prime minister, said in a speech in Berlin in March. Mr Rutte is one of the most vocal opponents of a eurozone budget Aware of the political tension, Brussels’ proposal aims to strike a balance between objections from north and south. In a nod to German fears about underwriting poorer countries’ spending, the text stresses that the stabilisation mechanism will result in no “permanent transfers” between eurozone countries, while governments will only be eligible for support if they have met core EU budget rules for the preceding two years.

Eligibility would also be linked to rises in a country’s unemployment rate, which must be higher than a 15-year rolling average and 1 per cent higher than in the same quarter the previous year.

Brussels’ draft plan allows for future upgrades to the scheme, saying it “should be considered as a first step in the development over time of a fully fledged insurance mechanism to cater for macroeconomic stabilisation”. The plan would need approval from EU governments and the European Parliament, with the proposal for sharing out central bank profits requiring unanimous agreement from capitals.

Drugmakers struggle to find immunotherapy combinations for cancer Discordant notes expected at this year’s Asco, a kind of rock festival for pharma DAVID CROW

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fter decades of frustratingly slow progress in discovering new drugs to battle cancer, the breakthroughs have started to come thick and fast.

Futuristic cell therapies from Novartis and Gilead Sciences can reengineer the body to attack tumours, while a drug from Loxo Oncology produces spectacular results by zoning in on cancer genetics.

The annual meeting of the American Society of Clinical Oncology (Asco), the world’s largest cancer conference, has become the main forum for drugmakers to chart their success. As the pace of discoveries has quickened in recent years, it has turned into a kind of rock festival for the pharmaceutical industry.

This week, 30,000 doctors and

pharma executives will again assemble in a huge conference centre on the banks of Lake Michigan in Chicago for the meeting to pore over results from hundreds of clinical trials.

The biggest advance has been the arrival of immunotherapy drugs, known as checkpoint inhibitors, which remove brakes in the immune system so it can fight cancer as it does other foreign invaders such as viruses.

The medicines, which wowed the audience at Asco in 2014, raked in $10bn in sales last year for Merck of the US, Bristol-Myers Squibb, Roche and AstraZeneca.

This year’s meeting was supposed to be another one for the Continues on page A2

French president Emmanuel Macron, left, with European Commission president Jean-Claude Juncker in Brussels last week © EPA

For Google, all roads lead back to search Alphabet is closing in on $1tn valuation thanks to a new growth spurt in the core business RICHARD WATERS

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nce their revenues reach $100bn, most companies are destined for comfortable maturity. The law of large numbers kicks in.

Not so for Google. The search advertising market may be 20 years old, but growth at the internet company has re-accelerated over the past three years. As a result, parent Alphabet — which gets 99.5 per cent of its revenue from Google — is expected this year to turn in its highest growth rate since 2011, even though its revenue will be nearly four times greater than it was then.

The $26bn in new business likely to be added this year is a stunning demonstration of the enduring power of Google’s core business. It also points to the health of a cash machine that has been funding the company’s next big businesses, fuelling its growth well beyond search.

If Alphabet can maintain this momentum and get past its current margin-crimping investment phase, its shares should be able to maintain their current earnings multiple over the next three years, said Dan

Chung, chief investment officer at Alger, a growth-oriented fund manager in New York. That points to 30 per cent upside in the stock over the same period, he added, something that would lift Google’s market capitalisation close to the $1tn mark.

Despite the strong recent performance and growth potential, there have been clouds overhanging Google’s share price this year. They start with the escalation in spending that has unnerved some investors in recent months.

“If there’s a frustration for Alphabet shareholders, they don’t do a good job of giving visibility into their businesses,” said Jim Tierney, chief investment officer at AllianceBernstein’s Concentrated US Growth Fund, voicing a common complaint.

“I trust them over the long term — but it would be really nice to have some milestones along the way.”

Google towers over rivals in digital advertising A bigger concern weighing on the stock has been the threat of a political and regulatory backlash fuelled

by Google’s growing power. “The biggest risk is clearly privacy regulation,

and also their monopolistic control of certain segments,” said Mr Chung.

But if it can navigate issues like these, then many Wall Street analysts believe Alphabet is on the verge of a strong growth spurt that will carry its revenue past $200bn by early in the next decade.

Underpinning this is the mobile business, which has given Google’s search engine a new lease of life.

With smartphone users carrying out more frequent internet searches, the “paid clicks” — the number of times users click on its advertisements — jumped 59 per cent in the first three months of this year, continuing an acceleration seen over recent quarters. Even with average ad prices falling 19 per cent, the result has been a pick-up in growth.

The question now is whether Google’s newer businesses will extend this momentum into new markets in the years to come. Foremost among them is YouTube. The online video arm already has $20bn in annual revenue and could grow at 20-30 per cent a year for the next five years, forecast Mark Mahaney, an analyst at RBC Capital Markets.

Explainer: Trump and Kim’s summit brinkmanship What are the chances the two leaders will meet, and what are the prospects for success?

DEMETRI SEVASTOPULO AND BRYAN HARRIS

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S president Donald Trump and North Korean leader Kim Jong Un are talking about holding a summit in Singapore in June. What are the chances that the summit will occur, and what are the prospects for success even if it does? Here are some points that help explain circumstances surrounding this pivotal event.

Will Trump and Kim actually meet?

Washington and Pyongyang have not confirmed that Mr Trump and Mr Kim will meet on June 12, which was the plan before the US president last week cancelled the summit. But US and North Korean officials have since conducted frantic diplomacy— in Singapore, New York and the Demilitarised Zone between South and North Korea — to resurrect what would be the first meeting between a US president and a North Korean leader.

Why did Trump cancel the summit but then reverse course?

