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Global ICT Leaders to Share Insights at ITU Telecom World 2015

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he rapid pace of digital transformation is creating new ecosystems, players and even industries – all holding tremendous potential.

But how can this potential be harnessed for the benefit of all? And what should the top-level priorities be? An outstanding line-up of speakers spanning government, industry, entre-

preneurs and innovators at the ITU Telecom World 2015 Leadership Summit on 12 and 13 October, 2015 will debate how best to accelerate ICT innovation, open up the digital

economy to all the world’s citizens, and work together to enable digital entrepreneurship as a driving force for socio-economic development. Speakers include:

Ministers and Regulators: Ali M Abbasov, Minister of Communications and High Technologies; Azerbaijan, Fatima Barros, Chair of BEREC

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Beyonic, Accord to Transform Mobile Money in Africa For NGOs and businesses working in emerging markets, mobile payments enable fast, secure money transfers and reduce losses associated with cash payments. However, until now, businesses making mobile payments needed to connect individually to every carrier they wanted to send money through, a time-consuming process for organisations that are operating in multiple countries. Beyonic’s cross-carrier

solution allows businesses to manage payments in multiple countries through one intuitive platform. “For those working in emerging markets, cash payments are riddled with security and logistical issues. Over the past few years, mobile money has become popular both for businesses looking to move away from cash, and for individuals who do not have the means to open traditional bank accounts. Beyonic’s system al-

lows NGOs and businesses to utilise mobile money for expenses with very little set-up, and we are excited to expand this important tool across Africa” said Luke Kyohere, CEO, Beyonic. Using Beyonic’s online interface, companies can manage payments to employees, aid beneficiaries, and vendors. The ability to make and track payments across any network opens up mobile money to businesses who previously

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AfDB Unveils ‘New Deal for Energy in Africa’

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A.M.Best: European Insurers Continue Emerging Markets’ Growth

Nigeria Tax Crackdown: An Imperative for Automated Business Solutions

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did not have the resources to connect to every carrier in a country. Beyonic is already integrated with prominent mobile money systems including MTN and Airtel in Uganda and Safaricom’s m-Pesa in Kenya, and has been used by organisations including Save the Children, Educate! and Innovations for Poverty Action to reduce the need for cash payments and increase operational efficiency.

L-R: Akin Ogunbiyi, Group MD/CEO, Mutual Benefits Assurance Plc; Chairman, Diamond Bank, Dr. Chris Ogbechie; Programme Chairman/ Moderator, Prof. Pat Utomi; Chief Economist and Director Research & Knowledge Management, African Export-Import Bank, Dr Hippolyte Fofack; Ag. Consul General, United States Embassy, Dehab Ghebreab; and Chairman, Board of Directors, Mutual Benefits Assurance Plc, Akin Opeodu, at the 20th Anniversary Public Lecture of Mutual Benefits Assurance Plc in Lagos.

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expertise in building mobile solutions and relationships with leading mobile carriers to bring Beyonic’s platform to 25 additional countries. Beyonic’s online platform enables businesses to quickly deploy, track and manage 2-way mobile money payments over multiple mobile carriers with one, easy-to-use system. Mobile money allows those in emerging markets to pay or receive money through even the most basic mobile phones.

Saraki’s Albatross: The need to Sheath Animosity

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eyonic, a technology company that aims to eliminate rampant use of cash in emerging markets, is announcing a partnership with Mobile Accord that will make Beyonic the largest mobile money aggregator in Africa. Beyonic currently operates in Uganda and Kenya, and will leverage Mobile Accord’s


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News

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Dell Unveils New Campus, Data Centre Networking Solutions

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ell has announced expansions to its networking portfolio to address growing complexities in campus networking and skyrocketing bandwidth demands in the data centre. For the campus, Dell is offering a new unified-campus architecture powered by the new Dell Networking C9010 Network Director switch and companion C1048P Rapid Access Node while in the data centre, Dell has debuted the Dell Networking S6100ON, which combines multi-rate connectivity, modularity, and open networking to deliver unparalleled inrack networking flexibility. Vice President and General Manager, Dell Networking and Enterprise Infrastructure, Tom Burns says these innovations are geared towards simplifying complex networking tasks. “At Dell, we’re taking a holistic, endto-end approach to networking from connecting server storage and workloads together in the data centre to connecting desktops and mobile devices in the campus and we’re excited about these new products and capabilities and the new levels of simplicity and flexibility to help our customers become future ready.” The new Dell unified-campus architecture is designed for mid- to largescale campus environments seeking improved scalability combined with simplified management and provides a single management view for the entire campus from access to core while offering a single point of control for quality of service, policy provisioning and software upgrades, as well as for programming software-defined attributes.

Beyonic, Accord Continued from Page 1

Mobile Accord has direct relationships with 78 mobile carriers in 44 countries in Africa and Asia and will use its connectivity to expand Beyonic’s reach. Together, Mobile Accord and Beyonic will work to implement a roadmap for expansion, starting with 10 key markets: Cote D’Ivoire, Ghana, Liberia, Malawi, Mozambique, Niger, Rwanda, Sierra Leone, Tanzania, and Zambia.

Global ICT Leader Continued from Page 1 of Administration and Digitisation, Poland; Begum Tarana Halim, Minister of Posts and Telecommunications, Bangladesh; Vijayalakshmy K. Gupta, Member, TRAI, India; Jack Hamande, Président du Conseil, IBPT, Belgium; Anusha Rahman Ahmad Khan, Minister of State for Information Technology, Pakistan; Tatjana Matic, State Secretary, Ministry of Trade, Tourism and Telecommunications, Serbia; Nikolay NikiforovMinister of Telecom and Mass Communications, Russian Federation; Jean Philbert Nsengimana, Minister of Youth and ICT, Rwanda;

L-R: Chairman, Heritage Bank Limited, Mr. Akinsola Akinfemiwa; Managing Director/CEO, Heritage Bank Limited, Ifie Sekibo and Executive Director, Heritage Bank Limited, Mrs. Adaeze Udensi at Heritage Bank Limited Chairman’s media parley in Lagos.

Winners Emerge in Intel #ClimbAfrica Competition

… As Julio Ludago completes Mt. Kilimanjaro Climb in 11 hrs, 8 minutes

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wo winners have emerged from Nigeria in the Intel #ClimbAfrica competition which was announced last week, for sport lovers to predict the time it will take Tanzanian Mountain Guide, Julio Ludago to ascend and descend Mt. Kilimanjaro in his attempt to beat the current world record of 6 hours, 56 minutes and 24 seconds. Sponsored by Intel Corporation, ASUS and his employer Ahsante Tours; Julio, who set out on Sunday, September 27, 2015 to beat the world record of ascending and descending Mt. Kilimanjaro currently held by Swiss-Ecuadorian Karl Egloff at 6 hours, 56 minutes and 24 seconds put up a spirited fight to complete the climb and finished in 11hours, 8 minutes, thus becoming the second Tanzanian and African to make this attempt to climb and descend the highest Mountain in Africa in the shortest time on record. The winners, Allan Thairo, and Dennis Murii Irungu had the most accu-

rate predictions on how long it would take Julio to climb Kilimanjaro, with 11hours, and 10 hours, 45minutes and 30 seconds respectively; and will receive the Asus Transformer Book T100 and Asus Fonepad. Finishing his climb, Julio said “I knew it was never going to be an easy task for me, but I had a lot of determination. I also drew a lot of inspiration from the support I received from the people who cheered me throughout this challenge. “My intention was to create awareness on mountaineering in Tanzania and inspire people around the world to come and climb Mt. Kilimanjaro. The high altitude, low temperature and occasional strong wind made it a difficult challenge but I waded through with a lot of faith. Despite not beating the current record, I believe I did my best and I hope that I have inspired other people to come and attempt the climb.” Commenting on the attempt, Head of Marketing and Public Relations Manager for East Africa at Intel Corpo-

ration, Lavinniah Muthoni, said that, “Julio’s story is truly inspirational. We celebrate his determination to complete the climb, even when the going got tough and we are proud that our technology supported him throughout his journey.” Julio’s employer, Ahsante Tours and Safaris Limited provided the logistical support during his training sessions and managed logistics during the day of the climb. According to the company’s Marketing Manager, Noel Kileo, “it is an exciting time for us to have been part of Julio’s incredible journey. Julio’s attempt was tough and even though he did not break the world record, we are proud of his accomplishment today. As a player in the tourism industry, we look forward to welcoming more people to visit our country and among other things, attempt to climb the highest mountain in Africa, Mt. Kilimanjaro.” Intel, through the use of technology enabled Julio to track his fitness levels

and also share his extraordinary experience with Africa and beyond. Throughout the preparation stage and actual climb, he used Basis Peak to help him track his activity, health and sleeping metrics 24/7. He was able to continuously monitor his heart rate, movement, perspiration and skin temperature throughout the climb. Julio also had an ASUS Transformer Book T300 Chi powered by Intel. The razor-thin and powerful 2 in 1 device with a 12.5” screen was useful during his preparation phase to track weather conditions, create a schedule and measure his progress. He was also able to surf the internet to get exercising tips and keep in touch with his fans. In February 2006, another Tanzanian guide Simon Mtui climbed and descended the mountain through the same route in 9 hours, 21 minutes. Mt. Kilimanjaro is the highest free-standing mountain in the world at 5,895 metres above sea level and is part of the Kilimanjaro National Park in Tanzania.

andYasuo Sakamoto, Vice-Minister for Policy Coordination, Ministry of Internal Affairs and Communications, Japan. High-level Industry Representatives: Helani Galpaya, CEO, LIRNEasia, Sri Lanka; Gordon Graylish, V.P. Sales & Marketing, Intel Corporation; Kevin Martin, Vice President, Public Policy, mobile and global access, Facebook; Gabriela Styf Sjöman, CTO, Telecom Italia; Joy Tan, President, Global Media and Communications, Huawei; Karim Taga, Managing Partner, Arthur D. Little, Austria; and Jeremy Wilks, Producer, Euronews. Heads of International Organisations, UN Agen-

cies and Academia: Udo Helmbrecht, Executive Director, ENISA; Nicholas Negroponte, Chairman Emeritus, MIT Media Lab; Cornelia Richter, Director General, GIZ, Germany; James Poisant, Secretary-General, WITSA; Sharad Sapra, Director, Global Innovation Centre, UNICEF; and José Toscano, Director General & CEO, ITSO. “The Leadership Summit programme gathers together policy makers, decision-takers, strategists and key ICT influencers at the highest level to identify and debate the central issues affecting the industry – from the urgent need to extend access to the digital economy to the 60 per cent of the world currently unconnected, to

recognizing and fostering the contribution of SMEs in driving technical and economic innovation and the establishment of digital single markets,“ said ITU Secretary-General Houlin Zhao. “As well as sharing their unique insights, the final session of the Summit will see the launch of the Budapest call for action – a global pledge underlining Ministers’ commitment to growing digital entrepreneurship, accelerating socio-economic development, and driving real change.” Leadership Summit sessions taking place at ITU Telecom World 2015 include: •Accelerating Digital Innovation for Social Impact •Integrating digital markets: new

building blocks to regional integration •Connectivity goals, the reality of reaching everyone by 2020 and why it matters so much.

Change of Name I, formerly known as MISS MUNIRAT ADEBISI ALARAPE now wishes to be known and addressed as MRS. MUNIRAT ADEBISI ALMUGIS BHADMUS. The General Public take note.


Business Journal October 5-11, 2015


Business Journal October 5-11, 2015

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Business Events www.businessjournalng.com

•L-R: Executive Director, Sterling Bank Plc, Mr. Abubakar Suleiman; Managing Director, Floodgate Insurance Brokers, Mr. Rotimi Olukorede; Managing Director, See The World Travels and Tours Limited, Mrs. Awoderu Iyabo Oluwatosin and Facilitator, Sterling MSME Academy/CEO, Mark George Consultants, Mr. Olugbolahan Mark-George, during the formal opening of the bank’s MSME Academy in Lagos.

