BusinssDay 01 Oct 2019 by BusinessDay

At 59, ‘Up NEPA!’ still a Nigerian reality INDEPENDENCE DAY SERIES

OLUSOLA BELLO, ISAAC ANYAOGU & STEPHEN ONYEKWELU

any who are now adults grew up screaming “Up NEPA!” each time the then state utility, the Nigerian

Electric Power Authority (NEPA), restored power supply, sometimes after days of power cuts. Now their children are still raising the chant indicating that it is not yet Uhuru

for Nigeria’s power sector. Nearly six decades after independence, Africa’s largest economy has been unable to keep the lights on for millions of its

populace beyond five hours a day outside major city centres, a development that sees Nigeria import more generators for household power supply than any other country in the world. The rule of thumb for an indus-

trial nation is about 1MW for every thousand of population. Therefore, Nigeria’s energy need is about 190,000MW for a population of 190 million, but the most the grid

Continues on page 47

businessday market monitor

Biggest Loser

Biggest Gainer NESTLE N1394.90 3.71pc

MTNN N130.50 -4.04pc 27,630.56

Foreign Reserve - $42.10bn Cross Rates - GBP-$:1.23 YUANY-N 50.57 Commodities Cocoa

US$2,442.00

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$1,480.40

news you can trust I **TUESDAY 01 OCTOBER 2019 I vol. 19, no 405

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gainst the backdrop of increasing socio-economic and political challenges that have hampered Nigeria’s progress since Independence in

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FAAN can’t confirm reports of repairs beginning at Enugu airport

...days after BusinessDay’s investigative story ODINAKA ANUDU &IFEOMA OKEKE

nessDay on their individual assessment and way forward for Nigeria, Balarabe Musa, a former governor of Old Kaduna State; Ayo Adebanjo, leader of the pan-Yoruba socio-cultural organisation,

he Federal Airports Authority of Nigeria (FAAN) failed on Monday to confirm reports that the Federal Government had started repairs on Akanu Ibiam International Airport Enugu’s runway. BusinessDay’s investigative story on September 27 had revealed that work was not going on at Enu-

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reflection, not celebration needed, say Balarabe Musa, Adebanjo, Ikokwu, others much more potential for growth and development than in 1960 such as Indonesia and South Korea have since gone on to emerge as part of the exclusive club of 20 most industrialised nations on earth or G-20. Speaking differently with Busi-

Nigeria @ 59: Faultlines tear at soul of a potential G20 nation 1960, government at all levels has been urged not to engage in wasteful celebration but to use the occasion of the commemoration of the anniversary to reflect on the mournful state of the country. This is because other nations that Nigeria was seen as having

3M -0.02 12.59

NGUS DEC 24 2019 362.68

The Nigerian Stock Exchange (NSE) celebrates the exemplary life of an icon, Pa Akintola Williams (m), a founding father of NSE, flanked by Abimbola Ogunbanjo (3rd r), national council president, NSE; Chris Ogunbanjo (4th r); Oscar Onyema (4th l), CEO, NSE; Aigboje Aig-Imoukhuede (5th l), ex-officio, NSE, and others in a symbolic closing gong ceremony at the Exchange, in Lagos.

Zebulon Agomuo & Iniobong Iwok

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Tuesday 01 October 2019

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THE GREATEST GIFT OF INDEPENDENCE IS FREEDOM SALUTE to Our founding fathers Armed forces Everyone working to keep us free

Happy Independence Day

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Statesmanship and calls for the restructuring of Nigeria STRATEGY & POLICY

MA JOHNSON

his piece is about fostering peace and unity in Nigeria, not on warfare. The perception of people about the government and its military is key in strategic thinking when a nation requires reformation. The strategy to be adopted must take into consideration prevailing socio-political and economic factors, and indeed the multi-cultural values of the people. Although, strategy at the highest level and its broader sense covers both military and civil aspects of societal continued existence, it is the mode of survival of the people that matters. The people of Nigeria need to survive current political, economic and social complications. Regrettably, the mode of survival remains a challenge. Most Nigerians are clamouring for restructuring. The demand for restructuring is at different decibels with devolution of power, resource control, constitutional amendment and regional autonomy being various stanzas of the demand. Some say they want a brandnew constitution and some scholars of constitutionalism have suggested how the nation could get it. They have submitted that the process for a new constitution reflecting the aspirations of the people can only be initiated by Mr President.

They argue that the national and state assemblies are not empowered by law to initiate the process for a new constitution. They say our federal and state lawmakers are only to carry out oversight functions, make laws and represent their people. There are those who want true federalism, in addition to resolving the North-South divide in Nigeria. Endless desires! Let’s turn our attention to the quote, “All military problems are political; all political problems are economic; and all economic problems are technological,” Carl Von Clausewitz, “On War”. The society, according to Clausewitz, is a “remarkable trinity” which comprise the people, the commander and his army, and the government. One could argue in support or against the fact that the people constitute the centre of gravity of a nation with a population of about 190 million. If the people are prosperous, you have a rich nation, and when they are poor, you will have a poor nation laced up with agitations. So, when the military in any society is having problems particularly with the people that it is empowered to protect as reflected in the above quote, one should examine thoroughly the political leadership. The job of the military is pure and simple – defend the territorial integrity of Nigeria from land, sea and air. But when the military as alleged, embarks on torturing, harassing and intimidating “innocent” people as a way of carrying out its legitimate functions, then the commander and the army may have to explain to the people on how it arrived at the overzealousness exhibited in executing its mandate. Today, the population of Nigeria, which is about 200 million, is almost six times what it was at independence in 1960. The political challenges of the

nation such as pervasive corruption and huge cost of governance amongst others have compelled the people to clamour for restructuring. They believe these challenges are responsible for extreme poverty and a fragile economy which need to be squarely addressed. The oil boom of the 1970s has not only weakened the nation’s agricultural base, but has destroyed significantly the promising technological foundation which would have sustained the phenomenal upsurge in population. This was the genesis of Nigeria’s economic problem. The oil boom of the past became our oil doom instead of giving birth to technological boom. When a sick economy is not responding to various policy treatments, it only shows that technology is conspicuously missing in the nation’s quest for industrialisation. Due to Nigeria’s reluctance to emerge as an industrialized nation with a thriving capital goods sector, reducing inflation figures to single digit has been herculean. What do people need in a country as diverse as Nigeria? Each generation of Nigerians looks for leaders- statesmen and stateswomen, who will do what is right and just, build a consensus among the people, and who will bring about the required reformation in the nation. Unfortunately, statesmen and stateswomen are very scarce in the society. Where are we going to get skilled political leaders who will take responsibility for their own actions in fostering unity between the north and the south in our country? It is time for men and women who are true democrats to stand in defence of the unity of Nigeria and the citizens. Strong-minded political leaders out there who possess egalitarian spirit must compulsorily display leadership

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The oil boom of the past became our oil doom instead of giving birth to technological boom. When a sick economy is not responding to various policy treatments, it only shows that technology is conspicuously missing in the nation’s quest for

qualities that we need to remember at this time of our nationhood. Nigeria needs righteous and Godfearing leaders in the nation’s political landscape. This is because, “when the righteous are in authority and become great, the people rejoice; but when the wicked man rules, the people groan and sigh.” Political leadership at all levels of the society is expected to set examples to the present generation. They are to work tirelessly to leave a legacy of greatness for the next generation to build upon. Since those in the Buhari-led political party have faith in restructuring, their word should be their bond. Restructuring must be done with all sincerity. Why? An energy which can neither be created nor destroyed has been generated through the demand for restructuring. If the call for restructuring is not attended to now with all sense of patriotism, it may metamorphose into something else in the future. Notwithstanding any political undercurrent, the clamour for restructuring reverberating across the nation cannot be treated with levity. The federal government must give the call for restructuring the attention it deserves in the interest of national peace and unity. The call for restructuring is beyond any political party at this stage. All institutions of the government must start working on the calls for restructuring. I suggest that the path of dialogue should be chosen as one of the ways of addressing all agitations. Blocking roads, and disturbing the peace of a larger society will not make agitators achieve their objectives. Happy Independence Anniversary! Johnson is an author and a retired naval engineer who has passion for African development and good governance

How smart packaging can strengthen trademark protection

he digital economy has proven very disruptive of the traditional business models and has dislodged the established methods of the production of goods and services across all the value chains. It has resulted in very innovative strategies in the production, supply, packaging and marketing of goods and services as well as new business models. As a result, we are witnessing the rise of the smart product economy driven by the need to capture markets by optimising customer experience and a finer-grain personalisation of products that are embedded with technologies that both protect the producers brand and trademark, and offer critical insights to the producer through data which enables a value creation that is further fed back into the product ecosystem. Smart products are designed to transmit data. Making a product smart requires new functionalities to be embedded in the product itself or in its packaging. These functions include data generation, collection, processing, transmission and/or reception and constitute part of the digital components of the product. The core aspects of product “smarting” is smart packaging and smart industrial equipment. Smart packaging is a product packaging innovation that utilises embedded sensor technologies in the packaging of products to serve three core purposes of quality, safety and communication. It is a combination of active packaging and intelligent packaging. Smart packaging is mostly used with foods, pharmaceuticals but the underlying technology can and has been adapted to many other types of products. Active packaging is an extension of the protection function of a package and is commonly used as a protection against oxygen, moisture and other natural conditions that affects the shelf life of products. It is the deployment of biotechnological tools with active materials that preserve the life span of mostly biodegradable products and/or to indicate when they are no

longer wholesome for consumption. The food and drug industry is really adopting this aspect of smart packaging and lots of countries have regulations that require such adoption. On the other hand, according to a Smithers Pira report, intelligent packaging is an addition of the communication function of traditional packaging, and communicates information to consumers based on its ability to sense, detect, or record external or internal changes in the product’s environment and information about the status of the product and other information useful to supply chain managers or consumers. It is the embedding of digital “smart” components into the physical components to turn “dumb” products to smart ones. It is this aspect of smart packaging that is well suited to trademark and brand protection. The report further highlighted intelligent packaging as a dynamic and potentially high-growth market with development in printed electronics, cloud computing and the Internet of Things driving the adoption of intelligent packaging technologies. Now let’s consider the link between trademark protection and smart packaging. Whilst local manufacturing remains on the rise in Nigeria, counterfeiting of these products by unscrupulous competitors remains a major albatross to the genuine efforts of these indigenous producers. Similarly, even for customised imported products distinguished with trademarks by the local brand owner, the easiest way for competitors to profit from the success of the products is to approach a manufacturer abroad to produce the same products and brand it identically. The financial damage to the original importer of the products is often massive. This is because the later counterfeit maker would have by passed the initial costs of products development and may also have produced a much larger scale and thus enjoys the economy of scale from the product. www.businessday.ng

Trademark serves the dual purpose of guaranteeing distinctiveness, quality assurance and source indicator. The implication of this is that the essence of trademark law and the rationale behind smart packaging are to a large extent the same. Trademark law and passing off is societies’ mechanism to ensure that trademark is well protected against infringers. However, market reality indicates that the threat of a trademark infringement action does not deter potential infringers as counterfeit products continue to dot marketplaces causing serious financial injury to product owners who have spent so much to develop products. Also, the cost of enforcing trademark protection may prove uneconomic for an aggrieved trademark owner. Trademark law identifies a trademark as any feature with it a distinctive character – be it symbols, crafted letters or numbers, designs, signature, etc. – adopted by the trademark owner which the registering authority accepts and which is not a non-registrable mark. Thus, with the embedding of digital technologies in the packaging of those products and instrumenting and conflating of the trademarks with smart packaging features, the counterfeiting of trademarks will be a thing of the past. The intelligent aspect of smart packaging uses electronic and digital capabilities like Near Field Communication (NFC), RadioFrequency Identification (RFID) chips to engage the customer through interfaces like their smartphones. Through this connectivity, the packaging can provide a micro-service such as authenticating the product which serves to ensure that the trademark on the package is not fake or counterfeit. Also, because these digital tools also enable tracking functions, it affords a real time tracking of the products’ journey across the value chain down to the final consumer. This will ensure that non-accredited distributors and imposters who

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LEVI C. CHIEFUNA market fake products but with authentic trade dresses and trademarks are easily identifiable and taken out. Also, as is already applicable in some countries and in some sectors, government regulatory agencies can actually insist on smart packaging as an imperative, common and minimum standard for all products. This will ensure that all producers adhere to this and consumers are protected from being subjected to fake and unwholesome products. In Nigeria, the government agencies whose mandate will permit this will be the Consumers Protection Council (CPC), The Standard Organisation of Nigeria (SON) and, NAFDAC. NAFDAC currently has some regulations applicable to product labelling like Bottled Water (Labelling) Regulations, Drug Labelling Regulations 2005, Guidelines for Change of Product Package Label, etc. none of this requires the adoption of smart packaging and are mostly focused in mere mentioning of ingredients and producers’ name. Also, SON regulations require the endorsements of the agency on products. However, it also does not recognise the use of smart packaging and how it can be more effective in executing their regulatory mandate. Lastly, according to Schaefer and Cheung, there is a global market opportunity for smart packaging. They note that the global demand for electronic smart packaging is expected to grow to over $1.45 billion over the next decade. Given the novelty of it in the Nigerian markets, this is a huge opportunity that can be exploited by a discerning entrepreneur looking for a niche area to thrive. Chiefuna is the founder of DigitApprised, a digital governance content platform

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Mokyr’s ‘A culture of growth’: A review in the African context (1) RAFIQ RAJI

n “A culture of growth: The origins of the modern economy,” Joel Mokyr, a professor of economics and history at North-western University in America, argues modern economic growth or “the great enrichment” or “the great divergence” emanated from a deliberate and revolutionary change in European beliefs, values and preferences. A radical change in culture. That change, “the European enlightenment” or “the enlightenment”, was incidentally propelled by just a few people. European elites decided to change the ways they saw the world. The result? Unprecedented prosperity that endures to this day. To make progress, a culture must encourage openness, progressivism, pluralism and competition. Attitude & Aptitude In the African context, especially as we continue to flounder economically, a key lesson is that the change that would alter the course of our history for the better and engender wealth creation would only be brought about when our elites decide to change their ways. But how can they do that in the current technological age with the west already so far ahead? To answer this question, it would certainly help

to know how “in the two centuries between Columbus and Newton, European elite culture underwent radical intellectual change” that led to “the enlightenment, the industrial revolution and the rise of useful knowledge as the main engine of economic (growth).” My rebuttal against the European triumphalism tag that is often pinned on those who argue culture underpins the West’s economic success is that of change. There was a marked change in European culture. In other words, an elite looked at its ways and made a decision to change them with the view to achieving sustainable prosperity. In other words, they gave up their growth-inhibiting inherited values and created new ones. That is a human and universal phenomenon unrelated to race or heritage. And it is a change that any group of human beings can decide to make. Evidence of the universality of this change can be seen in the similar success of other countries or regions of the world who decided to adopt similar principles with varied results. Today, we all know the earth is round-shaped. There was a time when those who thought so were publicly executed for defying dogma. How many more “the earth is flat” fallacious beliefs underpin our actions and approaches to life? Finding out the earth is round instead of flat is not what matters most. What does, is the deliberate questioning of beliefs and dogma with the singular purpose of discovering the truth. That deliberate and systematic curiosity is essentially what the Enlightenment was all about.

“Religious beliefs and metaphysical attitudes condition a society’s willingness to investigate the secrets of nature and alter its physical environment irreversibly.” Put in the African context, our religious beliefs and metaphysical attitudes weigh a great deal on our ability to innovate for economic success. When the Europeans decided to challenge these beliefs, they discovered truths that led to the development of the steam engine, aeroplane, and many more innovations that make us masters of our world today. Unsurprisingly, those who refused to be similarly irreverent are also some of the poorest today. After all, technological innovation, which underpins economic prosperity, is “a consequence of human willingness to investigate, manipulate, and exploit natural phenomena and regularities.” To a great extent, the openness of the west to new and foreign ideas, irrespective of its source, underpins its continued technological leadership. “Vested interests of incumbents protecting the rents generated by status quo techniques and fear of the unknown and novel create strong incentives to resist innovation.” “What changed history was that in Europe, over the long term, the innovators defeated conservatism. This did not happen anywhere else.” Why? “Political fragmentation, coupled with an intellectual and cultural unity, an integrated market for ideas, allowed Europe to benefit from the obvious economies of scale associated with intellectual activity.”

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Finding out the earth is round instead of flat is not what matters most. What does, is the deliberate questioning of beliefs and dogma with the singular purpose of discovering the truth. That deliberate and systematic curiosity is essentially what the Enlightenment was all about

Irreverence is key to progress “The most direct link from culture and beliefs to technology runs through religion.” We, Africans, are a very religious people. We are also a very poor people. No one is suggesting we give up religion or tradition. But we must be ready to question our beliefs and do not seek those answers from the clergy or elders in whose interest it is to jealously guard the advantages or “rents” religion or tradition offers them. Question everything. Question our traditions. Question our culture. Find your own answers. As a guide, you should ask whether a cultural or religious value or norm is backwardlooking or forward-looking. The latter is the one that engenders progress and creates long-lasting prosperity. Be unconventional How do you change a culture? Mokyr proceeds to answer this question by quoting George Bernard Shaw’s Maxim 124 in his “Maxims for Revolutionists”: “The reasonable man adapts himself to the world: the unreasonable one persists in trying to adapt the world to himself. Therefore, all progress depends on the unreasonable man.” You need unreasonable men and women to change a culture towards progress. Thus, it is no coincidence that it is the unreasonable and irreverent that create new wealth. “Dr Raji is chief economist at Macroafricaintel. He was previously an Africa Economist at Standard Chartered Bank, London, UK. (Twitter: @ DrRafiqRaji)”

Nigeria, we need a Marshall plan for the east

our hundred and ninety-two years between the fall of Constantinople and the start of World War II in Europe, there were 273 armed conflicts between national groups in western Europe, an average of almost one war every two years. In the 74 years since World War II ended, there have been a grand total of zero. Just to be clear, my definition of armed conflict here does not include uprisings such as the troubles in Northern Ireland, the Cod Wars (in which just one engineer was killed in three “wars”), or the coups in Portugal. Why has Europe witnessed such an outbreak of peace which goes against their own history? Most of the blame for this lies at the feet of one man. His name was George Catlett Marshall, and he was US Secretary of State from 1947 to 1949, a period during which he introduced the eponymous Marshall Plan to redevelop western Europe, and especially west Germany, with American money. At the end of Hitler’s war, Europe was in chaos, 50 million Europeans were homeless and starving, and it was hard to get around. No one knew what would happen to Germany. Joseph Stalin, the soviet dictator, had a fair idea; he wanted to destroy Germany and turn the whole place into a farm, so it would never be able to again threaten Russia. But at the same time, communists, who bought into Stalin’s ideology, were threatening to take over in some of the ruined countries of Europe. Italy, Greece, and even France. After yet another failed meeting to determine the future of Germany, Marshall, who

coincidentally was the US Army’s Chief of Staff during the war, and had in that capacity, been responsible for the destruction of a huge portion of German infrastructure, decided that the best way to prevent your enemy from ever being able to fight you, was to build him up. To that end, and over opposition from many members of congress, he instructed staffers in the state department to draw up plans for the development of the American, British and French-controlled sectors of Germany. The Brits and the French, despite their own objections and historical animus with the Germans, had no choice but to go along since the war had destroyed their own countries as well, and they were dependent on the Americans to rebuild. The result, after a short period of soviet opposition which included a failed blockade of west Berlin, was that west Germany rose from the ashes of the war and became the industrial powerhouse that it is today. Further, the establishment of the European Economic Community (EEC), the precursor to today’s European Union (EU), followed the pattern of encouraging greater economic integration in Europe. Indeed, the very first supranational post-war European body, the European Coal and Steel Community, was predicated on the fact that by being able to monitor each other’s outputs of coal and steel, members would be able to tell when one member had shifted onto a war footing. This worked so well, that it eventually grew into the EEC, and then became the EU. The result of all this economic integration in

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western Europe was that when in 1990 it was time for reunification of western and eastern Germany, it was on the west’s terms, and not the east. How is this relevant to Nigeria? In 1970, our own war ended, and we declared NVNV (no victor no vanquished). A plan was instituted to rebuild the shattered South-East under Ukpabi Asika, and to his credit, he did his best. However, as with most things Nigerian, our own brand of politics came into play, and we began to selfsabotage. It all began with the ports. Nigeria in the 1960s, had two economic corridors, the Western Economic Corridor (better known as LAKAJI these days), and the Eastern Economic Corridor. By acts of omission and commission, including it must be said, acts of neglect by local leaders starting with the recession of 1981, the Eastern Economic Corridor began to deteriorate. Most federal attention was paid to the LAKAJI corridor which runs from Lagos through Kano, to Jibiya on the border with Niger in Katsina State, while the Eastern corridor, which runs from Port Harcourt, through Enugu, to Maiduguri, was left to go fallow. That was a grave error, which has shown how the law of unintended consequences works. The first unintended consequence of the neglect of the Eastern corridor is the congestion of Lagos’ ports. Those ports – Apapa and Tin Can Island – serve the 1,225 km LAKAJI corridor which encompasses Lagos, Ogun, Oyo, Osun, Kwara, Kogi, Niger, Kaduna,

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CHETA NWANZE Kano, Katsina, and Jigawa – an area with a combined GDP of $119.7 billion in 2010. When compared with Nigeria’s 2010 GDP of $369 billion, this implies that the hobbled and hitherto deprioritised ports of the Eastern Economic Corridor had a GDP of $249.3 billion in 2010, almost twice the size of the LAKAJI corridor, and as a result serves a larger slice of the country’s economy. The second unintended consequence is this; it is not an accident that until the last four years, almost all of Nigeria’s primary security challenges were concentrated along the EEC. Think Niger Delta militancy, the pastoral conflict, the first wave of kidnappings, Maitatsine, Boko Haram. When people do not trade with each other, as we saw in Europe, they end up fighting with each other. And without free access to goods and services, resentment quickly builds, which in turn leads to conflict. For Nigeria to grow and eventually thrive, we need to, as a matter of urgency, begin to place emphasis on the Eastern Economic Corridor. The country needs it desperately. Happy Independence Day. Nwanze is Lead Partner and Head of Research at SBM Intelligence

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Attempts to stifle free speech

e believe, like Nobel Laureate, Wo l e S o y i n ka that th e lu d ic ro u s t rea s o n charges preferred against Omoyele Sowore shows the Buhari administration has attained an “unprecedented level of paranoia and is desperately trying to silent dissent, free speech and association. It is in the nature of democratic governance that citizens hold dissenting views and opinions and are free to express them, including those that are deemed offensive to the president. Recently, just a day before the expiration of the 45-day detention order granted it by the federal high court, Abuja, the federal government filed seven counts charges of treasonable felony and money laundering against the publisher of Sahara Reporters. The treasonable felony and money laundering charges against Sowore ranges from staging “a revolution campaign on September 5, 2019 aimed at removing the president,” causing insult, enmity, hatred and ill will on the person of the president, to transferring foreign currency from his New York account to Nigeria. Like Soyinka avers, we do not think even the ministry of justice

itself believe in those improbable charges and as a civil society group, the Socio-Economic Rights and Accountability Project (SERAP) said, the charges against Sowore – and several other similar trumped-up cases going on in several states – are persecution and not prosecution and makes a hideous mockery of Nigeria’s criminal justice system, rule of law, freedom of expression and media freedom. It appears some things do not change in Nigeria. We recall that in 1984, at the height of the economic malaise, scarcity of essential commodities and hunger pervading the country, the military regime of General Buhari rolled out a series of decrees and laws to curtail the freedom of expression of Nigerians. The infamous decree 4 prohibited journalists from reporting anything that could embarrass the regime, even if it was true. It did not take long before two journalists fell afoul of the law and were consequently locked up. In 2015, then candidate Buhari promised to operate differently saying he was now a converted democrat. But since coming to power in 2015, his government has become desperate to curtail free speech and trying in various guises to resurrect the infamous decree 4. It began early in the life of the administration with the anti-social

media bill sponsored by Bala Ibn Na’Allah (APC Kebbi South), which seeks to “criminalise anyone disseminating via text message, Twitter, WhatsApp, or any other form of social media an ‘abusive statement’ intending to set the public against any person and group of persons, an institution of government or such other bodies established by law”. When that bid failed, another phony bill seeking to regulate Non-Governmental Organisations (NGOs) came up. The bill, sponsored by Umar Buba Jibril, (APC Kogi West), sought for the establishment of yet another federal agency to supervise, coordinate and monitor NGOs with sweeping powers to regulate their conduct and grant a license for operation renewable every two years. Without such license, no NGO can operate and the agency could refuse renewal for no reason. What is more, only the license of the agency (not registration with the Corporate Affairs Commission) confers legal personality and perpetual succession on NGOs. When these efforts failed, the government, in 2017, started railing against what they call “hate speech”, with Yemi Osinbajo, Nigeria’s vice president likening it to terrorism and vowing the government will no longer tolerate it. Although Osin-

bajo never defined what exactly he or the government meant by hate speech, the army provided a precise definition when it announced through its director of defence information, that it was creating “strategic media centres to monitor social media in order to sieve and react to all anti-government, anti-military, and anti-security propaganda.” With this, the government could conveniently lump any statement or criticism by group or persons which caused it consternation, into its amorphous definition of hate speech and promptly clamp down on such groups or persons. Away from the centre, many state governors, most prominently Kaduna state, have been clamping down on free speech on social media. As we write, many Nigerians are in jail undergoing trials and some have simply disappeared without trace for criticising public officials. Nigerians must not allow the government to turn the country into a police state. If there is one thing history has taught us in Nigeria, it is that we must never allow the government to draw the borders of free speech. Nigeria is a democracy and not a theocracy or monarchy. Criticisms, dissent and free speech comes with it. As Harry Truman will say, you can’t stand the heat, get out of the kitchen.

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Tuesday 01 October 2019

BUSINESS DAY

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Nigerian oil in the waves of an unsteady global industry PASCAL UMEKWE

ince the discovery of oil in Nigeria, the nation’s oil industry has been dominated by major international oil companies such as Shell, Chevron and Exxon. These companies provided the huge capital required to unlock Nigeria’s oil resources. In many ways, this has turned out quite well for Nigeria because these multinationals were able to bring to bear their wide international networks and technological capabilities to deliver on world class projects within Nigeria. On the other hand, these were companies that by their very structure and diversity of assets are able to deploy capital quite easily across their portfolio essentially prioritised based on “the best player plays” principle; projects with the highest margins get attention and funding. In the last decade, the oil and gas industry has experienced seismic shifts brought about by tight oil development in the US. This has led to major changes for Nigeria including movement of development capital away from projects in Nigeria to projects in tight oil basins primarily in the US. What has happened to Nigeria’s oil industry in the recent past? In the last 25 years, on average, one in three barrels produced in Nigeria has been shipped to the US (Energy Information Administration, 2019). And over its production history, Nigerian crude has enjoyed the status of a well-known sweet crude,

rich in valuable crude oil product components, enabling this crude to command a price premium. In the last decade, tight oil production from the US has edged out much of the oil produced in Nigeria that was typically exported to the US, forcing crude producers in Nigeria to search for other markets besides the US. This level of displacement of Nigerian crude was very effective because the tight oil revolution in the US over the last decade has produced crude oil of similar quality. Another event that has reduced the competitiveness of Nigeria’s crude oil in the global market is the re-introduction of US crude into the global oil market after the lifting of the US crude oil export embargo in 2016. As a result, the US tight oil revolution does not just reduce export of Nigeria’s crude to the US, but causes Nigeria’s light sweet crude to compete with US crude for what new markets Nigeria struggles to find. In this fierce struggle for ready crude oil markets, the bargaining position of sellers will be helped or hampered by the availability of the required ships as well as commercially reasonable shipping insurance terms among other factors. The multinationals and their crude trading arms, ultimately will successfully sell crude exports from Nigeria, albeit at some price discount, which is ultimately reflected in lower royalties, production taxes and corporate income tax revenue to the federal government. Additional challenge facing crude production from Nigeria is the need to continue to attract capital for more exploration and development of fields. Continuous technological and efficiency improvements in tight

oil production that reduce development cost in the US erode some of the competitiveness of conventional oil production in Nigeria. For example, lower cost of production in the US tight oil basins such as the Permian continue to attract attention of multinational companies away from other higher cost, longer cycle projects outside the US. This change in focus to the US is seen in the level of divestiture of non-US and in some cases non-shale US assets by US companies, and increased consolidation of assets within the US tight oil basins. Some US operators have been able to drive down the cost of production to levels that were previously the exclusive privilege of low-cost OPEC producers in the Middle East or in Nigeria. Some operators place breakeven costs for their operations in the mid$20 per barrel range while others still report levels as high as the mid-$60/ bbl. range (Oil and Gas Journal, 2019). The way forward A few factors still keep Nigeria and most of OPEC producers competitive and as viable sources of future production. The key attraction of tight oil production is the speed of development, the rich ecosystem of technical skills teeming in the tight oil basins, which allow for rapid efficiency improvements and knowledge transfer, quick turn-around times and pay-out for wells. Granted that these positives exist, tight oil still remains quite capital intensive and not all companies own premium acreage in the richest basins like the Permian, nor the scale to take advantage of such acreage positions. Additionally, margins

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With consistent efforts towards cost competitiveness of the Nigerian barrel, Nigeria will be closer to shielding its industry from the price swings that edge out capital investment within Nigeria’s oil industry

Note: the rest of this article continues in the online edition of Business Day @https://businessday.ng Dr Umekwue writes from the US and he can be reached on pascalonline7@gmail.com

Addressing the primary care workload crises in Nigeria

e are facing currently, a primary healthcare crisis in Nigeria and speedy intervention is needed to enhance access to health care for our ever-growing population. The latest data from the World Health Organization (WHO) reveals that Nigeria physician-topatient ratio is 4 doctors per 10,000 patients and patients often wait hours to be seen. In the US the ratio is 26 doctors per 10,000 people and 28 in the UK. Nigeria repeatedly falls short on its 2001 commitment to spend at least 15 percent of its budget on health. Last year, just 3.9 percent was allocated. The Nigerian Medical Association advised there are only 40,000 doctors in an estimated population of 196 million. A WHO report by Uta Lehmann and David Sanders from the School of Public Health University of the Western Cape, says, “The use of community health workers has been identified as one strategy to address the growing shortage of health workers, particularly in low-income countries. Using community members to render certain basic health services to the communities they come from is a concept that has been around for at least 50 years. “There have been innumerable experiences throughout the world with programmes ranging from large scale national programmes to small scale community-based initiatives.” (Evidence and Information for Policy, Department of Human Resources for Health Geneva, January 2007). Community health workers have the potential to enhance primary care access and quality, but remain under-utilised in Nigeria. It is common knowledge that we do not have trained physician associates or assistants in primary care facilities to support medical doctors in providing primary care services. Rather, what we have in

some communities are quacks, people parading themselves as medical doctors with no medical qualification whatsoever. But I don’t see any reason why we should not welcome the idea of training physician associates or assistants to fill in the gap for medical staff shortage, when other developing and developed countries that have better healthcare systems do have them. In Nigeria, we do not have enough doctors per population or geographical area, this is the time to train more community healthcare workers as this would help in the much-needed awareness creation and community-based interventions for managing long-term conditions, reducing childhood illnesses due to lack of immunisation. Trained birth attendants will also help reduce maternal mortality and community nursing care will reduce infant mortality. In a typical medical centre in the UK for instance, healthcare assistants, advanced nurse practitioners, health trainers, clinical pharmacists or prescribers, work alongside doctors to provide patient centred care. This helps to reduce the work load on the doctors as these other clinicians and allied health workers have enough training and experience to manage long-term conditions and participate in triage system. In the UK, a lot of research has been done and there are calls to increase the health work force in the National Health Service (NHS) through the utilisation of community-based lay workers. In Brazil, community health workers receive basic training in disease identification and monitoring, immunisation, screening and health promotion. They support patients with medication adherence and chronic disease monitoring and liaise proactively with doctors and practice nurses. Community healthcare workforce could be

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ADAKU EFURIBE

utilised effectively in emergency care or first aid. In most public and private settings in Nigeria, there are no ambulance or paramedic services; having well trained community first aid responders would go a long way to save lives in times of emergency for example; cardiac arrest, collapse, and respiratory distress. Having a health unit manned by well-trained first aid responders in all public places like markets, motor parks etc is highly essential. Healthcare provision anywhere in the world is capital intensive but we can start from the basics; we can reduce the burden or costs in secondary healthcare provision especially in our public hospitals if we lay more emphasis on health promotion, patient health education and encourage people to engage in healthy living and self-care. Also, we could reduce the constant brain drain by retaining our health professional’s post-graduation. The federal government invests a lot of funds in government owned universities to train medical/healthcare professionals, only for them to migrate after graduation to practice in other countries. If we are going to invest funds in medical/healthcare education for our doctors, pharmacists, nurses, optometrists etc. we should create jobs as well, so the Nigerian populace can benefit from their expertise. Integrated healthcare practice at all levels is an efficient way of providing patient centred care where every member of the healthcare team contributes their own quota. Community healthcare workers are well placed to offer advice on healthy living and self-care in the language people of a specific demographic area would understand. Hypertension, chronic kidney disease, Type 2 diabetes mellitus, malaria, HIV/AIDs are among the diseases that could be prevented or well-managed through patient education and

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could be razor-thin, especially as WTI prices continue to hover around the $50/bbl. range. This non-uniform lowering production cost advantage is evident in the wide range of breakeven cost reported by producers. This implies that, while rapid execution allows independents to ride the waves of high price swings, unless prices stay consistently above $65 to $75/bbl., a long-term strategy, often preferred by stable multinationals will continue to require conventional resources located in commercially stable locales. And for small independents the quick decline rates in tight oil will continue to keep most in need of cash to maintain operations, insure constant edgy attention to the management of volatile times, including the tight-rope walk of balancing the benefits of price-hedging and the inefficiencies and associated value erosion from increasing financial operations. Additionally, private equity firms, and banks also see the level of capital required for tight oil development and are insisting on more discipline from operators. While in the past, awash with debt capital from an excited financial sector during high oil price periods, companies could pursue aggressive development in the tight oil basins, currently, there is ever growing push to improve efficiencies, drive down cost and keep debt levels low.

lifestyle modification. The role of health education cannot be overemphasised. For instance, there is still some form of stigma around epilepsy in some areas of the country; where people who are epileptic are believed to be possessed by some sort of evil spirits. In an unfortunate event of epileptic fits in public places, patients are not well cared for and objects like spoon etc. are inserted into their mouths with the aim to keep the airways open. This could be a choking hazard and has made recovery time worse for some patient. Community healthcare workers could perfectly fill that gap of providing basic health education and public health enlightenment. Addressing the primary healthcare crises in Nigeria is no mean feat, but we need to look at the issue holistically, it involves a multifaceted, public/private partnership, but the Government has to lead on this through enacting relevant laws and provision of training programs, monitoring and evaluation etc. I strongly believe a systematic integration of community health workers at scale could be an effective and a rapidly implementable approach to the current primary care workload crisis in Nigeria. “Without health, life is not life; it is only a state of languor and suffering,” François Rabelais

Efuribe is a clinical pharmacist & UN SDGs advocate, with expertise in medicines management and integrated healthcare

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Tuesday 01 October 2019

BUSINESS DAY

COMPANIES & MARKETS

COMPANY NEWS ANALYSIS INSIGHT

BANKING

Banks Non-Performing Loan Hit 13-Quarter Low …NPL ratio lowest since Q4 2015 SEGUN ADAMS

enders’ bad loans slow e d for the thirdstraight quarter to the lowest level since Nigeria’s recession in 2016 following a rebound in brent price in the first six months of 2019 and despite a slowdown in the domestic economy in the second quarter. Non-performing loan (NPL) declined 14 percent to N1.44 trillion in the second quarter compared to a 6 percent drop in the first three months of the year, analysis on selected banking sector data by the National Bureau of Statistics (NBS) shows. Year-on-Year NPL fell 25.62 percent. At current level, the NPL is some 11 percent shy of N1.29 trillion in noted the first quarter of 2016 while NPL ratio at 10.36 percent is the least since the fourth quarter of 2015. A loan is non-performing if there are zero repayments of interest or principal after a specific period, usually 90 days, while the NPL ratio is the portion of a lenders total loan book that is nonperforming.

Despite the sluggish pace of the economy which slowed to 1.94 percent in the quarter, lenders’ asset quality improved as oil remained largely above $60 per barrel in the period. “The behaviour of NPLs is directed by oil price movement. When oil price rallies, the economy improves, and this would enable oil corporates to meet their debt obligations” said Emmanuel Noko, Chief Economist at Enugu-based M&C Con-

sulting Limited. For the first half of 2019, Zenith Bank reported an NPL ratio of 5.3 percent, First Bank said its NPL ratio was 14.5 percent, United Bank for Africa at 5.62 percent, Guaranty Trust Bank at 6.8 percent while Access bank noted 6.4 percent. Meanwhile, the Monetary Policy Committee (MPC) at its last meeting noted “the improved performance and resilience of the banking sector, evidenced

by the continued moderation in the ratio of NonPerforming Loans (NPLs) from 11.2 to 9.4 per cent in 5 May and August 2019, respectively.” The Committee, however, called on the Management of the Bank (CBN) to drive the ratio below the prudential benchmark of 5 percent. The progress so far seen might be reversed if lenders who now have to give out as loan at least 60 percent

of all customer deposits do not manage the process and create systems to mitigate risks, experts have voiced. By sector, NPL decline was highest in Mining and Quarrying (-99.8%), water supply; sewerage, waste management and remediation activities (-95.9%) and Finance and Insurance (-84.19). On the other hand, NPL surged 137 percent in Government, and 34.83 percent in Power and Energy.