Mr Trump called off the summit after

North Korean actions suggested that conditions were not right. After not responding to the US for days, Pyongyang warned about a nuclear “showdown”, prompting Mr Trump to write to Mr Kim to cancel the meeting. After North Korea responded in a moderate way to his letter, however, Mr Trump welcomed the “warm” response and told his diplomats to attempt to salvage the summit.

North Korea suggested the summit, so why jeopardise the event?

Experts are still debating that question. Did China convince Mr Kim to move more slowly? Was Mr Kim trying to mollify hardliners at home? Or was he responding to comments by US national security adviser John Bolton and vicepresident Mike Pence who hinted that he might meet the same fate as Muammer Gaddafi, the former Libyan leader who was killed by western-backed rebels after dismantling his nuclear programme?

Who is Kim Yong Chol, the most senior North Korean official to visit the US in two decades?

Kim Yong Chol, who flew to New

York on Tuesday, is probably North Korea’s best-known official, after Kim Jong Un. He is a hardline military figure who previously headed the Reconnaissance General Bureau, North Korea’s spy agency. A top aide to Kim Jong Un, the 72-year-old general is known for his combative negotiating style and combustible nature. His arrival in the US marks the highest level North Korean visit to the US since 2000 when vicemarshal Jo Myong Rok met President Bill Clinton in the White House.

What is the significance of Kim Yong Chol visiting the US? He is a close confidante of Kim Jong Un, which highlights the importance of his trip at what is a crucial juncture in the diplomatic discussions. His visit is an attempt by North Korea to build trust and enhance communications — issues that have beset US-North Korea relations. He is also a trusted nuclear negotiator who can discuss in detail what North Korea can and cannot put on the table in terms of negotiations toward denuclearisation.

He will meet Mike Pompeo, US secretary of state.

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EU data privacy laws are likely to create barriers to trade GDPR creates serious, unclear legal obligations for both private and public entities WILBUR ROSS

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e in the US are deeply concerned about the way the EU’s new privacy guidelines, which came into effect last week, will force big changes in the way US and European companies do business.

Donald Trump’s administration

supports the new General Data Protection Regulation’s goal of protecting personal online data while continuing to enable transatlantic data exchange. We are also committed to working with the EU to implement the new guidelines.

We believe that data-sharing rules must respect privacy and protect our shared interests of maintaining public

safety and the easy functioning of the internet, while also taking into account the regulatory, scientific, and commercial needs of all our countries. As currently envisioned, GDPR’s implementation could significantly interrupt transatlantic co-operation and create unnecessary barriers to trade, not only for the US, but for everyone outside

the EU. The US thrives because it has an open, entrepreneurial society that encourages innovation and embraces technological advances. We believe consumers benefit because they enjoy the digital products and services that are invented and brought to market by US companies.

Complying with GDPR will exact a

Italian populist parties rekindle talks to form government

Drugmakers struggle to find immunotherapy...

Continued from page 29 ages, when pharma companies would finally start to prove a popular theory which holds that combining two immunotherapy drugs into one treatment can dramatically boost survival rates.

While a minority of between 20 and 30 per cent of cancer patients do extremely well on immunotherapies, most do not. Drugmakers have been trying to push response rates higher by testing cocktails containing two medicines targeting the immune system. Thousands of trials are under way.

However, the company that was supposed to be this year’s headline act will be conspicuously absent from the main stage.

Incyte, a US biotech group, had hoped to prove that combining its experimental immunotherapy with Keytruda — a leading checkpoint inhibitor made by its Big Pharma partner Merck — would boost survival rates in patients suffering from melanoma and other common cancers.

Global sales of checkpoint inhibitor immunotherapies have soared But after announcing the failure of its closely watched Phase III trial earlier this year, Incyte’s investigators will instead take to the podium with a presentation that tries to unpick why the approach was so unsuccessful.

“Every year Asco has an ‘advance of the year’,” said Brad Loncar, founder of the Loncar Cancer Immunotherapy Exchange Traded Fund. “This year was supposed to be the year of combos, but it hasn’t materialised as quickly or as robustly as anyone would have hoped.”

Outside of melanoma, the only combination approach that has been conclusively proven to work involves twinning a checkpoint inhibitor immunotherapy with chemotherapy, a treatment that has been used to fight cancer for more than 70 years.

Last month, Merck unveiled a large trial showing this cocktail can dramatically improve survival prospects for people suffering from the most common form of lung cancer, putting it on track to become the standard first-in-line treatment for these patients.

However, the inclusion of chemotherapy in the mix means patients must still contend with its brutal toxic side effects, such as hair loss, vomiting and anaemia.

The holy grail is still finding two immunotherapies that can manipulate the immune system so that it does all the work, meaning chemotherapy can be discarded altogether. But a crop of studies due to be presented at this year’s Asco meeting suggests there is still much more work to do.

significant cost, particularly for small and medium-sized enterprises and consumers who rely on digital services and may lose access and choice as a result of the guidelines. US companies have already invested billions of dollars to comply with the new rules. But even as companies update their privacy policies to bring themselves in line, many uncertainties remain.

Salvini pushes for new elections but bonds rally on hopes that vote can be avoided

JAMES POLITI AND CHLOE CORNISH

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Cecilia Malmstrom (left) to press Wilbur Ross for clarity on what kind of capping mechanism the US plans to apply when the temporary exemption expires on June 1 © Getty/AP

US trade secretary rebuffs EU demands for tariff exemptions Hopes fade in Brussels that full carve out from punitive tariffs can be secured ANNE-SYLVAINE CHASSANY AND JIM BRUNSDEN

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he US trade secretary has rebuffed Europe’s demands for a full exemption from US steel and aluminium tariffs due to come into effect this week ahead of last-ditch talks with the EU. Speaking at the annual OECD forum in Paris on Wednesday, Wilbur Ross pointed to ongoing trade talks with China as evidence that it was possible to engage with the Trump administration while being subject to tariffs.