•L-R: Chief Executive Officer, Nigerian Stock Exchange (NSE) Oscar Onyema with Managing Director and Chief Executive Officer, Airtel Nigeria, Mr. Segun Ogunsanya while presenting a gift to Oscar Onyema at the September edition of Airtel’s Employee Knowledge Series tagged, “Breakfast Session at the telco’s Headquarters, Banana Island, Lagos.

•L-r; Chief Executive Officer, Growing Business Foundation, Dr. Ndidi Edozien; Business Development Director, Sub- Sahara Africa, Intel Corporation, Stanley Muoneke; Head Strategy and Performance Monitoring, Universal Service Provision Fund (USPF), Kelechi Nwankwo ; and members of grand prize winning team, Datamart at the USPF Hackathon 2015 in Lagos recently.

•L-R: Head, Marketing and Communications, Nkiru Olumide-Ojo; Executive Director, Personal and Business Banking, Obinnia Abajue; Head: Transactional Products and Services, Babatunde Macauley; and Head, Business Banking, Lloyd Onaghinon, all of Stanbic IBTC Bank, at the launch of Stanbic IBTC Virtual Business Centre in Lagos

•L R: Head, Corporate Communications, Skye Bank, Rasheed Bolarinwa; Relationship Officer Skye Bank, Omofuma Augustina Omokoya; the proud winner of N250,000 category, a business woman, Mrs. Anibaba Omolara; and Head, Small Business Group Skye Bank, Ayo Olojede at the presentation of cheques to winners of the ongoing “Reach For The Skye Millionaire” reward scheme held in Lagos.

•Group Managing Director of the Nigerian National Petroleum Corporation, NNPC, Dr. Ibe Kachikwu (left), exchanged signed documents with Managing Director of Chevron Nigeria Limited, Mr. Clay Neff at the signing-ceremony of the $1.2 billion Alternative Funding Arrangement package for the financing of 36 Oil wells under the NNPC/CNL CVenture in London.

•L-R: Mr. Emmanuel Remvatas, Samsung Electronics, West Africa, , Managing Director, Smile Communications Limited, Mr. Michiel Buitelaar, Managing Director, Samsung Electronic, West Africa, Mr. Brovo Kim and Chief Marketing Officer, Smile Communications Limited, Mrs. Alero Ladipo at a Media Launch of Voice Over LTE by Smile Communications Nigeria in partnership with Samsung Electronics in Lagos.

•L–R: Mr. Oladipo Aina, Member, National Council, The Nigerian Stock Exchange (NSE); Alhaji Umoru Kwairanga, Member, National Council, NSE; Mr. Oluwole Abegunde, Member, National Council, NSE; Mr. Aigboje Aig-Imoukhuede, President, National Council, NSE; Mr. Oscar N. Onyema, Chief Executive Officer, NSE and Mr. Dunama Balami, Member, National Council, NSE and Engr. Muhammad Daggash, Member, National Council, NSE, celebrating Nigeria at 55.


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Editorial www.businessjournalng.com

The Federal Cabinet: Time for Effective Governance

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he 2015 Presidential Election ended on Saturday, March 28, 2015. It now belongs to the history books. Regardless of the pros and cons of the polls, it came and

went. And in a commendable act worth eulogising, the then incumbent president, Goodluck Jonathan conceded defeat and congratulated the declared winner, Muhammadu Buhari, a development that earned widespread local and international applause for Nigeria as a nation. On May 29, 2015, Jonathan handed the reins of power to Buhari, effectively handing to Nigerians a new administration at the centre formed by another political party, other than the PDP that been in office since 1999. As days and weeks passed, agitations began to emerge on the composition of a new Federal Cabinet to assist the president to run the affairs of the nation. As expected, political pundits and other Nigerians became restless and were raising concerns over the perceived delay in constituting the Federal Executive Council (FEC) and the attendant impact on policy direction, formulation and governance. When the agitations grew louder, Buhari came out in defence of his cautious stride and promised to unveil members of his cabinet by the end of September. Indeed, not everyone was pleased by the promise, let alone critics. But for others, it was a waiting game towards September. Accordingly, the news that Buhari has finally submitted list of his cabinet ministers to the Senate is a welcome development on many counts. First, it would calm frayed nerves in the polity. It would also ease the air of uncertainty surrounding the issue of governance in the country. Added to these is also the positive market sentiment it has sent to the financial and economic sectors in the country. On our part, we welcome the development as concrete evidence that Nigeria is now set for effective governance. As expected, Nigerians are eager to see the nominees appears before the Senate for screening, eventual confirmation and alloca-

President Buhari tion of ministerial portfolios. Our belief is that the president has made choice of people he desires to work with to actualize his dream for the country. It is also our belief that he looked beyond party membership and affiliation in nominating such persons for ministerial appointments into the Cabinet. We believe that appointing professional politicians into core technical positions where they lack the requisite competence

would be a great disservice, both to the government and Nigeria as a nation. There should be specific positions for politicians in the Cabinet, at least as compensation for working for the victory of the party at the polls. However, such positions should be anchored on the core competence areas of such politicians considered for nomination. We believe that every politician is a professional in one area of activity and should be duly

VocusRight Ventures

considered within that sector. We advise that tested technocrats should be given the opportunity to handle core technical areas, to bring the needed expertise and innovation to governance for the betterment of the people. The technocrats need not be card carrying members of the ruling party. All they need to justify their inclusion in the Cabinet is professional capacity to perform. In terms of expenditure, we strongly advocate trimming down the size of the Cabinet and the number of Special Assistants and Advisers which drain the public purse unduly. With dwindling revenue from falling price of oil in the international market, the country cannot afford a large Federal Cabinet and the attendant State Cabinets across the country that raises the level of recurrent expenditure to a frightening level. Indeed, austere times demand austere financial decisions for rational management of resources. Our nation today does not have the resources for a bloated Federal Cabinet. We need a manageable size of Cabinet that can run the country efficiently on available lean resources, without compromising competence. Given the general optimism and expectations expressed by Nigerians towards the Buhari administration, the government must endeavour not to disappoint Nigerians, first, by nominating the wrong persons to the Cabinet, and secondly, failing to make reasonable positive impact within a given period of time in office. The government cannot decree all the problems in the country to vanish overnight. However, it could initiate and implement policies that could lead to better days for the citizens through the appointment of the right caliber of persons into the Federal Executive Council. As we await the screening, confirmation and allocation of portfolios to the ministerial nominees, we must quickly remind the nominees that being chosen out of a population of 170 million is indeed a special honour they must cherish and appreciate by living up to expectations. Goodluck to the New Ministers!


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Banking www.businessjournalng.com

CBN Acts to Boost Liquidity, Cuts CRR to 25%

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Chioma Obinagwam

igeria’s apex bank, Central Bank of Nigeria(CBN) has taken frantic measures to cut the amount of cash that banks must hold as reserves aimed to stimulate liquidity in the economy. The decision, which was reached at the recently concluded Monetary Policy Committee (MPC) meeting held in Abuja, led to a reduction in the Cash Reserve Ratio (CRR) from 31 per cent to 25 per cent. CRR is the proportion of customers’ deposits a bank is required by the CBN to hold in reserve without loaning out. Nevertheless, the interest rate remained unchanged at 13 per cent whereas the symmetric corridor was also retained at 200 basis points around the Monetary Policy Rate (MPR) and the Liquidity Ratio remained the same at 30 per cent. This development is coming on the heels of the recent implementation of the Treasury Single Account (TSA), where about N1.2 trillion has been mopped up in addition to declining macro-economic variables. CBN Governor, Godwin Emefiele also expressed concern over liquidity withdrawals following the implementation of the TSA, which could affect economic growth. He said: “The committee noted that the overall macro-economic environment remained fragile. “The committee noted that liquidity withdrawals following the implementation of the TSA, elongation of the tenure of state government loans as well as loans to the oil and gas sectors

could aggravate liquidity conditions in banks and impair their financial intermediation role, thus affecting economic growth, unless some actions were immediately taken to ease liquidity conditions in the markets, he added. A peep at some macro-economic variables of the country show that inflation rate has skyrocketed to about 9.2 per cent as at the end of the first half of the year, which if not tamed could spill over to double digit. Oil prices had also fallen to about $43.84 per barrel in September. Real Gross Domestic Product (GDP) growth rate, according to the National Bureau of Statistics, lowered to 2.35 per cent in the second quarter of 2015, a significant decrease when compared with the 3.96 per cent in the preceding quarter. More so, foreign reserves went down

to about $30.69 billion as at September 2015 after shaving 2.97 per cent from the $31.63 billion it achieved in August. Despite the somersaulting macro-economic variables, the reduction of the CRR could not have come at a better time than now owing to the fact that it has a direct and immediate impact on the money supply. This is so because money that does not have to be reserved at a bank is money that can be used to make new loans. Money that can be loaned out is money that can filter through the economy and multiply through a process of multiple deposit expansion as businesses and consumers borrow money to invest. This multiplication process is described by economists as the multiplier effect. That means changes in the

reserve ratio will change the multiplier effect, and that changes the money supply. The money multiplier is the reciprocal of the reserve ratio. As we can see, changing the reserve ratio, which is inside of the multiplier, quickly changes the multiplier in the opposite direction. It is an inverse relationship. However, it’s important to understand that when the CBN changes the reserve ratio, this does not actually increase or decrease the money supply by itself. What it does is change the magnitude of the multiplier effect. This small detail can have a powerful impact on the money supply, and the money supply directly affects interest rates in the economy. When the money supply increases, interest rates go down and vice versa. Moreover, the change in the reserve ratio will have a dramatic effect on

World Bank Prices $1.25bn 2-Year Floating Rate Global Bond

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he World Bank has priced a 2-year USD 1.25 billion Floating Rate Note (FRN). The transaction is the largest USD FRN transaction of 2015 from a Sovereign, Supranational and Agency (SSA) issuer, and the largest FRN new issue priced since the World Bank’s $1.5 billion 2-year transaction in January 2013. The transaction had over 25 orders, including several new USD investors for the World Bank, taking advantage of this unique opportunity. The joint-

lead managers for this global bond are BMO Capital Markets, Credit Suisse and Goldman Sachs International. This 2-year USD FRN benchmark carries a coupon of 3-month USD LIBOR flat, paid quarterly, and matures on September 30, 2017. *On September 24, 2015, IBRD agreed to further increase the principal amount, the new total outstanding principal amount is USD 1.5 billion. The present transaction is consistent with the World Bank’s longstanding practice of deploying its franchise as

Investor Distribution of the $1.25 billion 2-year USD FRN Benchmark:

an issuer in the international capital markets to offer investor’s high-quality, liquid instruments. This approach has direct benefits for World Bank member countries as

well, since as a cooperative institution it is able to fund its activities as a provider of financial services to its members on highly attractive terms.