Notable sectors where NPL fell include Oil and Gas, a decline of 25.05 percent, NPL in Agriculture dipped 4.53 percent, Manufacturing dropped by 18.39 percent, Real Estate by 55.9 percent, and Education by 23.92 percent. Oil sector remained the sector with the biggest NPL by value; bad loans in the sector stood at 577.49 bn, 40 percent of total NPL. Gross loan in the quarter dropped marginally to N15.48 trillion.

MARKETS

Access Bank, Wapco, MTNN shine as Premium Board stands out on Year-to-Date SEGUN ADAMS

hen virtually all measures tracking s t o c k p e rformance by sector, size and other criteria are down, the premium board index, gauge for sector leaders, has shown resilience thanks to three stocks-Access Bank, Wapco and MTN. The premium board index is up 4.9 percent on year’s return, as at the close of trading on Friday while the main equity gauge returned a loss of 11.95 percent. This means investors

whose portfolio track the performance of the elite group of issuers that meet the Exchange’s most stringent corporate governance and listing standards would have a different story from many who have had their hands burnt in the bearish market. Leading the elite, MTN Nigeria, which listed in May, has gained 37.37 percent to N136 per share. L a f a r g e Wa p c o h a s gained 28.51 percent yearlong to N28.51 as at Friday becoming the second topgainer on the premium index.

Access Bank, a tier-one lender, has also been an investors’ darling with 12.5 percent gain till date. The five other stocks on the index include Dangote Cement, First Bank Holding of Nigeria, Seplat Petroleum, United Bank for Africa and Zenith Bank, are down so far in the year. However, analysts say these big stocks which have been affected by weak investor sentiments make for a good buy as they remain fundamentally sound and are attractively priced at current levels. The performance of

the premium board index means only one of 13 active indices, with a record from the first trading session of the year till date, has advanced. Pension index is down 18.03 percent, Industrial goods index is down by 13.28 percent, Banking index has plunged 15.1 percent, and Consumer goods index shows a negative return of 25.17 percent. Also, the index that tracks the biggest 30 listed companies has tanked 19.83 percent, Oil and Gas index is returning a loss of 21.08 percent, Insurance index

is 9.94 percent lower than it opened in January, while Corporate Governance index and Lotus index are down 19.5 percent and 20.9 percent respectively. The other two index which is also down track select value and growth stocks. The broad downturn m i g h t m e a n Ni g e r i a n stocks are poised to extend a streak of losses seen in the equity market on election years since 2011. Analysts say investors should maintain a longter m view as Niger ian stocks remain extremely

cheap compared to peers in frontier and emerging markets in which reflects low confidence about the growth potentials of Africa’s biggest economy struggling to recover from a recent recession. Information from Bloomberg show that the average investor is willing to pay seven times for each naira earnings to buy Nigerian stocks lower than Ghana (15.1x); South Africa (15.1x), Kenya (11x), Egypt ( 11x), even much below frontier and emerging markets average of 9.2x and 13.6x.

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

Tuesday 01 October 2019

COMPANIES&MARKETS

BUSINESS DAY

Business Event

BANKING

SunTrust Bank targets unbanked, launches outlet in Lagos market …offers 7.77% saving rates, maintenance charge-free account ENDURANCE OKAFOR

unTrust Bank Nigeria Ltd, a regional commercial bank has inaugurated a new branch in Idumota Market aimed at providing access to the unbanked population through credit facility. The strategic location of the new branch is as a result of the lender’s quest to provide financial services to the Micro, Small & Medium Scale Enterprises (MSMEs). According to Ayo Babatunde, MD/ CEO, SunTrust Bank, the lender believes Idumota is the centre of Lagos and such it decided was appropriate for the bank to have its presence at the location. “The focus of the bank is actually on MSMEs which means we start from micro to small and medium scale enterprises, we believe that is the sector that is going to galvanize the economy,” Babatunde told BusinessDay on

the sidelines of the event. As of Friday, September 27, 2019, the bank maintained brick-and-mortar branches and automated teller machines in Lagos, Abuja, Uyo and Port-Harcourt. 90 percent of the bank’s customers transact business on digital platforms, without visiting any physical branch. In his remarks, the CEO added that “today people say banking is almost saturated in Nigeria, but we believe there are smarter and better ways of doing things that is why we decided to take the technology approach to banking. With a headquarter in Lagos, SunTrust Bank is the “first full-fledged technology bank” and the first bank to receive a regional banking license from the Central Bank of Nigeria (CBN) since 2001. “We are focusing on the market men and women because they are the most excluded from the financial net and the MSMEs have some

needs that they cannot get from other banks but we are ready to let our customers bank on their term. Whatever they need we are going to provide it for them there are some of them,” Omotayo Idowu, Business Development Manage, SunTrust Bank said. According to the commercial bank, it has a product; Smart 247 account which offers doubles interest on savings with no account maintenance charges. This is as a result of the bank’s structure which is set up to completely impact lives, the bank revealed. “What this account allows you to do is that it is an account that operates as a saving account and at the same time like a current account. In normal current accounts, you will get withdrawal charges, which you know as the maintenance charge but in the Smart 247 account, we have waved that for the customers,” Babatunde said.

ENERGY

Eaton advocates microgrid adoption for reliable power, better impact on environment KELECHI EWUZIE

ower management company, Eaton has called for microgrid adoption as a solution to meeting energy demands in Nigeria more sustainably. Eaton also restated the benefits of microgrid as a way to eliminate costs associated with unexpected power loss; ensure continuous power supply, and facilitate renewable power generation. Temitayo Awojole, country manager, Eaton Nigeria says the utility landscape in Nigeria is constantly evolving, thus requiring innovative and sustainable

power management options. Awojole opines that with an estimated 4,600 power outage hours yearly, Nigerians are heavily reliant on generators, which are very expensive and not ecological. Speaking during a session at the Power Nigeria conference in Lagos, Awojole says Microgrid is the most viable solution. “Investment in microgrid solutions will be more cost effective overtime, with a projected cost savings of over 40 percent and a quick return on investment,” he said. “The United Nations SDG’s advocate sustainable consumption and production pat-

terns. It is possible for energy to be utilised responsibly. Microgrid adoption will reduce CO2 emission and is better for the environment,” he added. At the event, Eaton showcased its capabilities, highlighting the company’s Wadeville Microgrid facility in South Africa, and its energy storage project in Amsterdam, Netherlands. The company stated that custom solutionscanbedevelopedtomeet industry or community needs, and confirmed ongoing plans to provide microgrid support to the Food and Beverage industry and hospitality industry in Nigeria. Continue online @www. businessday.ng

L-R: Mike Oseh, deputy secretary general, Nigerian Gas Association (NGA); Chichi Emenike, financial secretary, NGA; Doyin Akinyanju, managing director, IBILE Oil and Gas Corporation; Olalere Odusote, commissioner for energy and mineral resources, Lagos State; Audrey Joe-Ezigbo, president, NGA, and Misan Jekhine, chairman, conference and events committee, NGA, during a courtesy visit to the honourable commissioner in Lagos.

L-R: Olukemi Olayinka, regional sales director, Lagos Mainland, Access Bank; Abosede Alimi, director, strategy, funding and stakeholder’s engagement, Lagos State Employment Trust Fund (LSETF); Valentine Buraimoh, chairman, Amuwo-Odofin Local Government Area; Popoola Ajayi, member, board of trustees, Lagos State Employment Trust Fund (LSETF), and Bimpe Gisanrin, team lead, women banking, Access Bank, during the LSETF W-Initiative Grassroot Stakeholder’s Engagement in Amuwo Odofin local government in Lagos.

MARITIME

Roland Lloyds Agencies pushes to close gender gap in maritime industry MODESTUS ANAESORONYE

aritime consultant and experts, Roland Lloyds Agencies Limited is pushing to close the gender gap and increase the presence and relevance of women in the maritime industry. They believe that there are a lot of roles that women can play in helping the industry unleash its potentials and contribute more to the economy. Roland Lloyd’s Agencies Limited is a multi-disciplined, independent company providing marine/air cargo superintending, cargo surveying, and calibration surveying of tankers, loss recoveries/claims investigations, consultancy and expert witness services. To achieve this objective, Roland Lloyd’s commemo-

rated the 2019 World Maritime Day in Lagos with high profile conversation around women empowerment and job opportunities for ladies in the maritime business. Roland Emorwodia, executive director, Roland Lloyds Agencies Ltd said that statistics all over the world show that maritime is a male dominated industry, like the ICT. Emorwodia said what his agency want to achieve with this programme, is to bring awareness that there is a sector called maritime, where we have as low as 3 percent women. So, what we have done with this programme is to bring to limelight that women can be sea farers, maritime consultants and surveyors, he said. World Maritime Day is an international Day observed by the United Nations, and

set aside for various maritime stakeholders and individuals in the society towards providing opportunities to raise awareness on topical issues in the maritime industry. The theme of the campaign for 2019 is “Empowering Women in the Maritime Community”. This provides an opportunity to raise awareness on the importance of gender equality, in line with the United Nation’s Sustainable Development Goals (SDG 5) and highlight the important – yet under-utilized – contribution of women within the maritime sector. In attendance were students of Epsilon College, Omojowo Programming Academy, individuals from various spheres of life, stakeholders and dignitaries in the society. Continue online @www. businessday.ng

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L-R: Adetola Adegbayi, executive director, Leadway Assurance Company Ltd; Prince Cookey, Publisher/CEO, Business Journal; Tope Smart, chairman of the occasion/chairman, Nigerian Insurers Association; Henry Nkemadu, representative of executive vice chairman, Nigerian Communication Commission, and Aituas Kola Oladejo, co-founder, Tech Innovation Academy, during the Business Journal second annual lecture and awards on the Digital Nigeria the Path to Sustainable Economic Growth in Lagos on Friday (20/08/2019)

L-R: Osita Oparaugo, founder/CEO, Ogelle; Bemimana Ramadhan, CEO, Bamenya Series, and Ngarukiye Ibrahim, business manager, Bamenya Series, after Ogelle.com and Bamenya Series Group reached content creation and sharing agreement.

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Tuesday 01 October 2019

BUSINESS DAY

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Tuesday 01 October 2019

BUSINESS DAY

Media business At 59, it’s not all despair as Nigeria’s potentials call for celebration - Analysts Daniel Obi

arking of N i g e r i a’s Independence today from Britain after 59 years offers a time of reflection. To some people, Nigeria has no reason to celebrate as despair and despondency stack on the faces of Nigerians after several leaders have taken Nigeria where it is today. But some other analysts believe that there are still reasons to celebrate. The civil war of 19671970 was principally fought, among other reasons, to keep Nigeria as one. This is because Nigeria will be significant globally if the country maintains the combination of resources and population. Today, Nigeria, though experiencing various socioeconomic and political challenges is a big market in Africa which ia hard to ignore by investors. Nigeria has been recording increase in FDIs principally because of its large market. “For instance, in 2018, the total capital inflows to the country stood at

$19.07bn out of which FDI accounted for $7.78bn. Furthermore, total capital flows to Nigeria, from January to May 2019 stood at $14.2bn of which FDI accounted for $2.87bn, representing a 20.18 per cent of the total amount” according to CBN. Akonte Ekine, CEO of Absolute PR said things may not look rosy today but Nigerians have to look deeper to appreciate the potentials, unity and togetherness in the country. Though there are socio-economic and political difficulties, these could have

been worse if Nigeria is not together as a nation, he said John Ehiguese, CEO of MediaCraft says Nigeria’s potentials cannot be overlooked globally. “When you look at Nigeria’s potentials both human and materials there are reasons to celebrate the country”. He however said that these potentials must be turned into reality. In spite of challenges of insecurity and poor infrastructure , Nigerians must celebrate existence of life, says Tunde Oyeyode, a social commentator. He also

commended majority of Nigerian youth for taking to entrepreneurship and farming instead of tilting to white collar jobs. He asked the government to provide the right environment to encourage this development towards stimulating the economy. As Nigeria celebrates 59 years of Independence, those who spoke to BusinessDay maintained that the central government has a big responsibility to ensure the realisation of the country’s potentials and total peace. “To ensure peace and unity in the country, it is important that appointments and construction of projects are made without parochial interest, favouring any ethnic group”, an analyst said. Speaking recently at a lecture in Minna, former Head of State, Abdulsalami Abubakar also challenged Nigerians across all ethnic and political divides “to raise the bar of peace and always walk the long road to peace in the interest of national unity and development.” The price of greatness of Nigeria is the responsibility of the government but more importantly of all Nigerians.

Online advertising: Digital measurement a challenge to marketers Daniel Obi

espite the projected growth in online advertising in 2020, digital measurement will still remain a challenge for marketers, according to Kantar in its latest annual state of marketing study entitled Getting Media Right: Marketing in Motion. The report said blind spots such as ‘walled gardens’ will continue to impact the ability to understand cross-channel performance. This leaves many advertisers in the dark about the performance of their brand across channels. CMOs are always frustrated about spending so much on adverts that nobody sees and therefore does not create the necessary impact. According to the report, 2020 is set to see a significant rise in digital ad spend, as marketers look to optimise their media mix. 84% of marketers plan to increase their investment in online video

advertising over the next 12 months, while 70% plan to increase spend on social media networks and 63% plan to increase spend on podcasts. This is in sharp contrast to print media, where 70% of marketers say they will decrease spend in magazines, while 66% will reduce their investment in newspaper advertising. “While the rapid growth in digital ad spend comes as no surprise, this new research indicates that marketers still have a long way to go to when it comes to cross-channel measurement and proving ROI,” said Jane Ostler, Global Head of Media Effectiveness, Kantar’s Media Domain said in a statement. “The next 12 months will see huge changes for the industry, with the rise of newer channels, such as podcasts and advanced TV, and the move away from cookies set to transform the way advertisers target and measure campaigns. Marketers should aim for the best of both worlds: they www.businessday.ng

need to create a framework to monitor impact on business and brand metrics. That means harmonising measurement tools, building an infrastructure that enables measurement across the diverse marketing mix, and creating meaningful insights to improve performance

across all channels.” Now in its sixth year, Getting Media Right examines the current state of marketing in a fast-moving connected world, and is based on in-depth survey feedback from nearly 500 senior marketers spanning advertiser brands, media publishers and agencies globally.

Quest for business inspires online media platforms to go for Advert vetting Daniel Obi

esire for longstanding agencyclient business relationship has compelled many online media platforms that were hitherto not approaching Advertising Practitioners Council of Nigeria, APCON for advert vetting to reconsider their stand. This development is against the background of threats by APCON management led by Ijedi Iyoha as acting CEO to punish recalcitrant online platforms that are not vetting Ads before publication and equally penalise companies whose Ads appear on such media platforms without vetting. The purpose of pre-exposure Ad approval by Advertising Standard Panel of APCON is to prevent exposure to the public of advertisement which may misinform, mislead or offend the public, disparage or malign com-

Panasonic empowers Nigerian technicians, engineers on repairs

anasonic Middle East & Africa Division along with its Nigeria partner Panaserv Nigeria Limited, promoters of the Panasonic brand of electronics in Nigeria has organized a special training programme in Lagos and Enugu for its key technical staff, channel partners and freelance technicians and engineers on Air conditioners installation and repairs The training, which took place recently in Lagos and Enugu respectively was fa-

L-R: Dinesh Bhambhani, branch manager, Panaserv Nigeria Limited; PremSankar Vijayan, senior executive/ Technical Engineer, Panasonic Middle East; Olalekan Olanrewaju, a participant, and Mohd Fadhi Bin Aziz, senior executive/Technical Engineer, Panasonic, Appliances & Air conditioning Malaysia, during the Panasonic Aircon Technical Seminar held in Lagos on recently. https://www.facebook.com/businessdayng

petitors or provoke unwholesome consequences such as violence. Ijedi told BusinessDay that many online operators may not be aware of Ad vetting and with sensitisation on the importance and process; many of them are turning their clients’ ads for vetting in order to remain good before the regulatory body and their clients as they don’t want their clients’ reputation to be questioned. She said the council does not require a special code to regulate online adverts because the APCON law mandates the council to regulate all adverts. According to her, APCON is putting human face to regulation including advert vetting in order to encourage business operations. Meanwhile, the industry is still waiting for the re-constitution of APCON council. Sources said government may soon reconstitute the council following consistent push by the industry and again government has realised that it is long overdue.

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cilitated by delegates and engineers from Panasonic Japan, Malaysia Factory & UAE as major resource persons in conjunction with the best of the company’s core technical staff in all the Panaserv service centres located in Lagos, Abuja, Kano, Port Harcourt and Enugu. Speaking on the rationale behind the training, one of the two Chief Trainers from Panasonic, Premsankar Vijayan stated in a statement that delivering this skill enhancement for all technical partners is an activity that is ingrained in the culture of the organization noting that the company would continue to empower more technicians with requisite skills. Vijayan explained that “these training sessions offer all participants the opportunity to update their skills in residential air conditioner installation and the use of ultra-modern tools for accurate diagnoses and repairs of air conditioners. This is why among the equipment being deployed for practical demonstrations include the latest models of gas leakage detectors, digital temperature thermometers, and vacuum machines, automated gas refilling machines, portable welding machines, clamp meters and several others.”

Tuesday 01 October 2019

BUSINESS DAY

ADVERTISING Lagos formal retail market expands with entry of FoodCo Daniel Obi

oodCo Nigeria Limited, a diversified consumer goods company with interests in retail, quick service restaurants, manufacturing and entertainment, plans to extend its footprints into Lagos with the opening of its first outlet in Lekki in October. FoodCo currently operates the largest supermarket chain in South-West Nigeria, outside Lagos and it is ranked among the Top 10 supermarket brands in the country by National Consumer Brands, according to a statement. Speaking on the new store, Ade Sun-Basorun, Chief Executive Officer Designate of the company, in the statement said that the decision to extend to Lagos was taken in response to the yearnings of Lagos consumers for convenience, premium, shopping and entertainment experience at affordable price. While revealing the theme of the Lagos outlet launch as “Lagos Life, Ibadan Price, he stated that the Lekki outlet will continue FoodCo’s rich tradition of providing a modern shopping experience combining excellent

customer service, top quality products, continuous innovation and affordable pricing to meet the lifestyle needs of the contemporary shopper. According to him, the Lekki outlet will provide an opportunity for Lagosians to savour FoodCo’s unique proposition which thrives on affordability for premium experience. He said: “The new FoodCo Lekki outlet marks the next phase in our evolution as we bring our model lifestyle malls incorporating a modern shopping centre, restaurant and premium entertainment to customers in Lekki, Lagos. In over 37 years of existence, our customers have come

to trust the FoodCo brand as a reliable neighbourhood partner whether it is in satisfying their grocery and other consumer retail needs or as a responsible stakeholder invested in the growth of our host communities as well as forging meaningful relationships with suppliers and other business partners. “As part of activities to mark the opening of the Lekki outlet, FoodCo will be giving out free vouchers every hour during opening periods from October 12-13. We would be offering tons of free product samples for foods, toiletries. There will be incredible deals, music and fun atmosphere for visitors”, he added.

- Targets 14,000 students in 2019

Don’t be ‘Me –Too’ brand: Be disruptive Mike Umogun

Beer Sectoral Group of MAN tackles underage drinking he Beer Sectoral Group (BSG) of the Manufacturers Association of Nigeria (MAN) in collaboration with the Collingwood Learning Incorporated and Thespian Theatre has launched the SMASHED program. Endorsed by the Federal Ministry of Health and supported by local health and education authorities in the country, the program is aimed at breaking the culture of underage drinking and reducing alcohol-related harm among Nigerian youths. A global theatre-in-education program initiated by Collingwood Learning Incorporated in the United Kingdom, SMASHED has engaged over half a million young persons in 20 countries of the world, since its inception in 2004. It involves the delivery of key learning on the dangers of underage drinking and alcohol-related harm to secondary school students, using drama presentations, while engaging participants in a motivational learning environment and equipping them with the facts, skills and confidence to make responsible choices and de-

BD Brand Talk

velop responsible attitudes in health-related matters. In his remarks during the launch recently, the BSG Chairman, Jordi Borut Bel stated ‘we are delighted to support the adoption of the SMASHED underage drinking program as it strengthens activities that are currently being undertaken by individual member companies to ensure that our products are not sold to or consumed by persons under the age of eighteen years”. Borut Bel noted that the project, which commenced in May in Edo State, would move on to Anambra and Enugu States in Septem-

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ber and October, covering over sixty public and private schools and reaching over 14,000 students; adding that “the expectation of the BSG is that the program will be scaled-up to involve at least six additional States in Nigeria by 2020 with plans for wider coverage in the coming years”. In her comments, Ayo Jaiyesinmi, CEO of Thespian Theatre assured “we will continue to partner with the BSG and local health and education authorities in ensuring that the program addresses issues related with underage drinking among Nigerian youths’

eing different is scary. In marketing, trying something different is scary. Nobody wants to be the marketer that messes up a multimillion-dollar brand. It’s easier to play safe, relying on what has worked before or for others. That must be why we have often heard from clients that there is a certain way to advertise in their category—for example, TV ads for men’s razors must start with a 10-second story, continue with a 15-second product demonstration showing the cutting edge deplored , and end with a 5-second joke. “This is how we must advertise in order to succeed,” they say but they seem to forget that the consumers have exposed to literally thousands of such advertisements and trigger to purchase is lost and many more millions of naira spent without the desired result. The users should be allowed to help co-create a good story to ensure what is aired is in sync with their reality and world. Brand Michael Jackson became popular in the 1980s and 1990s because he dared to be different, Michael Jackson it was

that turned musical videos from the drab affairs they were to a story telling affair that made people grabbed the edge of their chair and watch with passion . No surprise that Thriller won over half a dozen grammies. Michael’s team led by the legendary Quincy Jones knew and used the power of storytelling maximum effect and the world has followed suit. We are waiting for the artist that would take us to the next level Coming nearer home another Michael Power became a household name in Nigeria because Diageo dared to be Different and Disruptive as a Brand the way they told the Michael Power story by creating an African James Bond starring him in mini adventures on radio and television of about three to five minutes in length place Michael Power in various action points that made use his resourcefulness do good and create value for the brand. The Critical Assignment series became an instant hit across the continent. The two examples above show marketing communication at two extremes and both working and getting the job done. According to Junaid Abidemi , Account Director @ Kantar Nigeria in a recent media interview reminded us that simple messages get the job done but I dare add

long and interesting stories do work too. Try something new and innovative and consumers would vote on your side. Findings and studies by Kantar indicate that the Michael Power campaign worked. Diageo led the African market in its category by 50% in 2000. Brand recognition reach 90% and volume growth reach 50% in some markets in Africa. Diageo sales doubled in 2003 of schedule two ahead and Cleveland Mitchell (Michael Power) became the one of the most well-known alcohol advertising campaign in Africa. In 2002 because of its huge success Diageo owners of the Guinness brand adopted the same formula in Asia with the character Adam King But copying from a template often leads to mediocrity. In today’s world, it’s ads that are different that stand out and really capture attention, and its ads that capture attention that have a chance to be remembered, to convey brand impressions, and to deliver messages. Therefore, ads that are different are most likely to build brands. What are your thoughts on the length of marketing communication, Kindly share them with us and we can get some published in this column. Michael Umogun / Lead, Marketing and New Business / Kantar Nigeria

Oraimo unveils brand ambassador, introduces new 310 hours battery life necklace

raimo, foremost smart accessories company in Nigeria, has unveiled a legendary musical giant, Innocent Idibia popularly known as 2Face as its first and official brand ambassador amidst pomp and glitz. The unveiling, which took place in Lagos last weekend sought to raise the company’s brand imagery and drive uptake of its products through the creation of a thematic campaign tagged “Be the King”. The company whose key products range include power bank, headset, necklace, fit bands, USB cords, phone chargers, car chargers and others, also used the opportunity to launch a new necklace- King of Gbedu into

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the market. The king of Gbedu, which was presented to the new brand ambassador, has over 310 hours battery life with 2face signature on it. Speaking on the company’s need to announce the 2face/Oraimo relationship, the, West Africa Zone 1 Manager, Ilesanmi Oladunni said, ”We have always wanted to do something different, something that can change people’s lives so that they can explore the wonderful world,” adding that “to change the world, we decided to start with smart accessories, enabling our customers to keep exploring,” he said. While expressing delight over the signing of 2face as the brand ambassador, @Businessdayng

the General Manager of Transsion Holdings, Chidi Okonkwo said, ‘Today marks a significant milestone for two iconic brands that share similar traits of reliance, consistency, and quality. We at Oraimo have come a long way in providing our customers with best-in-class, quality products that guarantee satisfactory user-experience.” Speaking after his presentation as the company’s brand ambassador and launched of the new necklace tagged King of Gbedu, 2face thanked Oraimo for picking him to represent the brand. “I feel very honoured to be picked as the brand ambassador of the premium brand. I will do everything possible to promote its range of products.”

Tuesday 01 October 2019

BUSINESS DAY

Tuesday 01 October 2019

BUSINESS DAY

BANJO OBALEYE

CEOINTERVIEW

MD/CEO, Infinity Trust Mortgage Bank

Interview with Private Sector Leaders

‘If perfection, transfer of title is seamless, mortgages will be attractive to commercial banks’ With a housing deficit of more than 20 million units, Nigeria has a mortgage industry that is lagging its African peers in terms of contribution to GDP. This is on the back of the high interest rate that has made the industry less attractive to many in a country with most people in Africa, which houses more than 80 million people living on less than $2 a day. BANJO OBALEYE is the Managing Director/CEO of Infinity Trust Mortgage Bank. In this interview with BusienssDay’s ENDURANCE OKAFOR, he shares insight on how the mortgage bank has been able to withstand the storm to deliver good returns and how the Central Bank of Nigeria is working on an ‘interest draw back’ initiative that will see mortgage rate slide to a single digit. Excerpts:

espite operating in a challenging industry you have consistently reported good re t u r n s , h ow h a ve y o u achieved this? One thing is to have a supporting board and the management that is creative, competent and ready to put in their best. The management then supports all the other members of staff with adequate training to understand the business they are into. Most often we make the mistake in using the same approach for commercial banks to rate mortgage business. It involves a quite different approach; if you use the same approach, what you may likely face is the issue of liquidity mismatch because basically we need long-term capital to finance our longterm assets. So you will have to balance this to ensure that portfolios of loans are doing very well and are reflecting currently in our non-performing loan ratio. So I take it from the committed staff, supporting board and the need which everybody recognises that we should take the business first before we think about any other thing; everybody from the board down to the staff is ready to imbibe the spirit of corporate governance to move the company further than its current position. Nigeria has a high mortgage rate but has one of the world’s lowest mortgages to GDP rates. What has been the challenge of the industry? The high interest rate that we have in Nigeria is not an isolated case, everything is high in Nigeria: inflation is high, cost of funds is high, so it is basically the micro-economic reality that brings about the high interest that we have but for mortgages to be within the reach of every one, the interest rate has to be very friendly, say as low as 5-7 percent. But don’t also forget that the inflation rate as we speak is hovering around 11percent, so what this means is that any return you have that is less than that value is a loss in real terms. We know the peculiarity of housing and we know how important it is to the welfare of Nigerians and we equally have a very precarious situation in such that we have Land Use Act that was established in 1978 which has not been holistically reviewed. From that time to date you can calculate the number and see that it’s been almost 41 years. It should have been reviewed, but it is the constitution and so the process of reviewing it is very huge. Also, the intension of the Land Use Act was very laudable at inception, but you know, we get policy right but the implementation stage remains the challenge. When the Land Use Act was established, the problem of land was very enormous; it was difficult then for investors to assess land because they couldn’t tell the right owners of the properties. The Land Use Act was supposed to bring together the lands so that government could manage them on behalf of the people and can make it easy for asses. There are many infrastructures that are supposed to be put in place to alienate land, identify land, and identify ownership. If this has been done seamlessly, we wouldn’t have problem. Most government now look at lands as the means of revenue for them after putting price

tag that makes the cost of housing delivering very expense. Policies are some other challenge. You would want to assess mortgage, the mortgage banks would need to perfect it. Perfection means that one has to go and register the land at the registry to confirm that the house that was owned by Mr A is now own by MR B to enable anyone that wants to do anything on that house to have knowledge of the history behind the property. This is good for government database; you know accurate data are needed for decision making. If the Bureau of Statistics will need accurate data to advise government on policy initiative then when accurate data is not available, it is a problem. So government itself put bottleneck in place to get accurate data in the housing industry by making the cost of registration too expensive. There is nothing that suggests that government should not put the barest minimum cost of perfection in place so that people can perfect voluntarily. It is surprising sometimes, you buy a house for, say, N15 million and government will demand that you pay 8 percent of that amount, and for that reason many people are discouraged and refuse to go through with the process. When that happens government loses whatever amount that could have been gotten from such registration. They don’t look at that, what they are after is getting big amount at a go. Through policy advocacy, we are engaging government to see the opportunity and the need for them to open it up for people to come in and perfect their properties. Many investors in housing delivering have long term in mind. Among the projects developers have financed; some have been able to get as much as 300 percent value overtime. For instance, in 2009, there were two estates we financed in Abuja, now the prices have gone up. Apart from the primary home owners, who got it as their first homes, some bought these houses for speculative purposes, but they are reaping in millions now. Also when you have it as your first home, not only that you have a place to lay your head but you also have a means of security and means of investment. For example, you have a business plan with no funds but you have a house, you can take loan with the property and in return this can impact the economy positively. If you look at the value chain across housing, it is huge; we call it the potential giant that is just locked inside the room. I think government is realising this that is why it is one of the seven cardinal agenda of this present government. Interest rate remains a challenge, for instance if you take a house for say N9 million, at about 18 percent interest rate, you will probably be paying about N150,000 per month for 30 years but at 6 percent you will be paying about N60,000 plus per month, so you can see the impact of interest rate. Apart from that, all this costs are issues that we need to tackle. The perfection and the transfer of title should be seamless. Once this happens, commercial banks will start investing in mortgages; they run away from it now but those in this industry understand that it is a sleeping giant, by the time the right www.businessday.ng

antidote is given to the sleeping giant then you will see the potential unleashed. Latest NBS data put the real estate sector at a contraction mode of 3.49 as in Q2 2019. For 12 quarters before Q1’19 it was in recession. With the re-appointment of Fashola, what areas would you want his focus to be directed to spur growth? What I would want the honourable minister to do is to look at the duty of housing agencies. Government has nothing to do with building. What government should concentrate their attention on is enabling environment. With the current population statistics, Nigeria has about 200 million people. Despite this figure, we have only used 20 percent of our land space. We have a population explosion that the available properties will not be able to accommodate, if we don’t plan for it now crisis and unrest will erupt in the near future. There are some of these areas now that mass housing has been developed. What has the government done in alienating lands

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that are suitable for agricultural purposes so that you don’t build residential properties on them? Are we doing anything to ensure that the communities that we are developing can be self-sufficient? I read something about a family in the US. I think they were sent to prison for sending their daughter to school outside their community. When you are planning a district, you will have to make it in a way that it will be self-sufficient; the schools are located within; the markets are also situated within the environment, and the means of sustenance are there as well. So, these are the areas the ministry should focus- is it time for us in certain areas to be going vertical so that we can conserve the land we have? It is the ministry that should look into that. Instead of the Federal Housing Authority to be building houses, they should leave it to the developers to build, because with the power as the biggest spender in the economy, government can use that to regulate prices. So what I expect the authorities to do is to concentrate on; housing code, housing plan, roll out monthly housing price for houses, the rental policies on rental

@Businessdayng

properties-provide what the environment needs, give a lead way and let investors login into it. By the time you are going to build yourself, your attention becomes divided because in your quest to continue building, you yourself can go and build in an area where you are not supposed to build. Some years ago we saw the ministry of FCT demolishing houses. One would wonder what the ministry was doing when the houses were being built and realised it after a long time. So once they don’t do what they are supposed to do on time, there will be a problem along the line. I am expecting the minister to really roll out the office of the agencies under him in providing enabling environment rather than going directly into construction, it is not their business. I am an advocate of building functional houses and I always tell people, don’t over stretch affordability; let’s be real, housing cost is high- most of the material inputs for properties are imported while some are assembled in Nigeria but anywhere in the world, the least price of houses say for example in the US, ranges from $40,000 for a one bed-room apartment and

in the UK for about £50,000 which is around 15m in Naira. So it surprises me at times when people say they can build two-bedroom in Abuja for N3 million. It may be possible if the primary infrastructure like road, functional electricity, drainage system and water are available. But the situation we have in Nigeria is one where the developers have to put everything in place. So what we see these days is that some of these developers will look for off-takers and collect money from them but at the end of the day they won’t be able to deliver and those that can even deliver there won’t be infrastructure in place and these now become the potential slums. In this decade that we are in, we need to be rebuilding some of our old houses to have a very good and new outlook of Nigeria. When you are flying into Lagos for example, you will see the different structures with bad landscaping but fly into US and even South Africa, you will see well laid out structures. We should have gotten to a stage of rebuilding our old properties and reincorporating it into better environment. So if you ask me, I will tell you that any property that is less than N5million in a state capital like Abuja and Lagos are potential slums, unless the basic infrastructures are on ground already. Due to high interest among other barriers, mortgage is less attractive to Nigerians. What will it take for the country to have a singledigit interest rate? Yes, interest rate is double digits and it is high, but I always encourage people not to look at that; if you have the mindset to invest, you should do it now forget about interest rate as a barrier to you, because the interest will still be low compared to the value you will get over time under property industry. For example, I evaluated about four estates in Abuja, I discovered that some of these estates from 2009 to 2019, the prices have gone up by over 300 percent. The maximum inflation we had within the same period was about 15 percent, the maximum interest rate was about 18 percent. So if you didn’t invest then because of interest rate, you have lost. If you look at the environment where you operate, like Abuja the prices of houses will continue to be on the rise because it is an emerging city. Even as our population is growing, the need for housing will continue to increase. So interest rate should not be the real discouragement to investing in real estate. On the other hand, what can be done to drive down the interest rate? The interest of the mortgage sector is to have mortgage at a single digit, with that we can create more volume. We are conversing for that. Also, due to the fact that we have a high inflation rate, to put down the interest rate, we would need some kind of subsidy. This kind of subsidy must be the one that is targeted at the final consumer because that is the only one that will not be diverted to people who ordinarily don’t need it- it is people at the bottom of the pyramid that need subsidy. But most of the time when subsidy is not well planned it those at the top of the ladder that benefit from it. So what government is trying to do now will lead to a drop in interest rate on mortgage. It is already coming down, because www.businessday.ng

about two three years ago it was around 24-26 percent. The mortgage industry is currently doing less than 20 percent and even in some cases when we have the means of finance we do much lower than that. Also, if you operate in an environment that is less risky, you will attract less interest rate, that is what is applicable anywhere in the world. There is this initiative the Central Bank of Nigeria (CBN) is bringing on board now. It is called ‘interest draw back’ for mortgage finance. That initiative is coming up and in line with that the apex bank implemented the removal of the 5 percent cap on MPR for mortgage finance. MPR should not be used as a measurement basis for interest rate because MPR is volatile while mortgage finance is long term. Mortgage finance anywhere in the world can be contracted either at a fixed or variable rate. If I contract mortgage at a fixed rate for instance, like NHF that is 6 percent, it is fixed throughout. If MPR goes back to 1 percent tomorrow, it will still remain at 6 percent and that is not good for business, so that is why the cap on using MPR as a basis was removed and now you will see how the interest rate on mortgage will start coming down. In what area is Infinity Mortgage Bank contributing to bridge Nigeria’s housing deficit? On policy advocacy, we are driving the course and this initiative has led to a lot of policies coming up from the government now to address the issues that brought about the gap in the first instance. What we are doing now is part of the advocacy as well because this advocacy will get to the government and they will see that what they are doing in arresting the problem of housing is appreciated. Again we have been exceeding our targets of the number of mortgages we provide every year and so our driver primarily is to impact and secondly the value addition to assurance.

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Despite reporting a profit that was at 7-year-high in half year of 2019, your share price remained flat. Why do you think investors’ appetite for real estate is dampened? We haven’t understood well the problem and the opportunities in the housing sector. If most of the investors understand that very well you will see the activities will start coming up. It is a neglected sector that is bedevilled with a lot of external environment problems which is beyond the management to control but we just have to adapt ourselves into it. We talk about the issue of foreclosure law which is not in existence in Nigeria. Even on rental law, you will see people will pay for one year rent and in the next two to three years they don’t pay for it- they will take you to court and they can be there for another four years. There is no way issues like this will not be a disincentive to investors, if I know that my money comes in regularly as at when due then you will see activities. But when people have experiences like I bought a house and gave it out for rent and since then I have not been able to collect any more rent other than the first payment. So we are advocating for the review of our tenancy law, rental law, mortgage finance law, etc. These are the catalysts we need to bring out the industry to the limelight. I see Nigerian mortgage industry in the foreseeable future buying commercial banks because we have many activities. If you look at the montage industry, it forms the biggest trading securities around the world. We don’t have RIETS coming up, we don’t have mortgage corporate interest draw back, and many other initiative we don’t have in Nigeria and this is because we are still growing in our knowledge of the opportunities in this sector. I am sure by the time it comes on, people will start looking into it and even the investors, they are yet to understand the industry and so we need people to tell them about the opportunity there.Warren Buffet will tell you- the way to go is housing.