“There can be negotiations with or without tariffs, it’s not that you can’t talk with tariffs,” Mr Ross said. “China is an interesting case in point. They are paying the tariffs, they came into effect in March and they haven’t used this as an excuse not to talk. It’s only the EU insisting we can’t negotiate if there are tariffs.”

Mr Ross insisted the benefit to the US economy of tariffs outweighed the cost increases some industries were facing as a result of the more expensive imports.

“The sky has not fallen on the US and it won’t,” Mr Ross said. “But it creates a lot of jobs in steel and

aluminium, that’s real. I don’t see car companies closing up, I don’t see can companies closing up.”

Washington’s determination to impose trade tariffs on some longtime allies has dismayed the EU. Cecilia Malmstrom, the EU’s trade commissioner, will on Wednesday press for clarity from US officials on what kind of capping mechanism they plan to apply when the EU’s temporary exemption from the steel and aluminium tariffs expires on June 1.

In a speech at the OECD later in the day, French president Emmanuel Macron will urge world leaders to stand by the rules of the World Trade Organization while seeking ways to overhaul the international body to make it more efficient. He will draw parallels with the 1930s, an era that witnessed the rise in nationalism and led to the second world war, to make a case against unilateral actions, aides said.

“We have a duty to defend this multilateralism and refound it,” an Elysée adviser said. The adviser warned the EU was ready to retaliate if the US decided to inflict duties on its European allies.

“We won’t try to augment tensions, but we will respond,” the Elysée aide

said.

Speaking to members of the European Parliament on Tuesday, Ms Malmstrom warned that it was no longer realistic to hope for a full carve out from the 25 per cent tariff on steel and 10 per cent tariff on aluminium.

“Realistically, if the US decides to refrain from applying duties I expect them nonetheless to want to impose some sort of cap on EU exports,” she said.

The EU trade chief said it was still unclear whether the US would opt for a “hard” limit on the volume of European steel and aluminium allowed into its market, or instead grant the EU a “soft” quota above which the punitive tariffs would apply.

EU leaders earlier this month reiterated their call for a full exemption from the measures, which they slammed as a naked act of protectionism by the US government.

While the commission has already prepared a list of US products to be hit by additional tariffs, the plan would need to be adjusted if the Trump administration opts for a different solution than full application of the tariffs.

A soft cap — known technically as a tariff-rate quota, or TRQ — “would be less damaging than a strict hard cap”, Ms Malmstrom told MEPs.

The London Report: Royal Dutch Shell and BP lead FTSE rally Weaker dollar pushes oil prices higher BRYCE ELDER

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oyal Dutch Shell and BP led the FTSE 100’s rally from a threeweek low as a weaker dollar pushed oil prices higher. Energy producers accounted for about half of the index’s daily gain.

Engineer Bodycote was the FTSE 250’s top performer after posting its strongest quarterly organic growth since 2011 and saying full-year earnings

would beat consensus expectations.

A relief rally lifted B&M after the retailer reassured on current trading.

Go-Ahead slipped after Liberum took the transport operator off its “buy” list. Underlying trading at Go-Ahead’s regional bus business had likely been worse than headline figures suggested, given the previous year was held back by one-off accident claims costs, it said.

Stobart, the infrastructure and support services group, dropped on

news that Cenkos had resigned from its role as joint broker in response to a boardroom spat.

Photo-Me fell to a five-year low after warning of competitive pressures in Japan, where earnings will be held back by investment in its photo-booth business.

Centamin, the Egyptian gold miner, rallied from an 18-month low after both Panmure Gordon and Berenberg turned positive on valuation grounds.

taly’s anti-establishment Five Star Movement and the far-right League have plunged back into talks to form a coalition government in an attempt to avoid a new election and further market turmoil.

The renewed effort began on Tuesday night as Carlo Cottarelli, the former IMF official who had been charged with forming an interim technocratic government, put his own plans on hold after an informal meeting with Italian president Sergio Mattarella on Wednesday morning.

“New possibilities for the birth of a political government have emerged,” people close to Mr Cottarelli told the Ansa news agency.

“He is waiting for developments.”

However, people familiar with the talks between the populist parties warned that the chances of reconciling differences between the leaders remained a major hurdle.

Matteo Salvini, leader of the League, pressed for new elections instead at a campaign event in Pisa on Wednesday morning.

“This is my appeal: Sergio Mattarella should tell us the day of the vote and Italians will deliver justice for what has happened,” Mr Salvini said.

In a reference to the lawyer the two parties tapped last week as prospective prime minister, Luigi Di Maio, the Five Star leader who has been more keen on reopening negotiations, said: “There are two paths ahead: either we launch the [Giuseppe] Conte government with a reasonable solution or we vote right away.”

The rekindling of coalition talks triggered a rally in Italian bonds.

The yield on the politically sensitive two-year note tumbled about 72 basis points to 1.7 per cent by midday trading as prices rose. The yield on the benchmark 10-year note fell 10bp to 2.9 per cent.

Worries that new elections could become a referendum on Italy’s euro membership had contributed on Tuesday to the largest rise in twoyear yields since Reuters records began in 1996.

But there are several sticking points to a new deal. The League, which would be the junior member of a coalition, has been insisting it should claim the prime minister’s job — with Giancarlo Giorgetti, a senior MP, taking the role. Five Star officials say this is unacceptable.

The finance minister position is also a source of heated debate, with Mr Cottarelli himself being floated for the job but facing resistance from the League. Mr Conte’s role is also being discussed.