Nominal Gross Domestic Product (GDP). This principle is not reflective in the recent reduction of the CRR announced by the committee because it did not impact on the interest rate which remained unchanged at 13 per cent despite calls by experts for the lowering of the rate to a single digit as in the case of the inflation rate. Although interest rate did not change, the CRR cut, however, is expected to cushion the effect of the liquidity squeeze of the Treasury Single Account(TSA) on the economy. Reacting to the issue, a Senior Stockbroker at APT Securities, Tony Mordi said the reduction of the CRR is a step in the right direction, which will help neutralise the effect of TSA on banks. “The TSA came before the CRR reduction. The effect of the TSA will now be at zero level. What it means is that banks will now continue doing their business,” he said. “What I would expect is for banks to be more creative regarding deposits and in the quality of loans. Non-Performing Loans (NPLs) will reduce. The TSA and CRR will have effects on the banks,” he continued. Interestingly, Nigeria is not the only country that embarked on the reduction of its CRR. The People’s Bank of China recently cut down its Reserve Requirement Ratio (RRR) by 100 basis points to 18.5 per cent to boost bank lending and combat slowing economic growth in world’s second-biggest economy. Agreed that Emefiele has expressed fears of a dip of the economy in the northward direction in 2016, nevertheless, the cut in the CRR seem more like a better antidote to the liquidity issue in the meantime.

Ecobank Secures $285m Loan from Deutsche Bank Chioma Obinagwam

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cobank Transnational Incorporated (ETI) has announced that it has received a one-year Senior Unsecured Loan Facility of $285 million from Deutsche Bank AB. According to ETI, it appointed Deutsche Bank to be Initial Mandated Lead Arranger, Book-runner and Facility Agent, together with a syndicate of international banks to arrange this financing. Deutsche Bank A.G said it has successfully closed primary syndication with an over-subscribed order book. The final size of the facility was maintained at $285 million. ETI stated that it worked with Deutsche Bank on this transaction in view of the latter’s strong distribution platform and rapid execution capabilities. ETI will use the loan facility to refinance existing loans.


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Banking

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Nigeria Tax Crackdown: An Imperative for Automated Business Solutions

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igerian companies must ensure that they have robust, automated payroll systems and processes in place so that they can more easily comply with the demands of an increasingly tough tax regime in the country. That’s according to Magnus Nmonwu, Regional Director for Sage West Africa, who says that a hard-line attitude to non-compliance from the Nigerian federal and state tax authorities means that companies must get all their processes and paperwork in order to avoid tax troubles in the months to come. Nigeria’s Federal Inland Revenue Service recently said it would crack down on tax evaders by conducting audits of companies doing business in Nigeria to ensure that they are compliant with the various taxes due to the country. Furthermore, a law enforcement exercise saw the Lagos Inland Revenue Service temporarily seal the premises of 10 firms for failing to remit N45.52 million Personal Income Tax of staff to the state government. Says Nmonwu: “These actions show that Nigeria’s tax authorities are taking a zero-tolerance approach to non-payment of tax or incorrect remittances of taxes to the government, whether the reason is a deliberate evasion or an accidental oversight. With companies in Nigeria coming under more scrutiny for their tax affairs, it is essential to put in place systems and processes that help you to easily comply with tax regulations.” The Nigerian Personal Income Tax Act states that employers are required to file annual returns of all remuneration paid to their employees and taxes deducted and remitted to the tax au-

tion offers to the business also comes with other benefits, notes Nmonwu. Payroll fraud is a major risk, especially for smaller businesses, and incorrect payments can cost dearly. Payroll software delivers better visibility into transactions, provides an audit trail, reconciles input and output and offers a set of controls, checks and balances that help to prevent errors and fraud. What’s more, the ability to generate tax certificates, reports and electronic payslips with the click of a button is a major timesaver. A good HR and payroll solution allow HR managers to focus on performance management, training, skills development, alignment of the workforce with the business strategy, and other key strategic initiatives.

thorities on or before 31 January every year. Failure to do so carries a maximum penalty of N500, 000 for the employer and N50, 000 for individuals. In addition, employers must remit Pay-As-You-Earn (PAYE) tax each month for each employee to the relevant state internal revenue services, on or before the 10th day following the month in which salary was paid. Furthermore, employers and employees are each required to contribute 10% and 8% respectively of their employee’s monthly remuneration to the Nigeria’s contributory Pension Scheme. There are also other statutory payments, such as the Employee Com-

pensation Scheme (formerly known as the Workmen Compensation Act), Development Levy, National Housing Fund, Industrial Training Fund, just to name a few. A Lack of Formal Systems Makes it Hard to Comply Nmonwu says that one common reason some companies in Nigeria struggle to meet these tax obligations and deadlines is that they don’t have formal business systems in place to enable accurate recordkeeping, precise calculations and deductions, and automated preparation and submissions of these statutory returns to the relevant

tax authorities or government agencies when due. Against the backdrop of growing regulatory complexity, organisations need to realise that spreadsheets and other manual methods are no longer sufficient to meet their needs. To comply, companies need to put in place solutions that streamline capturing of transactions, automate payroll calculations and bring visibility of the business. Such solutions also make it simpler to keep track of annual changes to tax regulations that impact on payroll tax calculations and various changes in legislation, says Nmonwu. The discipline a good payroll solu-

Closing Words Nmonwu says that Nigeria’s federal and state governments are eager to expand their tax bases, and are investing heavily in modernising and streamlining tax administration. Given that they desperately need tax funds for social spending and infrastructure investment, they are closing in on companies that don’t comply, “As such, failing to meet the statutory reporting requirements set out in the Nigerian legislation is a growing business risk for companies in Nigeria. Failure to comply with these laws and regulations can cost a company greatly in fines, penalties, interest charges and reputational damage, which could lead to a going concern issues for the company. Putting in place electronic or automated systems that allow you to stay ahead of tax authorities and legislation can help you avoid this risk, thereby enabling you to concentrate on your core business functions” says Nmonwu.

Africa Hopes to Benefit More from Islamic Financing Windfall

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fficials and African actors in the world of finance have expressed, on 16 September in Abidjan, their desire to attract more financing from the Muslim-Arab world to cover the shortfalls in resources experienced by the continent. “The sector of Islamic finance offers excellent prospects for the African continent that our states should seize”, declared the Ivorian Prime Minister, Daniel Kablan Duncan, at the opening of the Africa Islamic Finance Forum (FAFI). For his part, the Ivorian Minister of Plan and Development, Albert Toikeusse Mabri, estimated that halal finance has several advantages for Africa, notably pointing to its low price. “Islamic investments have the characteristic of being readily available, in order to carry out development actions, to be at a low price and of an altruistic nature”, he remarked. On this occasion, Mr. Mabri invited West Africa “which has for a long time

remained hardly mobilised by this new mode of partnership with Arab countries” to benefit from this option. “Almost half the countries of the Arab League member states 10/22 are in Africa and their economies account for more than 33% of the GDP of the African continent”, noted the Director of the Arab Bank for Economic Development of Africa (BADEA), Sidi Ould Tah. “We remain committed to act today more than ever so that the economy, commerce, direct investment and finance strengthen this intertwining that we wish to render indivisible”, he suggested. After South Africa and Senegal, Côte d’Ivoire is preparing to subscribe to its first sukuk for the purpose of mobilising FCFA350 billion (about €534 million), thanks to the support of the Islamic Development Bank (BID) which has branches in Senegal, Niger, Guinea Bissau and Mauritania. Africa cruelly lacks resources to finance its economic development and infrastructure. According to data

published at the Africa Islamic Finance Forum, African banks remain “in spite of efforts achieved, Insuffi-

ciently capitalised and have for the most part short term even very short term resources, with a rate on demand

Albert Mabri Ivorian Minister of Plans & Development

deposit of 58.4% in the West African Economic Monetary Union WAEMU area”.


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Banking

ICD Report: Encouraging Islamic Finance Prospects in Africa

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newly-released report “Islamic Finance in Africa: A Promising Future” by the Islamic Corporation for the Development of the Private Sector (ICD) takes an in-depth look at the tremendous growth opportunities for Islamic finance to flourish in the region. The new report was released during the Africa Islamic Finance Forum 2015 in Abidjan. The report is being published as the global banking community comes together to define a transformative new landscape to integrate Islamic finance into the mainstream. Once of interest only to a niche market of Muslim investors, Islamic finance is now venturing beyond its traditional sphere, and is slowly gaining widespread acceptance in Africa. The birthplace of a quarter of the global Muslim population, the report highlights that Africa features a potentially strong demand for Islamic financial services and products. While still comparatively under-developed, Islamic finance is expanding in many parts of the region, and is now present across most of North Africa and in many countries of East and West Africa, particularly those with sizeable Muslim communities. One of the recommendations of the report is that Islamic finance can act as

of relatively low-income levels, a large informal sector and the prevalence of small businesses in Africa, Islamic microfinance is also a growth area worth looking into. The report also highlights notable progress in the sukuk sector, where recent developments have seen governments focusing more on creating a more enabling environment for sukuk issuances. Some countries which have issued sukuk include Gambia, Sudan, Senegal and South Africa, while Ivory Coast is lining up to issue its debut sukuk at the end of the year. Moving forward, several countries such as Tunisia, Egypt and Morocco have expressed keen interest in tapping the sukuk market for infrastructure financing and have finalised or are in the midst of finalizing their legal frameworks to promote sukuk issu-

the catalyst in mobilising funding into Africa, thereby resulting in economic growth and sustainable development. It is estimated that the region needed $93.0 bn per year to finance largescale infrastructure and manufacturing projects, while external funding is also needed to offset ballooning fiscal deficits. Meanwhile, 2 billion adults re-

ances. Although the Islamic financial services industry in Africa is currently dominated by the banking and sukuk segments, growth potential remains in the asset management and takaful spheres. In its key recommendations, the report underlines that to capture the tremendous potential, the regional industry must overcome various challenges which are broadly similar with challenges faced in other parts of the world. These include challenges on the regulatory front such as regulatory inconsistency, the shortage of qualified human capital, the lack of awareness and financial literacy by many end-users and consumers, and a conducive business landscape which will support the growth of Islamic finance.

main unbanked globally, and currently, sub-Saharan Africa alone accounts for as much as 17.0% of the world’s unbanked adults. In addition, there is a significant funding potential opportunity for Islamic banks in view of the increasing emergence of small-to-medium enterprises (SMEs) across Africa. In light

France to Slice Public Development Aid in 2016 Union Bank Supports Light

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rance is considering reducing its development aid and environmental credits in 2016, according to the 2016 Finance bill presented on 30th September during a cabinet meeting in Paris. According to official documents, the “Public Development Aid” (APD) mission is allocated payment appropriations of €2.60 billion next year against 2.77 in 2015. The “Environment, Development and Sustainable Mobility” mission is granted an amount of €6.49 billion, against 6.59 in 2015. These reductions are at odds with the recent commitments of President François Hollande to increase financing for these sectors. During a speech given on 27th September at the UN General Meeting, François Hollande promised to in-

Hollande crease by €4 billion per year the public development aid and this from 2020. He also announced an increase in environment funding from France by €2 billion per year in 2020. The disappointment of NGOs is

great. “This is a rude awakening”, Christian Reboul, Financial Development Manager for Oxfam, commented. “We come out of the UN General Meeting, where a big claim was made: to eradicate poverty in the next fifteen years. François Hollande took over this commitment, but we do not see the implementation of his announcements in the presentation of the 2016 Finance bill from the government. This is the 5th year in a row of cuts to the public development aid”, he added. In 2014, France has devoted only 0.36% of its GDP to APD, less than the 0.70% target set by the UN and fulfilled by only 5 countries, Denmark, Luxembourg, Norway, Sweden and the United Kingdom.

Equity Bank to Acquire ProCredit Bank in DR Congo

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he Kenyan banking group, Equity Bank announced on 30 September that it has obtained the green light from regulators to acquire 79% of the capital of ProCredit Bank Congo. The transaction announced last May, and whose amount has not been revealed, falls within the framework of Equity Bank’s expansion plan in Africa. The Kenyan group indeed announced, at the end of last March, that it was allocating $2 billion to its expansion plan in ten new African countries. Besides DR Congo, the group anticipates setting up in Ethiopia, Burundi, Malawi, Zimbabwe, Zambia, Mozam-

bique, Ghana, Nigeria and Cameroon. ProCredit Bank Congo is the 7th bank in DR Congo in terms of assets ($200 million) with a client base of some 170,000. The German finance group ProCredit Holding had 61% shareholding. Equity Bank made a profit before tax of 12.1 billion shillings ($120 million) during the first

quarter of 2015, an increase of 12% compared to the same period in 2014.