@Businessdayng

Tuesday 01 Octobeer 2019

BUSINESS DAY

property&lifestyle CBN’s cap removal on mortgage interest rate means higher loan cost—industry sources Endurance Okafor

layers in Nigerian mortgage industry are optimistic that the recent action by the Central Bank of Nigeria’s (CBN) that saw the removal of 5 percent cap on interest rates for mortgage finance will give room for rate increment. Prior to the removal, Nigerian financial institutions were only allowed by the CBN to add 5 percent to the MPR as the threshold rate for financing mortgages. But in a recent circular signed by Kevin Amugo, Director, financial policy and regulation department of the CBN, it was stated that the “maximum MPR + 5 percent” is no longer applicable to all financial institutions in Nigeria. “What it means is that banks and other financial institutions can add as much as, say 20 percent, to the MPR and then dish out that as their lending rate for mortgage financing and in return Nigerians will access mortgages at a higher rate,” a Lagos-based analyst said on the condition of anonymity. According to Abiodun

Akanbi, Head of Strategy at Abuja-based Infinity Trust Mortgage Bank, in the short term, the cap removal may lead to increase in mortgage rate. “Yes, it may have an impact on the ability of individuals to access mortgage in a short term but the policy will give the supply side the opportunity to easily access funds,” Akanbi said. High mortgage rate is considered as one of the key culprits for Nigeria’s housing challenge. Typical mortgage in Nigeria ranges between 7-10 percent for Federal Mortgage Bank of Nigeria (FMBN) and between 1525 percent for commercial mortgage institutions, one of the highest in the world. This has left the industry less attractive for a country that is referred to as poverty capital of the world, where millions live on less than one dollar a day. Africa’s most populous nation has one of the world’s lowest mortgages to Gross Domestic Product (GDP) rate at 0.6 percent. This lags Ghana’s 2 percent, South Africa’s 30 percent and crawls after the U.S and UK rates of 60 percent and 70 percent respectively.

“I think the Central Bank is trying to see if the market can regulate itself,” Roland Igbinoba, Founder, Pison Housing Company, told BusinessDay on phone. Igbinoba added that “even before the removal of the cap, mortgage rates in the country has been high and difficult for many to access.” Nigeria which has the highest population in Africa, has more than 17 million housing deficit and more than 90 percent of new homes that are built in the country are funded from personal savings. “The biggest problem in the sector is the high cost of the very limited mortgage available. If they can develop policy to ease housing finance, it will be impactful,” Wole Olabanji, the CEO of CoBuildIT, a Lagos-based real estate firm, said. However a source close to the central bank revealed to BusinessDay that the apex bank was at the final phase of commencing mortgage subsidy, with the aim to achieve a single-digit mortgage rate before the end of the year. The source who asked not to be quoted because of the sensitive nature of the issue, explained that the recent re-

REMI FEYISIPO, Ibadan

moval of the MRP+ 5 percent cap on mortgage interest rate was in line with the regulator’s plans to achieve singledigit mortgage rate. “The new policy is in preparation for the single digit interest rate on mortgages. The CBN has gotten to the board of governance for approval and before the year ends they would have commenced the subsidy,” the source said. Commenting on the cap

removal, Andrew S. Nevin, West Africa Financial Services Leader and Chief Economist, PWC said the CBN was obviously focused on a well-functioning real estate and mortgage market. He added however that “Nigeria’s Dead Capital locked up in real estate will only be unlocked with reforms to the Land Use Act and more streamlined systems for developing and buying and selling real estate.”

Expert offers insights on why global funds elude Nigerian property market CHUKA UROKO

…fingers unpriced risks, unclean window

hough Nigeria has a large property market with huge and compelling opportunities for investors, it is not receiving the kind of investments funds it should from global investors for a number of reasons that are not clear to the investors. Besides the frequently cited unfriendly business environment, these investors lack knowledge of how Nigerian property market works. This, according to Bill Endsley, Principal at World Citizen Consulting, is because there is lack of transparency in the market

just as transactional data is non-existent. “There are billions of global funds flowing into the property market at the moment, but not much is coming into Nigerian market; investors are unwilling to come to put their money here,” noted Endsley who spoke in an interview with BusinessDay on the sideline of a FIABCI International Real Estate Consultant (FIREC) programme hosted by FIABCINigeria chapter in Lagos at the weekend. Endsley pointed out that even though risks are always

there for any investor, those risks have to be priced so that an investor that is coming will understand what exactly the risks are. He noted, however that it was difficult now to price the risks in the Nigerian property market because of what he called “unclean window”. “We need to clean the window so that investors can see the risks,” he advised, adding that the Nigerian market also lacks transactional data for which the market should be looking at the property laws, the qualification of the professionals and the role of the

L-R: Roland Abonta, president, Nigerian Institution of Estate Surveyors and Valuers (NIESV); Adeniji Adele, president, FIABCI-Nigeria Chapter; Bill Endsley, guest lecturer; RBC Okafor and Kola Akomolede, members of FIABCI Nigeria, at the FIABCI-FIREC programme in Lagos. www.businessday.ng

Oyo says ready for land swap for affordable housing development

banking sector in property transaction. The stressed the need to train Nigerian professionals on international norms for real estate investing and standards so that they can attract more foreign direct real estate investors. He added that the professionals have to be brought to the level of world class consultants so that they can move Nigeria away from oil economy to the world of investment in property. Endsley affirmed that there were opportunities in the Nigerian property market and now was the prime time to invest in the market because, as he put it, ‘the country is trying to move away from the commodity-oil economy to a new industry and property is the foundation of everything.” For the investors, he advised that they should do proper market and financial analyses, explaining that market analysis would involve finding out what the market needs—whether it is residential or commercial property, while financial analysis would be looking at the cash flow and bank transactions. FIREC programme, already in its second edition, is an annual event through which

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FIABCI trains and educates its members on current trends in the built industry. It is all about real estate and how things are done globally with reference to Nigeria. “We need to push ahead otherwise the whole of us in the entire building industry will be far behind. In this age of digitalization, we need to keep abreast of events because things have changed drastically,” noted Adeniji Adele, President, FIABCI Nigeria chapter. Continuing, the president said, “we need to begin to gain insightful knowledge and share same. That is the essence of this programme. It is about gaining insightful knowledge and keying into international principles and practice; we believe in the continuous education of our members and also in sharing knowledge. We also need to connect with other professionals in the outside world.” He explained that the business world has become global and the real estate market has been internationalized, saying this has resulted in the need for professionals to transact business with investors from diverse cultures and backgrounds making it imperative for professionals to figure out how to deal with these cultural differences in their negotiations. @Businessdayng

he Oyo State government says it is ready to key into land swap arrangement to ensure development of affordable accommodation for the people of the state, meaning that the state is ready to partner any individual or group interested in the arrangement. “In order to provide infrastructure to our GRAs, we are ready to embark on partnership arrangement. So, whoever is prepared to embark on the infrastructure on our GRA should indicate interest so that we can have what we call land-swap arrangement,” explained Abdur-Raheem Abiodun, commissioner for lands, housing and urban development. The implication of this arrangement is that when an interested partner provides the infrastructure, government will give him part of the land so that the added value will be to the benefit of all the parties concerned. Abiodun revealed that the state government was unhappy that many of the developers who secured allocations for GRA plots in the past had abandoned the sites, saying that it would revoke any land left unattended to by unserious developers. He promised that government would release modalities for the sale of 38 housing units at the Calton Gate Estate, Akobo area of Ibadan. “The state government has approved the sale of 38 units of semi-detached bungalows situated at Carlton Gate Estate, Akobo to interested civil servants and members of the public for N7.5 million; whoever is interested should visit the ministry to obtain the form,” he advised. A statement by the Chief Press Secretary to the Governor, Taiwo Adisa, quoted the commissioner as saying the issue would be handled on the basis of fairness, transparency and accountability. “In line with the spirit of this government, which has high regard for civil servants, we have assigned part of the units to civil servants. We will map out a strategy as to how it will be made available to them and the same thing with members of the public,” he assured. The commissioner also assured members of the public that the state government was prepared to do whatever it could to ensure that it had a variable land system where it could accommodate the interest of well-meaning members of this state,” he said.

Tuesday 01 Octobeer 2019

BUSINESS DAY

property&lifestyle First time buyers, millennials in focus as Eximia Realty builds apartments CHUKA UROKO

uoyed and guided by a new project philosophy that favours compact, comfortable and convenient spaces, Eximia Realty Company, a young real estate investment and development firm, has set out to build a moderate estate targeted at first time home buyers and millennials. Known as Fiona Lawton Apartments, the moderate estate which is a truly gated community, also targets empty nesters and investors with its market (demand)conscious typologies, including studio, 1-bedroom, and 2-bedroom apartments. Increasingly, developers are embracing size reduction in their developments in line with not just economic realities but also global practices as reflected in such cities as New York (39 square metres) London(46 square metres)

Paris(36 square metres) and Hong Kong(15 square metres) in the last few years. Fiona Lawton Apartments’ small-size units offering is consistent with developer’s objective to to deliver real estate solutions by addressing emerging living models tailored to contemporary urban lifestyles. “The general trend of urban dwelling in leading cities across the globe since 2011 is that ‘the era of mac-mansion is gone’. With land in limited supply, construction costs spiraling out of control and the necessity to optimize living and maintenance costs, it has become inevitable to re-engineer home design and construction to achieve maximum efficiency,” explained Hakeem Oguniran, Eximia Realty’s CEO, at the ground breaking, signaling the commencement of construction of the estate recently. Ogun revealed their deduction from empirical analysis

that there was a reasonably significant market for micro apartments designed to suit the Nigerian lifestyle preferences in Lagos and a few other cities. “We are, therefore, set to tap into that opportunity through our ‘uniquely crafted living spaces’ based on the concepts of ‘compact, comfortable and convenient dwelling’,” he assured, adding that the dwelling units speak to the needs of discerning investors, empty nesters and young, upwardly mobile professionals and families who loathe commuting but are willing to trade size for proximity. Fiona Lawton Apartments, located in the burgeoning Lekki axis in Lagos, is designed into gated communities of between 48-60 small-size apartments, and the developer said they were set to launch similar developments in Surulere, Ilupeju, Yaba, Ikeja, Ogba and Ikoyi in the next few weeks

A man, his interior layout and world view Temitayo Ayetoto

tories are important aspects of people’s lifestyle that could interestingly be narrated with a simple sign wall painting or books hung from your coffee table to shelves. A man’s interior layout could give an insight into whether he’s an extrovert or introvert; a die-hard fan of a football club, a nerd or a non-mainstream person or in fact a socialite interested in the next concert happening in town. Whether you are a technology freak or not, layout communicates your stories to others and could misrepresent your views when you fail to place proper arrangement at the centre. Tasteful and sophisticated ways to reflect your personality and retain a sense of fun begin with keeping it simple. “This means choosing a neutral colour such as white, black or grey for most of the furnishings and textiles. This also means avoiding clutter by sticking with only a few streamlined necessities: a bed, which will be the focal point of the room; a desk, a dresser; a nightstand. A great way to do this is to choose neutral stainless steel furniture or pieces that can double as storage or fit storage boxes underneath,” an SFGate journal on home guides advises. Thomas Trafecanty, an interior design specialist, said simple things as picking out a paint colour for your walls says in-depth things about a person’s personality. People who love orange and yellow tones are optimistic, prefer-

L-R: Tobiloba Lawal; Moruf Akinderu-Fatai, commissioner for housing, Lagos State; Hakeem Ogunniran, chairman/ CEO, Eximia Realty Limited, and his wife, Iyabode Ogunniran, at the groundbreaking of Fiona - Lawton Apartments in Lagos recently

and months. Oguniran disclosed further that they have created what he called ‘Home Ownership Ecosystem’ to complement their developments and also to tackle both supply and demand

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rugs. The duvet cover will be the most visible and most used element of the bedroom, hence selecting a nice one that fits your budget is crucial. Lighting Plan on having multiple sources of lighting to accomplish sophisticated illumination effects for different activities and times of day is also crucial. Consider installing a dimmer on your primary overhead source of light, and invest in a floor lamp, a desk lamp and a bedside light, all of which can be moved around to achieve your desired glow. Once the basic elements of the bedroom are settled, it’s time to add a few touches of your personality. Frame photographs that are special to you in different sizes and arrange them on a dresser or side by side on the wall.

ers; needless to say that we are greatly encouraged by the market acceptance of Kyrious and Fiona Lawton apartments – our first foray into our defined market segment,” he said.

Investment opportunity opens as Lagos seeks private sector partnership for housing CHUKA UROKO

ring bright reminders of the life force of the sun and fire. Warm, bright colours also play on a person’s perception as they appear to leap forward, while cooler colours recede. People who gravitate towards brighter blues and greens are more laid back, he said, with the shades reminding them of open skies or bodies of water. Using muted tones and patterns signifies that you are a peacemaker, according to Jane Lockhart, another interior design expert in an Huffpost report. When you avoid statement pieces or colors, you are taking the middle ground. In a home, this can read boring or even unstylish. Having settled with a colour palette and furnishings in place, experts advise that effort is put into selecting high-quality, comfortable bedding, pillows and

sides of housing delivery. “To this end, we recently launched Kyrious Real Estate Multipurpose Society to ease the burden of home acquisition and financing for potential home own-

nvestment opportunity has opened for private estate developers as Lagos State government says it is ready to partner with those of them that are interested and capable of investing in housing in the state. This private sector invitation is part of the state government’s determination and efforts at continuously reducing housing deficit in the state by increasing housing supply through increased development. Lagos has housing deficit estimated at 3 million units and requires about 200,000 housing units for the next 10 years to be able to bridge the deficit. At an average of N5 million per housing units, the value of the opportunity available to investors is about N1.5 trillion. The state has a population estimated at 20 million. A Pison Housing Company report on the State of the Lagos Housing Market says about 80 percent of this population lives in rented accommodation, meaning that the opportunity is also huge for investors who chose to invest in build-to-let developments. Moruf Akinderu-Fatai, the state’s Commissioner for Housing, affirmed in his recent review of activities in the ministry that the housing deficit in the state was quite huge particularly in the urban areas where private sector participation was essential in order to change the

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present narrative. He pointed out that while the state government was set to deliver more homes this year, through rigorous planning and implementation aimed at completing many of the ongoing housing schemes in record time, more could still be achieved if additional private investors were willing to collaborate with the state government. The commissioner disclosed that the state government had already started implementing policies that would make the environment more conducive for private sector participation and joint venture investments in the provision of mass housing, especially in urban areas. The commissioner stated further that the unalloyed mission of the state government was to provide adequate and good quality housing in Lagos and also facilitate access of its citizenry to home ownership as shelter remains one of the important needs of man. “Qualitative housing remains a critical factor that determines the quality of living, hence the present administration in its quest for building a 21st century economy is focusing on providing decent homes in urban settlements for its teeming residents,” he assured. He also emphasized the commitment of the state to a continuous system whereby homes are provided to the public on a continuous basis @Businessdayng

until the deficit was significantly reduced. Akinderu-Fatai said that in order to serve the people better and to achieve the dream of a 21st century as swiftly as possible , the state government envisages a sustainable and continuous system in which homes can be consistently and regularly made available to a larger number of people. “Given other responsibilities of the State, this can only be possible when private sector investors collaborate with the state to add to the number of homes planned by government,” AkinderuFatai reasoned, calling on investors who are capable of meeting deadlines and delivering quality homes to see themselves as stakeholders with government. Earlier the Special Adviser to the Governor on Housing, Toke Benson- Awoyinka, had assured the public that government was committed to delivering on its mandate in the housing sector and would work hard to putting a smile on people’s faces in this regards by ensuring continuous availability of quality homes. Benson -Awoyinka assured that the state government would also attend to the welfare of those who may not be able to access homes through mortgage or outright purchase of homes in government owned schemes by ensuring that only genuine and registered real estate practitioners operated in the state.

Tuesday 01 October 2019

BUSINESS DAY

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Tuesday 01 October 2019

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Nigeria accounts for 45% of FPSO projects in Africa ahead of peers STEPHEN ONYEKWELU

he number of Nigeria’s planned and possible floating production, storage and offloading (FPSO) projects have put it ahead of African peers amid a booming market for deep offshore oil infrastructure on the world’s secondbiggest continent. With the world’s increasing need for new energy sources, new processing and storage facilities continue to be on the rise. These facilities are referred to as FPSOs have enabled many companies to explore and, quite literally, dig deep into uncharted territory. With this capability, FPSO has also made way for new destinations, from which oil and gas can be processed. One of them is in Africa. Nigeria has four planned and five possible FPSO projects, representing 45 percent of planned and possible projects in Africa. Angola, Africa’s second-biggest producer of oil has five planned and two possible FPSO projects. The rest of Africa has three planned and four possible FPSO projects, according to a new report by FPSO Network, an umbrella body for deep offshore infrastructure providers. Estimated at over $23.5 billion, the FPSO projects in Africa’s biggest crude oil exporter were expected to assist the Federal Government of Nigeria to move the needle from 37 billion barrels to 40 billion barrels of oil reserves target and daily production of four million barrels per day (b/d). FPSOs range in size from 50,000

barrels tankers with capability to process 10,000 to 15,000 b/d to Very Large Crude Carriers (VLCC) size units able to process more than 200,000 b/d and store 2 million barrels (such as the Bonga FPSO off Nigeria will be able to produce 225,000 b/d). Some are held in place with a simple spread mooring system, some are fitted with a turret system that allows the vessel to weathervane. A few small units are held in place by dynamic positioning. The choice of mooring system depends on local weather and sea conditions. As many as 60 to 70 subsea wells can be tied back to the production unit (the Dalia FPSO off Angola will be

tied to 67 wells through 9 manifolds) or the unit could be produced from only one well. In Nigeria, deep-water projects have typically included more favourable fiscal terms than onshore/ shallow water projects. But the Petroleum Industry Governance Bill (PIGB), if passed into law, is expected to increase the government’s share of production revenue coming from deep-water projects. “We are a mature field and the certainty of striking oil is high. With this, we can get tougher in our contractual arrangements, unlike countries just starting out” Ibe Kachikwu, former minister of state for Petroleum Resources said in one of his

last interviews, while in office, with BusinessDay and other journalists. Experts believe that until the fiscal aspect of the bill is considered and is satisfactory to the Federal Government and International Oil Companies (IOCs), the uncertainty regarding the Final Investment Decision (FID) on offshore projects would continue. Some of the prospective deepwater projects the development of which have either been sanctioned already or about to be sanctioned are Total’s Ikike, Owowo, Bonga SouthWest, and Preowei projects. The final investment decisions (FIDs) of these four are expected to be made by 2020, with the first oil from Preowei

scheduled for 2022. There is, of also the Zabazaba and the Etan fields which Eni and Agip are working on. In an earlier interview with BusinessDay, Oladiran Fawibe, the chairman and chief executive officer of International Energy Services, said that he could not explain why the government is demanding 50 per royalty from the deep-water projects and suggested that the government may be best served to study what is done in other oil-producing economies. “One thing I know is that we are not going to give Nigeria’s natural resources out too cheaply. But we cannot continue to treat the IOCs as if they have no alternatives,” Fawibe said.

Ikeja Electric leverages technology to cut technical losses, improve revenue ISAAC ANYAOGU

keja Electric is using technology to cut its ATC&C losses, improve revenue through better billing systems and engaging more with customers, a review of the company’s performance shows. Six technological tools have been key in helping the company achieve modest improvements in its operations. The Customer Information System as a database that stores customer information. It uses the EBM software to automate estimated billings and the MobiWorks App to provide realtime vigilance activities and escalations such as capturing of free riders, energy theft and meter bypass. Ikeja Electric’s Force App is used internally to consolidate several business units and manage process efficiently. the company’s iSafe app is meant for both the company and customers to report hazardous network conditions for improvement. The Meter Reading System is for capturing accurate reading of energy consumption and enhanced

reliability of billings. Ikeja Electric’s Customer Relationship Management tool is to provide record and track customer’s complaints and has been integrated with other key stakeholder units to ensure prompt resolution of customer inquiries and complaints. In August it announced the www.businessday.ng

introduction of its E-Billings platform which enables customers to receive electricity bills promptly and conveniently, via channels such as SMS, USSD, email, IE Bill portal and IE mobile Application. “The e-billing initiative is in continuation of Ikeja Electric’s desire to leverage innovation and technology to improve customer

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experience. It is designed to deliver electronic bills directly to the customer thereby eradicating challenges such as misplaced bills or delayed delivery and other issues which are associated with distribution of physical bills,” the company said in a release. The use of these technology tools has had measurable im@Businessdayng

provement in the company’s operations cutting down technical losses from 40 percent in 2014 to 26 percent in 2019. Ikeja said it has been able to improve billings, market, collections and technical efficiency by leveraging technology. However, while the company has improved collections remarkably, remittance to the market has fallen short. According to the Nigerian Electricity Regulatory Commission (NERC), while Ikeja Electric recorded the best collections efficiency of all the DisCos at 84 percent in the first three months of 2019, it only remitted 39 percent of its collections lower than Eko who recorded 43 percent remittance when collections were at 80 percent. However, It is noteworthy that tariff shortfall may have partly accounted for the observed low remittance by DisCos,” NERC said in its report. But when NERC adjusted remittance figures to account for tariff short fall, it still found that “regardless of the prevailing tariff shortfall DisCos’ remittance is still significantly below the expected threshold.”

Tuesday 01 October 2019

BUSINESS DAY

ENERGY INTELLIGENCE

Lekoil completes phase 2 Otakikpo field development in half year update DIPO OLADEHINDE

ekoil said it has completed planning for the phase two development at Otakikpo which would increase production towards the range of 15,000 bopd to 20,000 bopd from the range of 6,000 to 8000bopd. “As part of the Otakikpo development process, we commissioned an updated Competent Person’s Report detailing recoverable volumes within the Otakikpo Marginal Field in OML 11. The CPR, prepared by McDaniel Associates & Consultants Ltd focused on the discovered conventional oil accumulations only, with the field’s significant gas resources expected to be reflected in a future update,” Lekoil said. Lekoil, an Africa focused oil and gas exploration and Production Company with interests in Nigeria and Namibia announced revenue of $22.3 million from its Otakikpo operation in the first half of 2019 compared to $22.4 million in the corresponding period last year. Lekoil said capital expenditure to be incurred by the Otakikpo Joint Venture is expected to be approximately $170 million covering new wells and processing infrastructure, of which LEKOIL is expected to fund $68 million. Lekoil said the Nigerian subsidiary of the IOC will provide funding to the Otakikpo Joint Venture alongside the other funding partners, subject to due diligence, project economics, entry into definitive documentation and final investment decision while repayment will be made from production revenues from Otakikpo, in priority to any existing lending facilities (subject to agreement with existing lenders), future capital expenditure and returns to equity

holders. Concerning the much battled OPL 310 licence, Lekoil said it has executed a legally binding agreement with Optimum to progress appraisal and development programme activities at Ogo. CEO of Lekoil Lekan Akinyanmi said the recent settlement with Optimum, receipt of the OPL 310 licence extension from the Nigerian Government, and encouraging progress made in preparing to commence work on all its other interests, leads

Lekoil closer to delivering on the commitment to monetise the significant value that we believe exists in both existing and recently acquired opportunities. Optimum and LEKOIL are initially targeting a two-well programme over the next twelve to eighteen months, subject to receiving an extension of the OPL 310 licence from the Ministry of Petroleum Resources for the block and securing the necessary funding for the programme.

“We thank our shareholders for their continued patience and remain optimistic that the outlook is set to improve. We are excited about what we see is in prospect for all of us over the next few years, and we look forward to delivering on this,” Akinyanmi said. Under the terms of this agreement, LEKOIL will pay Optimum approximately $12.5 million in respect of Optimum’s past costs and fees, as previously announced on 30 August 2019. This amount includes $2.0

million in outstanding G&A arrears, a $5.0 million Operator’s fee in regard to LEKOIL’s 17.14 per cent participating interest and $5.5 million for the Operator’s sunk cost. Although the agreement does not address the recovery of the $13.0 million consideration previously paid by LEKOIL with respect to the acquisition of the shares of Afren Oil & Gas (Nigeria) limited in 2015 (which held the 22.86 per cent. participating interest in OPL 310). However, LEKOIL is working with Optimum on a resolution of this matter alongside the possible allocation of the 22.86 per cent to a Potential Funding Partner, and remains hopeful that an agreement can be reached. On OPL 325 which Lekoil holds a 62 percent interest in, the company believe it’s a promising exploration asset containing an exciting deepwater turbidite fan play although it has gross unrisked prospective resources estimated by Lumina Geophysical of 5,067 MMbbls. “We are awaiting the execution of the Production Sharing Contract (PSC) for the licence, at which point LEKOIL is due to pay $0.95 million to the seller as a back-cost reimbursement,” Lekoil announced. “In addition, we are performing some portfolio work to ready one of the prospects for drilling. Once these are complete we intend to begin the farm-down process.” Regarding OPL 276 which the company holds a 45 per cent participating interest in, Lekoil is optimistic about the prospects which have shallow reservoirs and are cost efficient to develop. “Our focus will now shift to moving plans quickly forward for oil and gas production,” Lekoil said concerning OPL 276,” Lekoil said concerning OPL 276.

Downstream operator 11 plc rewards customers in second edition of promo

eading downstream oil and gas industry operator, 11 Plc, formerly Mobil Oil Nigeria PLC says it is continuing with its Mobil Peel and Win promo to reward loyal customers and draw attentions to its quality products. The company held the grand finale of its ‘Mobil Peel and Win 2.0’ marketing promotion where several loyal customers were rewarded with various gifts including TVs, generating sets, motorcycle, Tricycle, popularly called Keke NAPEP, as well as cash prizes. The Mobil Peel and Win’ 2.0 Promo campaign which was concluded in Lagos at a well-attended event was designed, not only to appreciate loyal customers across Nigeria’s six geo-political zones, but also to draw attention to the superior quality that Mobil Super 1000 (XHP) and Mobil Super 2000 lubricant, two of 11 Plc’s major lubricants have delivered to Nigerians over the years. Speaking to participants who were drawn from across the country, the Managing Director of 11 Plc, Adetunji Oyebanji said: “Through this campaign, our customers have restated their commitment to the high-quality products that we offer them. We are proud of the success

of the campaign as it has offered us an opportunity to reward our growing number of customers; hopefully we will sustain this campaign in the coming years.” Prizes were handed out to winners at the grand finale including Adewole Adeboboye- a brand new car winner, Oduwale Bashiru – another brand new car winner, Kayode Adebayo-Tricycle, Samsudeen Olusegun Adesina from Kadunamotorcycle. Others are Bola Ilori who won a 40-inch TV set, Adebisi Gbenga- generator, Mojisola Oluwatoyin, Abogunrin Sunday who won smartphones and Aminu Abdulwasim, cash prize winner. In the other promotions across the country, the Mobil Super Peel and Win 2.0 produced winners from Kano, Abuja, Ibadan and Benin where winners carted away various gift items including motorcycles, tricycles, 40-inch TV sets, smartphones and cash prizes. In his welcome address, Umesh Malik, Manager, Lubricant Sales and Marketing, 11 Plc, noted that 11 Plc has spared no effort at delivering quality products which are based on research and the needs of the market. He said: “The Mobil ‘Peel and Win’ promotion is our way of rewardwww.businessday.ng

R-L: Umesh Malik, General Manager, Lubricants 11 Plc, Oduwale Bashiru, winner of a brand new car, Tunji Oyebanji, managing director, Seun Oke, Distributor Business Manager and Kareem Alolade all of 11 Plc at the ceremony to mark the end of the 11 Plc ‘Mobil Peel and Win Promo 2.0’ held in Lagos.

ing those end-users that are loyal to the Mobil brand; such end-users who have truly shown their loyalty to the brand.”

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These categories of end-users include car owners, motorcycle and tricycle owners/riders, generator operators/owners and most nota@Businessdayng

bly, auto-repairers and mechanics who constitute the membership of Nigeria Automobile and Technicians Association (NATA).

Tuesday 01 October 2019

BUSINESS DAY

OFFGRID BUSINESS Insight

Unilever shows other multinationals how to achieve 100% renewable electricity DIPO OLADEHINDE

he news of multinational Company Unilever with operations in Nigeria and other parts of Africa achievement of 100percent renewable electricity is expected to serves as a template to other business conglomerates on how feasible it is to stay off grid. The international consumer goods giant met its ambitious goal a few months early as the company recently announced that all of its factories, offices, R&D facilities, data centres, warehouses and distribution centres across five continents are now powered by 100% renewable grid electricity, a development which is expected to serve as a guide to other business enterprises on how feasible it is to stay Offgrid. Sam Kimmins, Head of RE100 at The Climate Group said Global companies like Unilever is sending a strong demand signal to the few markets where renewables remain harder to access. “They want to be able to source renewable electricity locally at an affordable price – and they want to do that now,” Kimmins told BloombergNET. Marc Engel, Chief Supply Chain Officer at Unilever, said climate emergency is one of the most urgent challenges companies face globally which was why the Unilever team worked hard to secure

renewable energy contracts for its sites across five continents, accelerating the delivery of 100percent renewable energy targets. “Of course, there is more work to do, but we hope the announcement will inspire further action elsewhere and help to prove that it is possible to combat the climate crisis and hold global warming at 1.5 Degrees Celsius. Renewable is doable,” Engel said on the company website.

The consumer goods giant noted that there have been no “net on-costs” to get to this point, explaining that the savings the company was able to generate through mechanisms such as Power Purchase Agreements (PPAs) which counterbalanced any other additional costs the project will acquire. In a situation where PPAs are not feasible, Unilever purchased Renewable Energy Certificates

(RECs) which are openly-traded certificates linked to renewable electricity generation while also signing partnership deals with partners around the world to generate renewable electricity at its own sites, with solar power in use at Unilever facilities in 18 countries. Unilever also announced that, via its investment in energy efficiency programs, the company has reduced total energy consumption

by 28percent and halved carbon emissions per metric ton of production since 2008. Unilever was one of 27 companies that responded to a call to action from the UN in June to step up their sustainability efforts, committing to reducing emissions further and setting science-based targets aligned with limiting global temperature rises to 1.5°C above pre-industrial levels. Also, another multinational auto manufacturer Honda Motor Company recently made the largest renewable clean energy purchase by any car maker. According to the Honda, the electricity will be utilized to offset emissions from its United States factories, thus enabling the company reduce its greenhouse gas emissions by 60 percent in its North American manufacturing plants. The news of Unilever and Honda’s success with renewable energy will serve as good news to other multinational companies operating in Nigeria a country faced with population boom that has sent carbon emissions soaring and stretched power supplies to breaking point. Africa’s most populous country needs more than 10 times its current electricity output to guarantee supply for companies operating in Nigeria and its 198 million people nearly half of whom have no access at all, Nigeria’s Former Minister of Power Babatunde Fashola said.

Solar, wind are now more cheaper than coal in most parts of the world

he world’s premiere authority on global warming, the Intergovernmental Panel on Climate Change (or IPCC for short), announced in an alarming report at the end of last year that the world is running out of time to curb carbon dioxide emissions. In fact, the data they collected found that in order to keep global temperatures from rising more than 1.5 degrees centigrade over pre-industrial average’s within this century (the goal set by the Paris climate agreement), the entire world would have to transition to 100 percent clean energy by the middle of the century. This, it goes without saying, is a lofty goal. But up until now, clean energies just haven’t been able to compete in a market flooded with cheap fossil fuels. Low- and no-carbon renewable energies like solar and wind power have long been subsidized by governments around the world because while they hold great promise for a clear, more sustainable energy future, they just couldn’t compete with natural gas, coal, and oil when it comes to the bottom line. But now, what was once so prohibitively expensive that governments needed to give financial incentive for these green

energy technologies to be adopted at any serious scale, have become extremely cheap--even with no government subsidies at all. This week Bloomberg reported on the once unthinkable phenomena of solar and wind subsidies disappearing across the world because the industry has outgrown the need for them. “On sun-drenched fields across Spain and Italy, developers are building solar farms without subsidies or tax-breaks, betting they can profit without them. In China, the government plans to stop financially supporting new wind farms. And

in the U.S., developers are signing shorter sales contracts, opting to depend on competitive markets for revenue once the agreements expire,” Bloomberg said. Perhaps most importantly, the article goes on to point out, these developments of self-sufficiency and profitability in the renewable energies sector “have profound implications for the push to phase out fossil fuels and slow the onset of climate change.” The importance of our global energy production and consumption in terms of the global community’s impact on greenhouse gas emis-

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

sions and climate change can’t be overstated. The Bloomberg report continues: “Electricity generation and heating account for 25% of global greenhouse gases. As wind and solar demonstrate they can compete on their own against coal- and natural gas-fired plants, the economic and political arguments in favor of carbon-free power become harder and harder to refute.” The reason that wind and solar have outgrown government subsidy programs is not because they never needed them at all--to the contrary, the fact that financial state support of renewables is no longer needed shows that the subsidies did exactly what they were supposed to. They allowed renewables, a young innovative sector, to get past the often-fatal initial stages of a new market sector where the prohibitively expensive first steps of scaling up an industry can often crush a company before it truly begins to function and then stabilize. Now, as JMP Securities equity analyst Joe Osha told reporters, “the training wheels are off.” Wind and solar have successfully been able to expand to a level where they can mass-market and standardize, meaning costs

go down and efficiency rises, especially as solar and wind technologies become more and more efficient. According to data from BloombergNEF, wind power now costs half of what it did in 2010, and in the same period of time, the cost of solar has plummeted by a jaw-dropping 85 percent, making wind and solar cheaper than building a new coal or gas plant in most of the world. Now, we just need wind and solar to be more widely adopted. Much, much more widely adopted. Sales are already up, but renewables still account for a very slim proportion of global energy mixes. The profits are there, and the need is most certainly there, but the status quo can be hard to shake. There is also the issue of variability with wind and solar--if the wind doesn’t blow or the sun doesn’t shine, production dips, but demand for energy does not. Luckily, there are solutions to this problem, and the market for energy storage, which would help provide a steady energy flow to the grid, is growing rapidly as well. We have a long, long way to go towards reaching the IPCC’s deadline of 100 percent renewables by the middle of the century, but the goal is now more attainable than ever.

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Tuesday 01 October 2019

BUSINESS DAY

EDUCATION

Weekly insight on current and future trends in education

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Nigeria @59: Under-funding, policy gaps challenges Bassey Andah Foundation set for in education sector remain unresolved Book Launch KELECHI EWUZIE

takeholders in the education sector have expressed concerns that as a country, Nigeria has struggled to attain her optimum level of development in education, when compared to her huge potential in term of both human and material resources. While Nigeria may be celebrating her 59th independence anniversary, industry watchers are however sad to note that an important sector like education continue to suffer from underfunding, policy gaps among other issues that hinders the progress of the sector. Analysts observe that the whole education system without gain saying the fact lacks adequate funding especially the citadel of higher learning for research and innovative ideas, they lacks good planning and management, teaching materials and quality teachers at all levels, owing to poor

governance and infrastructure. It is equally important to add that apart from the challenge of poor funding bedeviling the sector, there is the problem of lack of quality work force to propel the economy as a result of low moral for teachers a situation that have held back the nation’s educational system from performing its basic objectives. There is also the large scale teacher migration, poor working conditions, lack of professional recognition of

teachers by other professions and the wider society. As we celebrate Independence Day, it sad to see a pivotal sector like education lacking in key policy implementation to stem the tide of the crippling education sector. While issues around out of school children, poor teacher quality, infrastructure shortfall still persist, industry watchers insist the Federal Government need to do more to revived the sector from its current state, seeing that education is a vehicle for

social mobility Peter Okebukola, former executive secretary, National Universities Commission (NUC) believes that it is necessary and possible to position Nigerian universities to stimulate economic growth through a deliberate agenda of Production of Entrepreneurial Graduates, Focus on high-value programmes for rapidly growing the economy, increased emphasis on research and development. Okebukola further said Nigeria has to change her value system and invest on education, which is the intellectual laboratory of any nation and the engine that propels the economy. In his word, “It has been noted that ‘without a formidable intellectual base’ it is not likely that any society would move forward”. Tolu Odugbemi, former vice chancellor, University of Lagos, Akoka maintains that Education is the business of all stakeholders of the Project Nigeria adding that our future and survival depends on it.

reparations are in top gear for the unveiling of Book launch and Endowment of Research Chair for the Bassey Andah Institute of African and Asia studies, University of Calabar. The Book launch titled ‘Bassey Andah: A call to ser vice’ chronicles the many aspects and phases of BasseyAndah’s life and services and is billed to hold at the Nigerian Institute of International Affairs (NIIA), Victoria Island, Lagos, on Friday, October 04, 2019, by 10am. The event which will be graced by eminent personalities and scholars, including Ayo Banjo, former vice-chancellor, University of Ibadan (who is a special guest of honour). Other special guests of honour are Peter Obi, former Governor of Anambra State as well as Zana Akpagu,

vice-chancellor, University of Calabar, while Donald Duke, ex-Governor of Cross River State is the Chairman of the occasion. The Book will be reviewed by Emele Uka, former Prelate Presbyterian Church of Nigeria. The late Bassey Andah was a professor, researcher, scholar and teacher. He was a university professor at University of Ibadan before his demise and was appointed professor in 1978 after putting a total of 24 years of meritorious service for the university. The Book provides a vivid account of the unfolding and diverse nature of Bassey Andah’s hugely successful research and teaching career as a pioneering African scholar in his field, and his impact on a whole generation of practitioners that emulated and followed after him.