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Trump complains of no apology from ABC after Roseanne row Roseanne Barr has apologised for her ‘bad taste’ tweet to a former senior adviser to President Barack Obama JESSICA DYE

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S President Donald Trump has weighed in — sort of — on the move by Walt Disney’s ABC to cancel high-rated sitcom Roseanne after its creator, comedian Roseanne Barr, made a racist remark on Twitter about Valerie Jarrett, who was a senior adviser to former President Barack Obama.

On Wednesday morning, the president tweeted: “Bob Iger of ABC called Valerie Jarrett to let her know that “ABC does not tolerate comments like those” made by Roseanne Barr. Gee, he never called President Donald J. Trump to apologise for the HORRIBLE statements made and said about me on ABC. Maybe I just didn’t get the call?”

Ms Barr’s widely condemned comment — the latest provocation from a comedian who has courted controversy throughout her career — drew a swift and strong reaction

from ABC, which dropped the axe on the popular reboot of the Roseanne sitcom despite having previously renewed it for another season.

Ms Barr later apologised for the remark that she said was in “bad taste” — and on Wednesday, said she had been tweeting while taking the sleep drug Ambien — but that was not enough to salvage her show. ABC said in a statement that her comments were “abhorrent, repugnant and inconsistent with our values”, and Mr Iger, Disney’s chief executive, said in a tweet: “There was only one thing to do here, and it was the right thing.”

The cancellation was all the more unusual given the high ratings Roseanne pulled in during its first season back on the air. The show had been hailed as a big win for Disney’s strategy to try to appeal to a broader swath of Americans, and both Ms Barr and her onscreen character were Trump supporters — a relative rarity in the US television landscape.

Italian bonds enjoy steady demand from investors Government offers significantly higher yields on €5.6bn of debt raised KATE ALLEN

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taly’s first major bond sale since the eruption of market turbulence enjoyed steady demand from investors on Wednesday, but underlined the cost of the turmoil as the government offered significantly higher yields on the €5.6bn of debt raised.

The auction came on a day in which Italian bond prices bounced back after three days of near unrelenting selling because of fears that another election later this year would turn into a referendum on the country’s membership of the euro.

However, the bond market received some boost after the antiestablishment Five Star Movement and the far-right League — the two parties that fared best at the election in March — resumed talks to form a coalition government. They had abandoned those attempts over the weekend after the Italian president, Sergio Mattarella, vetoed the appointment of a Eurosceptic economist as finance minister.

The political uncertainty had seen the yield on Italy’s two-year bond soar from 0.27 per cent to as high as 2.72 per cent on Tuesday, while its 10-year debt yield jumped from 2.4 per cent to a high of 3.39 per cent.

In Wednesday’s auction, Italy sold five-year bonds with a yield of 2.32 per cent, floating rate seven-year bonds with a yield of 2 per cent and 10-year bonds with a 3 per cent yield. The bid to cover ratios — a measure of demand for

the debt — were 1.5, 1.5 and 1.4 respectively.

“Taking into account the market environment, [the] auctions’ results look fine,” said Chiara Cremonesi, a fixed-income strategist at Italian lender UniCredit.

The stability in the bond market saw the yield on 10-year debt drop 29 basis points to 2.84 per cent, while that on the two-year yield fell from 2.7 per cent to 1.49 per cent. It spurred a bounce in Italian stocks, with the FTSE MIB closing up 2.1 per cent. But the benchmark index, which until May was one of Europe’s best performing stock markets, remains lower for the year after the recent selling.

The amount Italy raised was near the top of a target range of between €3.75bn and €6bn that it had signalled to investors. But the level of yields in Wednesday’s sale were in stark contrast to those when it lost sold debt at those maturities.

The yield on the five-year was 1.75 percentage points higher than when it lost sold such debt in mid-May, while the seven-year was 1.77 percentage points higher and the 10-year 1.3 percentage points higher.

Seema Shah, a global investment strategist at Principal Global Investors, said the level of demand at the debt auction was “very encouraging”.

However, she noted that “as long as anti-European Union rhetoric is present amongst the populists, [European Central Bank] intervention is unlikely and Italian assets will remain under pressure”.

Roseanne Barr has apologised for her ‘bad taste’ tweet to a former senior adviser to President Barack Obama

Emerging markets raise interest rates to stem dollar strength Mexico and Brazil are seen next in line after Indonesia acts to boost rupiah ROGER BLITZ

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ore emerging market central banks are expected to raise interest rates to confront a resurgent dollar that is exposing their dependence on foreign borrowing.

Indonesia’s central bank on Wednesday raised interest rates for the second time in a fortnight, pushing up its benchmark seven-day repo rate by 25 basis points, amid concerns about capital flight.

The dollar’s strength since midMay has also triggered rate rises in Turkey and Argentina. Turkey’s rate move, viewed as long overdue by international investors and commentators, has arrested a slide in the lira that had wiped 23 per cent off its value in the past three months.

“EM central banks are responding to higher US rates by hiking their own rates,” said Win Thin at Brown Brothers Harriman.

Higher official rates have helped stem pressure for some EM curren-

cies. Indonesia’s rupiah, which up until last week had lost 4.6 per cent against the dollar this year, gained 0.4 per cent in the wake of the latest tightening.

The lira has rebounded 10 per cent since last week’s rate increase, but further pressure on Turkey’s currency could materialise if inflation data on Monday turn negative. Turkey’s central bank governor told investors in London on Tuesday he would be prepared to raise rates again at its scheduled meeting on June 7.

The Argentine peso, which had lost 18 per cent in the first nine trading days of May, also responded well after the country’s central bank raised rates to 40 per cent. But the peso has weakened again in recent days, albeit more gradually, as investors await the outcome of bailout talks with the IMF. The fall in the Brazilian real, by more than 11 per cent in two months, is prompting the market to start pricing in a rate increase from the central bank, Mr Thin said, while

Mexico, which raised rates in February, “may have to do more” ahead of July’s election.