Camera Africa Festival 2015

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nion Bank Plc was the main sponsor of the 2015 “Lights, Camera, Africa!” film festival which kicked off on September 30, 2015 at Federal Palace Hotel, Lagos. It was the second year running the bank will sponsor the festival. The Lights, Camera, Africa Film Festival was created to stimulate discourse on issues and experiences that are rooted in the African art industry. It is currently in its 5thyear and the major objective is to share a diverse range of African and independent cinema including documentary, feature, animation and giving support to the work of emerging African film makers. The star attraction at this year’s festival was the documentary film “FaajiAgba” by film-maker Remi Vaughan-Richards. “FaajiAgba” documents the experience of Kunle Tejuosho who sets out to record old time master musicians including Fatai Rolling Dollar, Alaba Pedro, SF Olowookere and Sina Ayinde Bakare in an effort to showcase and preserve their historical influence and musical styles. The movie tracks their journey over a six year period and is a funny, sobering and highly entertaining

preservation of an important part of the Yoruba and Nigerian culture. According to the Head, Corporate Affairs & Communications, Ms. Ogochukwu Ekezie-Ekaidem, “Union Bank is proud to once again partner with the organisers of the Lights, Camera, Africa film festival for the second year running. Supporting the arts is a focus area for Union Bank, especially projects that promote Nigeria and its culture and history. The Lights, Camera, Africa festival is a showcase for Nigerian and African filmmakers who are telling their own stories. This is very important to us as a bank with a strong Nigeria heritage.” Ms. Ekezie-Ekaidem also highlighted the fact that the festival was free and encouraged members of the public to take advantage of the cultural event. The festival ran from September 30 through October 5, 2015 and included a host of activities in addition to movie screenings including workshops, panel discussions, and family-friendly activities. Attendees also enjoyed musical showcases, after-parties and the very popular Festival Souk during the 5-day fiesta.


Business Journal October 5-11, 2015

For The Record Inaugural Speech by Dr. Akinwumi A. Adesina, President African Development Bank Group, September 1, 2015 Abidjan, Cote d’Ivoire he African Development Bank has become the institution that it is today thanks to the efforts of many great men and women – dedicated public servants all. To the serving and past members of the Board of Governors, Board of Directors, past Presidents of the Bank – including their Excellencies, Babacar N’Diaye, Kwame Donkor Fordwor and Donald Kaberuka, who are here with us, to the dedicated professional staff of our esteemed Bank – let me say thank you. Future generations will look back on your work with respect and admiration. We have a sacred duty to honor your hard work by building upon the solid foundation that you have created. This is the mission to which I pledge to dedicate myself as President of the African Development Bank: expanding opportunities and unlocking potentials – potentials for countries, for women, for the youth, for the private sector, for the continent. As we unlock these potentials we will unleash a new wave of growth and development shared by all. While Africa’s economies are growing, inequality is increasing all over our continent. The sparkle in the eyes of the fortunate few is drowned by the sense of exclusion by the majority. Hundreds of millions of people are left behind. Most of them are women and our young people. They do not feel the impact of economic growth in their lives. Our collective challenge is to drive inclusive growth – growth that will lift millions out of poverty. Africa can no longer be content with simply managing poverty. For our future and the future of our children, we must eliminate it. We must integrate Africa – grow together, develop together. Our collective destiny is tied to breaking down the barriers separating us. From large to small nations, from countries on the coast to those far inland, from the island states that depend on the blue economy, to states coming out of conflicts with resilience and determination, our aspirations are the same – to deliver quality growth and development and to see all Africans prosper. As we open up Africa with high quality regional infrastructure – especially rail, transnational highways, information and communications, air and maritime transport – Africa will witness a phenomenal boost in intra-Africa and global trade and the entrepreneurial spirit of small businesses, large businesses, and millions of our young people, will be unleashed. By strengthening regional approaches to development and delivery of our programs, including financing and advisory services, the Bank will reduce inequalities between regions and countries. Through partnerships with regional economic communities and the African Union we will make progress toward our shared goal of truly integrating Africa. We must build more resilient economies and reduce fragility risks. A one size fits all model to financing development should give way to customized support to fragile states and 5 countries coming out of conflicts. They need our understanding and they deserve our support – and confidence. Our confidence in their ability to build stronger political, economic and social institutions. Our confidence that they can – if well supported – foster inclusive growth, by effectively managing their resources for the development of their peoples. The resilience and doggedness shown by Liberia, Sierra Leone and Guinea in the face of the Ebola crisis

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Dr. Akinwunmi Adesina President African Development Bank and the success of Nigeria in tackling the pandemic clearly demonstrate that political will is the currency of development. The Bank will work in new ways to address root causes of economic fragility, support diversification of economies, strengthen institutions for transparency, accountability and good governance, and support countries to get more out of their own domestic resources. We will build Africa’s confidence in itself – the confidence to solve some of its greatest challenges. We must light up and power Africa. Energy is the engine that powers economies. The more energy economies have, the more prosperous are their peoples. We must do more to power Africa, from our homes, businesses, industries, to our schools and hospitals. To do so, we must take bold steps, think differently and act with a greater sense of urgency. Africa cannot stand by with such massive resources for both conventional and renewable energy and yet be known for the darkness, not the brightness, of its cities and rural areas. Factories lie idle for lack of power. The lack of energy has put the brakes on Africa’s industrialisation. Hundreds of thousands, especially women and children, die every year from the effects of smoke from biomass and fuel wood, simply trying to cook meals for their families. Much wealth is tied down and potential wasted on our streets as small businesses, welders, barbers, food processors, electricians, 6 all hard working Africans, are underemployed and spend most of their hard-earned incomes paying for energy. Africa is blessed with limitless potential for solar, wind, hydropower and geothermal energy resources. We must unlock Africa’s energy potential – both conventional and renewable. Our bright sunshine should not only nourish our crops, it must power our homes. Our vast water resources should do more than provide us much needed drinking water: they must power our industries. Unlocking the huge energy potential of Africa, for Africa, will be a major focus of the Bank. The Bank will be a leader on this critical issue, for nothing is more important for Africa’s economic growth and development. We will be bold, creative, build strategic partnerships

on energy for Africa and harness resources from public and the private sectors. We will work closely with our political leaders and support African countries to power their economies. As a Bank, we will launch a New Deal on Energy for Africa. We must build the African private sector to create wealth. By developing financial markets and leveraging private capital markets, businesses will be able to access long term financing crucial to invest in needed machinery, equipments and working capital. By unlocking the potential of small, medium and large businesses, Africa will fast track industrial growth and development. Like the skyline of a city, we will create space for the small, medium and large businesses. As businesses pay taxes, domestic resource mobilisation will grow to support national and regional development from within Africa. The Bank will prioritise the development of the private sector to drive the industrialization of Africa. Africa’s rural areas need economic ladders out of deepening poverty. Africa’s growing wealth is highly concentrated in the urban areas, while millions of people in Africa’s rural areas remain in poverty – bypassed by the pace of growth. Disconnected due to poor road networks, lack of access to water, energy and underserved by information and communication technologies, they remain at the periphery of the booming growth across the continent. Africa’s rural poor do not need handouts. They need opportunities to unlock their wealth potential. Revamping rural infrastructure, expanding rural energy, mobile telephony and access to finance will speed up income growth, employment, financial inclusion, and education and boost quality of life all across our rural areas. The Bank will prioritise rural economic development to help lift millions out of poverty. Ladies and gentlemen, Africa must feed itself. It is inconceivable that a continent with abundant arable land, water, diverse agro-ecological richness and sunshine is a net food- importing region. And Africa has 65% of all the arable land left in the world to meet the food needs of 9 billion people on the planet by 2050. This is a huge untapped potential and Africa cannot eat potential. Only by rapidly transforming the

agriculture sector can Africa meet the growing food needs of its urban population, while boosting incomes for millions of its farmers – majority of whom are women – and creating much needed jobs. We must think differently: grow agriculture as a business, to become a wealth-creating sector, not one for managing poverty. This will excite the youths to see agriculture as a viable business. By moving away from exporting primary commodities, to developing agro-allied industrial zones in rural areas, Africa will expand its ability to export processed cocoa not cocoa beans, processed coffee not coffee beans, textile instead of cotton. Africa will add value to all its staple foods. Africa will move up the value chain of wealth, diversify its economies, expand foreign exchange earnings, and reduce food import bills, boosting fiscal and macro-economic stability of countries. Africa will finally take full advantage of its soil wealth, not just oil or mineral wealth. The Bank will prioritise agriculture and food security for the regional member countries. Ladies and gentlemen, the future belongs to Africa’s youth. We must boldly address the high youth unemployment in Africa. Africa is today the youngest continent, with an estimated 60 percent of its population between the ages of 15 and 24. By some estimates, more than half of Africa’s youth are unemployed, underemployed, or inactive. This serves as a stark reminder that Africa is rapidly losing its future growth by under-investing in education and quality job creation for its young people. Unemployment and underemployment among the youth is a smoldering fire that risks unraveling all the economic gains in Africa. The youth are Africa’s biggest asset. We must invest in them to build skills and encourage entrepreneurship while providing access to the financial resources necessary to unlock their creativity and unleash the power of their business enterprises. The Bank will build Africa’s human capital and strengthen universities and vocational schools to meet the needs of employers. We will embark on innovative programs and financing approaches to accelerate job creation for the youths in Africa, and unlock economic prosperity from Africa’s demographic asset. Ladies and gentlemen, five priorities will shape our work at the Bank under my Presidency as we advance the implementation of the Bank’s Ten Year Strategy: Light up and Power Africa. Feed Africa. Integrate Africa. Industrialise Africa. Improve quality of life for the people of Africa. Our Bank staff, processes and systems will be shaped to deliver on these critical imperatives. We will become sharply focused on measuring the results of our lending operations on the lives of people. No longer will we judge ourselves simply based on the size of our lending portfolio but on the strength of Africa’s growth and development and the quality of improvements in the lives of the African people. We will be more than a lending institution. We will build a highly competitive, world-class knowledge-driven Bank, to provide top-notch policy and advisory services to countries and the private sector. We will become a true development institution with measurable impacts on the lives of Africans. The Bank cannot achieve these goals alone. I thank all the regional and non-regional shareholders of the Bank for their strong and highly commendable support over the years. The task to deliver inclusive growth for Africa is significant – but not insurmountable. To succeed going forward, this institution will continue to need your

strong support, especially for the African Development Fund 14 cycle, as we position the Bank to deliver impacts for the Sustainable Development Goals. We will build stronger partnerships for impact – from private sector, civil society and academic institutions, multilateral and bilateral development agencies. We will advance Africa’s priorities, as envisaged by the Founding fathers of the Bank. We will be a strong voice for Africa, positioning and building support for Africa in the global environment. As we look to tomorrow, we know that there are many important supporters and partners who will help us achieve our shared goals for the future of the Bank, but in my view, none are more important than the dedicated men and women who make up the Bank’s Board and staff. I wish to specially celebrate the staff, my colleagues, here in Abidjan and in all our country offices and Regional Resource Centers across Africa. You are the Bank’s greatest asset. I salute your hard work and personal sacrifices and those of your families – especially your courage and determination in coping with the move of the Bank headquarters from Abidjan to Tunis. The hospitality of the Tunisian government kept the Bank afloat through a trying period at its home base in Abidjan. Today, with the great leadership of President Ouattara, peace and stability were restored to Cote d’Ivoire and the Bank successfully relocated back to its home, right here in Abidjan. As your President, let me assure you that I will support you everywhere you are. We must now pull together as one effective, high performing team. Together, we can achieve more. The African Development Bank must march forward with a new resolve. The development finance landscape is changing rapidly – and the African Development Bank must change with the times. We must remain competitive. And we must lead. To do so, we must develop and deploy business processes that make us much faster in delivering financial and nonfinancial products and services to our clients. We must become the leading voice for development finance for Africa – supporting greater aspirations for Africa and mobilising resources, within and outside of the continent, for Africa’s growth and development. We must become a more efficient, effective, results- and knowledgedriven Bank. One that is flexible and innovative in driving new models that will further grow our business and income. As a Bank, we are already on the right path with decentralisation. But we must go even further. We must no longer focus on merely being present, we must grow our business and we must grow our revenue – everywhere we are. We must serve our clients, regional member countries, and the private sector much better. Our Bank will be merit-based and able to attract and retain top-notch professional talents. Our Bank will build and harnesses strategic partnerships to solve major development challenges facing Africa. We will unlock the greater potentials of Africa. And we will become the Development Bank of choice for Africa! Ladies and gentlemen, we need all of Africa to succeed, so let us rededicate ourselves to a greater Africa. An Africa with 12 prosperous, sustainable and inclusive growth - one that is peaceful, secure and united, regionally integrated and globally competitive. A continent filled with hope, opportunities, liberties and freedom, with shared prosperity for all. An Africa that is open to the world, one that Africans are proud to call home. Let us think Africa. Let us build Africa. Let us move Africa forward – relentlessly!