Leveraging tech base processes to prepare next generation leaders- the mPulse example KELECHI EWUZIE

ver 5,000 children between ages nine and 15 met in Lagos recently at the mPulse Planet to imbibe knowledge required for future of work and creativity. The summer event presented an opportunity to introduce Nigerian youths to the future by stimulating their minds and intellect using the latest technology for work and play. The event with the theme ‘Nigeria, the Future in 2044’ hosted by MTN Nigeria featured various indoor, outdoor and video games, as well as a ‘Tech Town’ with sections for driverless cars, AR game, product design, world of robotics, VR/AR technology, among others. Mazan Mroue, chief operating officer, MTN Nigeria, observes that one year after creating the mPulse platform it helps to expose millions of teenagers to the latest technologies and education materials that will help shape the world in 2044 and

beyond. Children are at the age where they are yet to decide about their future careers so it is important to expose them to the maximum number of technologies and platforms through MTN, where they take decisions on how they want to be in future, says Mroue. Mroue further opines

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that the teens are already exposed to technology and are already connected. According to him, “We need to give them attention and extra offers that will make life easier and enable them to make the right choice when they grow up and enter the university. And meeting them early is an opportunity for us and the

country on how we can train our people to take the right decision”. In 2018, MTN Nigeria launched the exciting proposition, mPulse to equip with the resources they need to maximise their potential and be all they want to be. The mPulse package comes with a voice plan and a fun, educative website,

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which hosts a wide variety of courses and study aids to help children from primary one to senior secondary three excel. The portal also provides a bouquet of single and multiplayer games, as well as life skills videos. From computer programming, fashion design, medicine and blogging to engineering, writing, data science and motivational speaking, among others, there is something for every interest. “All Nigerian children ages nine -14, irrespective of where they are; they are also allowed to access the platform online and leverage all the freebies and all the offers available for them. Today is just a physical interaction with all those different platforms. However there is a plan to replicate the same and extend it nationwide”, Mroue said. Oluwole Rawa, general manager, consumer marketing, MTN Nigeria, says with the mPulse platform comes with different contents about children doing new things successfully, which are things we don’t @Businessdayng

get from our kids because we are so focused on education, which is good, but games and entrepreneurship are things that you can do. Rawa pointed out that the telecommunication company’s decision to put together the second edition of the physical event in Lagos is geared towards ensuring children see some of the future technologies and feel them. To him, “Some children have never experienced things like product development, where they develop things with 3D and print them out for them to see physically; robotics, AR/VR. Some children have never experienced these apart from what they see on the internet, so we bring those things to life. It is a day of fun for the children. Even those that are not very tech-inclined, there is a whole lot for them to do”. Rawa said this year’s event was expanded because of the feedback and level of participation last year, adding that 5,000 people registered one week. So there is a possibility of further expanding it.

Tuesday 01 October 2019

BUSINESS DAY

EDUCATION Is success far fetched?

OYIN EGBEYEMI

uccess is a concept that often seems farfetched and sometimes unattainable, whereas it is more of an ambiguous notion; there is not one definition to suit all. We live in a local and global environment where many people seem to be so fixated on metrics and materialism as a measure of achievement rather than things that are a little less superficial. Hence writing about success is strange and awkward because I still do not understand how and why society determines it to be what it is; yet I understand what it means

to me, a state of mind. We live in times where success is defined based on other people’s terms. Many adults now would recall that if they did not follow conventional career paths of medicine, engineering, law or finance, they were deemed failures. Things have evolved beyond what seemed to be a rigid definition of the ideal career path. However, that mindset has not necessarily changed. With the evolution of communication and dissemination of information, we now seem to be following standards set by fads. Therefore originality has been watered down: people who do not genuinely have the skills or interest in one thing or the other may pursue that very thing adamantly because it is what social media says is “cool”, or perhaps there is a certain perception that that thing is lucrative. However this is why you would notice that many unoriginal copycats do not last, or are not “successful”. Success is not a destination

as many people may describe it. It is not a matter over which you say, “When I become successful…” It is an ongoing journey of self-awareness, selfevaluation and self-improvement. Whether personally, in relationships or in a career, I view the road to success as a very personal ambiguous road, which we should journey on ensuring that we have a feeling of contentment along the way whilst everyone maintains his or her own lane. If a person finds himself or herself unhappy through the journey, this person would very likely not be satisfied with whatever he or she has defined the end to be. This is not the way to live life. Despite the struggles and obstacles that we come across, we need to make that decision to be content. That mindset is what would fuel our sense of success. All of this is not to say that the journey to success is passive in any way. It is extremely important to be deliberate in

each and every single step of the way. It all starts from selfawareness: Where and who are you now? After assessing oneself objectively and critically, then it would be easier to define SMART (specific, measurable, attainable, realistic and time bound) goals. Thereafter, we need to identify work tools that would aid attainment of these goals. Some examples include education, reading material, skill building initiatives and networking opportunities. All of these can be cushioned by our support systems: family, spouses, partners, colleagues, friends, and so on. Along this journey it is also important to review progress through self-appraisal and environmental assessment. The road should not be straightforward, as unexpected twists and turns could come up along the way. These may be setbacks or even ways forward, but they are an inevitable part of the journey that we need to have enough resilience to handle

Institute seeks inclusion of change management in education curriculum

he Institute of Change Management (ICM) has called on the Federal Government to include the teaching of change management in the education curriculum at all levels. Joseph Anetor, registrar of the institute, made the call on the sidelines of the induction of new members into the institute in Lagos. He stated that it was important that students were trained to become change agents from the earliest stage of their education.

According to him, Nigeria cannot compete effective in this current era except it has persons with change management skills as policy formulators and executor. “Change is needed by everyone in order to adapt to the challenges of an ever changing and complex society. Those who cannot drive change cannot achieve any meaningful or tangible growth,” he said. Earlier in his keynote lecture titled ‘Leading in a VUCA world: The Change Management Imperatives’, Tayo Ayoola, a management consultant,

said the society today was characterised by volatility, uncertainty, complexity and ambiguity (VUCA). Ayoola said contemporary society was moving at nearly the speed of lightening which required today’s professionals to keep a step ahead of the unexpected and react in a timely manner; stay on course despite constant surprises and lack of predictability; steer one’s operations through complexity, chaos and confusion and be able to take decisive actions. The consultant urged pro-

fessionals to think global but act local. He noted that success in a VUCA world would require setting laudable goals, relying on technology, being flexible as well as adaptive among others. In his opening remarks, Nathaniel Osewele said the institute’s mission was to build skilled and competent change management specialist, organisations and institutions. A total of 15 people were inducted into the various cadres of membership of the institute.

Student shares how passion helped conquer phobia for mathematics

ohtisareh Sati, a student from Baptist High School, Jos, Plateau State says passion is the root of the energy that helped conquer the Mathematics phobia. Sati who is a contestant in the on-going Season 5 of the Cowbellpedia Secondary Schools Mathematics Television Quiz Show, says that Mathematics is much more than just a set of numbers. According to Sati, “What really interests me about Mathematics is how precise and logical it is and how you can find it in the world around us. It is like everything in the world follows some kind of Mathematical law, like the wave equations, etc,” In the senior category preliminary Group G (week 7) contest last weekend in Lagos, Kohtisareh and Akinyemi Dabira of the Ambassador College, Ota, Ogun State progressed to the semi-final stage at the expense of four of their

colleagues. Aside the N2 million grand prize, Managing Director of Promasidor Nigeria Limited, Anders Einarsson disclosed that the winner in each of categories, (Junior and Senior) will enjoy an all-expense paid educational excursion outside the country at the end of the

initiative. In addition, the first and second runners-up in each category will receive N1.5 million and N1 million respectively, while the teachers of the top prize winners will be awarded N500, 000. Those of the first and second runners-up will receive

N400, 000 and N300, 000 respectively. The 2019 edition of Cowbellpedia Secondary Schools Mathematic TV Quiz continues this weekend. It will be aired on DSTV Africa Magic Family Channel, AIT Network and other six television stations across the country.

Cross-section of attendees during the SHE Advance Event2 in Lagos recently www.businessday.ng

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and manage effectively. This sort flexibility is something that people often do not get right. When something is not working the way we might expect it to, rather than being stubborn or rigid, we need to take a step back to break up whatever the problem is into its many parts, analyse them critically and then figure out realistic solutions, which could even mean modifying the original plan. This is what people struggle with and why many companies have crumbled…being rigid and fixated on one strategy or method while the environment or even the company itself is evolving. There is another side to this matter, whereby people attempt to devise short cuts to attain what they view as success. They want to become fantastic at a certain skill, make money quickly etc, without realising the complexities of these goals and the level of hard work and resilience required to attain them. They therefore have

unrealistic expectations and a sense of entitlement. They often spend a lot of time dwelling on these rather than focusing on their reality. Anyone that we may view as sustainably successful (I use the word sustainable deliberately because there is a lot of fake news around success these days) in anything would tell you that they had to rise up through the ranks, train themselves, be patient, resilient and work diligently. Success is not a destination. It’s an ongoing journey. You have to work your way through every stage, acknowledge and be content with your small wins and then you may even get beyond your initial expectations. This mindset can be applied to anything in life; personal projects, fitness, relationships, careers, ANYTHING.

Oyin Egbeyemi is an executive administrator at The Foreshore School, Ikoyi, Lagos.

Oyo returns 43 percent school pupils back to class, reintroduces boarding system REMI FEYISIPO, Ibadan.

yo State governm e n t re v e a l e d that the State has returned 43% of its out-of-school children population back to class and working towards mopping the rest of the population outside classroom back before the end of the year. According to the State Commissioner for Education, Science and Technology, Kehinde Sangodoyin, the out-of-school children, I can assure you that we have 43 percent of the students back in the classrooms now and we are working to get them all back. We have a plan towards sensitizing the parents and facilitate procedures of mopping the rest of the number back to school from the street and to achieve this; we are going to work with SUBEB and UBEC to actualize this goal. “We are engaging all stakeholders, volunteers, traditional council, leaders of thought and the media to counsel the children wherever they may be found so that they will see the beauty of being back to school for the good of their own future. “Plans are underway to provide them with uniform, we have free textbooks and notebooks and we are supplying them with feeding to retain their interest after getting them back totally. We all know that poverty contributed to the cause of their being outside the school and these items are the major needs that will make them come to @Businessdayng

school and stay. Speaking at the launching and dedication of projects embarked upon by Old Students of Ibadan City Academy, Ibadan, Sangodoyin, a professor hinted that the State would leave no stone unturned in its move to provide qualitative education without financial burden on parents and guardians and has perfected all preparations towards reintroducing boarding system to public schools while 64,000 units of furniture would soon be distributed to all public schools in the State. He added that teachers on level sixteen to seventeen would assume the title of ‘tutor generals’ while government would start paying running cost for the upkeep of public schools from Monday September 30th 2019. “Parts of the State education policy is to improve access and participation of our students in academic activities at all levels, be it primary or secondary and since the governor has removed levies hitherto paid by our students and has just approved the payment of running cost to our primary and secondary schools. Also we are equally working on providing furniture to schools. 64,000 units will soon be distributed to all schools across the State. “Governor Seyi Makinde has proved himself and his administration that he does not bluff. He talks and back his talk with actions and this has been exhibited in his stride in education, security, health and workers welfare among other things.”

Tuesday 01 October 2019

BUSINESS DAY

Workplace automation: How AI Advances in machine learning software means some white collar jobs could be swept away by digital change Robert Wright, FT

hen Matt Radwell, a customer support officer for a small local authority in the UK, first started answering queries from the area’s residents, it was a frustrating and time-consuming business. If a resident contacted Aylesbury Vale District Council, 40 miles north of London, about an issue like housing benefit in which he lacked expertise, Mr Radwell might keep the caller waiting as long as 20 minutes. He had to find someone who could give him the relevant information. Over the past two years, however, his job has been transformed. When a resident types a question into the council’s online chat facility, an advanced computer system starts reading it. For around 40 per cent of inquiries, the system — which has been trained to recognise residents’ questions by using machine learning, a form of artificial intelligence — presents Mr Radwell and other customer support officers with a series of potential, pre-written responses. Each is labelled with an estimated probability of its being the correct choice. If one is appropriate, Mr Radwell clicks on it, satisfying the resident far more quickly and easily than before. The council’s machine learning system — provided by Digital Genius, a San Francisco-based specialist in customer service systems — has put it at the forefront of a transformation under way in millions of whitecollar jobs worldwide. The relentless advance of robotics and AI in the workplace has focused attention largely on the impact on manual labour. In many of the parts of the developing world that have yet to see a wave of industrialisation and the employment boost that it can bring, there is a fear that they might have already missed their chance, given the growing use of automation in factories. However, the growing power of software such as Digital Genius has opened up the possibility that new, intelligent systems will vastly improve the productivity of a range of office jobs from clerical to professional roles — which will reduce some of the drudgery involved in menial tasks but could lead to some people losing their positions. In The Globotics Upheaval published earlier this year, Richard Baldwin, professor of international economics at the Graduate Institute Geneva, predicts that white-collar jobs will be swept away faster by digital change

than in any previous economic transformation. “The explosive potential comes from the mismatch between the speed at which disruptive energy is injected into the system by job displacement and the system’s ability to absorb it with job creation,” Prof Baldwin writes. The potential impact goes beyond relatively basic customer service roles such as Mr Radwell’s, extending into professional services roles such as insurance and law that have seemed wholly reliant on humans’ judgment and understanding. Research last year by PwC, the consultants, found that 30 per cent of jobs in finance and insurance in developed economies were at risk of automation by 2029 and that in the same period 50 per cent of all clerical roles in the same countries were imperilled by automation. Michael Lewis, chief executive of Claim Technology, whose machine learning systems automate insurance processes, says AI technologies will remove the repetitive, dull aspects of handling insurance claims and enable staff to focus on “valueadded activities”. “Artificial intelligence will enable us to do . . . things that weren’t possible previously, or do things that are possible now [but] with far less effort and at lower cost and provide a better customer experience,” Mr Lewis says. Yet a look around Mr Radwell’s still-busy openplan office raises questions about how rapidly the changes under way will sweep through offices. Digital Genius has allowed the customer service team to leave two roles on www.businessday.ng

the team unfilled — it otherwise might have had to take on extra staff to handle the growing volume of calls from the area’s expanding population. But the team still employs eight people. This experience backs up the arguments of Richard Freeman, an economics professor at Harvard University who studies the impact of technology on work. Prof Freeman predicts few companies would be able to make sweeping changes such as dismissing their accounting de-

‘

You are still going to need people. The skillsets they deploy and what they actually do will change

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partment wholesale and leaving only a couple of people to manage the computers. “I think the disruptions are going to be slower than people are claiming,” he told a seminar held by the Oxford university Business and Economics Programme in July. “You are still going to need people. The skillsets they deploy and what they actually do will change” Mr Radwell rejects the idea that the introduction of Digital Genius threatens his future employment prospects, saying it has made the team “smaller but more versatile”. “We can take more stuff on and there are fewer people here,” he says. “I wouldn’t say it’s put my job at risk — it’s made my job better.” There are undoubtedly fields where machine learning systems, which are trained to analyse and quickly spot patterns in pools of data too big for humans to detect, have given employers extraordinary new capabilities. Engage Talent, a start-up based in Charleston, South Carolina, analyses recruitment and retention patterns at companies, tracking thousands of public data sources, such as companies’ ratings on Glassdoor, the employment site, analyst ratings, share price movement and regulatory action. It uses the information to advise clients on questions such as when might be a good time to approach staff at a rival. Matt Pietsch, Engage Talent’s chief revenue officer, says its models flagged up in advance a series of redundancies at Tesla, the electric carmaker. Signs from its model of unhappy staff had @Businessdayng

been “spiking” months before Elon Musk, the company’s chief executive, tweeted about its restructuring plans in June, according to Mr Pietsch. “If I’m a recruiter and I have the data from our system and I want to recruit people from Tesla, I’d want to target individuals on April 1 versus when the announcement is made and 6,000 other recruiters are targeting them,” Mr Pietsch says. It is a far bigger challenge, however, to fit machine learning into existing roles where employers and customers have become used to the strong sense of intuition and flexibility of human staff. The issues are clear in the low-rise glass block housing the Swindon offices of Zurich, the Swiss insurer, which handles everything from the processing of insurance claims to back-office functions such as human resources. Staff at the office 85 miles west of London have seen some significant benefits from robotic process automation or RPA, a relatively simple form of automation that takes over some predictable clerical tasks. Among the benefits of RPA have been that human resources staff no longer spend three days at the start of every month reconciling ledgers of the scheduled deductions from staff’s pay packets with the actual deductions the system is due to make. The RPA software does the reconciliation itself and flags up only apparent errors for humans to solve. RPA has reduced the number of staff needed in parts of Zurich’s businesses, although the company says it seeks to redeploy those affected,

Tuesday 01October 2019

BUSINESS DAY

is coming for your job

often by training them in automation. “The team know exactly which ledgers they need to investigate,” Dan Humeniuk, an automation consultant for Zurich, says of the HR staff. “They go and speak to the team members and investigate, without having three days from hell at the start of every month.” It is less clear, however, that machine learning is poised to take over more complex analytical and sorting work, such as the assessment of insurance claims for car crashes or burglaries. Alastair Robertson, Zurich’s head of continuous improvement and automation for the UK, is one of many in the field to express doubt about whether current systems are up to the task. When Zurich ran a pilot scheme three years ago using machine learning to sift claims, humans had to override the computer’s decision too often for the technology to be worthwhile. “While it could give a there-orthereabouts picture, the individual was still having to step in,” Mr Robertson says. “We’ve piloted it. We’ve found out what the software can do and what it cannot do. So it’s not something we’ve rolled out.” The claim that machine learning is unable to match the reliability and accuracy of human staff is a widespread one. Ben Allgrove, head of global research and development for Baker McKenzie, the law firm, says that, in insurance, only operators dealing with high volumes of routine, low-level claims have so far found the technology useful. A number of insurers — including Japan’s Fukoku Mutual Life — have said they are handling routine claims processing to machine-learning systems. Walmart, the US retailer, uses the technology to handle personal injury claims. “What is common about those two fact patterns is high volume, highly standardised,” Mr Allgrove says. “Yes, you can automate. How much you can automate probably depends [on what standard you want to achieve].” Even for organisations that have enjoyed success with machine learning, there has been considerable cost and effort. While Aylesbury Vale District Council is confident that Digital Genius has paid for itself in reduced salaries and improved service to local residents, the council faced a huge challenge feeding the system with sufficient data about residents’ needs. Maryvonne Hassall, the council’s assistant director for digital transformation, says it was only after four months of pilot programmes that the system started to show enough understanding to be a useful tool. “You need to work with it to help it to learn,” she says. For more specialist professional services firms, the effort required to train a system is often unjustifiably high, says Mr Allgrove. He says managers “massively underestimate” the cost of introducing machine-learning systems. “People

[are] figuring out where is it that the investments make sense when the legal industry is so fragmented and segmented that those business cases are so hard to come by,” he says. “Finding the main use case that makes economic sense at the moment is not easy.” Instead, workers are likely to find evolutionary new technologies being gradually introduced beside them. Mr Allgrove compares the process to how typing pools have disappeared from offices but many personal assistants are still employed by senior executives. “Individual jobs will change with the organisations,” he predicts. “But you are still going to need people. The skillsets they deploy and what they actually do will change.” Prof Freeman told the July seminar in Oxford that people often expected rapid introduction of new technologies in white-collar environments. They saw them as similar to blue-collar roles, where a robot could often be inserted into a process without disrupting the wider system. But that misunderstood how white-collar roles fitted into most organisations. “If you’re bringing in the latest accounting software, the company has to change the way it’s doing reporting, controls, to do a lot of stuff,” he said. “It’s actually a much slower process of adjustment.” Some participants are confident that improvements in machine-learning technology will eventually bring tasks such as assessing insurance www.businessday.ng

claims within reach of automation. Zurich’s Mr Robertson acknowledges there is software available that is “starting to go on that track”, although his company is not yet ready to deploy it. But, for many involved, the experience of automating knowledge work has reinforced not only the potential of new technologies but also the many, continuing advantages of dealing with intelligent, flexible humans. Mr Allgrove acknowledges that lawyers increasingly rely on machine-learning systems capable of scanning huge numbers of relevant legal cases to assess their chances of a success in a given case. But he insists the best lawyers’ judgments and their relationships with clients still trump such software. “The litigators who are most trusted in the market say, ‘We probably only have a 50-50 chance of winning but this is a case we must fight’,” he says. “We feel that the world has changed; social positions have changed slightly; the nature of the bench has changed’.” Echoing the views of people in many white-collar sectors, Mr Allgrove insists that the ability to exercise such nuanced judgments remains a “high-value skill”. “I think for the foreseeable future — by which I mean five to 10 years — that’s still there,” Mr Allgrove says. “While it could give a there-orthereabouts picture, the individual was still having to step in,” Mr Robertson says. “We’ve piloted it. We’ve found out what the software can

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do and what it cannot do. So it’s not something we’ve rolled out.” The claim that machine learning is unable to match the reliability and accuracy of human staff is a widespread one. Ben Allgrove, head of global research and development for Baker McKenzie, the law firm, says that, in insurance, only operators dealing with high volumes of routine, low-level claims have so far found the technology useful. A number of insurers — including Japan’s Fukoku Mutual Life — have said they are handling routine claims processing to machine-learning systems. Walmart, the US retailer, uses the technology to handle personal injury claims. “What is common about those two fact patterns is high volume, highly standardised,” Mr Allgrove says. “Yes, you can automate. How much you can automate probably depends [on what standard you want to achieve].” Even for organisations that have enjoyed success with machine learning, there has been considerable cost and effort. While Aylesbury Vale District Council is confident that Digital Genius has paid for itself in reduced salaries and improved service to local residents, the council faced a huge challenge feeding the system with sufficient data about residents’ needs. Maryvonne Hassall, the council’s assistant director for digital transformation, says it was only after four months of pilot programmes that the system started to show enough @Businessdayng

understanding to be a useful tool. “You need to work with it to help it to learn,” she says. For more specialist professional services firms, the effort required to train a system is often unjustifiably high, says Mr Allgrove. He says managers “massively underestimate” the cost of introducing machine-learning systems. “People [are] figuring out where is it that the investments make sense when the legal industry is so fragmented and segmented that those business cases are so hard to come by,” he says. “Finding the main use case that makes economic sense at the moment is not easy.” Instead, workers are likely to find evolutionary new technologies being gradually introduced beside them. Mr Allgrove compares the process to how typing pools have disappeared from offices but many personal assistants are still employed by senior executives. “Individual jobs will change with the organisations,” he predicts. “But you are still going to need people. The skillsets they deploy and what they actually do will change.” Prof Freeman told the July seminar in Oxford that people often expected rapid introduction of new technologies in white-collar environments. They saw them as similar to blue-collar roles, where a robot could often be inserted into a process without disrupting the wider system. But that misunderstood how white-collar roles fitted into most organisations. “If you’re bringing in the latest accounting software, the company has to change the way it’s doing reporting, controls, to do a lot of stuff,” he said. “It’s actually a much slower process of adjustment.” Some participants are confident that improvements in machine-learning technology will eventually bring tasks such as assessing insurance claims within reach of automation. Zurich’s Mr Robertson acknowledges there is software available that is “starting to go on that track”, although his company is not yet ready to deploy it. But, for many involved, the experience of automating knowledge work has reinforced not only the potential of new technologies but also the many, continuing advantages of dealing with intelligent, flexible humans. Mr Allgrove acknowledges that lawyers increasingly rely on machine-learning systems capable of scanning huge numbers of relevant legal cases to assess their chances of a success in a given case. But he insists the best lawyers’ judgments and their relationships with clients still trump such software. “The litigators who are most trusted in the market say, ‘We probably only have a 50-50 chance of winning but this is a case we must fight’,” he says. “We feel that the world has changed; social positions have changed slightly; the nature of the bench has changed’.” Echoing the views of people in many white-collar sectors, Mr Allgrove insists that the ability to exercise such nuanced judgments remains a “high-value skill”. “I think for the foreseeable future — by which I mean five to 10 years — that’s still there,” Mr Allgrove says.

Tuesday 01 October 2019

BUSINESS DAY

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Tuesday 01 October 2019

BUSINESS DAY

BDTECH

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E-mail: jumoke.akiyode@businessdayonline.com

Ten things to know about Facebook’s Libra crypto-currency or euros. 8. 50 percent of Facebook Libra’s basket will be on the us dollar, the remaining portion will consist of Euro with 18 percent, Yen with 14 percent, British Pound, 11 percent and the Singapore dollar with 7 percent. Surprisingly, the basket will not include the Chinese Yuan, the currency of the world’s second largest economy. 9. Libra is not an investment or speculative asset, so when you buy a Libra coin, that will not grant you any right on returns. “When you want to acquire coins, we would receive your currency e.g. Euros, and put them in the reserve in exchange for the Libra coins. So, the reserve will fill itself from the purchases of the coins, there is no monetary creation,” the association said. 10. Libra doesn’t expect to get all of Facebook’s audience, as users will have to submit documentation for KYC checks, hence there would be a gradual build up of people. The association will be responsible for the reserve and would be working with authorised resellers that will sell and buy from customers. It will also ensure is that the exchanges are highly regulated in the geographical countries where they provide services.

JUMOKE AKIYODE-LAWANSON

t is no longer news that Facebook, popular social media and social networking company has announced that it will, in 2020, launch its global cryptocurrency called the Libra coin; built on blockchain technology to promote financial inclusion. In simple terms, the Libra coin will allow for individuals everywhere in the world to trade and transact with a digital currency that is secure, stable, fast, mobile and cheap. Imagine being able to send money to family and friends or paying for goods and services anywhere in the world without having to pay exorbitant bank transfer charges, or losing value due to currency exchange. This is the opportunity Libra promises due to the fact that the crypro-currency, unlike Bitcoin, is essentially a stable coin, as it is pegged to governmentissued currencies such as the US dollars, Euros, British pounds, Singapore dollar, etc. BusinessDay was in London last week to meet with Betrand Perez, COO, Libra Association and some members of Calibra who spoke extensively on the prospects of Libra in financial and economic development. Here are ten important things to know about the Libra coin before its launch in the second half of 2020; 1. Libra coins will be backed by financial assets such as a basket of currencies. Users will be able to exchange Fiat currency into these digital currencies and use them for online transactions. Libra also relies on all those currencies in the basket, in the sense that it will rely on monetary policies of those central banks. Monetary policies from central banks of currencies in the fiat basket will instantly reflect on the price of the Libra coin. 2. Libra will significantly decrease fees currently charged by banks to send and receive money. It will also impact the speed of money transfers and lessen the time with the existing remittance corridors. 3. Christina Smedley, VP, brand and marketing for Calibra, one of the 28 members of the Libra associ-

ation told BusinessDay that data that customers share with Libra will not be shared with Facebook. “There are some fraud measures that we put in place just to make sure that the community is protected and will enable us to detect when bad activities are happening on the network. This proposed launch is at least a year away, so there’s a lot that we still need to sort out,” she said. 4. The Libra Association is made up of reputable partner companies such as Mastercard, Visa, PayPal, Uber, and many others. These companies shall work together to ensure payment processes are faster, more accurate, and safer than existing financial technology by using blockchain technology. 5. Libra has not yet been licensed by any regulator in any country to operate, however, the association is already in talks with regulators and central banks around the world including Switzerland and Singapore.

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“The Swiss regulator has stated that we should be regulated as a payment system and so we are going to apply as a payment system,” Betrand Perez, COO, Libra association said. 6. At first, Libra will only be available in the Facebook messenger app and WhatsApp. With the other partners in the Libra Association, it is accepted that those companies will find ways to integrate Libra payments. “We have announced from the Facebook site, the commitment to build a wallet which will be available in messenger and WhatsApp and on Facebook products. What’s important to remember is that it would be interruptible with other wallets so other people who are building on the blockchain will be linked,” the association said. 7. Right now there is no value for the Libra coin, as the basket has not been defined and it is too early to say how much Libra coin would be worth a particular amount of dollars

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Vivo set to launch innovative 5G chipset phone

f you’re an Android fan, then you might be aware of some of the rumors making the rounds on the upcoming Vivo smartphone - especially building its own chip. Just maybe you might be getting an Exynos processor in your hands instead. As of today, the premium mobile brand as confirmed it would launch its upcoming smartphone with Exynos 980 chipset by the end of this year. The Exynos 980 is the first midrange chipset with an integrated 5G modem. It’s an 8nm chip fea-

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turing two Cortex-A77 cores, six A55 cores, Mali-G76 MP5 GPU and an NPU. Using an integrated modem is cheaper (as they simplify the motherboard) and more power-efficient to boot. The 5G modem range will likely speed up download to 2.55Gbps using the sub-6GHz standard, a chip that’s capable of supporting 4G and 5G downlinks to hit up download speeds up to 3.55Gbps. However, we won’t be surprised if it does. We’ll keep this updated as more details emerge.

Tuesday 01 October 2019

BUSINESS DAY

BDTECH

E-mail: jumoke.akiyode@businessdayonline.com

Smartphone review: Tecno Camon 12 series and its exquisite camera functions JUMOKE AKIYODE-LAWANSON

ecno mobile, the popular smartphone company has recently released another trendsetting device into the Nigerian market – the new mobile phone, which is the 6th generation of brand’s camera-centric Camon Series comes with a long list of added values and updates from its predecessors. The Camon 12 series comes in three size and colour variants – the Camon 12, Camon 12 Pro and Camon 12 Air. The device, can be gotten in an Aqua Blue colour variant, a Boudreaux Red colour variant and a Midnight Black colour variant. All variants of the device come in a nebula gradient inspired look – a design patterned after the starlight that reflects beautifully in light conditions making the device very attractive. Also, putting into consideration its 6.52 HD AMOLED DOT Notch display and 7.88

thickness, it is safe to conclude that the device is very light and fits perfectly into the grip of a user.

The Camon 12 comes with a 16 MP front Camera flanked by a pair of dual flashlights to enable users

Energy industry experts propose digitalization for needed sector development …cite regulation of tech as sector’s biggest challenge so far JUMOKE AKIYODE-LAWANSON

xperts in the energy sector have said that digitalization of the sector would be imperative to its growth as well as lead to an expansion of the value chain within the sector. Key stakeholders who spoke at the Power Nigeria Exhibition and conference held at the Landmark center in Lagos recently, noted that digitalization of Nigeria’s energy sector would open up parts of the energy value chain to new players by removing natural synergies or barriers to entry. According to them, data science, machine learning, blockchain, internet of things (IoT) are top technologies that would aid effective distribution of power and keep it cost effective. Adebayo Johnson, general manager, PowerPro Company Limited, said that digitalization would lead to a disruption of the energy value chain with an emergence of new business structures that would lead to entrance of different players as well

as create better trading of energy resources. “Our physical assets would be gradually integrated unto digital platforms where we can collect, analyse data from them as well as respond to such data. This would ensure a seamless supply of energy to where it is needed at the right time and price.” According to Deep Karani, exhibition director, Power Nigeria Exhibition and conference, the adoption rate of new technologies could be directly affected by regulations, as companies would have to worry about the legality and necessity of such technologies based on the available regulations. “Nigeria, I believe is still running on old systems and there needs to be more energy efficient systems that come into play. Once these systems are changed, you would see in the next ten years, Nigeria will become the next biggest innovator of technology. When I speak to market players there is so much I learn about their vision of bringing new technologies into www.businessday.ng

the country, but now we are just figuring out how regulation can play a role. As we all know regulation has been the biggest challenge so far. Once that comes in place and few things are being mandatory, it would bring good change to the country. Speaking at the event, Gareth Rapley, group exhibition director, industrial portfolio, informal markets stated that the power sector in the country has opportunities for a lot of growth. “Digitalization is at the forefront of many companies’ agenda today, I think across all sectors and not just the power sector. There are many areas that come into that digital transformation and I think we are just at the beginning of the journey over the coming years. There is a lot of opportunity to develop the market here in Nigeria.” Rapley also said that industry players need to start from the basics so as to enable them retrospectively introduce solutions that would offer opportunities to accelerate development of the energy sector.

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take crystal clear selfies under lowlight situations – this a visible upgrade from its predecessor which spots a single flash light. Also, the focus on camera quality took a new dimension with the Camon 12. TECNO has introduced a Triple AI Max Camera of 16+8+2 MP which gives users the opportunity to take up to 120° super wide-angle shots – thus, with this device, capturing images of amazing landscape, cityscapes and indoor architecture has become stress-free. The 2 CM Macro photography feature included on this device makes it possible to take close-up shots without losing the smallest details on the object a user intends to capture – to mention also, is the bokeh effect that helps users tackle background issues by placing a clearer focus to the object to be snapped as against the background. In terms of battery, the Camon 12 packs an irremov-

able 4000mAh battery with super-fast charge, and can stay on standby for 24 hours after a single charge. The device is powered by MediaTek’s Helio P22 chipset which makes possible Smart AI imaging, AI Camera, reliable connectivity and power efficiency — with all the power packed in the Camon 12, the device would not get hot while performing powerful functions due to this ‘new premium chipset which sells at a good price point.’ Worthy to mention is the rear-mounted fingerprint scanner, Face ID unlock, Pin and Pattern featured added to the device to help users maximize privacy on their smartphone. The Camon 12 sells for N47,500 at authorized TECNO dealer stores across the country. Tecno has also announced that when you purchase the Camon 12, you’ll also be given a raffle ticket that entitles you for a raffle draw to win a trip to Europe.

Smile offers device swap as reward to loyal customers JUMOKE AKIYODE-LAWANSON

n furtherance of its quest to always please and excite its customers, 4G LTE pioneer service provider in West Africa, Smile Nigeria, has launched a campaign that is designed to give brand new SMIFI and Router devices to its loyal customers. This latest offer is targeted at customers who have spent a minimum of 12 months on the Smile network. Lotanna Anajemba, head of brands and communication, Smile Nigeria, said that customers who have spent a minimum duration of 12 months and have good data usage history are welcome to bring their old SMiFi or Router devices in exchange for a new device. Anajemba further explained that eligible customers can only benefit from this offer once a year and would have to update their Know Your Customer (KYC) record with Smile to enable them get notification for the offer. The lucky customers will be contacted via SMS and email and requested to visit the nearest Smile shop or kiosk nationwide to claim their new device. A vital aspect of this loyalty program is that it offers the customer a router or SMiFi device at no extra cost. However, cus@Businessdayng

tomers will have to trade in their old device for the new one. The Campaign primarily rewards unflinching loyalty. The offer is available in all the major Nigerian cities in which Smile operates. “We recognize that the internet is becoming more and more important for nearly everybody in their everyday lives, and as such, it is our goal to enable as many people as possible to enjoy the best customer experience on the Smile network,” Anajemba said. Industry watchers believe that the offer is part of Smile Nigeria’s objective to extend internet access to most Nigerians by delighting current customers and attracting new prospects alike. Smile’s effort to get Nigerians on to the internet is demonstrated by its aggressive investment in 4G LTE network in Nigeria, introduction of a wide and affordable bundle portfolio, available data enabled devices and exciting offers such as this. This latest offer seems to align with the company’s commitment to create a differentiated value proposition and provide customer centric services, which are aimed at adding unrivalled benefits to its teeming customers spread across major cities and towns in the country.

Tuesday 01 October 2019

NIGERIA@59

BUSINESS DAY

LABOUR

A nation in unending new minimum wage debate JOSHUA BASSEY

othing has defined engagement between the government and organised labour in the last three years like the new national minimum wage. Practically, a journey that started off in October 2017 with the setting up of a 30-man National Minimum Wage Committee by President Muhammadu Buhari, headed by Ama Pepple, a former federal permanent secretary appears to have approached a cul-de-sac. Nearly one year after the Pepple’s Committee submitted its report in of November 2018, which recommended N30, 000 up from N18, 000 as new national minimum wage, the implementation of the new wage benchmark has continued to stir controversy. Several meetings called to resolve the impasse have ended in fiasco, with no agreement reached. At the heart of the matter is the procedural adjustment of salaries of civil servants to reflect the new minimum wage. While workers at the lowest rungs - levels one to six are automatic beneficiaries of the N30, 000 new wage, it is not so with workers from grade levels 07 to 17. For workers in this middle, senior and management cadres, a consequential adjustment of their salaries is required. The disagreement centres on the percentage of adjustment. While the Federal Government has proposed 9.5 percent for employees on grade levels 07 to 14 and five per cent

for those on grade levels 15 to 17, labour, represented by the National Public Service Negotiating Council (JNPSNC) has demanded 30 percent consequential adjustment for officers on grade levels 07 to 14 and 25 percent for grade levels 15 and above. For the government, the argument has been about the ability to pay given that revenue accruing to the federation account is shrinking. Currently, the federal government is seen borrowing money to implement its annual budgets amid rising debt profile which is put at over N24 trillion. A higher consequential adjustment would leave the government struggling to pay salaries and allowances of its workers. There is also the argument that the challenge of non-payment of salaries at the state

level would worsen in view of the fact that at N18,000, several states could not pay. Already, the recent announcement by Zainab Ahmed, minister of finance, budget and national planning, that the Federal Government would commence deduction of the bailout funds it advanced to the states in 2016, totalling about N614 billion to enable them offset arrears of pensions, salaries and allowances owed to their workers, has sent shivers across the states. Governors of some of the affected states are said to be jittery, as this would further limit what gets to their respective states, thus hampering physical development. “It was a loan advanced by the Central Bank of Nigeria (CBN) and the repayment will be made to the

same CBN. So the recovery process for us is to deduct from the Federation Account Allocation Committee (FAAC) provisions to the states and remit same to the CBN,” Ahmed said in September. The concern raised by the states has again brought to the fore their vulnerability in the face of the expected implementation of the new national minimum wage of N30, 000. In many of the states that benefitted from the bailout funds, payment of workers’ salaries and pensions of retirees is still a challenge. Statistics from the Fiscal Responsibility Commission (FRC) showed that most of the 36 states in Nigeria are in near collapse state and living on borrowed time due to huge debt profiles. According to FRC report, the states have a combined debt in excess of N2.39 trillion as of 2017, a 53.31 percent deficit. The Nigerian Governors’ Forum (NGF) had insisted on a review of the nation’s revenue sharing formula as a condition to implement the N30, 000 minimum wages, arguing that the formula as it stands, gives the federal government undue advantage over the federating states. Many have challenged the states to look inward and find acceptable ways of upping their Internally Generated Revenue (IGR). In what shows that the states can help themselves in this wise, President Muhammadu Buhari recently took the governors to task. “Going forward, states must in the

next four years find ways to increase internally generated revenues, improve value-added Tax (VAT) collection and increase agricultural output without disrupting business activities” said Buhari to the governors during the inauguration of the National Economic Council (NEC) in Abuja. Apart from a few of the states, most of the 36 states rely almost 100 percent on FAAC to fund their budgets and programmes, as their IGR present a pathetic financial picture. This notwithstanding, organised labour has insisted the new wage must be paid. Like all other previous meetings, the last meeting of the JNPSN held on September 26, 2019, ended in a deadlock. Alade Lawal, Secretary-General of the JNPSN in a recent statement, warned that labour would not issue any fresh notification before embarking a national campaign to press home its demand for an acceptable consequential adjustment of salaries of civil servant and implementation of the new wage increase. Ayuba Wabba, president of the Nigeria Labour Congress (NLC) has backed the JNPSN position, saying the NLC would mobilise members for a strike in solidarity with the JNPSN. Many have argued that to avert a national strike, with its possible negative consequences on the already struggling economy, there is the need for the government to quickly resolve the impasse by adjusting their positions in the interest of the nation. Perhaps independence anniversary offers this opportunity.