Marcelo Carvalho of BNP Paribas said he expected Bank Indonesia to raise rates twice more in the coming months, despite the likely impact on growth and revenues, following hawkish comments from its governor, Perry Warjiyo.

EM countries such as Indonesia, Turkey and Argentina were suffering currency falls because of their large current account deficits, said Nafez Zouk of Oxford Economics.

Compounding Turkey’s problems was the rise in oil prices because it is an importer, while Indonesia was also vulnerable to risk-off sentiment because of the high proportion of foreign ownership of its debt market.

“It’s good to see Indonesia taking pre-emptive action and being prepared to sacrifice a bit of growth to stabilise the market,” said Mr Zouk.

“If emerging markets get ahead of the curve, that’s a welcome way for investors to navigate volatility.”

US company investment data signal interest rate rises Corporate spending offsets weak showing by consumers to sustain steady GDP growth SAM FLEMING

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trengthening investment by US businesses helped sustain steady overall economic growth in the first quarter, countering a weak showing by American consumers and leaving the Federal Reserve on track for further increases in interest rates.

Business investment rose at an annualised 9.2 per cent rate in the first three months of the year, much quicker than previously estimated and the best reading since mid-2014, according to the Bureau of Economic Analysis. The figures were supported by big advances in intellectual property investment, as well as spending on structures.

The figures contributed to overall gross domestic product growth of 2.2 per cent in the opening quarter of the year, marginally weaker than the 2.3 per cent previously reported for the period. The downward revision was driven by slower inventory accumulation, and it marked a deceleration from the fourth quarter’s 2.9 per cent pace.

Proponents of last December’s

$1.5tn tax cut have predicted a surge in corporate spending as well as booming wage growth as a result of the package. Evidence of the tax reductions’ impact has been mixed to date, with many analysts arguing much of the benefits will land in the pockets of stockholders. S&P 500 companies are on course for record share buybacks in the first quarter, according to analysts at S&P Dow Jones Indices.

“Tax cuts help at the margin but I don’t think they are a game-changer,” said Harm Bandholz, US economist at UniCredit in New York. The tax reductions will provide a temporary lift, he added, but “I don’t think this is changing behaviour”.

The GDP figures revealed further weakness in household spending, with consumers increasing outlays at an annual 1 per cent pace, far short of the 4 per cent growth seen at the end of last year. Slower export growth also weighed on the first-quarter reading.

However, the business investment growth figure of 9.2 per cent was a strong jump from the 6.8 per cent annual pace recorded at the end of last year.

Spending in intellectual property including software was up by 10.9 per cent, while outlays on structures rose 14.2 per cent. Gregory Daco of Oxford Economics said stronger capital expenditure by the oil and gas industry was part of the reason for the improved business investment data, with the sector recording annualised growth in spending on structures and equipment of nearly 30 per cent.

Despite the more sluggish headline GDP growth, analysts said the report will do nothing to change the Federal Reserve’s determination to lift short-term interest rates again in June by a further quarter point.

Economists at JPMorgan said the details of the growth data were encouraging enough to support an upward revision in their tracking estimate for second-quarter growth to 2.75 per cent from 2.25 per cent previously.

“It’s a fairly encouraging report,” said Mr Daco, predicting a further acceleration in the second quarter. “The economy is doing well and domestic fundamentals are strong in the context of uncertainty in Europe, rising oil prices, and increased protectionism on the part of the US.”

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ANALYSIS Germany struggles to fend off assaults from Trump Berlin under threat from shifting transatlantic relations but lacks vision to respond GUY CHAZAN

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Stronger dollar poses challenge for Wall Street blue-chips Currency strength seen hurting foreign revenues for multinational companies As the political crisis in Italy has deepened, the euro fell below $1.15 NICOLE BULLOCK AND CHLOE CORNISH

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arket turmoil in Europe led

by Italy’s escalating political crisis is set to extend the US dollar’s rise, raising questions on Wall Street of a hit to foreign profits for bluechip multinational companies.

The dollar has gained more than 7 per cent against the euro since the single currency peaked at $1.25 in early February. As the political crisis in Italy has deepened this week, the euro fell below $1.15 — its lowest level since July 2017.

Many of the leading lights in the S&P 500 rely on foreign-based revenues and thus face an unfavourable conversion when the dollar strengthens. It is not a perfect science — companies do not uniformly disclose their reliance on foreign revenues, and they can and do hedge their currency exposure — but few are likely to escape unscathed if the rising dollar trend continues.

Still, since mid-April, the dollar has steadily climbed against a basket of other major currencies, which include the euro, buoyed by signs of a stronger economy that has added more than 5 per cent to its value.

“A rising US dollar translates into a negative currency headwind for many of the companies in the S&P 500,” said Martin Jarzebowski, vice-president and portfolio manager at Federated Investors.

The dollar’s recent turn also coincides with the first-quarter reporting season by US companies. A surge in US corporate profit growth in the wake of tax cuts, estimated at about 25 per cent year on year

by Factset, has failed to drive the S&P 500 back to its record peak set in late January.

This refects a sense among some investors that earnings may have peaked for the cycle, with such apprehension reinforced should the dollar gain further altitude.

David Donabedian, chief investment officer of CIBC Atlantic Trust, said: “I do not look at this 4-5 per cent rise in the dollar as a big game changer in earnings.” Still, he added that the rebound in the currency “is supportive of the idea that after the third quarter you get a deceleration of earnings”.

Some industries and sectors are more sensitive to shifts in the dollar than others.

Tech companies as a group, for example, derive more than half of their revenue outside the US. Consumer staples groups also have significant overseas exposure, while telecoms companies, utilities and the real estate sector are largely domestic.