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NSE Emerges Best CSR Company at 2015 African Business Awards

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Chioma Obinagwam

s a further testament to its sustainability and Corporate Social Responsibility (CSR) achievements in promoting a sustainable capital market, the Nigerian Stock Exchange (NSE) was presented with the “Best Corporate Social Responsibility Award” at the 2015 African Business Awards held in New York on September 23, 2015. The African Business Awards, launched in 2008 by African Business magazine, is designed to celebrate excellence in African business, by recognising individuals and companies that are driving Africa’s rapidly transforming economy and creating new economic opportunities for citizens and communities all over the continent. The Managing Director of IC Publications and Group Publisher of Afri-

Oscar Onyema CEO, Nigerian Stock Exchange

can Business magazine, Mr. Omar Ben Yedder said: “It is encouraging to read the many achievements that are taking place all over the continent, despite the headwinds and difficult global environment. The continent continues to

African Security Exchanges Promote Sustainable Growth

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he Johannesburg Stock Exchange (JSE) will be hosting the African Securities Exchanges Associations (ASEA) conference —a premier association of 25 securities exchanges. The conference will be held in Johannesburg from 15 – 17 November. The theme of the conference is “Africa Evermore: Growth for sustainability”. The conference serves to underline the fact that Africa’s capital markets are stable, have huge potential, and are growing. ASEA President, Oscar Onyema said: “The conference will be another step in establishing the sustainable development of African capital markets, finding ways to facilitate and increase market access at the regional level, and promoting greater interconnection among African exchanges.” ASEA aims at developing member exchanges while enhancing their global competitiveness. The conference will include major players in the African capital markets, including listed companies, trading participants, regulators, government representatives, technology providers, legal advisors, and institutional investors from Africa, Europe, and Asia. The discussion topics will focus on themes relevant to Africa and will provide an ideal opportunity to network and exchange information with indus-

try leaders from across the continent. Over the last ten years, the continent has posted steady growth, standing up to the impact of global shocks and becoming an investment destination of choice. Capital markets have been the key drivers of this economic transformation and they continue to play a central role in Africa’s growth story. ASEA’s mandate is to promote Africa not only as a sound investment destination offering better returns than more developed markets but one that also incorporates strong regulatory structures. Onyema pointed out that transparency and governance are fundamental to a healthy business environment. ASEA Executive Committee Member, Zeona Jacobs, Director of Marketing and Corporate Affairs at the JSE, said: “By hosting this event, the JSE will serve to further position Africa as a serious global contender in the financial services and securities exchange sector.” “ASEA has been successful in attracting capital inflows to key markets in Africa by positioning them as key engines of economic growth and opportunities for business development,” said Jacobs. “The conference highlights the important role its members have in advancing the exchange market and raising Africa’s global competitiveness in this sector.”

be blessed with some remarkable individuals, who are driven and relentless in their ambitions to playing a transformative role.” The NSE said the calibre of entries is very high and continues to reflect and recognise Africa’s outstanding individuals and businesses. These entries, it noted, are assessed by a judging panel of renowned individuals who are chosen for their expertise on the African Business industry, with scores based on a set of qualitative and quantitative criteria. Receiving the award, the Chief Executive Officer, NSE, Mr. Oscar Onyema, expressed appreciation for the honour and reiterated the Exchange’s commitment to providing a platform for sustainable growth and development in the African economy. “The NSE is devoted to taking a leading role in creating a more sustainable and inclusive economy for our stakeholders. Sustainability is a

critical component of our business strategy. It is about responsible and inclusive investment services, increasing opportunity, preserving resources, improving lives, creating jobs and meeting the needs of the various stakeholders that we serve.” “We will continue to leverage our CSR platforms to share how, through efficient utilisation of resources, support of our committed employees and partners, we are transforming lives and communities,” he added. Leveraging its unique position as the biggest Exchange in West Africa, the NSE is championing sustainability along four key impact areas of Marketplace, its platform for promoting market-based approach to Environmental, Social and Governance (ESG) imperatives; Community, where the NSE makes contributions to positively impact lives; Workplace, through which the Exchange facilitates diversity, well-being and harness the talent

and skills of its people; and the Environment as it focuses on reducing its environmental impact. The NSE in July 2015 affirmed its core value of transparency when it released its first Sustainability Report titled ‘Connecting Nigeria to the World through a Sustainable Capital Market’. The report, Onyema said, demonstrates The Exchange’s commitment to increased disclosure, expanded stakeholder engagement and thought leadership on sustainability. This award brings to four the number of awards received by the NSE so far in 2015. It first received the “African Regulator of the Year award” at the 6th African Business Leadership Awards in London. Then, Lagos Chamber of Commerce and Industry presented it with the “Award for Promoting Best Practice Reporting and Corporate Disclosure’ and received the ‘Financial Institution of the Year award’ at The Oil & Gas Year Award Nigeria.

Stakeholders Hail Commencement of E-Dividend Mandate Management System Portal

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he recent announcement by the Securities and Exchange Commission (SEC) that the enrollment for e-Dividend payments can now be efficiently conducted at bank and registrar branches nationwide through the online platform launched on July 29, 2015 has been hailed by stakeholders. The e-Dividend scheme has been a priority initiative for the entire capital market in a bid to curb the growth of unclaimed dividends and improve the overall efficiency of Nigeria’s equities markets. Olufemi Timothy, President of Renaissance Shareholders’ Association of Nigeria applauded the initiative, which would reduce the number of unclaimed dividends. “It is a very landmark initiative from the regulation. It is something we have been calling for a very long time. With this, the number of unclaimed dividends will be reduced.” Timothy added that it would encourage those who are outside and have been skeptical about the market due to the alarming unclaimed dividends issues to key into the capital market. Tony Mordi, a Senior Stockbroker at APT Securities noted that it would reduce the number of unclaimed dividends and also bridge the gap between the Registrars and Shareholders. “We’ve been clamouring for that. If you see the list of unclaimed dividends, the magnitude is so massive to the tune of about N50 billion. It will also bridge the gap between the registrars and shareholders.”

Mounir Gwarzo SEC DG SEC said it follows the release of a circular on the implementation of e-DMMS portal by the Central Bank of Nigeria (CBN) to all Deposit Money Banks dated Monday, 14th September, 2015. “The e-DMMS portal utilises NIBSS’ robust Document Management System to which completed e-Dividend Mandate Forms filled by the investor could be uploaded. The e-Dividend Form can be obtained and properly filled at bank branches or in the office of a registrar,” SEC disclosed. “Where an investor opts to fill this Form at a registrar’s office, the Registrar shall verify details such as the investor’s name, account number and Clearing House Number (CHN). The completed form shall then be uploaded to the e-DMMS portal for immediate access by the investor’s chosen Bank. The Bank is required to vali-

date the investor’s Bank Verification Number (BVN) and other account details,” it continued. The Apex capital market regulator stated that an investor who choose to complete the e-Dividend Mandate Form at his bank branch shall have the Bank validate his/her BVN and account details before uploading a scanned copy of the Form to the e-DMMS portal. SEC, however, directs Registrars to ensure that all their offices are properly equipped to enroll shareholders who would be approaching them for the exercise. Speaking at the unveiling in Lagos, Mr. Mounir Gwarzo, SEC’s Director-General, said the platform was initiated in collaboration with the Central Bank of Nigeria (CBN) and the Nigeria Inter-Bank Settlement System (NIBSS). Gwarzo said that the e-dividend payment platform would address the lingering unclaimed dividend issue as the market had been awaiting the dividend payment platform in the past 20 years. “The era of stale dividend and huge unclaimed dividend in the market will be a thing of the past with the launch of e-dividend payment platform, and we are determined to see the full implementation of the e-dividend payment system,” Gwarzo said. The Director-General said that the commission would embark on massive public enlightenment on how investors would utilise the portal, saying the commission will also conduct intensive training for bankers and registrars on the usage of the new portal.


Business Journal Octobern 5-11, 2015

Technology

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UN Broadband Commission Affirms New Focus on Sustainable Development Goals

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he power of broadband to leapfrog development roadblocks and bring access to education, healthcare and employment opportunities should put high-speed information and communication technology (ICT) network roll-out at the top of every country’s SDG strategy, according to members of the UN Broadband Commission for Digital Development, which met in New York. This week’s adoption of the 17 SDGs sees the Commission enter a new phase, with 22 new members drawn from a range of sectors including the global technology industry, government ministers, leaders in education and healthcare, and two additional UN bodies who join existing Commissioners from ITU, UNDP, UNESCO, UN-ORHLLS, WIPO and the UN Foundation. Established in 2010, as a top-level advocacy body promoting broadband as an accelerator of global development, the group is chaired by President Paul Kagame of Rwanda and Mexico’s Carlos Slim Helú, with ITU Secretary-General Houlin Zhao and UNESCO Director-General Irina Bokova as co-Vice Chairs. “The UN Sustainable Development Goals will stimulate action over the next fifteen years in areas of critical importance for humanity and the planet,” said ITU Secretary-General Houlin Zhao. “All three pillars of sustainable development – economic development, social inclusion and environmental protection – need ICTs as key catalysts. That is why the Commission believes that ICTs, and particularly broadband, will be absolutely crucial for achieving the SDGs.” The Commission’s annual State of Broadband report, released last week, reveals that household Internet access in developed countries is close to saturation, with more than 81.3% of

households connected. But while the proportion of households in the developing world with Internet access has increased from 31.5% to over 34.1%, it remains well short of the Commission’s target of 40% by 2015. Household connectivity figures also mask strong disparities; in the 48 UN Least Developed Countries fewer than 7% of households have Internet access, while in sub-Saharan Africa only 1 in 9 households is connected. “To succeed, the new Agenda will draw on all accelerators of inclusion, all multipliers of poverty eradication and sustainability, and our message is that broadband, and new technologies, are a transformational force, to build inclusive knowledge societies,”