OIL&GAS

Oil and gas sector still waiting for passage of PIB DIPO OLADEHINDE

igeria is 59 years after independence yet Africa’s biggest oil producing country of over 190 million people still has a problem finding its feet in a quick paced world. For its oil and gas sector, it will be 59 years of old of few success and many old perennial problems such as the non-passage of Petroleum Industry Bill (PIB), non-removal of fuel subsidy, regulating the downstream sector and non-liberalisation of gas prices among others. According to those familiar with the sector, the challenge after 59 years would be how to improve the economic growth of a sector responsible for 90 percent of Nigeria’s foreign exchange earnings, however still contributes little to grow GDP which has remained in the one-digit margin, with all-time highest contribution of 9.84 percent in Q3 2017. KPMG, a multinational professional services network, and one of

the Big Four accounting organisations said significant opportunities exist in the gas value chain either in upstream, midstream and downstream with incentives already codified by law. “Political stability is driving growth with relative stability in the Niger-delta region. Also, Returns outweigh risk for business with the right market entry strategies,” KPMG said. According to data from National Bureau of Statistics (NBS), Nigeria’s oil sector grew by 5.15 percent quarter on quarter against -1.46

percent in Q1 2019.This is the first and biggest growth recorded since Q1 2018 were the sector recorded a GDP growth of 14.02 percent. Multinational professional services network with headquarters in London, PricewaterhouseCoopers (PwC) said the outlook for the industry is positive and operators can look forward to an exciting and dynamic future with an ever-changing competitive landscape characterized by divestments and new acquisitions as new market entrants continue to seek a share of the industry’s significant growth potential. “The onus however sits with governments to ensure that they continue to provide acceptable regulatory environments with attractive fiscal systems. The main difficulty that investors have is the risk associated with uncertainty,” (PwC) said. PwC said should uncertain regulations persist especially surrounding the passage of the Petroleum Industry Bill (PIB), the country might become less attractive to new

investments which is considered very important in increasing the country’s revenue. Nigeria has been on a perpetual voyage with PIB which is one of its most important bills ever to be contemplated in Nigeria’s history in a journey that began sixteen years ago with a lot of anticipation and promises. The bill is still stuttering through legislation after passing through four presidents, five presidential terms and five legislative tenures however the governance aspect of the bill which is Petroleum Industry Governance Bill (PIGB) is currently awaiting President Buhari (who is also the Minister of Petroleum) signature before it becomes a law. Other experts in the oil and gas sector ranked reforming fiscal and regulatory terms by passing into law a competitive PIB as the most urgent task facing the government. Next is leveraging the oil and gas sector to provide linkages across the economy and creating efficiency in the oil and gas sector.

Moving forwards, other stakeholders have also recommend to the government to organize transparent oil licensing bid rounds, deregulate the downstream sector, liberalize gas prices and abolish wasteful fuel subsidies. While Nigeria seems to dilly dally with over 186 marginal fields lie fallow because bid rounds have not been conducted leading to loss of billions of naira in revenue; other countries like Madagascar, Algeria, Ghana have organized oil licensing rounds to boost their reserves, increase revenue as well as their capacity to take advantage of soaring oil prices. Today, Nigeria is only capable of pumping some 2.5 million barrels of crude oil per day despite sitting on more than 40 billion barrels of proven reserves with its mid-stream and downstream infrastructure are arguably in worse shape than upstream production while huge gas reserves with an estimated value of $462.5 billion have been left trapped and unproductive for decades.

Tuesday 01 October 2019

BUSINESS DAY

NIGERIA@59 HEALTH

Nigeria’s healthcare sector disappointing ANTHONIA OBOKOH

ifty-nine years after Independence, Africa’s most populous nation’s health sector and the well-being of most Nigerians remain plagued by a seemingly relentless burden of both infectious and noncommunicable diseases, persisting social gaps, and inadequate human resources to provide care for a growing population. As Nigeria celebrates its 59th Independence anniversary today, the most appropriate response to Nigeria’s health care challenges would be to address the social determinants of health which lie outside the health system as a national priority, strengthen the health care system, and facilitate universal coverage for health care. When extreme poverty affects a large proportion of the population, as in Nigeria, health is predominantly affected by a lack of access to the basic requirements for life, clean water, adequate nutrition, effective sanitation, reasonable housing conditions, access to vaccinations and good schooling. Other factors include childhood and adolescent nurturing. In Nigeria cancer is responsible for 72,000 deaths every year, with an estimated 102,000 new cases of cancer annually. The devastating effects of the pandemic on the lives of individuals, families, whole popula-

tion groups, and society in general needs special attention. For years now, after much government denial and an abysmally slow response with regard to funding for cancer, the bill on the Establishment of Cancer registry is still pending. The Nigeria Cancer Plan 2008-2013 had goals and priority areas that were achieved with some still in the process of being implemented while others are yet to commence, have implications for a deteriorating national public health system committed to equitably serving all Nigerians. Nigeria has one of the worst tuberculosis epidemics in the world. Driven in recent decades by the spread of HIV infection, the incidences of tuberculosis increased from 407,000 people in Nigeria have

TB each year. Annual notifications increased, since tuberculosis, a case in Nigeria made international headlines, Nigeria is among the 14 high burden countries for TB, TB/HIV and MultiDrug Resistant TB. The country is ranked seventh among the 30 high TB burden countries and second in Africa. The problem of TB in Nigeria has been made worse by the issues of drug-resistant TB and the HIV/ AIDS epidemic. However, widening disparities Nigeria has also not been able to meet the commitment it signed with other members of African Union 18years ago – the Abuja Declaration – to allocate at least 15 percent of its budget to improve the health sector. Nigeria’s highest federal budget-

ary allocation to health was in 2012 when 5.95 percent of the fiscal allocation was allotted to health. The national public health sector, workforce is facing a critical shortfall of professionals as the brain drain in the sector has reached alarming proportions. About 50 percent of Nigerian doctors are working aboard. Patients are facing increasing wait times, limited access to providers, reduced time with caregivers, and decreased satisfaction. “The terribly low doctor-patient ratio is one of the reasons why we have many quacks within the medical profession. And many Nigerians are dying in the hands of these quacks,” Francis Faduyile, president, Nigeria Medical Association, told BusinessDay. Approximately less than 5 percent of Nigerians have health insurance that provides access to health care, the remaining dash their hope to traditional medicine and other measures or wait for death. “The crisis at the NHIS is affecting the whole healthcare insurance business,” Umar Sanda, former president of Healthcare Provider’s Association of Nigerian (HCPAN), said in a telephone interview. “There is lack of payment disbursements from the HMOs and payment has been delayed,” he explained, adding: “The enthusiasm to do the work has reduced.” Up to 98 percent of people pay out of pocket for private-sector care. Worse still, many of the private hospitals functioning are not sustainable

as they lack the proper structure to run profitable healthcare businesses. Most of the state hospitals are in a state of crisis, with the public health care infrastructure run down and dysfunctional as a result of underfunding, mismanagement, and neglect. This has been most visible in all states and is also striking by health professionals on poor remunerations. According to the World Health Organisation, Maternal mortality rate in Nigeria is 814, per 100,000 live births only outperforming Chad with 856, Central African Republic; 882, and Sierra Leone; 1360. Wartorn countries like Somalia and the Democratic Republic of Congo even outperformed Nigeria. Also, while Botswana and Mauritius have the proportion of births attended by skilled health personnel as 100 percent, Nigeria is again down the pyramid with 35 percent, competing with countries like Eritrea, Ethiopia, South Sudan, and Chad. The statistics can get worse, for every 1000 births in Nigeria, 108 infants (and children) die before the age of five, and again, the country sits comfortably close to the bottom of the ladder in Africa. Underfunded overtime, the problem of lack of uniformed data has also remained a clog on the wheel of progress of governments at various levels, thereby hindering the provision of adequate, effective, affordable and efficient healthcare services to Nigerians.

TECHNOLOGY

Buhari’s government needs to prioritise ICT development FRANK ELEANYA

here is no doubt that Nigeria has made some progress in the area of information and communication technology (ICT), but the government’s participation in this developmental journey has at best been perfunctory. Some of the time, it was reacting to an imminent change rather than taking the initiative. Hence, much of the progress recorded in ICT in recent times had commenced from individuals tired of waiting for authorities to act and decided to take the initiative themselves. The country’s thriving tech ecosystem, for instance, was built not by an intentional government strategy but by young people disenchanted by the state of the economy, the growing poverty, widespread corruption, unemployment and who saw the opportunity to create and build innovative solutions. Thus, in less than a decade, the young innovators have become the major attraction of investors

both local and foreign and perhaps the best thing coming out of the country’s chequered ICT history since independence. In 2018, 148 start-ups in Nigeria attracted $178 million in grants and from funding rounds, helping them to maintain a sizable share of the financial backing received by African tech-driven businesses, data from Tech Point Africa showed. It is arguably as a result of these increased activities and attention to young innovators that the ICT sector’s contribution to Nigeria’s

GDP has grown in recent times. By the second quarter of 2019, ICT had contributed 13.86 percent to the country’s GDP, overtaking the oil sector at 8.8 percent. The new minister of ICT, Isa Ali Pantami said he expects the gap to more than double by 2021. “I’ve been saying it and I’ll repeat it again that the future of the world is in the ICT. It is a privilege to be part and parcel of this sector and at the same time to be with the stakeholders of the ICT in Nigeria,” adding that “If you look at it critically, and most importantly the

recent statistics released by the NBC, it will tell you that the future is indeed in the ICT. So this is a clear indication that at the pace ICT is growing in Nigeria, most probably in the next 2 or 3 years, the contribution of the ICT to the GDP will, at least, double that of oil sector”, the minister said at a session of the International Telecommunications Union (ITU Telecom World 2019) in Budapest, Hungary. While the potential is there for ICT to displace oil permanently as the top driver of Nigeria’s economy, it is going to take more than rhetorics or political correctness to make it a reality. The authorities must as a matter of urgency address the fundamentals such as broadband infrastructure. There are over 40 million Nigerians who have no access to the internet. On the other hand, over 122 million internet users in the country have to struggle with poor internet networks and speeds and not-so-cheap data packages to stay connected with the rest of the world. Despite having over

150 million with mobile phones, mobile broadband penetration is at a paltry 33 percent. Fixed and satellite broadband assets are largely untapped even when they have capacities capable of delivering wider and far more stable connectivity to the country. Broadband infrastructure assets contributing below expectations mean that the government has a lot of work to do in ensuring that the investors who own them are willing to deploy them. The government can start by declaring these assets as national assets and creating a pathway for operators, state governments and regulators to quickly resolve any differences that arise. Finally, at 59, the Buhari administration’s one-mind pursuit of a corrupt-free Nigeria means the government needs to cement its friendship with ICT and deepen its investment in digitalization of all government processes. Without automation, the incentives to corruption would always be there, no matter how many corrupt individuals are shipped off to prison.

Tuesday 01 October 2019

BUSINESS DAY

NIGERIA@59 MARITIME

Cargo inspection at ports still manual as Nigeria fails to facilitate trade AMAKA ANAGOR-EWUZIE

ifty-nine years into independence, cargo clearing at the nation’s seaports has remained cumbersome as the Federal Government foot drags in automating cargo clearing procedure through the adoption of a Single Window Platform and use of scanning machines for cargo inspection. As a result, service delivery at Ports has remained poor as cargo dwells longer in Nigerian Ports because it takes a minimum of 22 days for an importer to clear and take delivery of the cargo. Therefore, importers using seaports in Nigeria where cargo dwells longer than necessary, pay more as demurrage to shipping companies and storage charges to terminal owners for not taking delivery of their consignments as and when due. Single Window is a platform that brings all facilities and parties involved in cargo clearing at port together in one place, with the aim of reducing time and efforts involved in getting approvals from different players at ports. Recall that Hameed Ali, comptroller general of Customs had in 2017 promised that the electronic single window would be introduced into port operations before the end

of 2017. He said there were plans to replace the scanners at the port, to improve the Ease of Doing Business at ports. Two years down the line, port users are yet to see these technologies established in the ports. Technology eliminates human to human contact and gives the right service to the importer, said Cajetan Agu, director, Consumers Affair of the Nigerian Shippers Council (NSC) while speaking on challenges of trading across borders at a workshop held recently in Lagos. According to him, Nigeria is losing for failing to adopt technology like neigbouring West African ports. Citing example, he said that before the introduction of single window in Benin Republic, cargo dwell time was more than 18 days but since the port embraced single window, cargo dwell time crashed to less than seven days and revenue for government also jumped up by 33 percent. He further said that cargo dwell time was more than 22 days in Lome port before the introduction of single window, but that dropped to three days due to use of technology. Findings show that in Port of Tema, Ghana cargo dwell time came down from 24 days to 15 days due to improved service efficiency at the port. Tony Anakebe, managing director of Gold-Link Investment Ltd, a

Lagos-based clearing and forwarding firm, said importers and their agents are presently encountering various kinds of challenges while clearing their goods from the port due to the 100 percent physical inspection by the officers of the Nigeria Customs Services. He said there are different taskforces instituted in the ports by government agencies including Customs. These task forces, according to him, must grant approval before the importer would be allowed to move the container out from the port,

thereby making documentation processes very clumsy and cumbersome for importers. “Nigerian ports need Customs that make use of Single Window and other electronic clearing system to facilitate trade. We also need an enabling legislation that would enthrone international best practices in Customs operations,” he said. It is said that it is easier to import from China than to move manufactured cargo from Lagos to Benin or Ghanaian markets due to clumsy port procedure and multiple checkpoints on the Lagos-Benin Corridor.

Meanwhile, Agu said that there exist 18 checkpoints from Seme border to Agbara, and 27 checkpoints in total from Seme to Mile 2. He further said Nigeria needs to reduce the number to two to facilitate regional trade. “Time is money in port business and delays encountered at the border stations and ports translate to money that includes payment of demurrage and storage charges at the ports. The requirement of high number of document in cargo clearing is another problematic area,” he said.

INSURANCE

Nigerian insurance industry ripe for N1trn annual premium MODESTUS ANAESORONYE

ith Nigeria’s over 180 million population and a demographic structure favouring a youthful population in the mist of abundant human and natural resources, the nation’s insurance industry almost the age of the country is ripe to underwrite an annual premium income of over N1 trillion. But with over 100 million adult population and only 86.6 million of them having no form insurance cover is considered a market opportunity for insurance companies. Penetration ratio for industry stood at 0.4 percent in 2018, one of the lowest in Africa compared with countries like South Africa (17 percent ), Kenya (2.8 percent ) and Ghana (1.1 percent), further underscores a huge potential yet untapped. According to industry sources, the low penetration ratio presents a huge opportunity for growth and as such the sector is tagged as one in a growth phase. Although the challenges that drag the industry still remain, lack of tailored products to reach the low-income earners is

one that must be bridged to take the industry to its next level. The asset base of the industry’s stood at N1.3 trillion as at 31 December 2018, reflecting a compounded annual growth rate of 17 percent in the last three years. In 2018, the century-old underwriting industry generated Gross Premium Income (GPI) of N448.6 billion, which reflects a 12 percent growth year-on year, according to Agusto & Co’s data analysed by BusinessDay. However, total assets, GPI and profits are controlled by a few play-

ers in the industry, where top five players account for 45 percent of GPI, 42 percent of total assets and 61 percent of after-tax profits. As Nigeria therefore marks its independence anniversary, government should support the industry by ensuring that the Consolidated Insurance Act that has been with the legislators for over 6 years is given a push to strengthen regulation and enforcement. One important thing is that, government should give the insurance of its assets a priority, pay premiums as that will go a long way in setting

a good precedence for the private sector to emulate. Another expectation from the government is the enforcement of the different compulsory insurance made compulsory under the law that will push the growth of insurance and its contribution to the economy beyond expectation. On the side of operators and regulators, the potential of the Nigerian Insurance market will not be achieved if certain factors are not urgently addressed. Analysts have long contended that the travails of the industry are caused by both operators and regulators and they revolve around the following: Poor Product Awareness; Distribution; and Poor Regulatory Enforcement Insurance products awareness is driven by industry adverts and public enlightenment campaigns. Insurance adverts are still very little compared to other jurisdictions and there doesn’t appear to be adequate funding or focus directed at massive wide-scale public enlightenment efforts. More importantly though is distribution, which remains a major issue with the industry. There appears to be only one well developed distribution channel in Nigeria, i.e. the broker channel. The industry

has focused on this channel to its detriment. The broker channel focuses on the corporate end of the market to the disadvantage of the retail market as brokers rightly use their expertise to serve the corporate market segment. This probably explains why as at the end of 2012, only 1.3million Nigerians had taken up any form of individual insurance (i.e. life, property, and even compulsory insurance like motor) (EFInA, 2012). Comparing this to a population of 168m (as at 2012), this represents an abysmal 1% population penetration. In recent times a few insurance operators have tried to explore selling insurance through telecommunication operators. This innovation gave these operators access to a wider spectrum of the population and this was widely embraced because of the convenience of buying insurance through the mobile phone. This effort deepened the population penetration of insurance further than the 1 percent population penetration in 2012. But unfortunately, most of these initiatives have been stopped as result of regulatory issues, involving NAICOM, NCC, and the CBN and need to re-ignite again to deepen the penetration.

Tuesday 01 October 2019

BUSINESS DAY

NIGERIA@59 HOUSING

Over-ripe adults in search of home CHUKA UROKO

oday, Nigeria and Nigerians are marking the 59th Anniversary of the country’s independence and attainment of nationhood. Because of the state of the nation, the mood is generally sombre and a good number of Nigerians are marking the anniversary with anger and frustration. But it is arguable to say that the country and its citizens have nothing to look back to and be joyful. Though at 59 the country may not be courageous enough to hold its head high in celebration given its circumstances, one thing stands tall. From a population of 50 million at independence, the country has increased in number to an estimated 200 million. That, at least, gives cause for celebration. Again, the country is relatively at ‘peace’ with itself unlike some other nations of the world, especially those of the Middle East, that are in perpetual strife—killing, maiming and destroying their future. Nigeria is also unlike other countries which are ravaged by both man-made and natural disasters. However, beyond these mundane issues, Nigeria could best be described as an anti-thesis in terms of development and economic growth in the past 59 years. The country may be celebrating accomplishments in other aspects of its development, but housing remains a sore spot in all the achievements it has made these long years. At 59, Nigeria is an over-ripe adult, yet it is in search of home. With a housing deficit that is in excess of 20 million units; a total housing stock estimated at 13 million units for a 200 million population, and homeownership level that is a little above 10 percent, the country’s housing situation is simply dire.

These find explanation in the country’s poor infrastructure base and a dysfunctional mortgage system. Postindependence era up to the early years of the military in government Nigeria made giant strides in infrastructure provision. That effort saw the development of rail lines in many parts of the country, long and well paved roads, and iconic bridges such as the Third Mainland Bridge in the West and the Niger Bridge in the Eastern part of the country. The country also invested massively in electricity, healthcare, airports and education infrastructure at both secondary and tertiary levels, leading to the establishment of many federal universities, polytechnics, university teaching hospitals, primary and secondary health centres, etc. Infrastructure and housing development have chicken and egg relationship. This period also saw the development of government houses.

Houses estates such as the 1004 Estate in Victoria Island Lagos, Festac Town also in Lagos and many other estates in major cities of the country were built and given out to Nigerians. Individuals were also able to build their own homes because apart from having income that had value, building materials were also affordable. Private sector operators also augmented government’s efforts, delivering housing that were affordable to the people. Even those whose income could not support owning homes could easily rent or get housing loans from banks at very low interest rate. Anthony Owuye told BusinessDay that during these ‘good old days’ banks offered special rates for housing loans such that civil servants could afford them. But today, the story has changed and the situation is such that while population has grown and still growing at high rate with fast-paced urbanization, infrastructure is at a standstill

while housing development seems to be shrinking judging from the annual increase in deficit. What the country has seen in the last two decades are old roads with craters and ditches, hospitals that speak more of death than life, airports without simple lighting facilities, dead and impassable rail tracks, epileptic power supply, dry and falling water taps, decaying and deserted national monuments. This ugly state of affairs has impacted significantly on housing delivery. What the country sees today is a situation where, because of poor infrastructure elsewhere, everybody wants to live in the city and therefore developers are concentrating their activities in the urban centres. The implication is that the demand for housing is too high for the available supply, leading to high house prices that are not affordable by the predominantly poor urban dwellers. Those who

cannot afford what is on offer settle for the shanties in the hinterlands. This explains why the country’s housing deficit is both quantitative and qualitative. Evidently, Nigeria needs to build more and build cheaply to give home to its many homeless citizens. A country where over 80 percent of its population are renters is a homeless country. To move away from its present sorry situation to a level where a young higher school leaver can afford a roof over his head, the country needs to improve on its infrastructure base, create a functional mortgage system and regig its property laws through a comprehensive ownership reform. “In order to tackle the challenges of housing, state governments should stimulate investment in infrastructure; they should also leverage private capital through public private partnership (PPP) initiative,” Johnson Chukwuma, a structural engineer, advised. Deji Alli, CEO, Mixta Africa, agrees, canvassing clearly articulated targets, need-based resource allocation, reviewing of existing development guidelines, development of integrated infrastructure and encouragement of PPP as a viable development initiative. But Wale Babalakin, Chairman/ CEO of Bi-Courtney Limited, warns, explaining that the PPP initiative is, under serious threat from the same governments whose officials do not respect terms of contracts and agreements, but see private investors in public infrastructure as either competitors or inferior partners. The country also needs to grow its mortgage system through a deliberate legislation on interest rate and loan tenor. At the moment, mortgage is neither accessible nor affordable. There is no clarity and these concerns that should be addressed for more people to be able to take mortgage for homeownership.

MARKET

Nigerian companies are still in the dark BALA AUGIE

welve-months shy of 60 years after breaking of the shackles of slavery, Nigeria’s retail and manufacturing sectors have continued to wobble, while workers lose their jobs and join the unemployment pool. Companies are dying like flies while those alive are on sick beds. Baba Abu, a 49 year old bartender could felt tears well up in his eyes; sudden and unwanted, as he recounted how he lost his jobs. In the space of 10 years, he had worked in six different companies but four of them had been liquidated, while two had to shrink wage cost to stay afloat. “My financial conditions have been deteriorating and l struggle to feed my wife and children. Many among my colleagues who were downsised have gone back to the village to farm. Some of them are even dead. They had lost hope. “It is very difficult getting a job these days, and it is disappointing that after 59 years of independence, we are not where we are supposed to

be,” said Abu. Over 3 decades, retailers and manufacturers have been hobbling, as epileptic power supply, a weak consumer purchasing power, harsh regulatory environment, and decrepit infrastructure continue to stunt growth. Of course, companies had once flourished, especially in the sixties, seventies, and early eighties, when local and multinational firms were operating in a thoughtful environment; between 1976-79, the then military heads of state- Muritala Muhammad and Olusegun Obasanjoimplemented nationalisation policy that transferred stakes in foreign firms to Nigerians. In the eighties, Leventis Stores dominated the Nigerian consumer goods retail market alongside the likes of Kingsway and UTC. Leventis owed a football club that paraded the best stars across West Africa; one of them was Ghana’s legendary keeper, Edward Ansah. The Kaduna Textile Mills, established by the then Premier in Northern Region, Sir Ahamadu Bello, in 1957, has been moribund, and efforts by successive government

to invigorate the company has been unsuccessful. Findings show that the textile industry provided 500,000 jobs in the 1980s. Nasco Group of companies was dominant in 1980s but its owner Nasco Biscuits in Jos, Plateau State is beset with security challenges and operational inefficiencies. In 2015, the refusal of the central bank governor to let the Naira float, the restriction of foreign exchange restriction on 41 items, and President Muhammadu Buhari’s lack of policy direction compounded the woes of retailers and manufactures as severe dollar scarcity hindered them from importing raw materials and equipment to meet production. In 2016, the country slipped into its first recession in 25 years after two negative growths, as companies continue to leave for Ghana. That same year, about 272 firms were forced out of business, 50 of which are manufacturing companies, according to the Manufacturing Association of Nigeria (MAN); South Africa retailer, Woodworths, pulled out Nigeria over high rental costs, duties and complex supply chain. So far, economic numbers have

been disappointing, while investors have dumped Naira assets in pursuit of safe haven assets across the globe. The economy grew at a slower pace of 1.94 percent in the second quarter of 2019 (Q2) 2019, according to a recent report by the NBS; that compares with a growth rate of 2.10 percent in the first quarter. More worrying, manufacturing sector contracted by 0.13 percent from the 0.81 percent expansion in first quarter (Q1)2019. The contraction contradicts evidence from manufacturing Purchasing Managers Index (PMI) data published by the Central of Bank Nigeria (CBN) in the period which suggested that activities continued to expand, albeit at a weaker pace. The cumulative bet revenue of the largest consumer goods firms that have released half year results showed combined revenue dip by 1.13 percent to N839 billion from N849.55 billion as at June 2019; five out of the total number recorded a sharp drop in revenue, the first in 3 years. These firms are also spending less to produce each unit of currency as combined net profit margins reduced to 4.17 percent in the period

under review as against 6.33 percent the previous year. Combined net profit dipped by 26.55 percent to N47.18 billion as at June 2019. Dangote Sugar, the largest producer of the sweetener, said in a conference call last month that recurring menace of smuggled sugar remains a severe concern for the growth prospects of the producer of the sweetener. In addition, the Apapa gridlock continues to impact distribution network thus increasing the lead time for product deliveries. Dangote Flour Mills has continued to record recurring losses, while Olam International Limited, a leading food and agri-business company with operations in 70 different countries, intends to buy the Nigerian miller for N120 billion. Experts say President Muhammadu Buhari has less than 3 years to formulate transformation policies that will help propel economic growth, as over 50 percent of a population of 200 million live on less than $1.29 a day. The unemployment rate is at an all-time high of 23 percent, as the country dethroned India to become the poverty capital of the world.

Tuesday 01 October 2019

BUSINESS DAY

news Oil minister flags off OML 25, says FG will not leave Kula in the cold NNPC, Shell, Belemaoil assure of smooth take off

Bank NPLs hit 3-year low of 9% on new CBN policy

Ignatius Chukwu

…as oil & gas accounts for 40% of lenders’ bad debt

he troubled Kula oil field (Oil Mining Lease 25) was reflagged off recently by the minister of state for petroleum, Bayelsa-born Timipre Sylva, who led what was described as the highest industry delegation to any host community in recent history. O M L 2 5 w h i c h p ro duces between 35,000 and 40,000bpd had recorded $1.7bn loss over the shutdown, according to government officials at the event. Industry sources said by the event, joint inspection visit would take place, inventory would be taken and facility testing would begin before a decision would be taken to resume pumping of oil and gas. The resolution of the explosive crisis took place in Abuja two weeks back and what was termed win-win resolution took place whereby Shell’s rights as licence holder and JV operator was reaffirmed, Belemaoil was accepted as maintenance rights holder while rights of the host communities were agreed upon with both Shell and Belemaoil as joint development partners for the communities. The minister cut the tape at Belema town where the flow station is located. By the action, he said he expected operations to resume in the 35,000bpd oil field which also has gas and is the nerve for all the oil and gas gathered in Bayelsa and eastern Rivers State heading to Bonny export terminal and other gas centres. The flag-off was witnessed by Mele Kolo Kyari,

ENDURANCE OKAFOR

Deji Omotoyinbo (l), executive director, SportVision, with Nduka Irabor, director, League Management Company, during the launch of matchcentre.ng in Lagos, yesterday.

GMD of the Nigeria National Petroleum Corporation (NNPC); Osagie Okunbor, managing director of Shell; Jack-Rich Tein Jnr, founder/ president of Belemaoil, top political leaders including the deputy senate president (who was represented), top officers from Army, Navy, Air Force, and other top industry players. The minister, a former governor in Bayelsa State, later addressed the communities at the Kula centre (Anglican Church field) where he assured that the Federal Government would not let Kula down or allow them to walk alone. Saluting them as Ijaw heroes, he said it was historic that the top industry policymakers have paid a visit to a

host community in the Niger Delta at the same time. “This is history. We have listened to the community in Belema town. I have told the monarchs and chiefs that we need peace, we need development. This is a time to develop, not to fight. We need to change strategy. If there is no peace, investors will not come. Investors are waiting to move into the Niger Delta but peace is what they are waiting for,” he said. Adding his voice at the square, the NNPC boss said, “Peace is our objective at the moment. There has been two years of fighting, and there is need for peace. Mr President salutes you but wants you to know that there is need to restore peace to allow other things

to follow”. Osunbor of Shell expressed gladness over the eventual return of reason, peace and dialogue, and thanked all thos e who helped in the process. The Belemaoil founder, Tein Jnr, who addressed the Belema women (who held the flow station hostage for over two years) said the agitation has ended and that assessment of the facilities would begin. He told the women that their outcry had reached the highest authorities and that President Muhammadu Buhari has made it possible for Belemaoil to bring development to the Niger Delta communities and other regions.

•Continues online at www.businessday.ng

Plaudits, flaks as Nigeria marks 59th Independence anniversary …as US says committed to fight against Boko Haram, ISWA

SOLOMON AYADO, INNOCENT ODOH, JAMES KWEN, Abuja, & SEGUN ADAMS, Lagos

s Nigeria celebrates its independence anniversary today, government officials and political pundits have expressed divergent views on how well the country has fared since it became free of the British colonial government on October 1, 1960. While some shared messages of hope, others gave critical reviews, while some called for increased patriotism. In a goodwill message, the United States of America said it remained committed to helping Nigeria fight the Boko Haram insurgents and the Islamic State in West Africa (ISWA), while InspectorGeneral of Police, (IGP) Mohammed Adamu assured of a hitch-free celebration across the country.

O p p o si t i o n Pe o p l e’s Democratic Party (PDP) urged Nigerians to be patriotic, admonishing the citizenry to remain resilient in standing up for the unity and survival of the nation despite the daunting challenges. The PDP, through its national publicity secretary, Kola Ologbondiyan, in a statement issued on Monday encouraged Nigerians to keep hope alive in the face of the excesses, impunity and recklessness of retrogressive forces in high places seeking to undermine national cohesion. “The PDP notes that the October 1 date remains an undying signpost of our freedom and unity as a nation. It reminds of the roots of our national cohesiveness; the sacrifices of our heroes and our determination to live harmoniously and succeed www.businessday.ng

as one people, in all spheres of human endeavours; a national distinctiveness for which we are known and respected all over the world,” it said. The party urged leaders at all levels to be committed and sacrificial in the discharge of their duties and desist from empty promises, rhetoric and propaganda, as Nigerians look up to them for solutions. Nigerians should heal fault lines – APC The All Progressives Congress (APC), the country’s ruling party, has admonished well-meaning Nigerians to engage only in acts that would heal the country’s fault lines by promoting ethnic and religious tolerance and peaceful coexistence, which would engender Nigeria’s growth and development. APC in a message of felicitation to Nigerians on the

country’s 59th Independence Anniversary signed by Lanre Issa-Onilu, the party’s National Publicity Secretary noted that as a nation, Nigerians are better together than they are apart. The APC Spokesman stated that, “in spite of the inherited and our current challenges, President Muhammadu Buhari administration has made commendable strides on so many fronts, most significantly the fight against graft, diversifying and revamping the economy, curbing insurgency and emerging crimes, promoting positive values in our national life, strengthening our democratic institutions and processes and achieving a respectable international standing. “As Africa’s most popu-

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Continues on page 47

he ratio of non-performing loans (NPLs) to total gross loans in Nigeria’s banking sector declined to more than a three-year low of 9.30 percent as at June 2019. This is on the back of the Central Bank of Nigeria’s policy that requires effective management of credit risk. The ratio which is a measure of the health of the banking system dropped to its lowest point in the second quarter of 2019 since the 5.32 percent last reported in the fourth quarter of 2015, data released by the National Bureau of Statistics (NBS) on Sunday show. Analysis of the data revealed that the banks’ NPL ratio was down 2.43 percentage points from 11.73 percent in the second quarter of 2016 to 9.30 percent in the corresponding quarter of 2019. A non-performing loan is a loan in which the borrower hasn’t made any scheduled payments of principal or interest for some time. In banking, commercial loans are considered non-performing if the borrower is 90 days

past due. The CBN in August 2019 set new limits for banks and other financial institutions on the NPL to reflect in their books. “The NPL limits are required to help banks manage their credit risk effectively. To this end, all banks are to ensure that the level of the NPLs in relation to gross loans does not exceed five per cent,” the apex bank said. The apex bank’s regulation is contained in the Prudential Guidelines to Microfinance Banks, Deposit Money Banks, Mortgage Refinance Companies, Finance Companies, and Development Finance Companies, The total non-performing loans in the banking sector stood at N1.44 trillion at the end of the second quarter of 2019, a 25.39 percent decline when compared to the N1.93 trillion recorded the year before. In the same period under review, the gross loans stood at N15.48 trillion, up 1.19 percent from the N14.29 trillion in the corresponding quarter of 2016.

•Continues online at www.businessday.ng

Investors gained N60bn in September amid bargain hunting, profit taking ...concerns over economy as Nigeria clocks 59 Iheanyi Nwachukwu

earth of positive news which dampened investors’ appetite for shares of listed companies reflected in a paltry N60 billion gained by sto ck buyers in the month of September 2019. The 21-day trading period in the review month saw continued cyclical performance in the equities market as stock buyers factored in risk-off sentiments in the global economy, as well as macroeconomic and structural issues in Nigeria. As Nigeria marks 59th independence anniversary today, market watchers say Federal Government’s lethargic approach towards utilising the capital market remains the elephant in the room. The Nigerian Stock Exchange (NSE) All Share Index (ASI) gained 0.38 percent which helped moderate record negative returns year-to-date (YtD) to -12.09 percent. The NSE-ASI had opened the review month at 27,525.81 points but it stood higher at 27,630.56 points as at September 30, 2019. Also, the value of listed stocks @Businessdayng

moved up from September open level of N13.391 trillion to N13.450 trillion as at September 30. The local bourse closed the last trading session in the third quarter (Q3) of 2019 in the red as sellers took profit on gains made in the preceding week. This happened despite the late rally seen on Monday, September 30, in the shares of Nestle Nigeria plc (3.71 percent), Total Nigeria plc (7.92 percent), CAP plc (9.89 percent), GTBank plc (5.80 percent) and Dangote Cement plc (0.53 percent). With some largely capitalised companies seen recording significant capital appreciation lately, analysts expect portfolio rebalancing activity in early October to spur buying interest in the market. Ahead of companies’ third-quarter financials expected to be released in few weeks’ time, research analysts at Lagos-based Vetiva are asking investors to buy stocks like GTBank plc, UBA plc, Access Bank plc, FCMB, Stanbic, Guinness, Seplat, Total, and Forte Oil. They believe that these stocks are currently high-

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Tuesday 01 October 2019

BUSINESS DAY

news At 59, ‘Up NEPA!’ still a Nigerian... Continued from page 1

offers is a paltry 4,000MW on good days. Nigeria’s highest ever peak output was Thursday, 7 February 2019 at 21.00hrs when the Transmission Company of Nigeria (TCN) announced that the national grid had successfully transmitted a new generation peak of 5375MW. Analysts have blamed issues of vested interest, lack of collaboration, corruption, low tariff, energy theft and many years of decay the ineffectiveness and inefficiency that have dogged the power sector for several decades. The history of Nigeria’s chequered power sector started in 1896 when the first (20MW) power plant was built at Ijora, near Lagos. A structure began to emerge in 1951 with the formation of Electricity Corporation of Nigeria (ECN) to regulate electricity supply and generation. By 1960, the Niger Dam Authorities (NDA) set up to manage dams in Nigeria with a total installed capacity of 50MW. To consolidate pockets of power generation in different areas, in 1972, NDA and ECN merged to form NEPA, a state-owned vertically integrated power utility that held sway till 2013 with the privatisation of assets of the Power Holding Company of Nigeria. NEPA was bogged by years of poor investment, inadequate maintenance of power assets, a bloated labour force and government subsidies that fed Nigerians the notion that electricity should be free. The Federal Government privatised the sector in 2013 modelling it after India’s power sector privatisation. This led to the creation of 11 power distribution companies managing the downstream operations and five generating companies acquiring power generation assets. Five years after privatisation which earned the Federal Government about $3 billion, the Nigerian government has provided about $10.33 billion, according to BusinessDay calculations, in the form of intervention funding and loans to the players. Actual power supply has risen from about 2900MW to between 3000MW and 4000MW on average. Nigeria’s population grows at over 2 percent annually so entire cities report power cuts that last for weeks. The power privatisation policy was organised to have the distribution companies (DisCos) who would collect and pay the Nigerian Bulk

Electricity Trading (NBET) plc, who will then pay every other operator in the value chain – generation companies (GenCos), gas companies (GasCos) and the Transmission Company of Nigeria (TCN). It was assumed that the DisCos would collect a cost-reflective tariff hence a Multi-Year Tariff Order (MYTO) was developed. However, “the challenge was assumptions that fed into tariff changed”, said Chuks Nwani, an energy lawyer. And DisCos began to default badly. Inflation jumped from single digit, gas prices rose and foreign exchange went through the roof. This set in liquidity challenges in the system. Operators say the regulator, the Nigerian Electricity Regulatory Commission (NERC), erred by failing to enforce sanctions on defaulters. DisCos withheld more than they should without penalties and political interference marred the process. Analysts say the privatisation exercise was abused towards the end, when the competent people driving the process were fired and replaced with those pliable to special interests, the regulator was weakened and became susceptible to political interference and the DisCos became the enfant terrible of the electricity market. By 2 February 2016, power generation which rose to 5074MW crumbled when Niger Delta militants blew up the Forcados pipeline which fed gas to all the critical gas-fired plants in the country and Nigeria’s power sector collapsed. B a b a t u n d e Fa s h o l a , former minister of power, works and housing, began an incremental power programme. In 2017, the government secured approval for a Power Sector Reform Implementation Programme along with the World Bank and African Development Bank for a $7.6 billion funding for the sector and began a phased implementation of aspects of the programme. The same year, Fashola announced that Gencos could now sell power directly to eligible customers and a competition transition charge was arranged to assuage the concerns of the DisCos that they will lose huge market share. NERC has approved a mini-grid regulation which has provided an opportunity to deepen energy access for rural communities. The Rural Electrification Agency (REA) is ramping up efforts to help communities without access to the grid or those

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L-R: Chuks Oluigbo, news-editor, BusinessDay Media Limited; Zebulon Agomuo, editor, BDSunday; Jumoke Akiyode-Lawanson, head, ICT desk, Businessday Media; Peter Okebukola, guest lecturer; Chido Nwakanma, editorial board member, BusinessDay Media, and Kelechi Ewuzie, education correspondent, BusinessDay, at the BusinessDay knowledge sharing series in Lagos, yesterday. Pic by Pius Okeosisi

Nigeria @ 59: Faultlines tear at soul of a potential... Continued from page 1

Afenifere; Guy Ikokwu, a Second Republic politician; Dauda Birma, a chieftain of the ruling All Progressives Congress (APC) and former education minister, among others said they were not satisfied at the level of progress Nigeria has made in the last 59 years. I n a statement, a copy of

which was sent to BusinessDay, a group, The Guild of Public Affairs Analysts of Nigeria, noted that Nigeria, since 1960, has continued to oscillate from one self-inflicted crisis to another, which have left her far behind her peers. The group said that “Heightened insecurity in the country leading to continuous kidnappings, maiming and killing of innocent Nigerians has become a serious concern to all Nigerians. The economy has gone from bad to worse, causing many industries to close down with attendant job losses. With huge number of Nigerians pushed into the labour market; emigration to other countries including South Africa has exposed Nigerians to hatred and unnecessary deaths.” Balarabe Musa, a former governor of the Old Kaduna State, said that there was nothing to celebrate in the 59 years of the country, adding that the only difference is that it is still a united country despite the crises. “There is nothing to be proud of in the 59 years that the country has had independence; except that despite our problems we still remain one nation,” Musa added. Blaming the woes of the country on bad leadership, the former presidential candidate of the People’s Redemption Party (PRP), said: “The only way to move forward is to change the faulty system that has continued to enthrone bad leadership. I believe we have stagnated. What is happening now is that all of them are after their personal interest and it should not be so; it has to change to the public interest.