“Regional banks, homebuilders — there is a whole group of industries that really do not have a lot of exposure outside the 50 states,” said Mr Donabedian.

“But this is not a big enough move [in the dollar] to be playing that — not as of yet.”

FactSet data also show that Wall Street analysts forecast companies that make more than half of their revenue outside the US reporting greater revenue and earnings increases for the second quarter compared with those that are more domestically focused and the overall S&P 500.

Market moves also reflect that exposure to economies outside the US remains in favour.

The S&P 500 US Revenue Exposure index, which measures the performance of companies in the index with higher than average revenue exposure to the US,

is down for the year, whereas an index that measures companies with a higher than average revenue exposure outside the US is up nearly 3 per cent. Over time, however, the latter’s performance has been driven more by bullish or bearish sentiment about China than the moves of the dollar.

The dollar’s recent ascent helps to explain why the shares of small companies, which tend to generate most of their revenue at home, have outperformed the S&P 500. The domestic focus also insulates small-caps to the trade tensions that have emerged this year and makes them a bigger beneficiary of cuts in the corporate tax rate and a stronger economy.

According to David Lefkowitz, senior equity strategist at UBS Global Wealth Management, the back of the envelope calculation indicates that a 10 per cent change in the dollar spurs a 2 per cent shift in S&P 500 earnings.

Mr Lefkowitz said the dollar “would have to rise another 10 per cent before that tailwind [to S&P 500 earnings] would go away. The move is pretty small in the scheme of things”.

Meanwhile, the strengthening dollar and weakening pound provides a boost to international stocks in London, where the FTSE 100 index hit an all-time high earlier this month.

“North America accounts for roughly 20 per cent of [FTSE all share] revenues,” said James Illsley, a UK equity portfolio manager at JPMorgan Asset Management, adding that approximately 40 per cent of UK-listed dividends are declared in dollars: “Think about big oil stocks, HSBC . . . You can receive [these dividends] in sterling as a UK investor, so dollar strength will obviously help”.

Survivor Rajoy looks to stave off political demise Spanish PM faces confidence vote this week, but has shown opponents his durability MICHAEL STOTHARD

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pain’s prime minister Mariano Rajoy was once in a helicopter crash after he took off from a bullring outside Madrid. The aircraft’s tail was snapped off on impact. Mr Rajoy emerged with only a broken finger.

The episode in 2005 was an early part of the legend of Mr Rajoy as an indestructible politician — disliked, ridiculed and written off dozens of times as prime minister, yet a man who has defied critics and held on to power.

On Friday the 63-year-old will face his latest threat, with Spain’s Socialist opposition having called a confidence vote in a bid to oust him from government. This followed a damning verdict in a corruption case last week, which found members of Mr Rajoy’s Popular party guilty of operating a slush fund.

Mr Rajoy himself was not accused of wrongdoing but the courts said testimony by him and other senior figures, who said they knew nothing about the fund, was “not credible”.

Spain’s opposition and much of the

media has called for Mr Rajoy to dissolve the government and call elections.

But despite the groundswell of opposition, there are signs that Spain’s great survivor might cheat political death once again this week.

“For 15 years people have been predicting the end of Rajoy, and every time they are proved wrong,” says Ignacio de la Torre, chief economist at Arcano. “The truth is he will probably survive the vote against him and continue as prime minister.”

hen the White House last week declared a national security investigation into automotive imports, paving the way for new tariffs on German cars, Berlin’s incredulous foreign minister responded with a joke. It did not go down too well.

Heiko Maas told his US counterpart Mike Pompeo that the idea of Audis, Mercedes and BMWs endangering US national security was preposterous. “On the contrary,” Mr Maas quipped, “German cars make America’s streets safer.”

Mr Pompeo was not amused.

Mr Maas’s comment reflects the extent of German bewilderment at US president Donald Trump, who has called into question a transatlantic alliance that has been the cornerstone of Berlin’s postwar foreign policy.

And no one in Berlin seems to know how to respond.

The threat on cars was the latest in a string of jabs and punches borne by Germany. Mr Trump’s rejection of the Iran nuclear accord and his decision

the White House, she has adopted a tone that some critics see as appeasement. After Mr Trump threatened his steel tariff, Germany was more conciliatory than some other EU countries, advocating trade talks with the US to lower tariffs across a broad spectrum of products, especially in manufacturing.

If that was designed to make Mr Trump more emollient, it failed.

The tariffs that could result from the probe into car imports he announced last week would be particularly painful for Germany, potentially costing the country €5bn — or 0.16 per cent of gross domestic product, according to the Ifo Institute for Economic Research.

Some have urged Ms Merkel to take the gloves off and lead a common European counter-attack.

“Time for Europe to join the resistance,” was the headline of a recent editorial in the news magazine Der Spiegel.

Indeed, a succession of German officials have been stressing the need for unity and solidarity in the EU’s response to Mr Trump. “In

US president Donald Trump and German chancellor Angela Merkel at the G20 summit in Germany last year © AFP

to move the US embassy in Israel to Jerusalem were met with consternation in Berlin. The situation could be worse this week if the EU fails to secure an opt-out from Mr Trump’s threatened steel and aluminium tariffs by the US’s June 1 deadline.

None of these measures has been solely directed at Germany, yet it has come in for more criticism from Mr Trump than any other EU state — over everything from its huge trade surplus with the US and liberal refugee policy to its failure to meet Nato defence spending targets. Germany is second only to China in what it stands to lose from US protectionist trade measures.

Chancellor Angela Merkel has acknowledged the strategic challenge that Mr Trump poses, saying Europe can no longer fully rely on the US, must assume more responsibility for its own defence and “take its fate into its own hands”.