Middles East, Africa PC Market Declines 25% in Q2 2015

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he Middle East and Africa (MEA) PC market suffered a sharp year-on-year decline of 25.6% in Q2 2015, marking it as steepest decline ever recorded in the region for a single quarter. The latest market insights from global technology research and consulting firm International Data Corporation (IDC) show that overall PC shipments for the quarter fell to 3.3 million units. Desktops were down 21.2% year on year to 1.4 million units, while the notebook segment declined 28.6% to total 1.9 million units. “Two of the biggest declines were

seen in Turkey and the ‘Rest of the Middle East’ region (Iran, Iraq, Syria, Yemen, Afghanistan, and Palestine),” says Fouad Charakla, Research Manager for Personal Computing, Systems, and Infrastructure Solutions at IDC Middle East, Africa, and Turkey. “Both these territories carried over high inventory levels from the previous quarter as a result of a slowdown in demand. This factor was an inhibitor of PC shipments in other parts of the region as well, including the UAE. Currency fluctuations also had a negative impact on supply and demand in several key markets across the region.

said UNESCO Director-general, Irina Bokova. “This goes beyond mere advocacy for networks and services. This is about opening new paths to create and share knowledge, about enhancing freedom of expression, about widening learning opportunities, especially for girls and women, about developing content that is relevant, local and multilingual – this message has never been so important.” Speaking at the opening of the Commission session earlier, President Paul Kagame stressed the importance of putting technology at the heart of development. President Kagame said: “Four billion people still have no Internet access. There is an urgent need to reverse this trend. Fewer than seven per cent

of households in the Least Developed Countries are connected. This is a problem, of course, but it is also means there is a lot of room for growth. In Africa, we are determined to seize this opportunity. An example is the Smart Africa initiative, which encourages nations to invest more in infrastructure, innovation, and entrepreneurship.” President Kagame invited Commissioners to attend the Transform Africa Summit taking place in Kigali on 1921 October, adding that the summit will be a time to forge the way forward towards further implementation of smart and sustainable ways to harness ICT for Africa’s development. This 12th meeting of the Commission also welcomed a number of special guests, including H.E. Luis Guill-

ermo Solís, President of Costa Rica; distinguished British filmmaker and activist, Baroness Beeban Kidron; and Klaus Schwab, Executive Chairman of the World Economic Forum. “The proposed set of 17 SDGs provide a clear and solid framework for human development,” said Broadband Commissioner Dr Carlos M. Jarque, who also represented Co-Chair Carlos Slim at the meeting. “Broadband represents a powerful way to accelerate progress towards their attainment. We need to look at innovative cross-sectoral strategies that can leverage the power of high-speed networks to improve education, healthcare and the delivery of basic social services to everyone, and especially the poorest in the world who need them most.”

Algeria: New Taxes in ICT, Telecom Sector

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ollowing the drop in oil prices which will impact on the budgetary forecasts, the Algeria government decided to make some adjustments in various sectors. In the ICT and Telecommunications sector, the draft 2016 Finance Bill provides for a Value Added Tax increase (VAT). In other words, the VAT for accessing mobile 3G internet will jump from 7% to 17%. For landline internet access, the tax remains low. Even the tax on yearly revenues for mobile operators previously at 1% will move to 2%. Apart from mobile operators,

importers of computer hardware will also pay more taxes. According to the same draft bill, a 30% customs duty will be instituted on imports of full sets of computers, laptops, etc. The fall in oil prices, Imane Houda Feraoun, Minister of Post and ICT, had already announced that it would impact on the sector by freezing investment programs and forcing a “rationalisation of expenditure”. This investments freeze will however not affect projects on the expansion of the fibre optic network throughout the country, undertaken by Algérie Telecom.

Imane Houda Feraoun, Minister of Post and ICT of Algeria


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Technology

Samsung Showcases Education, ICT Skills at 5th Innovation Africa

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Powered by Samsung Africa amsung Electronics Africa took part at the 5th Innovation Africa Summit at the Speke Resort Munyonyo, Kampala, Uganda from 30 September to 2 October

2015. Over 40 African ministers, deputy ministers, and cabinet secretaries from 30 countries were present to

meet and share insights on education, innovation and ICT skills development in Africa. “We are excited to be participating once again at this event and look forward to engaging with ministers and their delegations about innovations and solutions that respond to African problems. It is critical for Samsung not to have a blanket approach

but rather tailor make solutions, and Innovation Africa gives us the opportunity to share insights with the different ministries and officials,” says Corporate Citizenship & Public Affairs Manager, Abey Tau. At the Summit Samsung will showcase the Solar Powered Internet School (SPIS) solution that has been rolled out throughout the continent

in countries including South Africa, Nigeria, Kenya, Ghana and Mozambique, to name a few. At the end of the Summit Samsung will surprise one local Ugandan school by donating the SPIS to them, adding Uganda to the growing list of countries benefiting from the SPIS. All meetings that Samsung has secured with the delegates will take

ITU Unveils Annual Award: Leadership in Sustainable Development through ICTs

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TU emphasised the vital role that information and communication technology (ICT) will play in meeting the new Sustainable Development Goals (SDG) at a special award ceremony held at UN Headquarters, New York which officially recognised nine Heads of State/Heads of Government for their efforts to improve access to ICT networks and services. The ICTs in Sustainable Development Award re-affirms ITU’s commitment to enabling development through ICTs. Recipients of the prestigious award included: •H.E. Sheikh Hasina, Prime Min-

ister of the People’s Republic of Bangladesh •H.E. Mr Josaia Voreqe Bainimarama, Prime Minister of the Republic of Fiji •H.E. Mr Ali Bongo Ondimba, President of the Gabonese Republic •H.E. Mr Uhuru Kenyatta, President of the Republic of Kenya •H.E. Dato’ Sri Mohd Najib bin Tun Haji Abdul Razak, Prime Minister of Malaysia •H.E. Mr Paul Kagame, President of the Republic of Rwanda •H.E. General Prayuth Chanocha, Prime Minister of the Kingdom of Thailand •H.E. Mr Tabaré Vázquez, Presi-

dent of the Eastern Republic of Uruguay •H.E. Mr Meltek Sato Kilman Livtuvanu, Prime Minister of the Republic of Vanuatu. The award was conferred by ITU Secretary-General Houlin Zhao at a Gala Dinner hosted by the Global Sustainability Foundation (GSF), which celebrated ITU’s role in ‘Connecting the World’. Speakers at the event heralded the catalytic role that ICTs play in the achievement of the SDGs. “The leaders recognised at this event set the benchmark for improving access, affordability and application of ICTs to drive socio-economic

development,” said ITU’s Zhao. “With the international community on the brink of agreeing a bold 2030 agenda, it is clear ICTs have a fundamental role to play in the achievement of the new Sustainable Development Goals. ITU will be doing everything in its power to support our members – both government and private industry – in driving sustainable development through ICTs, and will work tirelessly to ensure the benefits of ICTs are available and accessible to all the world’s people.” ICTs play a pivotal role in achieving the post-2015 development agenda, enabling access to key development tools. E-education platforms help poor and remote populations to access to education and digital literacy skills, opening the world of employment. Emergency telecommunications facilitate key communications for natural disasters, helping to effectively co-ordinate relief efforts. mHealth tools open access to medical care, both for doctors and patients, reducing costs for prevention, diagnosis and treatment of non-communicable diseases, and long-term and preventable illnesses. The awards were presented following a full day of events including the Broadband Commission for Sustainable Development’s bi-annual meeting and the launch of an ITU 150th Anniversary exhibition which is housed in the Main Hall of the United Nations Headquarters.

place in the SPIS, built in a 12-metre renovated shipping container that can accommodate up to 24 pupils, and fitted with solar panels that power the equipment. Furthermore, it is equipped with a 65-inch large-format display screen, a teacher’s laptop, Samsung notebooks, a printer, and fans to cool the container. The classroom’s computer server is loaded with educational content that covers the entire basic education syllabus, allowing facilitators to teach any subject or grade. Energy efficient LED lighting and an IP camera, which is designed to use 3G connectivity, allows for remote classroom monitoring. “The donation of a SPIS aligns well with our philosophy that technology and education go hand-in-hand. Projects like the SPIS are at the forefront of integrating ICT into Africa’s education models and illustrate our commitment to innovation. We hope the SPIS positively impacts the people of Uganda and provides them with tangible solutions which will enhance the lives of learners – the future leaders of our continent,” concludes Tau.

Easy Taxi integrates App into Microsoft Outlook Calender

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ocket Internet-backed taxi hailing startup, Easy Taxi, has launched a new version of its mobile app that is integrated into Microsoft’s popular email solution, Outlook. The new mobile app,Easy Taxi for Outlook enable users to request a taxi within their Outlook email account when reminded of a calendar-saved event, thereby offering users other options of booking for a taxi. The new solution, which allows users to schedule a taxi by simply setting up a notification that will be sent within Outlook, is aimed at optimizing a user’s arrival time to meetings, events, lunches, and other commitments. Dennis Wang, Global Co-chief Executive Officer (CEO) of Easy Taxi said, “We want to offer more and more convenience and practicality to our users,” He further said: “During office hours, Outlook already notifies the person of a meeting through a reminder, now in the same Calendar tool the person can request a taxi. It’s extremely simple!” Easy Taxi, launched in 2012 and currently available in 30 countries and 420 cities including Easy Taxi Nigeria in Lagos and Abuja. The App connects taxi drivers and passengers, allowing them experience a fast, convenient and safe ride at just the tap of a button. The Easy Taxi app is available for Android, iOS and Windows Phone devices, as well as for B2B clients through Easy Taxi PRO and Easy Taxi Corporate solutions.


Business Journal October 5-11, 2015

Technology

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4G Smartphone Market Share Captures 58% in Q2 2015

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lmost six in ten (58 percent) smartphones sold in Q2 2015 were 4G enabled, according to the latest global smartphone sales data from GfK. And with a major operator launching 4G services in India at the start of this month, 4G is now available in all key countries. GfK forecasts 4G smartphone penetration to continue to grow at the expense of 3G, which is currently at 38 percent of smartphone units and is forecast to decline by another percentage point by Q4 2015. Kevin Walsh, Director of Trends and forecasting at GfK comments: “India is expected to be the largest contributor of absolute smartphone unit growth globally this year. The main reason behind this is the currently low smartphone penetration in the market together with a significant intensification of the competition amongst the smartphone vendors, which will drive ASP erosion allowing more affordable devices in the market.” There are significant regional differences in 4G take up: price polarisation in N. America, saturation in W. European markets, local brands tackling global players in India and China, and intense price competition in emerging markets. Walsh continues: “The first half of the year has seen macro events providing headwinds to top-line demand in regions like C&E. Europe, LATAM and China. However, the underlying trend of consumers optimising their digital consumption by screen size, within affordability constraints, continues in all regions. This trend can be seen from TV’s down to smartphones. In smartphones, it manifests in trends like price point polarisation in the US, the rapid screen-size increases in emerging markets and phablet market development. These trends are forecast to continue to the end of year but we see new inflection points and

market drivers for 2016.” N. America - +10 percent year-on-year growth in unit sales in Q2 2015 In this market, which like W. Europe is nearing saturation point, we see a price polarization as sales of high ($500+) and low end ($0-250) devices grew at the expense of mid-ranged devices ($250-500). Smartphones in the high end captured 43 percent of smartphone unit share in Q2 2015, up from 38 percent in 2Q 2014. N. America and China were the only regions to see an increase in high-end smartphone unit share on a year-on-year basis. W Europe - units up +9 percent year-on-year, but value and ASPfall Unit sales of smartphones grew +9 percent year-on-year in Q2 2015, but sales value declined, due to a mix shift towards the low-end observed in the quarter capturing almost 50 percent of the smartphone unit mix, up from 37

percent in Q2 2014. This region had very high LTE penetration levels in smartphones in Q2 2015, with the Nordics taking the top three places: Norway at 90 percent, Denmark at 89 percent and Sweden at 88 percent. China - high-end demand increased +49% year-on-year in Q2 2015 Unit sales fell -10 percent year-onyear in China to Q2 2015, which follows the previous quarter’s decline of -14 percent year-on-year. However, strong demand for highend smartphones ($500+) pushed smartphone value up +17 percent year-on-year to $26.8bn in the quarter. The high-end smartphone market now accounts for 17 percent of the market, up from 10 percent in Q2 2014 - and is growing at the expense of the low-end. In 2015, GfK forecasts high-end unit demand in China to grow +28 percent year-on-year, the strongest growth in this price band of any region this year.