We have not been able to ensure peace and justice, which is why development would be difficult for the country.” Musa also said that restructuring of the country has become inevitable if Nigeria was to get out of its current woes. “I agree with the call for restructuring. I agree that we should go back to the regional system; each region should have its own constitution which should be consistent with the federal constitution. “No state in Nigeria is presently viable, but I believe the regions should control their resources and use it to develop themselves. With this, they would be more viable; even Lagos State is not viable now,” he said. Speaking in similar vein, Ayo Adebanjo, leader of the pan-Yoruba socio-cultural organisation, Afenifere, said that the nation had stagnated, while advocating for a new constitution to address the nation’s multifarious challenges. “We are not making any progress as a country; if you want to be sincere with yourself, you would admit that we have retrogressed. We have to move away from the current constitution. The current constitution has to change to a federal constitution; so that we can address the several issues affecting the country. Look at the security state of the country and all that. Everything has collapsed in Nigeria. We are just patching up,” Adebanjo said. Speaking to BusinessDay on the way forward for Nigeria, Guy Ikokwu, a Second Republic politician, said leadership was at the core of the country’s problems, and that it must also leverage technology like other countries to succeed in the present age. “The solution for Nigeria as in other countries is leadership, ICT capabilities, technical and scientific education to elevate our capacities in the productive sectors for the sake of our present children and children unborn,” he said. Ikokwu further said: “Let us ensure that henceforth, we

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all abide by the fundamental objectives and directive principles of state policy in our constitutions. That the Federal Government of Nigeria shall be a state based on the principles of democracy and social justice. “That sovereignty belongs to the people of Nigeria from whom government derives ALL its powers and authority. “That security and welfare of the people shall be the primary purpose of government, and that accordingly, national integration shall be actively encouraged whilst discrimination on the grounds of place of origin, sex, religion, status, ethnic or linguistic association or ties shall be prohibited”. Dauda Birma, a chieftain of the ruling All Progressives Congress (APC) and former education minister in the late Sani Abacha era, said: “The agitations and uprising we are seeing today have their root in what happened in the civil war days that have not been properly addressed. I cannot tell you that I am happy the way things are going in the country. I have more fears than hope, because every passing day, new agitations and challenges show up. “There is an adversarial development between government and the governed, and it is growing on a daily basis. In consonant with my age and experience, I do not like what I am seeing. I just hope that God will intervene, because without God intervening, the adversarial relationship between the government and the governed may even grow worse and new problem could emerge. I cannot tell you that I am optimistic about the signs that I see. I hope God will set our affairs in order in spite of us.” Solomon Kumangar, director-general media and communication to the Adamawa State Governor, who spoke with our correspondent in Yola, urged all Nigerians to work in unity to realise the dream of the founding fathers of Nigeria. “Our forefathers had a vision to see a country that is united; they had a vision to see a country where every Nigerian would @Businessdayng

be his/her brother’s keeper, but certain developments recently have intended to give an impression that a knife has been put on the rope that binds us and things have fallen apart. But in spite of all the challenges, Nigeria is a country that is full of potentials only that we have to rise up and realise that we cannot continue to live on a potential of greatness alone. We must put ourselves together and ensure that the greatness which we ever dream that Nigeria will become is achieved in our life time,” Kumangar said. The Guild of Public Affairs Analysts of Nigeria further said: “A country that is still grappling with a mere 4,500 megawatts of electricity for a population of 180 million people cannot be said to have done well in the provision of electricity. Tertiary institutions are churning out hundreds of thousands of halfbaked graduates yearly without industries to absorb them due to lack of infrastructural support. Recall, Egypt and South Africa with population figures of 81 million and 43 million, respectively, generate about 45,000 mega watts each.” Ayo Oyoze Baje, president of the group in the statement, said: “Health tourism has become a norm as the leaders patronise foreign hospitals because local hospitals are decrepit and one doctor attends to 5,000 people as against one doctor to 600 patients as recommended by United Nations. “Nigeria is now the poverty capital of the world and may likely overtake India in October as open defecation capital of the world! These are not indices that should prompt any seriousthinking nation to celebrate.” It further noted that “Everything is virtually being imported; from ordinary toothpick to toothbrush and rice. Certainly, this is neither development nor independence. In view of the aforementioned, it will be unnecessary for billions of naira to be earmarked and the drums rolled out to celebrate the 59th independence anniversary in a country that is not truly independent in the true meaning of the word. It should be a period of reflection for the ruling class.”

Tuesday 01 October 2019

BUSINESS DAY

news At 59, ‘Up NEPA!’ still a Nigerian... Continued from page 46

who are underserved to get power through renewable energy sources. In 2018, NERC approved a Meter Asset Provider policy to stop the DisCos from billing customers using their discretion. Analysts say more of these reforms are needed to get the power sector out of the current situation. “We need to make tough decisions and elevate longterm planning above politics, nepotism and vested interests,” said Ayodele Oni, energy partner at Lagosbased Bloomfield Law Practice. Oni counselled that the DisCos need to clearly list what their c0hallenges are and the regulator should listen. “These will be things such as a cost-reflective tariff and ensuring a national grid that can wheel out generated electricity. On the other hand, the regulator needs to adopt a robust carrot and stick approach, with clear Key Performance Indicators (KPI) and enforceable sanctions,” Oni said. “This might mean that the performance agreement contracts will have to be reopened and reviewed, and we really have hit the reset button in the power sector and get serious,” he said. In August, the regulator signalled an intention to begin to address the lack of cost-reflective tariff by re-

viewing the MYTO electricity pricing template which raises the price on average by 30 percent. Reforms have also been announced to help the TCN deliver better wheeling capacity. In July, a power agreement was signed between the Nigerian government and Siemens, a leading German electric company, that will see the German company upgrade transmission and distribution networks which could double Nigeria’s electricity generation and raise distribution capacity three-fold to 11000MW by 2023 President Muhammadu Buhari said he directed Siemens to fix the power distribution and transmission aspect of the electricity challenge in a roadmap brokered by German Chancellor Angela Merkel when she visited Nigeria in 2018. Analysts are optimistic that such collaborations may help dent Nigeria’s poor power output. But an operator who was an executive director in the defunct National Electric Power Authority (NEPA) said when Nigeria is ready for electricity, it would go for it. “I don’t believe Nigeria is good enough for steady power supply. The tariff is not right and there is huge energy theft, yet the government is telling investors to go to court. How can there steady power supply?” said the operator who does not want his name mentioned.

Investors gained N60bn in September ... Continued from page 45 ly undervalued but have strong fundamentals, adding that their potential return in excess of or equal to 15 percent is expected to be realised between their cur rent pr ices and the analysts’ target price (TP). “The market is grossly undervalued across the board as investor apathy is deepened by the day. But this provides a buy signal as market fundamentals remain strong. Investors are still apprehensive of macroeconomic instability and inclement operating environment. This partly explained the prolonged downward trend on The Exchange,” said Sola Oni, CEO, Sofunix Investment and Communications. “Aside from mega listing of MTN and a few others, there is abysmal dearth of new listing. Government is crowding out equity investors as monetary policy favours investment in fixed income,” Oni said. Beyond the conventional capital market products of equities and bonds as well as manual regulatory pro-

cesses, the players and regulators in the Nigerian capital market are introducing new and innovative processes and products, said Mary Uduk, acting director general, Securities and Exchange Commission (SEC). Uduk said capital markets across the world have products and mechanisms to stimulate economic growth and development. Although many of such products are available in Nigeria, there are aspects that are still untapped, thereby limiting the realisation of the country’s potential. Influenced by the capital market trends in the period ended December 31, transaction fees recorded by the NSE declined to N3.3 billion, a 13 percent drop against the preceding year. The NSE presented this at its annual general meeting on Monday. Oscar N. Onyema, chief executive officer of NSE, said the Exchange demonstrated resilience in the face of a challenging operating environment closing the year with surplus of N2.70 billion.

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L-R: Fatimah Bintah Bello-Ismail, national council member, Nigerian Stock Exchange (NSE); Aigboje Aig-Imoukhuede, ex-officio, NSE; Oscar Onyema, chief executive officer, NSE; Abimbola Ogunbanjo, president of the national council, NSE, and Mojisola Adeola, secretary to the council, NSE, during the annual general meeting (AGM) at the Exchange in Lagos.

FAAN can’t confirm reports of repairs beginning... Continued from page 1

gu airport as earlier claimed by FAAN and Hadi Sirika, minister of aviation, who said the airport was shut down to effect repairs and maintenance that would enhance safety operations. The News Agency of Nigeria in Lagos State on Sunday quoted Henrietta Yakubu, general manager, corporate affairs, FAAN, confirming that her agency had started rehabilitation the runway of the Enugu airport — days after the BusinessDay report. Yakubu said that work had finally begun at the airport ahead of the December 2019 deadline set for the completion of the runway repairs and other renovation work. However, when BusinessDay spoke with her on the phone to get more details on the work, she said she hadn’t

been able to get across to the engineers. “The engineers are the ones that have the information and know the extent of what has been done. I have been speaking with the airport manager and he has also not been able to get them,” she said. On August 24, FAAN announced the closure of the airport, which is the only international airport in the South East region, for the reconstruction of its runway. Following the closure of the airport, international flights have been diverted to the Port Harcourt International Airport in Rivers by Ethiopian Airlines. Similarly, domestic flights were diverted to the Sam Mbakwe Airport, Owerri, the Port Harcourt Airport and the Asaba Airport in Delta State. So far, the Federal Gov-

ernment has shown little seriousness with the Enugu airport repairs, which is the sixth busiest airport in Nigeria after Lagos, Abuja, Port Harcourt, Kano and Owerri. In 2018 the Enugu airport processed an average of 273,000 local passengers and 41,000 international passengers. The situation of the Enugu airport is in sharp contrast with what transpired during the closure of Abuja airport for repairs. The Federal Government shut down Abuja International Airport on March 9 2017 and work began the following day by Julius Berger. Flight operations began a day before the six-week deadline given by Sirika. Moreover, before the shutdown of Abuja airport, the Federal Government upgraded Kaduna airport. In February 2017, naviga-

Plaudits, flaks as Nigeria marks 59th Independence... Continued from page 45

lous nation, we can do much better, given our natural resources and potential. The President Buhari administration is committed to building on and affirming our Giant of Africa status.” There is still hope – Atiku Presidential flag bearer of the PDP and former vice president, Atiku Abubakar, lamented that Nigeria is yet to meet the expectations of the citizens, alleging the lack no freedom of the press and stating that the judiciary is also under the attack of the current government. He added in the message that since October 1960, when the nation gained independence never has the nation experienced arrest and intimidation of those who speak out on the state of the nation like in the current Government. “On October 1, 1960, our nation’s Founding Fathers

could never have fathomed that 59 years after birthing the largest black nation on earth, we would be facing a situation where we do not have a free press, our judiciary being under attack, and our youths and activists, who should ordinarily be the future of Nigeria, would be facing the very real threat of arrest and intimidation should they speak out about the state of the nation,” he said. He, however, noted that it is not all gloom and doom, stressing that “there is still hope. Much hope.” Atiku called for more attention to be paid to girl-child education, adding that it is an age-long truism that women are the teachers of a nation. He averred that the greatness of Nigeria has much to do with how well it educates the children, especially the girl-child, even as he commended the Governor Bello Matawalle of Zamfara State for leading the way by mas-

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sively investing in public education. He also cited the example of Chief Allen Onyeama and his public spiritedness which saw him offer relief to Nigerian citizens who were victims of the recent xenophobic attacks in South Africa. Buhari has turned Nigeria into a joke, nothing to celebrate – CUPP The Coalition of United Political Parties (CUPP) has said there is nothing to celebrate as Nigeria turns 59, insisting President Muhammadu has turned the country into a very big joke. The CUPP noted that apart from misery, division, incompetence, banditry, tribalism and hopelessness that has taken centre stage, there is no single practical development the nation has witnessed since the administration mounted the saddle of leadership. The position of CUPP was contained in a state@Businessdayng

tional facilities at the Kaduna airport were upgraded by NAMA ahead of the closure of Nnamdi Azikiwe International Airport, Abuja. The runway was also repaired to absorb the increased volume of traffic to be diverted from Abuja to Kaduna airport, said Mathew Pwajo, NAMA general manager, Safety Management Systems/Quality Assurance. Four days after shutdown of Akanu Ibiam Airport, Olumide Ohunayo, head research and corporate travel, Zenith Consult and Travel, had wondered why contractors were yet to report at the airport, which is critical as the only international airport in the SouthEast part of the country. “As at the time they closed the airport, I expected all the necessary materials to be in place. What was the rush to close it when the contractor was not ready?” Ohunayo queried. ment issued by its spokesperson, Ikenga Imo Ugochinyere, on Monday in Abuja. “The Buhari administration that rode into power in 2015 on the promise of bringing change to the country has turned Nigeria into a huge joke among the comity of nations. “For the nation’s 59th independence anniversary, there is indeed absolutely nothing to celebrate about,” it insisted. It added that the Buhari’s administration has so far displayed incompetence in administering this nation and that it instead rubbished all the efforts made by the nation’s founding fathers. CUPP further posited that the current administration has inflicted fear on the Judiciary by harassing and arresting judges at will, therefore desecrating the temple of justice.

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Tuesday 01 October 2019

BUSINESS DAY

POLITICS & POLICY Nigeria @ 59: Makinde calls for renewed patriotism, perseverance, prayers REMI FEYISIPO, IBADAN.

s Nigeria marks 59th independence anniversar y, Governor Seyi Makinde, has called for renewed patriotism, perseverance and prayers to enable the country to wade through the myriads of socio-economic challenges currently facing the people. While felicitating with the people of Oyo State and Nigerians in general on the occasion of the independence anniversary, Makinde, said: “I felicitate with our countrymen on the occasion of Nigeria’s independence anniversary. As you all can see, the nation is wading through some socio-economic issues, which demand us to remain committed to the goal of nation-building. With perseverance and

Governor Seyi Makinde

the never-say-die instinct of Nigerians, we will get to our goal of a great country, successfully,” In a message to the people of Oyo State and his countrymen at large,

the governor assured the people of Oyo State to continue to stand with his government in its avowed determination to deliver the good and uplift the standards of living in the

Pacesetter state. The governor further said: “As far as Oyo State is concerned, we are determined to deliver on our promises. While we appreciate the reception given to our government thus far, let me reassure our people that the hope and faith they invested in us will not be squandered. “We will ensure that the Omitutun (fresh showers), which characterised our campaign, will bring forth the goodness everyone desires. We are determined to turn Oyo State to a goldmine for investors, haven for good health, secured living and a bastion of quality education. “We are already turning around the sad memories from our education, health and social sectors and our people can only look forward to more.”

Mourning yet in the morning of freedom ZEBULON AGOMUO

one are the days when Nigerians, particularly, school children, trooped out, clutching the GreenWhite-Green national flag, in bold and happy identification with the country’s commemoration of its Independence. That euphoria died many years ago. Until the 80s when the rapid decay of Nigeria began, Nigerians looked forward to every October 1. Students and school children went to designated centres for March past. Parents never bothered about the safety of their children as it was taken for granted that nothing would happen to them. Indeed, there were no cases of missing persons during such occasions. The same applied to every May 27th, Children’s Day celebration. In those days, families that could afford television sets gathered around the oblong ‘box’ to listen to the National broadcast by the President. And everybody wished his neighbor “Happy Independence”. It was fun. With the return of the country to civil rule in 1999, such ceremonies were gradually revived, but a Death Knell came with

the upsurge of insecurity, particularly of the Boko Haram hue. This was worsened by the attack on October 1, 2010 at the Eagle Square by the Movement for the Emancipation of the Niger Delta (MEND) which left 12 dead and 17 injured. Ever since, such ceremonies have continued to be marked without fanfare, and it has killed the joy of many Nigerians. Added to the insecurity issue is the belief by Nigerians that they have not been getting the desired quality of leadership from the political class, and as a result there is no more excitement about ‘Nigeria’s Independence’ celebration. This has been made worse by the failure of leadership to make articulate broadcast on such a day, on a policy that citizens could put their fingers on. In the last few years, such celebrations have become a child’s play and an opportunity for a ruling party to abuse their predecessors and political opponents. There is nothing ennobling in their so-called broadcast. So, for these reasons, people no longer pay attention to the so-called broadcast. As Nigeria turns 59 to-

day, many citizens are languishing in state-inflicted pains. While some are being held in prison for crime they did not commit, a number of others have been granted bail but government has refused to obey court orders. Many Nigerians are dying in many so-called hospitals without treatment. A lot of people are being held in different kidnappers’ dens across the country. Bandits are on rampage in the country, killing and maiming innocent citizens. So, viewed from every side, many people see nothing to celebrate in Nigeria at this time. Many Nigerians are still languishing in poverty without hope of where the next meal will come from. This has become alarming as a recent report by the World Poverty Clock shows Nigeria has overtaken India, a country with a population that is seven times larger than Nigeria’s, as the country with the most extreme poor people in the world. According to the report, 86.9 million Nigerians, representing nearly 50 percent of its estimated 180 million populations, are now living in extreme poverty. This means that with a major

population boom—Nigeria will become the world’s third largest country by 2050— and its problem will likely worsen. This, no doubt, would make near impossible for the United Nations to achieve one of its Sustainable Development Goals (SDGs), which aims at putting an end to extreme poverty by 2030. Just recently, a report conducted by Steve Hanke, an economist from John Hopkins University in Baltimore, United States ranked Nigeria as the sixth most miserable country in the world. This can be confirmed by the high poverty and insecurity level as well as dwindling living standards in the country. Pat Utomi, a political economist, who alluded to this, said a lot of Nigerians are suffering because the nation is being mismanaged by its elite political class. “We are not surviving; millions of people are hungry and dying out there. Everywhere in Nigeria is a war zone. If we do not fix this, we are dealing with an existential crisis,” Utomi said. It is no longer news that corruption, which could be traced way back to the

South, Middle-Belt leaders demand explanations over Osinbajo’s alleged ordeal weeks ago. Something is definitely wrong even he Southern and when we cannot place our Middle-Belt leaders fingers on it yet. of Nigeria have de“This is because of the manded clarifications on opaque handling of afthe seeming clampdown fairs of a supposed conon the person and office stitutional democracy and of Vice-President, Yemi open society in a manner Osinbajo in recent times. reminiscent of a kingdom In a joint statement is- where things are done acsued yesterday, a copy of cording to the whims and which was made available caprices of the monarch.” to BusinessDay and titled The group added that ‘Rumble in Presidency: the explanation on the Need to Know,’ demanded recent actions against explanations on the al- Osibanjo had become leged humiliation of Osin- imperative considering bajo by some forces in the the multi-ethnic nature presidency. of the country to avoid Prominent leaders, suspicion. including E. K . Clark “We are a democracy (South South), Ayo Ade- and the people need to banjo (South-west); John know the ways their lives Nwodo (South-east), and are being run by those Pogu Bitrus (Middle Belt), they have hired to do the under the auspices of job. Moreover, the multiSouthern and Middle-Belt ethnic nature of Nigeria Leaders Forum (SMBLF), and the geo-political balsaid it has followed with ancing of its presidency keen interest develop- will make the kind of acments in the presidency tions that have been taken as regards the office of the against the Office of the vice-president in the past Vice-President to attract few days, while expressing the usual suspicion of worries over the alleged the experiences of Ebitu humiliation of Osibanjo. Ukiwe and Oladipo Diya if The concerned leaders there are no explanations stated that Osinbajo has to the public. been stripped of his func“In this dispensation tions, including some that in particular, references are constitutional, by fiat, would be made to the stressing that the develop- treatment of Walter Onment does not tally with oghen, Winifred Oyo-Ita the declaration of APC and now Osinbajo on one governors that all is well hand, and Abdulrsheed at the seat of power. Maina of Pension Reform According to the group, Task Force, Usman Yusuf “The Office of the Vice- of NHIS and Governor AbPresident today is defi- dullahi Ganduje of Kano, nitely not what it was two on the other hand,”.

INIOBONG IWOK

military era, has become endemic in Nigeria’s political system. This is such that out of 175 countries, Nigeria is the 144 most corrupt nations, according to the 2018 Corruption Perceptions Index report of the Transparency International. Statistics show that corruption rank in Nigeria averaged 121.48 from 1996. It reached an all time high of 152 in 2005 and a record low of 52 in 1997. Nigerians have seen several levels of corrupt and sharp practices, especially the unimaginable ones recorded during the years of military rule. It is not yet uhuru for Nigeria. At 59, when its peers have grown to full blown adults and have become independent in

every sense of the word, Nigeria is still a toddler, tied to the apron string of her colonial masters. Whereas her peers go to global meetings and summits with testimonies of their exploits in all spheres of life, Nigeria goes cap-in-hand; always seeking foreign aids and assistance. Basic things of life have continued to elude her citizens. In all indices of development, she scores below pass mark. She is being regarded as the centre of all sorts of diseases and infirmities. Many believe that surviving in Nigeria is a miracle. This is the true story of Nigeria, 59 years after it got independence from the British colonial masters. It is still mourning in the morning of freedom.

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Tuesday 01 October 2019

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news Budget delay hampering investments, choking economy - NECA JOSHUA BASSEY

elayed budget and poor implementation are choking the national economy and denying Nigeria investment opportunities, Employers’ Consultative Association (NECA) says. Timothy Olawale, director general of NECA, a member of the organised private sector (OPS), who gave the submission on Monday, noted that other African countries were reaping from Nigeria’s failure in this regard. According to Olawale, looking at the disturbing trend from 2014, the earliest the national budget had been passed was in 2016 and that was in the month of March. “Nigeria’s fiscal year begins in January and ends in December; hence, we can imagine the dire consequences of the late passage of the budget on national development and business growth,” he said. Comparing Nigeria with other countries, he said: “In Ghana for instance, the budget for the 2019 fiscal year was approved in November 2018. In Ethiopia, the budget for the 2018-2019 fiscal years was approved few days before the commencement of the fiscal year in July 2018. In Egypt, the budget for their 2018-2019 fiscal years was approved about a month to the commencement of the fiscal year. “The stability and predict-

ability of the budgetary process of these countries could be one of the reasons why they are becoming the new desired destination for foreign investments.” He further noted that national development was premised on proper budgeting and disciplined implementation, adding that the consistent delayed passage of Nigeria’s national budget and below 50 percent implementation year on year had contributed to slow growth. He, nevertheless, lauded fresh attempts to return the nation to a January – December budgetary year, saying beyond helping government’s focus on the business of development, it would also improve investors’ confidence and aid planning for both the private and public sectors. He explained that businesses thrive on certainty of government policies and programmes, a return to January - December fiscal year and focused implementation of same would accelerate national development. While he agreed that budget implementation was largely based on availability of revenue, the DG, however, urged “the government to ensure fiscal discipline, cut wastages and put more life into the war against corruption.” He also called for speedy action by the executive and legislature to make this a reality that no efforts must be spared to achieve a 100 percent implementation.

Dale Carnegie hosts workplace confab for business, HR leaders

ale Carnegie Training, a training organisation, will be hosting The Workplace Conference with the theme, ‘Building the Workplace of Our Dreams’ on October 3, 2019, at Oriental Hotel, Victoria Island, Lagos. The event, which is by-invitation-only, is targeted at CEOs, senior HR leaders and other decision makers and co-sponsored by Coronation Merchant Bank, Credit Direct Limited and Tolaram Group. The conference will focus on how Nigerian organisations can begin to build the ideal workplace. Speaking at a press conference held in Lagos September 28, Patrick Nwakogo, the country director of Dale Carnegie Training Nigeria, announced that his organisation was set to hold this conference as a corporate social responsibility while celebrating its six years in Nigeria. Interested attendees are expected to request for invitation on the event webpage: www. theworkplaceinitiative.org. He noted that the event was free, but invitation was required for anyone who desired to attend. “Research shows that only about 20% of employees are unleashing their full potentials due to lack of engagement on the job, amplified by negative work cultures,’’ he said. He indicated his organisation’s commitment to the transformation of the Nigeria workplace. Expected to lead delibera-

tions at the event are leading CEOs and industry professionals, including the HR directors from some of Nigeria’s leading companies, including MTN Nigeria, Dangote Group, Sahara Group, Tolaram Group, Stanbic IBTC Bank, AB-InBev, among others. Representatives of the conference partners were also at the press conference and fully declared their support for the event. According to Oluseyi Boluwatise, divisional head of corporate services at Credit Direct Limited, “we are solidly supporting this vision because the concept of the ideal workplace resonates with our organizational value, as we are constantly seeking to provide a conducive, enabling and inclusive workplace for everyone, especially the younger generation.’’ Onayimi Aiwerioghene, head of enterprise management group at Coronation Merchant Bank, said the bank was supporting the conference because they believe in the vision Dale Carnegie was aiming to achieve with the conference. While answering questions from reporters, Nwakogo said, Building the ideal workplace is not what you do when the economy is working, but rather what you do to get the economy working,” and enjoined organisations to take steps towards improving workplace cultures. www.businessday.ng

L-R: Onayimi Aiwerioghene, head, enterprise management group, Coronation Merchant Bank; Rita Brodie-Mends, clients engagement manager, Dale Carnegie Nigeria; Patrick E. Nwakogo, country director/CEO, Dale Carnegie Nigeria; Oluseyi Tolu-Boluwatise, divisional head corporate services, Credit Direct Limited; Blessing Bello, technical assistant to CEO, Dale Carnegie Nigeria, and Amaka Amalu, conference cordinator at a press briefing to announce its forthcoming “WorkPlace Conference

OML 11: Rivers acquires SPDC’s

45% equity in Ogoni oil field T Ignatius Chukwu

…submits $150m bond, N1bn cash

he Nigerian oil industry quaked on Monday, September 30, 2019, when the Rivers State announced it had just acquired the controversial Ogoni oil field (Oil Mining License, OML 11), noted for consuming Ken Saro Wiwa and other prominent Ogoni indigenes along with violence believed to have claimed over 2,000 lives. It is not clear if the step would put an end to the 30 years of crisis and bloodshed in Ogoni area, undergoing an equally controversial $1 billion clean-up scheme ordered by the United Nations. In a state-wide broadcast, Governor Nyesom Wike said the state had already submitted a ‘guaranteed bond’ of $150 million in an escrow account and N1 billion cash that would go to the Ebubu community that had won many claims in courts around the world.

The purchase is from a court-ordered auction, he said. Broadcasting right from the Executive Council Chambers in the New Brick House in Port Harcourt, Governor Wike declared that the state government had just fully acquired Shell Petroleum Development Company of Nigeria (SPDC) 45 percent interest in OML 11 situated in Ejama Ebubu community in Eleme Local Government Area and the adjoining Ogoni and other communities of the state. Wike, in his address titled: ‘We will continue to advance the interest, security and prosperity of all,’ explained the background for the acquisition of OML 11, saying this premised on court judgments that had been registered in the United Kingdom and Nigeria for enforcement. He said: “This fresh case commenced in 2001 and passed through four different

justices of that court arising from twists and turns associated with opposed litigations, until it was disposed of about 10 years after in June 2010 by Buba J. (the fifth judge to preside over the matter). “SPDC and its parent companies appealed the judgment at the Court of Appeal in 2010, which again suffered the twists and turns passing through six different panels comprising three justices each between 2010 and 2017 before it was finally disposed of by the panel of that Court led by Gumel JCA of the Port Harcourt Division. The appeal was dismissed. “SPDC and its parent companies took out a further appeal to the Supreme Court of Nigeria in 2017, which appeal was considered and dismissed by that court in a judgment read by Hon. Justice B. Akaahs, JSC delivering a lead judgment in a unanimous decision. After losing at the High

Court, SPDC gave the successful Ejama Ebubu plaintiffs a ‘Bond Guarantee’ stipulating that First Bank of Nigerian Limited would pay them the value of the judgment debt and interests thereon in the event that SPDC’s appeal to the Court of Appeal fails at that court. The original ‘Bank Guarantee’ is still with the community. “When SPDC’s appeal failed at the Court of Appeal, Shell instructed the bank to dishonour their guarantee, which did and gave rise to a series of six different litigations in various Courts against First Bank and the Central Bank of Nigeria. SPDC’s excuse was that they had lodged an appeal at the Supreme Court of Nigeria. The enforcement cases had been to Owerri, Abuja, Lagos, etc. in six different lawsuits. On the 11th of January 2019, Shell’s appeal was dismissed at the Supreme Court of Nigeria.

Buhari mulls increased funding for judiciary Tony Ailemen, Abuja

resident Muhammadu Buhari on Monday pledged that his administration would continue to adequately fund the judiciary to enable it discharge its responsibilities. The President said his administration had already started by raising the amount budgeted from N68 billion in 2014 to N100 billion in the 2019 budget, an increase of N32 billion in about five years. This is as the President said it was the collective duty of the three arms of government to ensure fair justice delivery, and safeguard the rights of all Nigerians. The President stated this at the commissioning of the annex building of the headquar-

ters of the National Industrial Court of Nigeria (NICN), Area 3, Abuja, which also marked the valedictory session of the President of the Court, Babatunde Adejumo. “You will all recall that in 2014, the entire budgetary allocation to the judiciary was N68 billion. ‘‘Today, the judiciary budgetary allocation has gone up to N100 billion. Rest assured that we shall continue to adequately fund the judiciary to ensure it is enabled to discharge its responsibilities,” he said. The Nigerian leader used the occasion to appeal to the three arms of government to continue collaborative partnership to ensure that policies, programmes and projects of this administration positively

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impact the lives of Nigerians. ‘‘Simply put, all Nigerians, regardless of ethnicity, religion and politics, deserve peaceful and prosperous lives. Where these basic rights are trampled upon, Nigerians deserve fair justice delivery. “It is therefore our collective duty to work collaboratively to ensure that such rights are safeguarded,’’ he said. Congratulating the President of the Court on his retirement and meritorious service to the country, the President said Justice Adejumo’s numerous contributions were well known and appreciated. ‘‘I am confident his legacy will have a positive impact on those who follow him,’’ he said. Speaking on the mandate of the Court, the President recalled that it was established @Businessdayng

as a specialised Court to adjudicate on disputes arising from and relating to labour, industrial and employment matters. ‘‘Indeed, it is the Court in Nigeria that is constitutionally mandated to perform these functions. Thus, the performance of this court directly impacts Nigeria’s ease of doing business indices,’’ he said. The President noted that the completion of the annex building would further enhance the efficiency and effectiveness of justice delivery by the court. ‘‘Furthermore, the socioeconomic impact of this court cannot be downplayed as it also provides the platform for employees, retirees as well as the dependents of deceased employees to find justice when treated unfairly,’’ he said.

54 BUSINESS DAY

Tuesday 01 October 2019

news Boundary disputes: Osinbajo brokers peace between Ebonyi, Benue Tony Ailemen, Abuja

V L-R: Mary Gbegbaje, acting executive secretary, Financial Markets Dealers Association (FMDA); Promise Chuksnwanbuisi, member, FMDA governing council; Ayokunle Ojo, vice president; Adetoun Dosunmu, president; Sam Ocheho, immediate past president, and members, Ayodeji Abimbola and Dare Otitoju, at the 26th annual general meeting/swearing in ceremony of the new FMDA governing council in Lagos. Pic by Pius Okeosisi

Rivers Port reaches end of lifespan as NPA gives reasons for decommissioning BUA concession AMAKA ANAGOR-EWUZIE in P H

anaging director of the Nigerian Ports Authority (NPA), Hadiza Bala Usman, on Monday in Port Harcourt, Rivers State, said the authority had discovered that all the quay walls in Rivers Port were weak and presently at the point of collapse. According to Usman, the NPA recently instituted a conditional survey of the port, and a report sent to it reveals the fact that the port has reached the end of its lifespan. Speaking at the combined second and third quarters stakeholders meeting held in Port Harcourt and Onne ports, Usman said the NPA was making

a presentation to the Federal Ministry of Transportation and its board to institute a full rehabilitation and reconstruction of the port in totality. Usman, who spoke in response to the decommissioning of BUA Terminal, said the NPA had been served a contempt of court while arriving Port Harcourt yesterday. She said in November 2016, a notice of termination was issued to BUA Terminal for none compliance with the port development plan. This, according to her, was because as part of the concession agreement, there were certain developments that each terminal operator was supposed to do. “BUA was required to rehabilitate and reconstruct that particular terminal but it did

BEDC rolls out 500,000 meters to curb estimated billings IDRIS UMAR MOMOH, Benin

enin Electricity Distribution Company (BEDC) plc on Monday disclosed plans to roll out 500,000 meters to its states of jurisdiction in the next three years. The states are Edo, Delta, Ondo and Ekiti. Abu Ejoor, executive director of BEDC, made the disclosure at a press briefing/launching of Meter Asset Provider (MAP) in Benin City. According to Ejoor, the meters will address the estimated billing practices in Nigerian Electricity Supply Industry (NESI), attract private investment to the provision of metering services in NESI, enhance revenue assurance, close the metering gap through accelerated meter roll out and encourage the development of independent and competitive meter services. Out of the 500,000 meters, a total of 190,000 will be rolled out in Edo State in the next two years with a monthly cumulative average at around 10,000 units, he said.

According to Ejoor, in taking off, MAP in BEDC will initially have up to three months of build up roll out, which will eventually pick up with expected monthly run rate of 20,000 units with total of 500,000 rollout within the period of three years. He said the project was being launched to take off in Government Reservation Areas (GRA) to Ihama, Benin City, and Okpella in Auchi, Edo North. The project is carried out by G. Unit Engineering Limited, Sabrub Consortium Nigeria Limited, Inlaks Power Solution Limited, FLT Energy Systems Limited and Turbo Energy Limited. Ejoor, however, urged customers to cooperate with enumerators by responding promptly to requests for completion of enumeration form with a passport photograph, a utility bill for post-paid customers and vending slip including mobile number and email address to ease of providing quick information to parties. www.businessday.ng

not do that for years. NPA did an inspection to determine that, and at the end BUA concession was terminated for failure to adhere to that development plan,” she said. She said BUA instituted an injection that prevented NPA from interfering with its concession for one and half years. “We got the injection in January 2018. So, between January 2018 and June 2019, BUA enjoyed using that terminal in totality with that collapsed quay walls, “ she said. NPA recently received a letter from the same BUA drawing the authority’s attention to the fact that the condition of the quay wall in that terminal was not safe, and at the point of collapse, she said. “As a responsible regulator, we looked at the state of that quay

wall, having used it for one and half years in that state. We now decommissioned the concession based on health and safety reasons,” she said. She further said the same BUA had gone to court to restrain NPA from implementing the decommissioning that was instituted based on safety concern. “We were not planning to embark on contempt of court until BUA wrote us that it is now issue of safety. So, I am curious to what contempt of court this is about,” he questioned. She however noted that BUA is presently drawing attention of the public and alleging unfair treatment, even as she said it was important to NPA that BUA notifies the stakeholders and the court that they wrote to NPA in that regards.