But she has struggled to elaborate on her vision. Germany remains reliant on Washington’s security guarantees, has a limited choice of other international partners and is squeamish about developing the kind of hard power that has underpinned America’s place in the world.

Thorsten Benner, head of the Global Public Policy Institute in Berlin, said the chancellor was deliberately avoiding a debate that would spell out the ramifications of Mr Trump’s policies for Germany.

“She needs to be leading the discussion, but she seems to shy away from it,” he said. “It is as if she does not want to expend any political capital on the issue.”

Instead, in her interactions with

all these questions — tariffs, Iran, protectionism — the EU must speak with one voice,” said Jürgen Hardt, foreign policy spokesman for Ms Merkel’s CDU/CSU bloc.

That was why it was important to strengthen the EU, Mr Hardt said, for example through increased defence and security co-operation.

But the bloc has been weakened by political instability in Italy. And anyone hoping that the election last year of Emmanuel Macron as French president would revive the Franco-German engine of closer European integration, and so strengthen the EU vis a vis the US, will have been disappointed.

Berlin’s response to Mr Macron’s ambitious proposals for reforming the EU and the eurozone has so far been tepid.

Daniela Schwarzer, director of the German Council on Foreign Relations, said this has “opened up a void which has been filled by critics of Mr Macron” such as the Eurosceptic, populist Alternative for Germany.

“Germany has missed the opportunity to redraft the EU’s positive leadership role,” she said.

Beyond Europe, Germany’s options are limited. Some experts think it should work more closely with likeminded, mid-sized countries such as India, Japan, Canada, Mexico and Brazil, which also support free trade and the multilateral institutions under attack from Mr Trump.

“If Germany could create . . . a critical mass in favour of the international liberal order, it can make a difference,” said Ulrich Speck, senior visiting fellow at the German Marshall Fund. “We need to . . . increase our weight.”

BUSINESS DAY

Opinion

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NEWS YOU CAN TRUST I THURSDAY 31 MAY 2018

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ANSWERING WASTE PROBLEMS WITH ENERGY SOLUTIONS: HOW VISIONSCAPE IS CLOSING THE LOOP

Answering waste problems with energy solutions: How Visionscape is closing the loop SEGUN HAASTRUP

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frica is hungry for energy. According to the World Economic Forum (WEF), only 24% of sub-Saharan Africans have access to electricity, and the energy generation capacity of the entire African continent (excluding South Africa) is only 28 Gigawatts, equal to that of Argentina alone. With the current state of low energy consumption and access, even individuals connected to a power grid experience on average; 54 days of power outage a year – that’s darkness for 15% of the year.

The move towards innovative ways of turning what was once termed a waste crisis into a sustainable solution for a struggling sector is quickly becoming commonplace amongst African leaders,

such as of an anaerobic as well as organizations digestion plant through in the public and private our subsidiar y, Vision sectors. Africa’s immediEnvironmental Engineerate need for energy has ing based in Northern catalyzed the growth of Ireland, VEE specializes the waste-to-energy inin anaerobic digestion dustr y globally. In the (AD) and waste-to-enwaste-to-energy converergy (WtE) projects in sation, Sweden is a great the various communities model for a near perfect Vi s i o n s c a p e o p e rat e s. waste management sysThe Eco Park will also tem. The country began feature engineered cells, its waste management a materials recovery facilrevolution in the 1980s ity, a tyre recycling facilw ith the development of incineration plants.

Africa isdumpsite hungry for energy.

According to (WEF), only 24%ity of amongst others.” says ria –Economic waste Forum management landslide inthe World Irvine.

Today, the countr y inand energy.

March 2017have which sub-Saharan Africans accesskilled to electricity, and sustainable the energy generation capacity of He concludes, “Africa’s cinerates 50% of its waste over 100 people. The WTE According to CEO, John the entire African continent (excluding South Africa) is only 28 Gigawatts, equal to that to generate energy, and plant is to divert waste Irvine, Visionscape’s sus- future lies in diversificaof Argentina alone. With the current state of low energy consumption and access, even tion and it is our responrecycles about 49%, leavtainable business model, from their to Koshe individuals connected a powerdumpgrid experience on average; 54 days of power outage ing only 1% to go into the furthers the conversa- sibility to har vest and is being a year –site that’sand darkness for 15% offacilithe year. landfill. tated by a public-private tion on rethinking global share our knowledge in In Africa, Ethiopia is partnership between the re s ou rc e ma nag e m e nt global best practices, VEE The move towards innovative ways of turning what was once termed a waste crisis into the first African county government and a con- and exploring alternative will be delivering the AD; another first in West Afa sustainable solution for a struggling sector is energy quickly becoming commonplace amongst to launch a full wastesources for emergsortium of investors from to-energy plant in Addis AfricanSingapore, leaders, as wellChina, as organizations in the public and private sectors.

Africa's and ing markets. “As part of rica. It will receive waste ranging from agricultural Ab ab a. Th e p l a nt w iimmediate l l Denmark. need for energy has catalyzed theour growth of the waste-to-energy infrastructure devel-industry waste to household orincinerate 1400 tons globally. of InVisionscape the waste-to-energy conversation, Sweden is a great model for a near opment s olutions, theperfect Sanitation ganic waste and induswaste every day and will Eco Park currently un- in the waste management system.

Thecusp countryofbegan its waste management revolution Solutions is on the trial slurry, the plant will supply 30% of the city’s der construction in Epe offering a lasting solution 1980s with the development of incineration plants. Today, the country incinerates 50% electricity. The project to address two significant will house several solu- generate electricity for the of its waste to generate energy, and recycles about 49%, leaving only 1% to go into the w a s t r i g g e r e d b y t h e challenges facing Nige- tion- providing facilities Eco Park.” landfill.