C&E. Europe - a tale of two halves: rise and fall Despite unit sale declines of -11 percent year-on-year in Russia and -34 percent year-on-year in Ukraine driven by macroeconomic factors, the total regional smartphone demand grew +3 percent year-on-year in Q2 2015, buoyed by strong growth in Poland and Romania. GfK forecasts smartphone unit demand in Russia to decline to -14 percent year-on-year, and -23 percent year-on-year in Ukraine in 2015. Latin America - Brazilian economic slowdown starts a change of pace A significant slowing of growth in this region has been caused mainly by the macro-economic situation in Brazil. Q2 2015 saw +1 percent yearon-year unit growth, compared to +28 percent in Q1 2015 and +72 percent rise in Q2 2014. In 2015, GfK forecasts total smartphone unit demand and sales value to

drop in Brazil for the first time ever, with unit sales expected to fall -3 percent year-on-year, and sales value to decline -15 percent year-on-year. Emerging APAC - fierce competition in a growing Indian market In Emerging APAC, smartphone unit demand increased by +22 percent year-on-year in Q2 2015, with all major countries growing. India in particular has seen strong unit growth of +40 percent year-onyear; with local brands accounting for three of the top five smartphone vendor spots in the quarter. A number of Chinese smartphone brands have entered the Indian market this year, intensifying the already fierce competition between international and local vendors. The resulting price war is forcing ASPs down in a market where more than 80 percent of sales are in the low-end. In Q2 2015, smartphone ASP in India declined -12 percent year-on-year. In 2015, GfK forecasts smartphone prices in India to fall -11 percent year-on-year and 4G unit demand to more-than-triple, capturing 6 percent of the smartphone unit demand. Developed APAC - unit sales up +6 percent as Japan improves Unit sales in Developed APAC grew +6 percent year-on-year in Q2 2015, driven by Japan (+15 percent), which benefitted from an easy comparison with low sales in Q2 2014. GfK forecasts smartphone unit demand in the region to grow by +1 percent year-onyear in 2015. A -6 percent smartphone demand decline in S. Korea will be offset by Japan, which is forecast to see a +3 percent year-on-year increase. Walsh concludes: “Weak macroeconomic trends will continue across a number of major countries such as Brazil, Russia and China, but recoveries when they come are often faster than expected especially for tech sectors. In addition, we are still a long way from saturation in emerging market while adjacent industries to the smartphone fuel the next round of growth, generally complementing and in some cases cannibalising smartphone growth.”

IDC Unveils New Internet of Things Roadmap for Africa

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nternational Data Corporation (IDC) is delighted to announce that its ‘Internet of Things Roadshow’ will be visiting South African shores in February 2016, with the country’s inaugural event set to take place at the Radission Blu hotel in Johannesburg. Providing a perfect platform for South Africa’s ICT community to discuss the latest goings on across the Internet of Things (IoT) landscape, the event will assess the progress that is being made at the local, regional, and global levels. “The era of the Internet of Things is here, and the potential for the associated technologies to radically transform individual businesses and society as a whole is huge,” says Mark Walker, Associate Vice President at IDC Sub-Saharan Africa. “With IoT, organisations can enhance their operations to gain real-time insights, improve their efficiencies, develop new business

models, and deliver innovative services to customers, partners, and employees alike. However, the IoT industry is facing a number of challenges that are hindering its growth, such as skill shortages, a lack of standardisation, and concerns around security and privacy, so there is a pressing need for all IoT stakeholders to gather together to plot a mutually beneficial path for future success.” Drawing on its most recent survey findings, IDC believes we are now entering a crucial period for educating the wider IoT ecosystem on its inherent benefits. “IDC’s ‘Global IoT Survey’ indicates that IoT deployments are still in their early stages, with only onethird of planned endpoints already connected,” says Walker. “As such, the next 18 months represent a critical window for vendors to implement strategies and position themselves as IoT thought leaders.

In order to secure a key role in the future IoT arena, vendors should focus on building attractive capabilities around consulting and professional services, while simultaneously developing a broad IoT ecosystem of partners.” During the ‘Internet of Things Roadshow’ in Johannesburg, keynote speakers from South Africa’s most innovative companies will share the lessons they have learned from their own IoT deployments, dissecting the challenges they encountered along the way and outlining the innovative solutions they used to overcome them. Industry experts from some of the world’s leading IoT players – including the event’s Diamond Partner, Samsung – will also be on hand to document the technological advancements being made across a wide variety of different domains. Delegates will be drawn from across South Africa’s vertical spectrum, with the government, trans-

portation, manufacturing, healthcare, oil and gas, banking, energy, retail, mining, and automotive sectors all set to be heavily represented. The conference will provide insights into a range of existing and emerging vertical-specific applica-

tions and will present attendees with a clear outlook on the trends that are set to shape IoT adoption in South Africa over the coming years, with a particular focus on the role of Big Data and new approaches to data processing and analytics.


Business Journal October 5-11, 2015

14

Technology

Gartner Report: Every Employee Is a Digital Employee

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he integration of digital requirements into most work processes and growing employee digital dexterity are leading to a world where every employee is a digital employee, said Gartner. “Today’s employees possess a greater degree of digital dexterity,” said Matt Cain, Research Vice President at Gartner. “They operate their own wireless networks at home, attach and manage various devices, and use apps and Web services in almost every facet of their personal lives. They participate in sharing economies for transport, lodging and more.” This results in unprecedented numbers of workers who enjoy using technology and recognise the relevance of digitalisation to a wide range of business models. They also routinely apply their own technology and technological knowledge to streamline their work life. Gartner has outlined several ways in which the IT organisation should exploit employees’ digital dexterity: Implement a Digital Workplace Strategy The digital workplace is a business strategy that promotes employee agility and engagement through a more consumer-like computing environment. Most organisations approach the consumerisation of IT in a disjointed way, with specific technology initiatives such as mobile or social. Very few have a strategic vision where the busi-

Rather than try to fight the tide, the IT organisation should develop a framework that outlines when it is appropriate for business units and individuals to use their own technology solutions and when IT should take the lead. IT should position itself as a business partner and consultant that does not control all technology decisions in the business.

ness benefits of consumerisation are thoroughly analysed and implemented in a methodical and synergistic way across business units. Making computing resources more accessible in ways that match employees’ preferences will foster engagement by providing feelings of empowerment and ownership. The digital workplace strategy should therefore complement HR initiatives by addressing and improving factors such as workplace culture, autonomous decision making, work-life balance, recognition of contributions and personal growth opportunities. “IT leaders are in a unique position to strategically sense and respond to

a set of seemingly disconnected business initiatives for employees, partners and customers. The central thread that ties them all together is the consumerisation of technology, and a failure to engage with this will further marginalise the IT group,” said Cain. Embrace Shadow IT Over the next several years, Gartner predicts that IT spending will increasingly occur outside the consolidated IT budget. “Shadow IT” is the term sometimes used to describe the situation when business units buy, own and operate IT resources with little or no assistance from the IT group. Many IT departments consider

shadow IT inefficient and a source of risk, and see part of their role as containing its spread. This approach is not only futile but a waste of valuable talent in the workforce. “Shadow IT investments often exceed 30 percent of total IT spend,” said Cain. “This will only increase because demand for new apps and services to pursue digital opportunities outstrips the capacity of IT to provide them. At the same time, cloud services will mature and employee demographics will shift to increasingly technically savvy employees frustrated by the pace of traditional IT, and with the skills to find their own IT solutions.”

Use a Bimodal Approach To meet the demands of fast-evolving business and workforce dynamics, Gartner suggests that organisations adopt a bimodal approach to IT operations. Bimodal IT separates the risk-averse and “slow” methods of traditional IT from the fast-paced demands of digital business, which is underpinned by the digital workplace. This dual mode of operation is essential to satisfy the ever-increasing demands of digitally savvy business units and employees, while ensuring that critical IT infrastructure and services remain stable and uncompromised. With the accelerating pace of technology evolution, Gartner said that organisations that can embrace and exploit new and emerging technologies will be in a position to reap substantial competitive advantage. “Organisations that formally embrace and extend the digital competencies of their employees will experience improved business outcomes and gain competitive advantage,” said Cain. “The trick, however, will be to ensure that employees willingly embrace new technology, rather than feel threatened by it.”

Gartner: India Targets $21.4bn Mobile Services Market in 2015

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obile connections in India will grow to 880 million in 2015, an increase of 5 percent from 837 million connections in 2014, according to Gartner. Spending (in constant USD) on mobile services will grow 4 percent to reach $21.4 billion in 2015. Spending on mobile services will be driven by data services, which is expected to grow 15 percent to reach $6.5 billion in 2015. A large chunk of this growth will be driven by the increasing use of cellular services on data-centric devices, such as tablets and notebooks, through either embedded cellular modems or USB sticks. “In India, the rise in spending on data-only connections will be driven by two user scenarios - first, to complement their fixed Broadband connectivity, so they can use their larger-screen data-centric devices on the go. In other use cases, data-only connections will be the way for consumers to access Broadband connectivity because of a lack of fixed networks,” said Neha Gupta, Senior Research Analyst at Gartner. Newer and faster networks, a rise in the number of users of these networks, and more affordable smart-

phones will help to increase spending on data services. Spending on data services will also be heavily driven by mobile apps, particularly mobile video apps. Apps and content are driving traffic volume as people increasingly chat to friends and family, watch videos on the move, and listen to streamed music. “Mobile data provides a substan-

tial revenue opportunity in India. Communication service providers (CSPs) will need to focus on creating new pricing, with a focus on data access, such as shared plans. They will also need to refine the services they already provide, with a focus on creating richer, more immersive and more personalised experiences, to increase their customer numbers,” said Gupta.

Senegal: Association of ICT Users Demand Suspension of Mobile Number Portability

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fter the Pan African Institute for Citizenship, Consumers and Development (CICODEV), the Senegal Association of Users of ICT (ASUTIC) also criticised the introduction of portability of mobile numbers in the country. It judges that the launch of this telephone service was done without the pre-requisite conditions to enable it functioning well being in place. The Association is therefore requesting its suspension. With portability, ASUTIC explains that telephone numbers remain the same, but subscribers change their network. However, in this incessant transfer of subscribers from one operator to the other, there is no audio

signal to indicate on which network the call will be emitted by a user considering that the person they are speaking to could have also switched operators. This situation prevents users from knowing beforehand the applicable tariffs for a call. ASUTIC indicates that Orange even took advantage of this gap to increase its national communication tariff two days before the official launch of portability. A notice to the clients was published in this regard by the newspaper “Le Soleil” on August 27, 2015. All mobile telephone users in Senegal have been asked by ASUTIC to stop using the portability service as long as the problems surrounding it have not been solved.