Lagos moves against illegal conversion of property JOSHUA BASSEY

agos State government has warned property owners and developers against illegal conversion of usage, especially industrial premises, saying the act could no longer be tolerated. Conversion of property to other usage other than what was originally approved by the government is widespread in Lagos, Nigeria’s economic hub. The commissioner for physical planning and urban development, Idris Salako, who gave the warning, said the government would henceforth come down hard on violators of the state’s physical planning laws. According to Salako, industrial premises are primarily designed for productive activities expected to provide employment opportunities and grow the economy of the state, and must remain so. “Government has noticed with dismay the continuous illegal conversion and use of industrial premises for other uses including places of wor-

ship, event centres and other non-complementary uses. The general public is hereby warned that all non-complementary facilities such as places of worship and social related activities are not permissible within industrial estates in consonance with the Operative Development Plans and relevant sections of Lagos State Physical Planning Permit and Building Control Regulations (2019),” Salako said. The official, who said appropriate sanctions shall be applied against violators of the regulations, listed Ikeja, Ilupeju, Apapa, Oshodi, Mile 2 Amuwo, Ikorodu, Epe, Orile Iganmu and Oregun Industrial Estate as those majorly affected He appealed for the continuous support of Lagosians in sustaining the industrial estates as hubs for job creation and economic prosperity. He urged that enquiries on the matter should be directed to the ministry of physical planning and urban development, secretariat, Alausa, Ikeja, for clarification.

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ice President Yemi Osinbajo on Monday settled the age-long boundary dispute between Ebonyi and Benue states at the Presidential Villa, Abuja. BusinessDay gathers that the long awaited peace was achieved when Osinbajo had met behind closed doors with the governor of Benue, Samuel Ortom, and deputy governor of Ebonyi State, Kelechi Igwe. The meeting was called to end the age-long boundary dispute between the people of Ngbo in Ohaukwu Local Government Area of Ebonyi and their neighbours, Agila in Ado Local Government Area of Benue State. The meeting, which was attended by officials of the National Boundary Commission (NBC) took far reaching decisions on the matter with a view to put a finality to the reported killings in the area. Addressing State House Correspondents after their closed door at the Presidential Villa, Abuja, Governor Ortom said the Federal Government at the border area would soon carry out a demarcation exercise as part of measures aimed at halting the protracted conflict. “We are also here with the acting director-general (DG) of National Boundary Commission and we had taken far reaching decisions to ensure that we demarcate the boundary between these two states so that we can hold our people responsible,” the governor said. Governor Ortom, who attributed the prevailing tension at the border to the activities of criminal elements operating in the affected areas, said, “Very soon the boundary commis-

sion would be coming out with a program that both Benue and Ebonyi will team up to provide the necessary logistics and security to ensure that the boundary is demarcated.’ Ortom, who also spoke on the Jukun-Tiv crisis, dismissed insinuations of a conflict between Benue and Taraba states, saying the untoward development was purely a Taraba affair between indigenes who were aboriginal residents of the area. His words, “This is largely Tiv and Jukun in Taraba. I have Jukun in Benue State. We are not fighting. There were issues in the past and I decided to set up a judicial commission of enquiry, which is still sitting to look at the remote and immediate causes of this strife so that we will find a lasting solution to it. “This other one is more of a problem in Taraba, but because there are TIV people in Benue and we are talking about TIV people. So, each time people are displaying some run back to Benue so that’s the spirit of it.” The Benue State governor also expressed confidence in Governor Dairus Joshua’s capacity to come up with a permanent ceasefire to the conflict in the state. He said, “I think that the governor of Taraba State is doing well. Recently they met and they agreed that there should be ceasefire even though I saw in the press that there were some Issues with that peace agreement. “But you know each time there is efforts to try to solve problems, criminal elements will come in and I think that the steps that the governor took by inviting two sides, both the TIV and the Jukum to sit together and find means on how they can resolve this matter is the best approach.

Reforms: Edo inducts over 1,000 newly recruited civil servants

n line with Edo State Governor Godwin O b a s e k i’s v i s i o n t o reposition the state’s civil ser vice for optimal performance, the state government has commenced a three-day orientation programme for over 1,000 civil servants recently recruited into the state civil service. While declaring the orientation programme open at Imaguero College in Benin City, the state’s Head of Service, Isaac Ehiozuwa, said the programme was organised by the state government for officers on Grade Level 07 and above who were appointed into the mainstream of the state’s civil service between 2017 and 2018. According to Ehiozuwa, “These officers were absorbed into the mainstream of the civil service in 2017. They also include those recruited in 2018 by the Edo State Civil Service Commission. “The main thrust of the @Businessdayng

exercise is to develop their capacity on rules guiding the civil service and train them on how to conduct themselves as civil servants while discharging their duties.” Ehiozuwa urged the participants to take advantage of the programme to understand what is required of them in the discharge of their duties, adding, “Edo State government, under the leadership of Governor Godwin Obaseki, is committed to ensuring training and re-training of every category of staff in the state public service to achieve efficiency and ensure effective service delivery to taxpayers.” He said civil servants must continue to represent government positively and show respect for constituted authority, noting, “These are sacrosanct in the service, as the government rewards hard work. There is also a mechanism that exists in the service designed to call erring staff to order.”

Tuesday 01 October 2019

BUSINESS DAY

news Buhari, Sanwo-Olu unveil 149-bed MCC in Alimosho JOSHUA BASSEY

L-R: Bernard Aigbe, Edo State auditor-general; Isaac Ehiozuwa, head of service, and Deborah Enakhimion, permanent secretary, Directorate of Establishments, Training and Manpower Services, at the commencement of a 3-day orientation programme for over 1,000 civil servants recently recruited into the state civil service, in Benin City, Edo State.

#RevolutionNow: Court orders Sowore back to DSS’ custody Felix Omohomhion, Abuja

… pleads not guilty to FG’s 7-count charge

onvener of RevolutionNow protest, Omoyele Sowore, was on Monday ordered back to the custody of the Department of State Security (DSS) after the Federal Government slammed a seven-count charge bordering on treasonable felony on him. Sowore, who was arraigned before Justice Ijeoma Ojukwu of the Federal High Court in Abuja, alongside Olawale Bakare, who was arrested in Osun State during a #RevolutionNow protest, pleaded not guilty to the charges. Bakare also pleaded not guilty to the two-count charge against him in the charge sheet that was read out to them. After taking submissions, the court ordered that they be taken back to the custody until October 4 for arguments on their bail application. In the seven-count charge preferred against Sowore by the Office of the Attorney-General of the Federation, through the Chief State Counsel, A. K Alilu, the publisher of Sahara Reporters along with his co-defendant were accused of committing conspiracy to commit treasonable felony in breach of Section 516 of the Criminal Code Act Cap

C38 Laws of the Federation of Nigeria 2004 and punishable under the same section of the Act. The prosecution also alleged that the defendants committed the offence by allegedly staging, “a revolution campaign on August 5, 2019, aimed at removing the President and Commanderin-Chief of the Armed Forces of the Federal Republic of Nigeria.” The prosecution also accused them of committing the actual offence of treasonable felony in breach of Section, 4(1) (c) of the Criminal Code Act, by using the platform of Coalition for Revolution, in August 2019 in Abuja, Lagos and other parts of Nigeria, to stage the #RevolutionNow protest allegedly aimed at removing the President. It also accused Sowore of cybercrime offences in violation of Section 24(1)(b) of the Cybercrimes (Prohibition, Prevention) Act, by “knowingly” sending “messages by means of press interview granted on Arise Television network which you knew to be false for the purpose of causing insult, enmity, hatred and ill-will on the person of the President of the Federal Republic of Nigeria.” It also accused Sowore of

money laundering offences in breach of section 15(1) of the Money Laundering (Prohibition) Act, 2011 by alleged transferring by means of swift wire, various sums of money from his United Bank of Africa Plc account with number 3002246104 into Sahara Reporters Media Foundation’s account with Guaranty Trust Bank in order to conceal the origin of the funds. Sowore and his co-defendant told the trial Judge, Justice Ojukwu that they are not guilty in all the charges preferred against them by the federal government. Earlier, the defendants, through their counsel, Olumide Fusika objected to the defendants taking plea on the ground that they were not given access to any of their counsel to discuss the charge sheet served on them. Fusika told the court that the DSS, which has held the first defendant since August 3, 2019, refused to release him, in spite of a court order to that effect. He cited several cases to the effect that the DSS refused to obey the order of court and that nobody, no matter how mighty, is above the law. He pointed out that the defendants couldn’t take

Obaseki calls for probe of N20bn NDDC emergency fund allegedly expended in Edo ... to sue Commission’s contractors for sub-standard projects

do State Governor Godwin Obaseki has called for a probe into the utilisation of the N20 billion emergency funds allegedly expended by the Niger Delta Development Commission (NDDC) on projects in the state in the last six months. He also said the state government was exploring the option of suing contractors handling the Commission’s projects for delivering sub-standard projects, which caused flooding in parts of the state. The governor said this while receiving the House of Representatives Ad-Hoc Committee on abandoned NDDC projects in the state,inBeninCity,thestatecapital. He noted that the state government would stop NDDC contractors from executing sub-

standard projects, as there was a need for synergy between the state government and NDDC in delivering quality projects. “This kind of action is embarrassing to our administration and causing us political problems as our citizens are confused about the roads we are constructing and the substandard roads executed by NDDC contractors,” he said. The governor added, “I have instructed the state’s Solicitor-General to begin the process to take legal action against NDDC contractors, who execute sub-standard work in the state, particularly the contractor who handled the project on Apostolic Street off Sokponba Road, which led to flooding in the area. We will blacklist them. www.businessday.ng

“I am surprised that the NDDC management is here as I invited them months ago when I received complaints about the quality of work done by their contractors but they ignored the invite. There is no need having NDDC in the state when they have total disregard for the state government.” He said the interim management of the NDDC claimed that N256 billion was spent on emergency project work, out of which N20 billion was spent in Edo State in the last six months, adding, “A year ago, barely 10 per cent of the NDDC budget for Edo State was implemented. The immediate past interim management team of the NDDC needs to come and show us how they spent N20 billion in the state.

their plea because they were denied access to their counsel to look at the charges preferred against them. In his submission, the prosecution counsel, Hassan Liman told the court that the order made by Justice Taiwo Taiwo on September 24 was in view of pending arraignment of the defendants.

ife of President Muhammadu Buhari, Aisha Buhari and the governor of Lagos State, Babajide Sanwo-Olu, will on Thursday unveil a 149-bed Maternal and Child Centre (MCC) located within the Alimosho General Hospital, Lagos, in continuation of efforts to reduce incidence of child, maternal mortality in the state. Commissioner for health, Akin Abayomi, disclosed this Monday while inspecting the facility ahead of the commissioning. The specialist centre was built and donated to Lagos State by the Federal Government through the Office of the Senior Special Assistant (SSA) to the President Muhammadu Buhari on Sustainable Development Goals (SDGs). According to Abayomi, the three-floor facility has two operating theatres, recovery rooms, sterilisation room, delivery room, consultation rooms, private and general wards, scanning room, side laboratory rooms, reception area, lounge, nurses room and station, doctor call rooms,

scrub room and a boardroom. Also put in place at the centre are ultra-modern equipment in aid of prompt delivery of maternal and child care services, such as patient monitors with EC02, suction machine double jar, ultra scan machines, oxygen generating machine, vacuum extractor delivery set, anaesthetic machine and diathermy machine. Others include emergency cart with defibrillator, baby incubators, phototherapy lamps, paediatric ventilators, multipara meter monitors for mothers and babies, crash cart, theatre monitor, defibrillators and fetal Doppler. Abayomi, who praised the Federal Government for the donation, noted that the centre would positively impact the efforts of Lagos State to promote the health of the mothers and children as well as improve the state’s health indices. “We are very grateful to the Federal Government to have produced this extra capacity facility for us in our endeavour to look after mothers and children. We already have one mother and child centre at Alimosho but we have exceeded the capacity,” he said.

Tech4Dev selected as only Nigerian organisation to present at UN Solutions Summit in New York … aims to train 5m African women on coding skills by 2030 Jumoke Akiyode-Lawanson

ech4dev, a non-profit social enterprise that creates proactive and reactive technology solutions for decent work engagement through digital skills empowerment and advocacy, with its solution Women Techsters, was selected to present at the recent 5th UN Solutions Summit in New York. The UN Solutions Summit is a catalytic gathering at the United Nations headquarters during UN General Assembly Week. The Women Techsters is a solution aimed at bridging the digital and technology knowledge divide between

men and women. Women Techsters is empowering girls and women across Africa with varying degree of digital, deep tech, and soft skills required within the technology ecosystem. The goal is to train 5 million Africa women on coding skills by 2030. Selected for the 5th annual Solutions Summit were 10 different solutions from 1,400 applications in over 400 countries across the world. However, the Women Techsters was the only solution selected from Nigeria. Diwura Oladepo, executive director, Tech4Dev, expressed her excitement at the win, reiterating the impact the programme would have

on the African continent, as the women beneficiaries across Africa would be trained for free on the digital skills and empowered with resources to access decent jobs. The 2019 UN Solutions Summit themed “Lifting innovators, advancing the Sustainable Development Goals (SDGs), held at the UN headquarters from September 24 – 26, 2019. Megan Smith, CEO, Shift7, and former chief technology officer for the United States and co-organiser UN Solutions Summit, expressed her delight at the Women Techsters project and regarded it as an extraordinary solution to build women for the future of Africa’s workforce.

Glo felicitates with Nigerians on country’s 59th independence anniversary

lobacom has felicitated with Nigerians on the occasion of the country’s 59th Independence anniversary. The telecoms operator, which prides itself as the grandmasters of data, saluted the resilience of Nigerian citizens at keeping the country united in spite of challenging circumstances. In a goodwill message to the government and people of Nigeria, Globacom said there was much to be celebrated on the country’s 59th Independence anniversary. It submitted that there was cause for Nigerians to

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cheer as the country had over the years made appreciable progress in several areas in its march to development. “We felicitate with the government and people of Nigeria on the nation’s Independence celebration. We believe that a major reason for joy is the resilience of Nigerians to weather the storm and remain one united country notwithstanding continual threats to its cohesion,” Globacom said. While acknowledging that Nigeria ought to have risen above current developmental challenges given the country’s rich human and natu@Businessdayng

ral endowments, Globacom expressed optimism that the foundations for the emergence of a truly great nation would be laid by government at various levels. “59 years ago, our nation heeded the call of freedom, and we continue to move forward in unity and progress,” it said. Globacom reiterated its utmost belief in the ability of Nigerians to rise above present challenges and excel in their endeavour, adding that it would continue to empower Nigerians with world-class telecommunication services to accelerate the country’s development.

Tuesday 01 October 2019

BUSINESS DAY

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Tuesday 01 October 2019

BUSINESS DAY

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Tuesday 01 October 2019

BUSINESS DAY

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Tuesday 01 October 2019

BUSINESS DAY

FINANCIAL TIMES

World Business Newspaper JAMES POLITI IN WASHINGTON

he whistleblower at the heart of the impeachment inquiry into Donald Trump has agreed to appear “very soon” before members of Congress, a top Democratic lawmaker said on Sunday, tightening the screws on the US president in the unfolding Ukraine scandal. As White House aides and Republican allies struggled to contain the political fallout from the case, Adam Schiff, the chairman of the House intelligence committee who has taken a leading role in the impeachment inquiry, told ABC News that his panel would be receiving “unfiltered testimony” from the whistleblower. On Monday Mr Trump lashed out at Mr Schiff on Twitter, saying he had “illegally made up a FAKE & terrible statement” in an apparent reference to the Democrat’s account of the whistleblower case to Congress last week. “It bore NO relationship to what I said on the call. Arrest for Treason?” the president wrote. Mr Schiff said that although a date for the whistleblower hearing had not been set, it would happen as soon as security clearances had been secured for the whistleblower’s lawyers and logistical arrangements had been made to protect his identity. The deal to allow the whistleblower to speak directly to US lawmakers further increases the heat on Mr Trump, who is facing

Whistleblower to testify ‘very soon’ in Trump impeachment probe Democrats raise pressure on US president over Ukraine phone call

Republicans are trying to make the Ukraine scandal about Joe Biden, left, as Democrats step up impeachment efforts against Donald Trump, right © AFP

the biggest threat to his nearly three-year-old presidency after the anonymous official said the US president pressured Ukraine to investigate former vice-president Joe Biden and his son Hunter. Democrats have seized on the

Carrying a laptop can lead to accusations of being an internet scammer

Wall Street bank spots ‘window of opportunity’ to boost exposure to eurozone equities

nvestors should put their faith in the beleaguered eurozone, according one of Wall Street’s biggest banks, which now expects the region’s stocks to outperform the US despite the stubborn persistence of risks including Brexit. JPMorgan has raised eurozone equities to “overweight” at the expense of US stocks which it has downgraded to “neutral,” in a marked shift from its longstanding preference for Wall Street. The decision comes amid a “tactical window of opportunity” given US stocks’ long spell of outperformance and the cheap valuations on offer in the eurozone, JPMorgan’s equity strategists said in a research note published on Monday morning. “We now believe that there is an opportunity for eurozone to bounce back.” JPMorgan Eurozone equities have underperformed the US by 20 percentage points in dollar terms since last May, creating a good entry point

NEIL MUNSHI IN LAGOS

for investors, according to the note. Institutional investors have turned particularly sour, with US domiciled funds having “severely cut” their exposure to Europe. JPMorgan’s strategists added that eurozone equities are trading well below their historic relative valuations compared with the US. The recommendations come with the European economy teetering on the brink of a recession, as a sharp downturn in the region’s manufacturing sector has begun to bleed into the wider economy. Mario Draghi, the president of the European Central Bank, warned in an interview with the FT that the region’s latest monetary stimulus “may have to last a long time” if national governments do not start spending more to counter the global slowdown. The US bank said the prospect of an increase in fiscal stimulus could be enough to support markets: “While JPMorgan’s base case is that meaningfully stronger fiscal support is unlikely anytime soon, we believe that equity markets could start to price in increasing odds of this happening.” www.businessday.ng

president. “I intend to hold the president accountable. And I intend to do a thorough investigation,” Mr Schiff said. He added that “what we have seen already is damning” given Mr Trump had tried “to coerce

Nigeria’s tech industry outraged at alleged police shakedowns

JPMorgan bullish on Europe as bank shifts away from US stocks PHILIP GEORGIADIS IN LONDON

whistleblower’s account, and a record of a call between Mr Trump and Volodymyr Zelensky, the Ukrainian president, on July 25, to launch an impeachment inquiry into Mr Trump, only the fourth such action against a sitting US

that leader to manufacture dirt on his opponent and interfere in our election”. Mr Biden is a top contender for the Democratic nomination to challenge Mr Trump in the 2020 presidential election. Compounding suspicions about Mr Trump’s actions, the US president withheld aid to Ukraine as he made the case for help from Mr Zelensky. Two separate polls released on Sunday showed that Americans were giving Democrats the benefit of the doubt over Mr Trump, at least for now. An ABC News/ Ipsos poll found that 63 per cent of Americans found the allegations against the US president to be “serious” while 36 per cent of Americans believed they were “not so serious”. A CBS News poll found that 55 per cent of Americans backed the impeachment inquiry, while 45 per cent opposed it. Stephen Miller, a top adviser to Mr Trump, dismissed the allegations against the US president as a “partisan hit job” in an interview with Fox News on Sunday morning, and attacked the whistleblower as a “deep state operative, pure and simple” who was “close to” being a spy.

igeria’s tech industry is rising up against what its leaders say is a campaign of police harassment and extortion of tech workers after the alleged arrest of a software developer went viral. The #StopRobbingUs campaign launched on Sunday after Akinmolayan Olywatoni, a developer at Buffer Media in Lagos, tweeted that members of the city’s Special Anti-Robbery Squad had stopped him while he was carrying a laptop and taken him to a police station where they demanded N1m ($2,759) to release him. “Next thing was slaps and punch, here and there. All I could hear was confess you’re [an] internet frauster [sic] or not? I kept saying I’m not a fraudster, I’m a developer for a company and all,” he wrote. He said he had paid N15,000 to be released. Lagos’s tight-knit tech community quickly responded, with scores of other developers posting similar stories about being accused by police of being “Yahoo boys”, a nickname for internet

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scammers. A Nigerian police spokesman declined to comment, but the force’s complaints department said on Twitter that an investigation had begun. Local media reported that four officers had been arrested on suspicion of extorting Mr Oluwatoni. Tech investors said the arrests were a worrying trend that “accentuates the talent drain” in Africa’s largest economy. “This is a country where we’re complaining about lack of jobs, and this is a sector that is creating jobs,” said Bosun Tijani, cofounder of CcHub, the Lagos tech incubator, referring to the fact that roughly half of young Nigerians are unemployed or underemployed. He said that the Nigerian police extorted citizens of all stripes, but software developers were subject to a specific, gadget-driven type of shakedown that police used to frame them as “419” fraudsters, so-named after the police code for internet crimes. “They target anyone they find with a mobile phone or a laptop that is too good, because they think these are the tools that the @Businessdayng

419 folks use,” said Mr Tijani. “It becomes very difficult, because for software engineers, these are their tools — a lot of the companies in Nigeria will buy you a MacBook. So if a police officer sees you with a MacBook he automatically thinks it’s too expensive for a young person to be carrying around, even though it’s for your job, and he uses that as an excuse to extort you.” Mr Tijani and the others behind the campaign have collectively raised hundreds of millions of dollars in venture funding and turned Lagos into the most valuable start-up ecosystem on the continent. They have raised more than $30,000 in the first 24 hours of a crowdfunding campaign for a potential class action lawsuit and public awareness campaign. Mr Oluwatoni said he had previously been harassed by police while carrying his MacBook, while his brother had been stopped for playing Clash of Clans on his phone. But on Saturday, he said police stopped him because they saw his iPhone. “If they see you with a Mac it is bad — then with an iPhone, it’s terrible, terrible,” he said.

Tuesday 01 October 2019

BUSINESS DAY

NATIONAL NEWS

Global dealmaking grinds to slowest pace in two years Fears of economic slowdown sap corporate confidence as M&A activity falls 11% ERIC PLATT, JAMES FONTANELLA-KHAN AND LAURA NOONAN IN NEW YORK AND ARASH MASSOUDI IN LONDON

lobal dealmaking has eased to the slowest pace in more than two years, as fears of an economic slowdown sap corporate confidence and a $200bn tobacco industry merger was abandoned due to shareholder criticism. Total mergers and acquisitions activity has fallen 11 per cent so far this year to $2.8tn, with roughly $740bn of deals clinched in the third quarter, according to new figures from data provider Refinitiv. Those sums have been supported by a wave of mega-transactions greater than $10bn in size, which have helped offset a broad decline in dealmaking among smaller companies as well as a slight drop-off in private equity buyouts. The three months to the end of September proved to be the quietest quarter for announced takeovers since the middle of 2017, even as investment bankers in the US tried to tee up a mega-deal between tobacco groups Altria and Philip Morris International. But that deal, like several before it, faced a critical reaction from shareholders — with the stocks of both companies declining after the two made public their talks — and ultimately collapsed last week. “Today’s M&A market is driven by companies looking to become stronger to withstand periods of uncertainty,” said Chris Ventresca, global co-head of M&A at JPMorgan Chase. “There is increased worry that the status quo business plan may not be sufficient to withstand a harsh downturn or prolonged period of uncertainty.” European dealmaking was down 32 per cent to $556bn compared to the same period a year ago, the slowest since 2017 as uncertainty surrounding Britain’s exit from the European Union weighed on activity. Activity in Asia was also off sharply, hit by a steep decline in Chinese acquisitions, which fell to a 12-year low. The drop off in Europe came even as investors have cheered a $27bn bid by the London Stock Exchange Group to purchase Refinitiv. The fate of that transaction will become more clear within the next two weeks as Hong Kong Exchanges and Clearing faces a deadline to make firm bid in its efforts to purchase the LSE Group and scupper the Refinitiv deal. The third quarter saw a dearth of activity among the types of transactions that are critical for Wall Street’s profitability engine. The number of deals agreed this year worth less than $5bn have fallen 11 per cent, including a 24 per cent decline in transactions valued between $1bn and $5bn. “M&A markets thrive when CEOs and directors have confidence in the future, and it’s hard to have confidence in the future

when the world around you is in turmoil both economically and politically,” said Scott Barshay, a partner at law firm Paul Weiss. “So a lot of companies are in wait-and-see mode on strategic transactions until they have a better idea on how some of these geopolitical and economic uncertainties will play out,” he added. Dealmakers admitted that M&A was entering into the final innings of what has been one of the strongest and longest deal cycles in history. But several said that there was still considerable room for expansion given low interest rates and the easy availability of cash on the market to finance transactions. Without singling out any company, James Woolery, veteran dealmaker and head of M&A corporate at law firm King & Spalding, added that he expected many large groups would spin off units or sell assets in a bid to rationalise their portfolios. This has been true so far this year for companies such as Pfizer, the US pharma giant that spun off its Upjohn unit and combined it with generics drugmaker Mylan to create an off-patent group with an enterprise valuation of about $50bn, as well as brewer AB InBev, which agreed to sell its Australian operations to Japan’s Asahi for about $11.3bn. Pressure remains on corporate boards to spin-off slower growth units, with campaigns from activists like Elliott Management and Third Point contributing to M&A activity. Elliott, which is one of the most active hedge fund investors, has urged telecom and media group AT&T to sell a number of assets, including DirecTV and HBO. Daniel Loeb of Third Point has directed his efforts at Sony, pushing for the company to spin-off its “crown jewel” image sensor business. Robin Rankin, co-head of mergers and acquisitions at Credit Suisse, said: “It’s fairly tough to announce deals as well as closing them once they are agreed but there are encouraging signs that things are going to get better.” She added: “If the economy continues to grow, even at a slow pace, M&A activity should improve. What we are experiencing now is just short term challenges in part due to uncertainty, and disconnect between buyers and sellers.” The drop in M&A activity is reverberating across Wall Street, which has become dependent on the very largest transactions. Those assignments can be incredibly lucrative, as evidenced by the $123m JPMorgan Chase stands to earn for its role in Botox-maker Allergan’s planned $63bn sale to US pharmaceutical group AbbVie. But failure — such as missing out on a big deal or working on one that collapses — can weigh heavily on an M&A department’s earnings. Overall, fees generated from advising on takeovers are down 11 per cent this year to $20.3bn, a five-year low. www.businessday.ng

The economy has been hit hard over the past year by Iran’s inability to export oil © ABEDIN TAHERKENAREH/EPA-EFE/Shutterstock

Impoverished Iranians forced to leave Tehran for a cheaper life

Unable to make ends meet as US sanctions hit the economy, residents flee the cities MONAVAR KHALAJ IN PARAND

hen times were good, customers at Arash’s tea house in southern Tehran would smoke two hookahs a day, each flavoured water pipe costing them 80,000 rials, or just under $2. But such was the impact of the reimposition of US sanctions on the Iranian economy after President Donald Trump abandoned the 2015 nuclear deal, Arash was lucky if customers smoked two a week. Things got so bad he could no longer afford the monthly rent of 30m rials ($714) to keep running the ghahveh khaneh — an oldstyle café popular with workingclass men. This month, he moved his business to Parand, a dusty satellite town some 35km south-west of Tehran, hopeful that life would be cheaper and easier. “I guess no

one leaves Tehran to live or work here unless they feel miserable like me,” said Arash, as he sets colourful glass water pipes on a table in the down-at-heel neighbourhood he now lives. Official figures are hard to come by, but a recent parliamentary report suggested that people are being pushed out of larger cities by the rising cost of living. The “rise in cost of sales and rents in big cities, especially Tehran, has increased movement to the satellite towns . . . which could lead to social crises”, the report said. At least 1m people moved out of big cities last year because of economic hardship, said Ali Kord, a member of parliament. Over the past year, Iran’s economy has been hit hard by Tehran’s inability to export oil. The rial has fallen in value against the dollar by about 60 per cent since last year, the most recent data shows inflation of 42.7 per cent and the IMF has estimated the economy

will shrink 6 per cent this year. Inflation has also hit the housing sector — house prices rose 82.2 per cent in the three months to the end of June on the previous year. Rents rose 29.1 per cent in the same period, according to Iran’s statistical centre. “There is a hopelessness towards the future which looks dark,” said Alireza Sharifi-Yazdi, a social psychologist. “People are not optimistic enough to make plans even for their next three years.” The widespread availability of basic commodities and medicine mean that street protests are unlikely, he added. The government of Hassan Rouhani acknowledges that times have been hard but also reiterates the point that conditions have stabilised over the past year. The impact of the crisis has been clear in towns such as Parand, where hundreds of new flats were built in recent decades and arrivals from Tehran have become a regular sight.

Mohammed bin Salman warns of skyrocketing oil prices Saudi crown prince calls for action against Iran to prevent damage to world economy JAMES POLITI IN WASHINGTON AND ANDREW ENGLAND IN LONDON

ohammed bin Salman, the Crown Prince of Saudi Arabia, has warned that oil prices could skyrocket to “unimaginably high numbers” due to tensions with Iran, offering a grim prognosis for the world economy if Riyadh’s dispute with Tehran ramps up any further. “If the world does not take a strong and firm action to deter Iran, we will see further escalations that will threaten world interests. Oil supplies will be disrupted and oil prices will jump to unimaginably high numbers that we haven’t seen in our lifetimes,” Prince Mohammed said in an interview with CBS on

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Sunday evening. Tensions between the two countries flared up dramatically this month after drone and missile attacks hit Saudi oil facilities, triggering a big disruption to supply and a temporary spike in oil prices. Iran has denied any involvement in the attacks and backed claims by Yemen’s Houthi rebels that they launched the strikes. Washington and Riyadh have dismissed suggestions the assault was launched from Yemen, saying the weapons were Iranian and the strikes came from the north. Prince Mohammed said he hoped that a military response could be avoided, and warned that war between the two countries would have devastating consequences far beyond Saudi Arabia. “The region represents about 30 @Businessdayng

per cent of the world’s energy supplies, about 20 per cent of global trade passages, about 4 per cent of the world GDP. Imagine all of these three things stop,” he said. “This means a total collapse of the global economy, and not just Saudi Arabia or the Middle East countries.” The attacks on Abqaiq, the world’s largest oil processing plant, and Khurais oilfield temporarily knocked out more than half the world’s top exporter’s crude production, underlining the vulnerability of Saudi’s oil infrastructure. The kingdom is Washington’s closest Arab ally and has been a staunch supporter of the decision by Donald Trump, US president, to withdraw from the 2015 nuclear deal Iran signed with world powers and impose crippling sanctions on the Islamic republic.

Tuesday 01 October 2019

BUSINESS DAY

FINANCIAL TIMES

COMPANIES & MARKETS

@ FINANCIAL TIMES LIMITED

Forever 21 bankruptcy puts 350 stores at risk Fast-fashion pioneer tripped up by tough competition and aggressive global expansion ALISTAIR GRAY IN NEW YORK

orever 21, the fashion retailer whose constantly changing styles and low prices once made it a hit among young women, has filed for bankruptcy protection, felled by intense competition and its own aggressive global expansion. After weeks of questions about its future, the California-based company said on Sunday night that it planned to shut as many as 350 of its 800 stores around the world as part of a Chapter 11 restructuring. In the latest blow to shopping malls and high streets grappling with a wave of retail failures, most locations in Asia and Europe have been earmarked for closure, along with up to 178 in the US. The privately owned chain was founded in 1984 by husband and wife Do Won and Jin Sook Chang, Korean immigrants to the US who opened their first store in Los Angeles. Forever 21 became popular among fashion- and budget-conscious teenage girls and expanded rapidly. As well as its huge stores, the chain became known for quirks including Bible passages printed on its carrier bags that reflected the family’s Christian beliefs. It was also unwilling to offer customers special deals on the basis that “the first price should be the right price”. More recently, however, Forever 21 lost ground to rivals such as H&M and Primark, and its styles have fallen out of favour. Environmentally conscious shoppers also increasingly question the sustainability of fast fashion. “Forever 21 has been found wanting against that backdrop,”

said Neil Saunders, managing director of the GlobalData Retail consultancy. “The brand has lost a bit of its cachet.” He said the company’s already thin profit margins had made it difficult to turn make money online, and noted the chain’s “extraordinary large” bricks and mortar stores. “When sales become lacklustre, that means the model becomes unprofitable,” he said. Forever 21, which is still owned by the Chang family, said in a statement it hoped to “return to basics that allowed the company to thrive and grow into the fast fashion leader”. Linda Chang, executive vicepresident and daughter of the founders, said: “This was an important and necessary step to secure the future of our company.” Forever 21 said the location of US stores to be closed had yet to be determined and would depend on “conversations with landlords”. It did not immediately respond when asked how many jobs were under threat. The company said it planned to focus on a “profitable core” and maintain a presence in the US cities in which it currently operates. It said it would also continue operations in Mexico and Latin America. Its demise adds to a growing list of bankruptcies this year in US retail. Other recent failures include luxury department store chain Barneys New York and Diesel USA. In total US retailers have announced about 8,000 store closures this year, according to Coresight Research. To help the chain continue to trade during the bankruptcy proceedings, lenders led by JPMorgan Chase Bank have agreed to provide $275m in financing and TPG Sixth Street Partners will inject $75m.

How fortunes reversed for Germany and Greece Economic powerhouse has lost steam, while laggard recovers TOMMY STUBBINGTON

he eurozone economy has been turned upside down. Germany, the region’s industrial powerhouse, is experiencing its sharpest manufacturing decline in more than a decade, according to IHS Markit. According to the research company’s latest purchasing managers’ indices, released last week, the same sector in Greece — for a long time the euro area’s economic basket case — is growing faster than anywhere else in the currency bloc. The figures highlight the vulnerability of Germany’s export-heavy economy, which is widely believed to have gone into recession in the third quarter, to a global slowdown. For Greece, they are the latest sign of a belated recovery from a huge economic fall. Curiously, German weakness and Greek strength also explain why both countries’ bond yields are close to record lows. German debt, which is seen as the eurozone’s benchmark

safe asset, has rallied sharply since the spring as gathering economic gloom — domestically and around the world — saw investors betting on more stimulus from the European Central Bank. As Germany’s yields plunged further below zero (the 10-year yield is minus 0.57 per cent), fund managers became increasingly desperate to seek returns elsewhere. Greece’s bonds continue to offer the highest yields in the eurozone, but investors’ income-seeking has pushed them to record lows of just above 1.3 per cent on the 10-year note. At the same time, relatively strong Greek growth has given investors confidence that its debt is less risky than before. “As more and more eurozone government bond yields fall into negative territory, investors are simply forced to seek higher ground,” said Rabobank analyst Richard McGuire. “Greece’s positive yields look tempting and improving economic fundamentals are at least not telling buyers to stay away.” www.businessday.ng

The data show it: diverse companies do better When it comes to female representation a link to returns is provable JESSICA ALSFORD

he search for proof of a link between responsible business and investment return is still in its early days. But the data are clear in one area: diverse companies make better investments. The popularity of sustainable investing has soared with assets under management reaching $31tn in 2018, up from $23tn two years earlier, according to the Global Sustainable Investment Alliance. But, for sustainability to truly merge with mainstream investing, evidence needs to be clear of a correlation between environmental, social and governance (ESG) policies and investment returns. Plenty of anecdotal examples show how negative incidents in these areas, such as poor governance, environmental disasters or data privacy failures, have resulted in significant share price underperformance. Valuations of companies also appear to have benefited from healthy exposure to some of the themes of sustainability such as renewable energy, plastic recycling or biofuels.

But, despite this evidence, it has been difficult to pinpoint specific ESG metrics that can be added into an investment strategy to generate alpha. It is not for lack of trying. The parallel rise of systematic and sustainable investing should have made fertile ground for such analysis to be conducted. But quantitative analysis needs consistent, comparable and high frequency data — something that, to date, has been somewhat lacking in sustainable investing. Among the roughly 1,600 constituents of the MSCI World equity index only 38 per cent of companies report either carbon or greenhouse gas emissions, according to Refinitiv. However, thanks to the persistent efforts of investors and organisations such as the Sustainability Accounting Standards Board (SASB), progress is being made: 10 years ago, only 13 per cent of companies in the indexreported this data. This increasing availability of richer ESG datasets enables sustainability and quant teams at banks to collaborate to identify factors that can be incorporated into investment strategies. Morgan Stanley recently

launched a score that assesses the level of gender diversity within a company’s workforce. Diversity has been a focus for corporates and investors alike for nearly a decade, with the 30% Club launched in the UK in 2010 and France introducing board gender quotas in 2011. Data availability for the percentage of female employees and managers is still relatively sparse, but by combining it with information on the diversity of executives and board members, we were able to make some robust analyses and conclusions. By backtesting over the past eight years — a period for which we had enough data on representation — we were able to conclude that companies with more genderdiverse workforces do outperform their less gender-diverse peers. Globally, the most gender-diverse companies outperformed their regional benchmarks by 1.7 percentage points on average each year, while the least gender-diverse firms underperformed by 1.4 percentage points. Excess returns were highest in North America and Asia Pacific, excluding Japan.