Excess energy produced will be distributed to surrounding communities as one of the company’s CSR initiatives. The successful deployment of this pioneering facility is expected to open the market and encourage more public and private investment in waste-toenergy projects. Beyond the process of energy generation, and to guarantee the completion of the cycle in a zero-waste loop, subwaste or end product from the ADP is rich fertilizer used for farmlands in the agricultural sector. From farmland waste to energy generation and back to providing fertilizers for the farms, ensuring that nothing is wasted. The closedloop system of production has been a conversation amongst environmental experts for decades.

Haastrup is an environmentalist in Lagos.

In Africa, Ethiopia is the first African county to launch a full waste-to-energy plant in Addis Ababa. The plant will incinerate 1400 tons of waste every day and will supply 30% of the city’s electricity. The project was triggered by the dumpsite landslide in March 2017 which killed over 100 people. The WTE plant is to divert waste from their Koshe dumpsite

Consumption to replace investment as key to China growth • Catching up with US will depend on continued ‘opening up’ and avoiding big upheavals MARTIN WOLF Wolf is the Chief Economics Commentator of The Financial Times.

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hina is shifting its growth model to one relying more on consumption and less on investment. It is also urbanising, ageing and experiencing dynamic technological change.

It should therefore offer the world’s businesses a gigantic, rapidly growing, but challenging, consumer market as it evolves from being the “workshop of the world”.

Already between 2007 and 2017, the aggregate size of Chinese household consumption rose from a mere 13 per cent of US levels to 34 per cent. Yet the share of household consumption in China’s gross domestic product was still as low as 40 per cent last year.

Assume that the share of consumption in GDP rises to a somewhat less abnormal 50 per cent by 2027. Assume, too, that the economies of China and the US grow in line with the latest forecasts

of the International Monetary Fund up to 2023.

The IMF forecasts that the Chinese economy will expand by 42 per cent between 2017 and 2023 (a compound annual rate of 6.1 per cent). The corresponding figures for the US are 13 per cent and 2 per cent. Thereafter their growth is forecast at 8 and 4 per cent respectively, in nominal terms (or 5 and 2 per cent in real terms).

Then the Chinese economy would be the same size as that of the US, in dollars, by 2026, and its aggregate consumption would reach 74 per cent of US levels by 2027. (See charts above).

Assume, instead, less optimistically, that China’s consumption share remained at a mere 40 per cent of GDP. Assume, too, that, after 2023, the growth of China’s nominal GDP (in dollars) falls to a mere 6 per cent, while that of the US remains at 4 pe cent. Then China’s aggregate consumption will still reach 55 per cent of US levels by 2027. Even under these considerably less favourable assumptions, this will be a hugely important market.

W hat, t h e n , w i l l b e the features of this growing consumer market?

A recent report from the World Economic Forum and Bain & Company delineates its main drivers and the challenges these are likely to create.

By 2027, 22 per cent of the Chinese population (324m people) will be over 60. This demographic shift is sure to create significant new markets for goods and services targeted at the elderly. Meanwhile, the young adults of 2027 will virtually all be from onechild families and familiar with the digitally-enabled and relatively prosperous China of today. They are likely to be considerably more demanding than their elders.

China’s astonishingly dynamic “sharing economy” — already visible in the booming market for shared bicycles and cars for hire — will expand further, reducing demand for outright ownership.

As elsewhere in the world, Chinese consumers will also increasingly demand and obtain personalised goods and services. In addition, argues

the report, the pattern of consumption is likely to be split between those seeking a more traditionally Chinese lifestyle and those with a preference for a more westernised way of life.

The dramatic development of China’s digital economy will increasingly weave together online and offline worlds. Hema, for example, is a start-up, backed by the Alibaba Group. As I w itnessed during a recent visit to Alibaba’s headquarters in Hangzhou, a Hema store is a mixture of supermarket, restaurant, distribution centre and online store. I saw a possible future — and it worked.

Crucially, just five companies, all of them Chinese, seem likely to end up controlling the data created by this digitally-enabled, mass-consumer market. This can bring great benefits to consumers. But it will also create immense monopoly power. Concerns over privacy and control over data might come to China, as they have to the high-income countries.

Finally, China was already 57 per cent urban-

ised by 2016, according to the World Bank. Urbanisation could rise to 70 per cent by 2027 and then to the over 80 per cent normal in the advanced economies, with most of the new inhabitants moving to Tier 2 and Tier 3 cities and inland, rather than the saturated coastal megacities, Beijing, Guangzhou, Shanghai and Tianjin, or inland Chongqing.

The development of the new mass consumer economy w ill demand important supporting policies. These will include upgrading of skills, s p re a d i n g b e n e f i t s o f growth more widely, tackling China’s vast environmental challenges and strengthening the trust that a histor y of fakes and tainted products has damaged.

The plausible assumption, however, is that over the next decade a mass consumer s o ciety w ill emerge in China. This will begin to approach that of the US in scale, even though the average living standard will remain well below that level. Moreover, Chinese companies are emerging as world

leaders in this technologyenabled economy.

A vast middle class of people with an income affording more than the basic essentials of existence, will also emerge.

These consumers will be not only be more demanding, but will seek goods and services that enrich their lives.

The great probability is that all of this will indeed happen. But this is not certain. It assumes that the doctrine of “reform and opening up” will continue to guide Chinese policy successfully and that nothing dramatic — financial crisis, armed conflict, a collapse of the global economy, domestic political upheaval — comes in the way of continued progress.

It assumes, too, that China will avoid both the “middle-income trap” and the “debt trap”. China’s record suggests that it will do just that and will continue to progress, albeit at a somewhat slower rate than before. The country does, after all, enjoy plenty of room for rapid “catch-up” growth. Bet on success. That seems the likely future.

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