Foreign investors hunt for yield in New York skyline Commercial property gains as institutions shift from low coupon bonds and volatile stocks JOSHUA CHAFFIN IN NEW YORK

or a New York building whose main storefront sits empty, 711 Fifth Avenue has become unusually sought-after. Kuwaiti pension fund Wafra agreed to pay $909m for the building in late August, well above what many believed it would fetch when Coca-Cola decided late last year to put it on the market. In the mother of all flips, Wafra then sold its interest this week to BVK, a German pension fund, and a Turkish partner, Bilgili Group. Whatever else the topsy-turvy sale

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means, it appears to confirm New York commercial property’s hearty appeal to institutional investors, many foreign, at a time of historically low interest rates around the world. “On every sizeable deal we offer there are more institutional bidders showing up,” said Douglas Harmon, chairman of capital markets at Cushman & Wakefield, which handled the original sale. “There are more institutions that want to own real estate than ever before.” Pension funds, sovereign wealth funds and their ilk have long been a force in real estate. Yet commercial property appears to be attracting fresh attention at a time when bonds @Businessdayng

offer so little yield and equity markets have been so volatile. Private equity groups Blackstone and Brookfield have captured attention in recent months by closing their largest ever property funds — $20bn and $15bn respectively. Beneath those headlines, pension funds in places such as Alaska and Oregon have been quietly increasing their own real estate allocations. One of the latest moves came from the California State Teachers’ Retirement System, which this month said it would boost its real estate investments from 13 per cent to 15 per cent of its portfolio while dialling back public equities.

Tuesday 01 October 2019

BUSINESS DAY

ANALYSIS

Donald Trump and Boris Johnson have weaponised the will of the people The ‘by any means necessary’ approach is fuelling an Anglo-American democratic crisis GIDEON RACHMAN

“B

y any means necessary” is the slogan used in 10 Downing Street to describe UK prime minister Boris Johnson’s approach to Brexit. The same phrase encapsulates Donald Trump’s approach to re-election in 2020. The consequences of this attitude to government became clear last week, as rule-of-law crises broke out on both sides of the Atlantic. In the UK, the Supreme Court ruled 11-0 that the Johnson administration had acted unlawfully in suspending parliament. On the same day, an impeachment inquiry began against the US president, prompted by a whistleblower’s claim that Mr Trump pressured the government of Ukraine to dig up dirt on his political opponents. These concurrent crises are more than a coincidence. They are signs that the laws and conventions that underpin liberal democracy are under attack in both the UK and the US, two countries that have long regarded themselves as democratic role models for the world. In normal times, a British or American government would have responded to the legal blows dealt to them last week with caution, restraint — and even contrition. But those days are gone. Instead, the Trump and Johnson camps are whipping up their supporters to believe that their legal problems are an act of revenge by political enemies intent on thwarting

the will of the people. Mr Johnson has combined a pro forma acceptance of the court ruling with a claim that the Supreme Court judges were wrong (all 11 of them). His allies continue to splutter that the court is made up of metropolitan Remainers. Questioning the independence of judges has long been part of Mr Trump’s rhetoric. During the 2016 election, he suggested that a Mexican-American judge would inevitably be biased against him because of his stance on immigration. Contempt for the rule of law is baked into the “by any means necessary” approach to politics. In the UK, the Johnson adviser who adopted the motto is Dominic Cummings, who in a rambling blog post this year expressed his frustration that, in government, “discussions are often dominated by lawyers” — and that these killjoys often deemed his bright ideas “unlawful”. Once you have asserted that the end justifies the means, then any tactic is logically permissible. It is telling that “by any means necessary” was a slogan originally adopted politically by Malcolm X, the African-American activist of the 1960s, who was frustrated by the non-violent methods of the civil rights movement. The implied threat of violence is already part of the Trump-Johnson playbook. After MPs complained last week that the prime minister’s language was encouraging attacks on politicians, Mr Cummings’ response was that it is unsurprising people are angry and that the best way to soothe their righteous anger is to get Brexit done.

Vale holds dividends as it looks to repair damage from dam disaster Iron ore producer has set aside more than $6bn to cover fines and clean up costs NEIL HUME IN RIO DE JANEIRO

ale, the world’s biggest iron ore producer, is focused on repairing the damage caused by a deadly dam burst in Brazil and has no plans to buy back shares or resume dividend payments, says its chief financial officer. Two hundred and fifty people — mainly Vale employees and contractors — died in January when a dam holding waste material from a mine collapsed, unleashing a torrent of sludge that destroyed everything in its path including a staff canteen. The company subsequently suspended all shareholder returns apart from a mandatory dividend required by law. Twenty people are still missing and earlier this month Brazilian federal police unveiled the first criminal charges against Vale and Tüv Süd, its German safety inspector. “Vale is a very important company for lots of individuals. We have about 200,000 individual shareholders and about 200,000 retirees from the largest pension funds in Brazil that depend on the income,” CFO Luciano Siani told the FT Commodities Americas Summit in Rio de Janeiro. “So we understand the anxiety

of this audience . . . but what I have to say is that this is not a priority for the company right now. We need to be completely focused on reparation, compensation, litigation and beefing up our balance sheet.” Vale has set aside more than $6bn to cover fines and clean up costs and decommission nine socalled tailings dams with similar structures. But the fallout from the tragedy, near the town of Brumadinho in the southern state of Minas Gerais, helped drive iron ore to a five-year high above $120 a tonne over the summer, boosting profits at Vale and other producers. Since then the price of the steelmaking ingredient has fallen back to $90, a level at which Vale can still generate healthy margins. Mr Siani said the impact of the disaster on the global iron ore market had been a “little overestimated”. Vale was forced to curtail 90m tonnes of output in its immediate aftermath. “The fact is China is going to increase steel production by more than 10 per cent this year. So a spike would have happened without Brumadinho. Certainly it contributed . . . but it is unfair to say Vale is making more money [because of the collapse] because this is an incredibly unique year for the industry.” www.businessday.ng

Interview: Mario Draghi declares victory in battle over the euro Departing ECB president justifies more stimulus and says hawks have lost the political argument LIONEL BARBER AND CLAIRE JONES IN FRANKFURT

rom his corner office on the 40th floor of the European Central Bank’s gleaming twin tower headquarters in Frankfurt, Mario Draghi sums up how the ECB has been transformed during his presidency. “[The building] embodies our values,” says the 72-year-old Italian, with a touch of pride. “Transparency and independence.” Under Mr Draghi, the ECB has come of age. Alongside the Federal Reserve and the Bank of England, it has developed a formidable arsenal, injecting trillions of euros of stimulus into the eurozone economy to counter the impact of the global financial crisis. Mr Draghi, now approaching the end of his eight-year term, has won standing ovations at Brussels summits. In May, President Emmanuel Macron awarded him France’s Commandeur de la Légion d’Honneur, praising him as the heir of Jean Monnet and Robert Schuman, the European project’s founding fathers. Yet for all Mr Draghi’s panache, the region’s economy remains fragile. And there is a growing feeling that his central bank has shouldered too much of the burden and can no longer be the only game in town. It is a view the ECB’s president vigorously endorses. In a dig at the German economic establishment with whom Mr Draghi has frequently clashed, he says: “I [have] talked about fiscal policy as a necessary complement to monetary policy since 2014. Now the need is more urgent than before. Monetary policy will continue to do its job but the negative side effects as you move forward are more and more visible.” He adds : “Have we done enough? Yes, we have done enough — and we can do more. But more to the point what is missing? The answer is fiscal policy, that’s the big difference between Europe and the US.”

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Over the course of two interviews with the Financial Times, Mr Draghi took on his critics, highlighting the lessons of the multiyear eurozone debt crisis, his own legacy and the challenges facing his successor Christine Lagarde, former managing director of the IMF. He also justified a final package of monetary stimulus that has proven controversial with the bank’s hawks, a constant thorn in his side. The son of a central banker, Mr Draghi enjoyed impeccable credentials for the ECB post: a long career at the Italian Treasury and Bank of Italy; a doctorate in economics from the Massachusetts Institute of Technology; and a stint at Goldman Sachs, that helped him learn how to communicate with financial operators. He arrived in Frankfurt just as the eurozone crisis was about to accelerate into a new, treacherous phase. “By the end of 2011, the credit flows to the private sector were dropping dramatically,” he recalls. Two rate cuts followed, the first within days of taking over. As the eurozone’s economy worsened, Mr Draghi found himself confronted with the central tension in the eurozone, one that has haunted Europe’s efforts at deeper integration since the founding Treaty of Rome: the uncomfortable trade-offs between national sovereignty and the wider collective interest. This tension was felt most acutely in Germany, the eurozone’s most populous nation and richest economy. While the political elite, notably Chancellor Helmut Kohl, had signed up to the euro as part of the Maastricht treaty, the rest of the country was more ambivalent. Nowhere more so than the Bundesbank, the postwar guardian of price stability. The eurozone crisis exacerbated these tensions. Germany remained relatively unscathed, but others, notably Greece, Italy, Spain and Portugal, were exposed because of their high current account deficits @Businessdayng

and public debt. “My argument was that they should try to see that this is not a one-country world, that this is a more complex reality than just one country,” says Mr Draghi. Inside the ECB board, his relationship with Jens Weidmann deteriorated fast. The Bundesbank president went public, criticising the central bank’s accommodative stimulus on the grounds that it would unleash one of the things Germans fear most: rampant inflation. Press attacks became frequent, with front covers portraying the Italian as a mafia don, setting fire to €100 notes. Whatever his frustrations, Mr Draghi is too diplomatic to single out the Bundesbank or Mr Weidmann for criticism, but he implies that both are behind the times. “This mindset is the product of success. You had a very prestigious institution, the Bundesbank, with a successful monetary policy 20 to 50 years ago — when almost everyone else was basically making one big policy mistake after another,” he says. “But with the euro we had entered a new world. And this world was changing fast.” In this era of low inflation, austerity and high unemployment in the region’s periphery, as well as a fragmented financial system, Mr Draghi believes that the ECB had to intervene, with or without full support from all member states. “It would have been much better if we had had unanimity from the outset. Once I understood that was not going to be the case, it was a necessary price to pay,” he says. There is a further stinging rebuke: opposition within the ECB exemplified by Mr Weidmann undermined the ECB’s credibility in the markets. “The prior universal view [was] that the ECB was fundamentally a very conservative central bank. So, it took some time before expansionary moves could be viewed without a certain degree of scepticism. But this only reinforced our determination.”

Tuesday 01 October 2019

BUSINESS DAY

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Tuesday 01 October 2019

BUSINESS DAY

The Executive Vice Chairman, Management and Staff of Aiteo hereby

Our esteemed Silk

on the conferment of Senior Advocate of Nigeria (SAN) and consequent swearing-in, held on the 23rd of September 2019 at the main courtroom of the Supreme court of Nigeria. This prestigious honour recognizes your exceptional merit and contributions to the legal field through your demonstration of exceptional character, professional integrity, leadership and distinction in the dispatch of your duties by your learned colleagues. We wish you great success in your professional journey as you continue to provide legal scholarship and leadership towards building our nation.

Tuesday 01 October 2019

BUSINESS DAY

Live @ The Exchanges

L-R: Fatimah Bintah Bello–Ismail, National Council Member, The Nigerian Stock Exchange (NSE); Aigboje Aig-Imoukhuede, CON, Ex-Officio, NSE; Oscar N. Onyema, OON, chief executive fficer, NSE; Otunba Abimbola Ogunbanjo, President of the National Council, NSE and Mojisola Adeola, secretary to the Council, NSE during the Annual General Meeting (AGM) at the Exchange in Lagos.

NSE: Earned transaction fees decline by 13% to N3.3bn …holds annual general meeting Stories by Iheanyi Nwachukwu

he Nigerian Stock Exchange (NSE) held its 58th Annual General Meeting (AGM) of members on Monday, September 30, 2019, at the NSE Event Centre, Lagos. During the AGM, the Audited Financial Statements of The Exchange as at December 31, 2018 and the reports of National Council and auditors were presented to the members as part of the Ordinary Business of the day. According to the Chief Executive Officer of NSE, Oscar N. Onyema, the NSE demonstrated resilience in the face of a challenging operating environment closing the year with surplus of N2.70billion. “Total revenue declined to 8percent that is N7.67billion as investors sought towards more guaranteed investment asset classes in the face of uncertainty. Our listings revenue stream was the most impacted, as it fell by 21percent to N1.4billion”, he said. Influenced by the capital market trends within the period,

transaction fees also declined to N3.3bn, a 13percent drop from last year. The balance sheet remained s t ro n g w i t h a 9 p e rc e n t growth in total assets as the Group closed 2018 with total assets of N29.1billion, with approximately N4.1billion (14percent) held in liquid assets and an accumulated fund of N25.9billion to close the year with a sound liquidity position and strong balance sheet. Amid these results the NSE said it will continue to capitalise on new opportunities, take advantage of recent technological disruptions and seek corporate partnerships, to maintain a fair and orderly market while deliver ing sustainable values to its customers and stakeholders. Speaking at the AGM, the President of the National Council of the NSE, Abimbola Ogunbanjo said, “In line with global markets, our equities market experienced a decline in 2018. This trend, however, was counterbalanced by the NSE’s delivery of key initiatives for the development of the Nigerian capital market.” He said: “We witnessed the Debt Management Office (DMO) list the pioneer N10.69bn

Federal Government of Nigeria (FGN) Sovereign Green Bond, and a N100billion FGN Ijarah Sukuk Bond. This further asserted our aspiration as the platform for both the public and private sector to raise and access capital, encourage financial inclusion and create sustainable value. We also expanded our focus on retail investment, positioning the Exchange to deploy innovative and agile smart products and services. We made significant progress with the Demutualization process, with the bill now signed into law and assented to the President. The successful completion of this project will ultimately strengthen our market as a significant driver of socioeconomic development”. Members of the Exchange re-elected Catherine Nwakaego Echeozo who retired by rotation, as a member of the National Council. Members also reelected Katsina State Investment & Property Development Co. Limited (Represented by Fatimah Bintah Bello–Ismail); Fortress Capital Limited (Represented by Yomi Adeyemi) and Pilot Securities Limited (Represented by Seyi Osunkeye).

Private sector activities key drivers of growth- SEC

rivate sector activities have been described as key drivers for economic growth and development as they create jobs and pay the taxes that finance services and investments. This was stated by Acting Director General of the Securities and Exchange Commission (SEC) Mary Uduk during the inauguration of the SEC Private Equity Committee in Abuja, weekend. Uduk who was represented by Acting Executive Commissioner Corporate Services of the SEC, Henry Rowlands, said the

inauguration of the SEC Private Equity Committee is ahead of the planned National Private Equity Summit. Uduk said the event is an epoch making one for the country as it underscores one of its objectives of facilitating proper understanding and appreciation by government of the importance of private sector activities as key drivers of private sector led economic growth. She said the Nigerian government recognises the importance of private sectorled economic growth, hence it has put in place several partnerships and initiatives

between the private sector and the government with a view to achieving optimal economic growth.According to her, “The private sector remains the key driver of economic growth with the federal government providing enabling framework to galvanise and support private sector investors and participants through such vehicle as private equity funds. “A M c K i n s e y r e p o r t highlights this fact by its data that reveals that private equity net assets grew as much as 70percent from 2002 till 2018 and twice as fast as public equities.

Tuesday 01 October 2019

BUSINESS DAY

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Tuesday 01 October 2019

BUSINESS DAY

Live @ The STOCK Exchanges Prices for Securities Traded as of Monday 30 September 2019

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. 273,698.24 7.70 0.65 261 50,416,132 UNITED BANK FOR AFRICA PLC 210,326.44 6.15 -0.81 120 3,239,618 ZENITH BANK PLC 587,114.43 18.70 1.08 213 4,732,174 594 58,387,924 OTHER FINANCIAL INSTITUTIONS FBN HOLDINGS PLC 197,424.11 5.50 -0.91 230 21,211,941 230 21,211,941 824 79,599,865 TELECOMMUNICATIONS SERVICES MTN NIGERIA COMMUNICATIONS PLC 2,656,263.95 130.50 -4.04 109 1,182,761 109 1,182,761 109 1,182,761 BUILDING MATERIALS DANGOTE CEMENT PLC 2,581,636.87 151.50 0.53 76 78,925 LAFARGE AFRICA PLC. 256,113.95 15.90 -0.62 60 504,296 136 583,221 136 583,221 EXPLORATION AND PRODUCTION SEPLAT PETROLEUM DEVELOPMENT COMPANY PLC 326,586.73 555.00 -0.29 49 127,479 49 127,479 49 127,479 1,118 81,493,326 REAL ESTATE INVESTMENT TRUSTS (REITS) SKYE SHELTER FUND PLC 1,710.00 85.50 - 1 75 UNION HOMES REAL ESTATE INVESTMENT TRUST (REIT) 10,175.81 40.70 - 0 0 UPDC REAL ESTATE INVESTMENT TRUST 13,074.52 4.90 - 0 0 1 75 1 75 OTHER FINANCIAL INSTITUTIONS NIGERIA ENERYGY SECTOR FUND 411.91 552.20 - 0 0 VALUEALLIANCE VALUE FUND 3,312.39 103.20 - 0 0 0 0 0 0 1 75 CROP PRODUCTION FTN COCOA PROCESSORS PLC 440.00 0.20 - 0 0 OKOMU OIL PALM PLC. 52,417.35 54.95 - 39 160,701 PRESCO PLC 40,350.00 40.35 - 10 13,440 49 174,141 FISHING/HUNTING/TRAPPING ELLAH LAKES PLC. 8,520.00 4.26 - 1 500,000 1 500,000 LIVESTOCK/ANIMAL SPECIALTIES LIVESTOCK FEEDS PLC. 1,290.00 0.43 -8.51 6 630,000 6 630,000 56 1,304,141 DIVERSIFIED INDUSTRIES A.G. LEVENTIS NIGERIA PLC. 688.30 0.26 - 7 124,708 JOHN HOLT PLC. 214.03 0.55 -9.84 2 250,450 S C O A NIG. PLC. 1,903.99 2.93 - 1 100 TRANSNATIONAL CORPORATION OF NIGERIA PLC 41,460.95 1.02 1.96 68 7,185,732 U A C N PLC. 21,609.72 7.50 -1.96 88 1,911,949 166 9,472,939 166 9,472,939 BUILDING CONSTRUCTION ARBICO PLC. 711.32 4.79 - 0 0 0 0 INFRASTRUCTURE/HEAVY CONSTRUCTION JULIUS BERGER NIG. PLC. 24,486.00 18.55 - 3 4,500 ROADS NIG PLC. 165.00 6.60 - 0 0 3 4,500 REAL ESTATE DEVELOPMENT UACN PROPERTY DEVELOPMENT COMPANY PLC 2,728.32 1.05 -9.48 44 3,006,315 44 3,006,315 47 3,010,815 AUTOMOBILES/AUTO PARTS DN TYRE & RUBBER PLC 954.53 0.20 - 0 0 0 0 BEVERAGES--BREWERS/DISTILLERS CHAMPION BREW. PLC. 9,003.92 1.15 - 16 210,668 GOLDEN GUINEA BREW. PLC. 242.22 0.89 - 0 0 GUINNESS NIG PLC 74,473.02 34.00 - 41 115,947 INTERNATIONAL BREWERIES PLC. 108,307.86 12.60 - 7 21,945 NIGERIAN BREW. PLC. 419,837.36 52.50 - 49 117,927 113 466,487 FOOD PRODUCTS DANGOTE FLOUR MILLS PLC 115,000.00 23.00 2.68 76 1,598,010 DANGOTE SUGAR REFINERY PLC 130,800.00 10.90 - 64 98,441 FLOUR MILLS NIG. PLC. 58,635.43 14.30 2.14 58 743,996 HONEYWELL FLOUR MILL PLC 7,533.69 0.95 - 20 581,110 MULTI-TREX INTEGRATED FOODS PLC 1,340.10 0.36 - 0 0 N NIG. FLOUR MILLS PLC. 766.26 4.30 - 1 1,000 NASCON ALLIED INDUSTRIES PLC 35,502.47 13.40 -2.19 10 168,392 UNION DICON SALT PLC. 3,321.07 12.15 - 0 0 229 3,190,949 FOOD PRODUCTS--DIVERSIFIED CADBURY NIGERIA PLC. 19,627.21 10.45 - 18 13,144 NESTLE NIGERIA PLC. 1,105,676.21 1,394.90 3.71 87 296,667 105 309,811 HOUSEHOLD DURABLES NIGERIAN ENAMELWARE PLC. 1,680.31 22.10 - 0 0 VITAFOAM NIG PLC. 4,878.29 3.90 - 6 88,705 6 88,705 PERSONAL/HOUSEHOLD PRODUCTS P Z CUSSONS NIGERIA PLC. 27,793.34 7.00 - 13 123,915 UNILEVER NIGERIA PLC. 153,391.64 26.70 -7.93 18 279,137 31 403,052 484 4,459,004 BANKING ECOBANK TRANSNATIONAL INCORPORATED 147,713.89 8.05 -9.55 30 550,417 FIDELITY BANK PLC 49,257.15 1.70 -1.18 46 835,442 GUARANTY TRUST BANK PLC. 859,390.43 29.20 5.80 266 58,493,182 JAIZ BANK PLC 13,258.91 0.45 2.27 12 1,173,702 STERLING BANK PLC. 57,580.84 2.00 - 26 810,032 UNION BANK NIG.PLC. 203,845.27 7.00 - 12 171,823 7,364.28 0.63 - 9 250,761 UNITY BANK PLC WEMA BANK PLC. 22,758.93 0.59 -3.28 16 891,281 417 63,176,640 INSURANCE CARRIERS, BROKERS AND SERVICES AFRICAN ALLIANCE INSURANCE PLC 4,117.00 0.20 - 0 0 AIICO INSURANCE PLC. 4,573.93 0.66 1.54 16 1,446,946 AXAMANSARD INSURANCE PLC 17,430.00 1.66 -2.35 11 374,860 CONSOLIDATED HALLMARK INSURANCE PLC 2,276.40 0.28 -6.67 1 200,000 CONTINENTAL REINSURANCE PLC 21,471.58 2.07 9.52 10 845,000 CORNERSTONE INSURANCE PLC 6,186.39 0.42 - 6 86,377 GOLDLINK INSURANCE PLC 909.99 0.20 - 0 0 GUINEA INSURANCE PLC. 1,228.00 0.20 - 0 0 INTERNATIONAL ENERGY INSURANCE PLC 487.95 0.38 - 0 0 LASACO ASSURANCE PLC. 2,197.03 0.30 7.14 12 1,579,048 LAW UNION AND ROCK INS. PLC. 1,675.57 0.39 - 2 40,490 LINKAGE ASSURANCE PLC 4,080.00 0.51 - 1 1,000 MUTUAL BENEFITS ASSURANCE PLC. 2,234.55 0.20 - 0 0 NEM INSURANCE PLC 12,145.16 2.30 - 3 19,696 NIGER INSURANCE PLC 1,547.90 0.20 - 1 6,415 PRESTIGE ASSURANCE PLC 2,637.45 0.49 - 1 4,000 REGENCY ASSURANCE PLC 1,333.75 0.20 - 1 138,600 SOVEREIGN TRUST INSURANCE PLC 1,668.16 0.20 - 0 0 STACO INSURANCE PLC 4,483.72 0.48 - 0 0 STANDARD ALLIANCE INSURANCE PLC. 2,582.21 0.20 - 0 0 SUNU ASSURANCES NIGERIA PLC. 2,800.00 0.20 - 0 0 UNIC DIVERSIFIED HOLDINGS PLC. 516.46 0.20 - 0 0 UNIVERSAL INSURANCE PLC 3,200.00 0.20 - 0 0 VERITAS KAPITAL ASSURANCE PLC 2,773.33 0.20 - 0 0 WAPIC INSURANCE PLC 4,550.13 0.34 2.94 25 2,649,662 90 7,392,094

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MICRO-FINANCE BANKS NPF MICROFINANCE BANK PLC 2,743.97 1.20 9.09 10 431,440 10 431,440 MORTGAGE CARRIERS, BROKERS AND SERVICES ABBEY MORTGAGE BANK PLC 4,158.00 0.99 - 0 0 ASO SAVINGS AND LOANS PLC 7,370.87 0.50 - 0 0 INFINITY TRUST MORTGAGE BANK PLC 5,796.93 1.39 - 0 0 RESORT SAVINGS & LOANS PLC 2,265.95 0.20 - 0 0 UNION HOMES SAVINGS AND LOANS PLC. 2,949.22 3.02 - 0 0 0 0 OTHER FINANCIAL INSTITUTIONS AFRICA PRUDENTIAL PLC 7,820.00 3.91 - 16 58,400 CUSTODIAN INVESTMENT PLC 35,291.19 6.00 - 3 6,000 DEAP CAPITAL MANAGEMENT & TRUST PLC 660.00 0.44 - 0 0 FCMB GROUP PLC. 32,674.47 1.65 1.23 59 16,780,448 ROYAL EXCHANGE PLC. 1,080.53 0.21 - 1 491 STANBIC IBTC HOLDINGS PLC 397,991.17 38.00 - 44 186,598 UNITED CAPITAL PLC 12,720.00 2.12 - 42 437,762 165 17,469,699 682 88,469,873 HEALTHCARE PROVIDERS EKOCORP PLC. 1,680.29 3.37 - 0 0 UNION DIAGNOSTIC & CLINICAL SERVICES PLC 852.75 0.24 4.35 3 112,900 3 112,900 MEDICAL SUPPLIES MORISON INDUSTRIES PLC. 494.58 0.50 - 0 0 0 0 PHARMACEUTICALS EVANS MEDICAL PLC. 366.17 0.50 - 0 0 FIDSON HEALTHCARE PLC 9,388.62 4.50 - 3 5,500 GLAXO SMITHKLINE CONSUMER NIG. PLC. 8,490.72 7.10 -0.70 12 250,694 MAY & BAKER NIGERIA PLC. 3,450.47 2.00 - 4 21,200 NEIMETH INTERNATIONAL PHARMACEUTICALS PLC 759.66 0.40 -9.09 5 317,590 NIGERIA-GERMAN CHEMICALS PLC. 556.71 3.62 - 0 0 PHARMA-DEKO PLC. 325.23 1.50 - 0 0 24 594,984 27 707,884 COMPUTER BASED SYSTEMS COURTEVILLE BUSINESS SOLUTIONS PLC 745.92 0.21 5.00 6 2,090,280 6 2,090,280 COMPUTERS AND PERIPHERALS OMATEK VENTURES PLC 1,470.89 0.50 - 0 0 0 0 IT SERVICES CWG PLC 6,413.06 2.54 - 1 395 NCR (NIGERIA) PLC. 534.60 4.95 - 0 0 TRIPPLE GEE AND COMPANY PLC. 292.02 0.59 - 1 1,500 2 1,895 PROCESSING SYSTEMS CHAMS PLC 1,127.05 0.24 - 12 850,000 E-TRANZACT INTERNATIONAL PLC 9,996.00 2.38 - 0 0 12 850,000 TELECOMMUNICATIONS SERVICES AIRTEL AFRICA PLC 1,157,510.66 308.00 - 13 2,686 13 2,686 33 2,944,861 BUILDING MATERIALS BERGER PAINTS PLC 2,173.68 7.50 - 10 27,769 17,885.00 25.55 9.89 23 146,420 CAP PLC CEMENT CO. OF NORTH.NIG. PLC 203,724.26 15.50 3.68 16 84,985 MEYER PLC. 313.43 0.59 - 0 0 PORTLAND PAINTS & PRODUCTS NIGERIA PLC 1,769.32 2.23 - 1 21,696 PREMIER PAINTS PLC. 1,156.20 9.40 - 0 0 50 280,870 ELECTRONIC AND ELECTRICAL PRODUCTS AUSTIN LAZ & COMPANY PLC 2,256.91 2.09 - 0 0 CUTIX PLC. 2,818.12 1.60 - 10 97,305 10 97,305 PACKAGING/CONTAINERS BETA GLASS PLC. 29,873.33 59.75 - 0 0 GREIF NIGERIA PLC 388.02 9.10 - 0 0 0 0 AGRO-ALLIED & CHEMICALS NOTORE CHEMICAL IND PLC 100,754.14 62.50 - 0 0 0 0 60 378,175 CHEMICALS B.O.C. GASES PLC. 2,547.42 6.12 - 1 250 1 250 METALS ALUMINIUM EXTRUSION IND. PLC. 1,781.64 8.10 - 1 40 1 40 MINING SERVICES MULTIVERSE MINING AND EXPLORATION PLC 852.39 0.20 - 0 0 0 0 PAPER/FOREST PRODUCTS THOMAS WYATT NIG. PLC. 83.60 0.38 - 0 0 0 0 2 290 ENERGY EQUIPMENT AND SERVICES JAPAUL OIL & MARITIME SERVICES PLC 1,252.54 0.20 - 9 671,835 9 671,835 INTEGRATED OIL AND GAS SERVICES OANDO PLC 46,742.11 3.76 -2.34 43 743,003 43 743,003 PETROLEUM AND PETROLEUM PRODUCTS DISTRIBUTORS 11 PLC 55,351.37 153.50 - 11 1,958 CONOIL PLC 11,658.40 16.80 - 21 214,753 ETERNA PLC. 4,108.06 3.15 -1.56 14 230,660 FORTE OIL PLC. 20,579.20 15.80 - 31 100,562 MRS OIL NIGERIA PLC. 5,729.98 18.80 - 2 2,500 TOTAL NIGERIA PLC. 43,968.08 129.50 7.92 58 42,682 137 593,115 189 2,007,953 ADVERTISING AFROMEDIA PLC 1,820.01 0.41 - 0 0 0 0 AIRLINES MEDVIEW AIRLINE PLC 17,551.17 1.80 - 0 0 0 0 AUTOMOBILE/AUTO PART RETAILERS R T BRISCOE PLC. 294.09 0.25 - 3 10,000 3 10,000 COURIER/FREIGHT/DELIVERY RED STAR EXPRESS PLC 2,387.46 4.05 - 3 10,015 TRANS-NATIONWIDE EXPRESS PLC. 361.01 0.77 - 0 0 3 10,015 HOSPITALITY TANTALIZERS PLC 642.33 0.20 - 0 0 0 0 HOTELS/LODGING CAPITAL HOTEL PLC 4,723.78 3.05 - 0 0 IKEJA HOTEL PLC 2,452.98 1.18 - 5 201,327 TOURIST COMPANY OF NIGERIA PLC. 7,862.53 3.50 - 0 0 TRANSCORP HOTELS PLC 41,042.18 5.40 - 0 0 5 201,327 MEDIA/ENTERTAINMENT DAAR COMMUNICATIONS PLC 4,800.00 0.40 - 0 0 0 0 PRINTING/PUBLISHING ACADEMY PRESS PLC. 211.68 0.35 - 1 5,000 LEARN AFRICA PLC 864.02 1.12 - 0 0 STUDIO PRESS (NIG) PLC. 1,183.82 1.99 - 1 450 UNIVERSITY PRESS PLC. 496.12 1.15 - 1 3,500 3 8,950 ROAD TRANSPORTATION ASSOCIATED BUS COMPANY PLC 563.62 0.34 - 3 65,087

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Mezuo Nwuneli: The breath of fresh air in Nigeria’s agricultural finance

”

CALEB OJEWALE

raditionally, Nigerian agriculture was not the place to find educated professionals, much less experts in finance, investment banking or private equity. Ironically, for decades, the agriculture sector has amongst other challenges been bedevilled with limitations in access to finance, and a dearth of innovation to drive growth. The agric sector needed professionals that will bring their knowledge and expertise to the fields and help stimulate growth, but the fields were the last place those professionals would want to be found. Finding a professional with expertise in private equity, investment banking, and corporate finance with 22 years of experience in Nigerian agriculture was therefore bound to be a strange sight, but for Mezuo Nwuneli, the past decade has been one of transforming agriculture in Nigeria and supporting businesses to grow. His company, Sahel Capital, has raised $65.9 million till date, the chunk of which has been invested in seven companies, with two or three other investments still to be executed. But who is Mezuo Nwuneli, managing partner of Sahel Capital Agribusiness Managers Limited? Mezuo has a 22-year career in a broad spectrum of finance related roles in private equity, investment banking, and corporate finance. Over the past ten years, Mezuo has worked extensively within the agribusiness sector in West Africa and across a broad range of crop value chains. He has also previously worked in the financial services, oil & gas, and telecommunications sectors. Mezuo started his career with the corporate finance team of the Sabre Group in Dallas in 1995, and then worked in J.P. Morgan & Co’s mergers and acquisitions group in New York. He was previously a Partner at AFIG Funds, a private equity firm covering 28 countries in West and Central Africa; and has also worked in leadership positions at SecTrust (now Afrinvest), Ocean & Oil Holdings, and MTS First Wireless. He resigned from AFIG to co-found Sahel Capital in 2010. He is also the Co-Founder/Chairman of AACE Foods, an agro-processing company based in Ogun State. Mezuo holds a Master in Business Administration (MBA) from Harvard Business School, and a B.Sc. in Industrial Management, with a minor in Information Systems from Carnegie Mellon University. He is a 2007 Archbishop Desmond Tutu Fellow and a 2015 Eisenhower Fellow. Sahel Capital managed by Mezuo is a leading private equity

Before there was money available for agriculture, we already showed we were interested in it by putting our own money to try and build businesses and be active in the space

Mezuo Nwuneli

firm focused exclusively on the agribusiness sector. Sahel Capital is the fund manager for the Fund for Agricultural Finance in Nigeria (“FAFIN”), a private equity fund focused on SME agribusiness opportunities in Nigeria. Journey to agriculture and the ‘leap of faith’ with AACE Foods In 2009 while in Senegal working in private equity, Mezuo and his wife Ndidi saw an opportunity in food and agriculture, and they “decided to dive in head first,” as Mezuo recalled in an interview. According to him, it was an opportunity to both generate commercial returns and also have an impact on people’s lives. At the time, the couple did not know so much about agriculture. When Mezuo and his wife launched their first agribusiness in 2010, the focus was on processing. The initial business plan was to produce jams, spreads, spices, and seasonings. But, what caught their attention was that there was one noodles company in the country, which at the time was importing 50 tonnes of chilli pepper per month. This, they considered shocking because they knew chilli pepper

could be sourced in Nigeria. The business therefore started by trying to go through the import substitution model, by building the local supply chain, with the expectation that if they could ensure the right quality and price points for buyers, they would effectively displace all the FMCGs and multinationals who were importing spices. This way, build volumes, and on the back of those volumes, then launch a retail brand into market, and ultimately also start exporting. Even though seasoning was supposed to be a later stage introduction, it was fast tracked and became the main product since the market needed it more. Looking back a decade of AACE Foods, Mezuo recalls the first day with no equipment, no real factory, a rented location in Ojokoro, Ahmadiyya where the business operated for two years before moving. The business started in a modified house with very basic equipment, but today, has grown to attain an enviable position in the industry. With his background in investment banking, corporate finance, and other sectors, one would think Mezuo saw a vision of unlimited cash flow in agriculture, hence, the inter-

est. As he explained, however, the attraction for food and agriculture is not just the investment potential, but also to have the ability to impact people’s lives. Championing agricultural finance in Nigeria While there is Sahel consulting that provides management consulting and advisory services to a range of international clients within the agricultural sector, there is also Sahel capital, which is the private equity firm that manages funds for institutional and international investors. Initially, both were one firm, but as it grew they realised there was a need to have two separate entities to better serve each market appropriately because they are different dynamics. The firms were effectively separated in January 2017 with Sahel Capital run by Mezuo, while Ndidi (his wife) runs Sahel Consulting, with each spouse being a shareholder in the other’s company. Mezuo’s plan to set up a private equity venture focusing on agriculture started in 2012. However, in 2013 while he was still in the process of working that business plan, the government decided to anchor a private equity fund (which was FAFIN) focused on food and agriculture and there was going to be a Request for Bid (RFB) process. When Mezuo and his team saw this, they were excited because it was as though the announcement by government was tailor made for them. Going through the selection process, Mezuo recalls there were many international and local applicants, and Sahel got selected in the middle of 2013. In his words: “I would guess the reason we were selected beyond

track record and what we’ve done in investing, is that before there was money available for agriculture, we already showed we were interested in it by putting our own money to try and build businesses and be active in the space. That gave credibility that it wasn’t because there was money on the table that we wanted to do this.” FAFIN is a private equity fund that provides financial, capacity building, and technical assistance to selected SMEs in the Nigerian agribusiness sector. Investors in FAFIN include the African Development Bank, DFID Impact Fund (managed by CDC Group), Dutch Good Growth Fund (managed by Triple Jump), the Federal Government of Nigeria, KfW Development Bank, and the Nigeria Sovereign Investment Authority. The first close of funding was in 2014 with $33 million, followed by another round in 2017, which yielded an additional $32.9 million, to increase the total pool to $65.9 million that Sahel Capital manages. FAFIN’s portfolio companies under Mezuo’s management have so far generated 672 direct jobs, out of which about 17 percent are women, and indirectly impacted over 16,300 individuals through their engagement across the value chain. FAFIN portfolio companies aggregate a significant amount of crop from Nigerian farmers including over 25,500 MT rice paddy, 13,000 MT cassava, 364,000 litres of milk, 260,300 birds and 24,000 MT shea nuts per year. In terms of deliverables, Sahel Capital is expected to invest in ten to twelve companies, where it would have equity. It is supposed to build and create value in those companies, such that when money is returned to the investors, it would have made over 8 percent per year in dollar terms during the fund’s 10-year period. So far, seven investments have been made and expecting to do another two or three investments in the next six months, with that, be done with all the capital of FAFIN, and likely going back to the market next year to raise a new fund to do the same thing in the sector. The seven companies currently in his portfolio are; L&Z Integrated Farms; Diamond Pearls Agro Allied; Dayntee Poultry; Crest Agro Products; Coscharis Farms; Ladgroup; and Polyfilm Packaging Nigeria Limited. If Mezuo had to advice anybody, he had to this say: “Very early on, surround yourself with mentors, a good board, and good advisers who have knowledge in areas you do not have knowledge on, because as you encounter the different challenges, they’ll be the ones to help guide you since they have gone through it before. “If you think you can do it by yourself, you are mistaken,” he said.

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