Business Journal October 5-11, 2015


Business Journal October 5-11, 2015

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Energy www.businessjournalng.com

AfDB Unveils ‘New Deal for Energy in Africa’ •A blueprint to get rid of Africa’s energy poverty by 2025

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he African Development Bank Group (AfDB) unveiled its landmark initiative to solve Africa’s huge energy deficit by 2025 at a High Level Stakeholder Consultative Meeting attended by business and political leaders at its headquarters in Abidjan. The “New Deal for Energy in Africa,” which charts the way for a transformative partnership on energy focuses on mobilising support and funding for the initiative from five key areas. Firstly, the AfDB would significantly expand its support towards energy in Africa; development partners would also be obliged to scale up on-going efforts while countries must also expand their share of financing going into the energy sector and at the same time demonstrate stronger political will to

ensure success of the Deal. Development partners would also be required to work together and co-ordinate their efforts to drive critical policy and regulatory reforms of the energy sector to improve incentives for accelerated investments. “A lot of financing will be needed. Together, we must close the $55 billion financing gap for energy in sub-Saharan Africa. And we must raise our level of commitment to meet the $22 billion needed to support universal access to energy in the region,” AfDB President Akinwumi Adesina underscored in a speech unveiling the Deal. Adesina also illustrated how domestic resource mobilisation would play a crucial role by leveraging on just 10% of the continent’s tax revenues estimated at $500 billion per year; how ending the over $60 billion annual illicit financial flows out of Africa can help;

how developed countries meeting the 0.7% commitment for Gross National Income for development assistance which can generate more than $178 billion can also help to scale up energy development in Africa. “The New Energy Deal for Africa will push for the establishment of a Bottom-of the Pyramid Energy Financing Facility for Africa. This should support some 700 million people to afford clean cooking energy stoves. The cost is well within our reach to provide, for it will take only $4.2 billion to solve the problem. We can and must solve their problem – and do so quickly,” the AfDB President said. He called for the development of major regional energy projects such as the Inga dam in the Democratic Republic of Congo. Quoting an African proverb, Adesina said Africa must go far and solve its

energy challenge by 2025. He added: “And for that we must move together. This is why at the Bank we have proposed the formation of the Transformative Partnership on Energy in Africa. Under this, we will pull together to drive the needed reforms in Africa’s energy sector to achieve the universal access to energy by 2025. Success lies just ahead of us!” Also speaking at the gathering, Nigerian Banker and Co-chair of the African Energy Leaders Group, Tony Elumelu, said the private sector can play a crucial role in the development of Africa’s energy sector, if provided with the required enabling environment. He said given the situation in which some 600 million people lack energy in Africa, it would be necessary for Africa to explore all good sources of energy to meet the huge deficit, adding that the AfDB was in the best position to bring businesses, governments and international organisations together to make the deal a success. For his part, former United Nations Secretary General, Kofi Annan, in a video message, commended the initiative, noting that Africa’s leaders had no choice but to urgently bridge the energy gap. The Vice Prime Minister of the Democratic Republic of Congo, Thomas Luhaka and Cote D’Ivoire’s Prime Minister, Daniel Kablan Duncan commended AfDB President Adesina for putting together such an ambition initiative barely two weeks after his investiture. They pledged to mobilise the necessary political support required to ensure that Africa gets rid of its “energy poverty” by 2025.

Indonesia Seeks Reactivation of OPEC Membership

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he Republic of Indonesia is officially seeking reactivation of its membership of OPEC after a period of absence. The request has been circulated to all OPEC Member Countries for their consideration and approval. Considering the feedback, the Indonesian Minister of Energy and Mineral Resources, His Excellency Sudirman Said, will now be invited to attend the next regular Meeting of the OPEC Conference on December 4, 2015. This will include the formalities of reactivating Indonesia’s membership of the Organisation. In June, H.E. Said was invited to attend the OPEC International Seminar, where he met OPEC Ministers. The OPEC Secretariat has also recently received a high-level delegation from the Indonesian Parliament, headed by the Chairman of its Energy Committee. Indonesia became a member of the Organisation in 1962, before suspending its Membership with effect from January 1, 2009. OPEC said Indonesia has contributed much to OPEC’s history and it welcomes its return to the Organisation.

Sustained Low Oil Prices Could Reduce E&P Investment: EIA Schlumberger

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ow oil prices, if sustained, could mark the beginning of a long-term drop in upstream oil and natural gas investment. Oil prices reflect supply and demand balances, with increasing prices often suggesting a need for greater supply. Greater supply, in turn, typically requires increased investment in E&P activities. Lower prices reduce investment activity. Overlaying annual averages of the domestic first purchase price (adjusted for inflation) on oil and natural gas investment reveals that upstream investment is highly sensitive to changes in oil prices. Given the fall in oil prices that began in mid2014 and the relationship between oil prices and upstream investment, it is possible that investment levels over the next several years will be significantly lower than the previous 10-year annual average. Oil production is a capital-intensive industry that requires management of existing production assets

and evaluation of prospective projects often requiring years of upfront investment spending on exploration, appraisal and development before reserves are developed and produced. Investment Response Previous investment cycles provide insights into how investment responds to crude oil price changes. In 1981 and 1982, after crude oil prices significantly increased, investment topped out at more than $100 billion (in 2014 dollars) and then averaged $30 billion to $40 billion per year into the early 2000s as crude oil prices fell and remained in the $20$30/bbl range. From 2003 to 2014, investment spending increased from $56 billion to a high of $158 billion as crude oil prices increased from $34.53/ bbl to $87.39/bbl, including several months of prices reaching more than $100/bbl. EIA’s 2015 Annual Energy Outlook Reference case projects real

domestic first purchase prices to average about $70/bbl in 2020. This price level could result in substantially lower annual oil and natu-

ral gas investment over the 2015-20 period than the annual average of $122 billion spent during the 200514 investment cycle crest period.

Won’t Extend $1.7bn Eurasia Drilling Deal

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chlumberger will not extend its pending agreement to acquire a minority equity interest in Russia’s Eurasia Drilling when the current extension expires, according to a company statement. The world’s largest service company will “focus on other M&A opportunities” instead, Schlumberger said in Thursday’s statement. The company announced its intention to buy a 45.65% stake in Eurasia Drilling in January, in a deal valued at $1.7 billion. However, a lack of regulatory approvals led the deal to be postponed four times, with the current extension set to expire on Sept. 30.


Business Journal October 5-11, 2015

Energy

17

Africa Offers Huge Potential for Growth in LPG Consumption

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rgus Media will host the second annual Argus Africa LPG conference in Cape Town, South Africa, on 2021 October, 2015. The conference will bring together companies with a long-term interest in LPG to discuss topics ranging from supply constraints, to the importance of robust cylinder management and the necessity of adequate primary infrastructure and regulatory frameworks. Muzi Mkhize, Chief Director of Hydrocarbons, Department of Energy, South Africa will give a keynote address on the role of LPG in tackling South Africa’s energy supply challenges. Delegates will attend from across Africa, representing marketing and distribution companies, traders, importers, cylinder and equipment manufacturers and government and regulatory bodies. South Africa’s Minister of Energy Tina Joemat-Pettersson said at last year’s Argus Africa LPG that “providing sufficient and appropriate sources of energy is a challenge facing our continent. LPG as a reliable source ought to be deployed to deal with this challenge.” Africa offers huge potential for growth in LPG use, but there are a number of challenges that are holding back development, including infrastructure, policy and cultural barriers. Keynote speakers at the Argus Africa LPG conference in-

clude: •Blaise Edja, General Manager Global LPG, Oryx Energies •David Ohana, Group Managing Director Kenol Kobil •Muzi Mkhize, Chief Director of Hydrocarbons, Department of Energy, South Africa •George Amoako Adjei, Director of Commercial Operations, Ghana Gas •Michael Kelly, Deputy Managing Director, WLPGA •Hardy Rossouw, Africa Head of LPG and LNG, Vivo Energy •Atose Aguele, Managing Director, Avedia Energy • Abdelkader Benbekhaled, General Manager, Salam Gaz •Gambetta Nacro, Managing Director, SONABHY •HA Mbise, Commissioner for Energy and Petroleum Affairs, Ministry of Energy and Minerals, Tanzania Other participants include: Afrox | AlHussami Companies | Alpic Gas | Authentic Oil and Gas Synergy Services | Avedia Energy | Basefeeds and Trade Services | BGN International | Botswana Oil | Cavagna Group Asia | Cenegas| Chimons Gas | CMC Cerezuela | Department of Energy South Africa | E1 | Easigas | Energy Regulatory Commission| Engen Petroleum | Evas LPG Cylinders | Ghana National Gas | Glencore | Global LPG Partnership | Gulf Energy |Gunvor | Hangzhou Tianlong Steel Cylinder | Hexagon Ragasco | KenolKobil | Krier

Technologies | LPGSASA | Mathimosetso Trading and Enterprise | Mauria Udyog| National Petroleum Authority | Navgas | Navigator Gas | Nersa | Oryx Oil South Africa | Oryx Supply and Storage | Petco Trading DMCC | Petrogal Moçambique | Pioneer Global | Poten and Partners | Reatile Gaz| Salamgaz | SHV Energy | Singapore

Petredec International | Sonabhy | Strategic Energy |Techno Oil | Totalgaz Southern Africa | Transnet National Ports Authority | Uganda LPG Association | Ultimate Gas | Vivo Energy Maroc | Vopak Terminal Durban | WLPGA | Zimbabwe Energy Regulatory Authority and many more... Nick Black, Vice-President, LPG,

African Renewable Energy Fund Achieves $200m Capital Target

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he African Renewable Energy Fund (AREF), a dedicated renewable energy fund focused on sub-Saharan Africa, announced during the African Development Bank’s “Energy Week” that it successfully reached its final

close at its hard cap, with US $200 million of committed capital to support small- to medium-scale projects, with investment at the final close from European Investment Bank (EIB) and the Global Energy Efficiency and Renewable Energy Fund

(GEEREF), among other investors. The African Development Bank (AfDB) and its Sustainable Energy Fund for Africa (SEFA) are the fund’s lead sponsors, with equity investment of US $25 million and US $25.5 million, respectively, alongside US $4.5 million from the Global Environment Facility (GEF). SEFA has additionally committed a US $10-million Project Support Facility (PSF) to be deployed at an early stage to structure bankable deals. The total AfDB-mobilised package of US $65 million has provided a solid foundation for attracting capital from commercial and institutional investors to the renewable energy segment in Africa. The fund, which is headquartered in Nairobi, held its first close of $100 million in March 2014 and since that time has been investing capital in grid-connected development stage renewable energy projects, including small hydro, wind, geothermal, solar and biomass projects. AREF is the first dedicated sub-Saharan African renewable energy fund and is managed by Berkeley Energy, a fund manager focused on developing and investing in renewable energy projects in emerging markets. Berkeley Energy also manages dedicated renewable energy funds in Asia. Berkeley Energy has more than

30 staff in five offices globally, shortly expanding into West Africa. The final investor group also includes West African Development Bank (BOAD), ECOWAS Bank for Investment and Development (EBID), The Netherland Development Finance Company (FMO), Calvert Investments, the UK’s Development Finance Institution called CDC Group, the Belgian Investment Company for Developing Countries (BIO), OeEB - the Development Bank of Austria, Wallace Global Fund, Sonen Capital, Berkeley Energy, African Biofuel and Renewable Energy Company (ABREC) and now the European Investment Bank, the Global Energy Efficiency and Renewable Energy Fund, and a number of other private investors. AfDB had originally selected Berkeley Energy as the fund manager for AREF following a global competitive procedure and with the fund having reached its hard cap as well as successfully closing a number of transactions in its initial period, Berkeley Energy has justified the AfDB’s selection. The Berkeley Energy team comprises Managing Partner TC Kundi; Partner Alastair Vere Nicoll; Chairman Andrew Reicher; Investment Director and AREF lead Luka Buljan, Project Director David Hastings; and

at Argus Media said: “The long-term growth of the entire LPG industry ultimately depends on Africa. There is so much latent demand for LPG, which can and should be tapped. That is why we are so committed to engaging with African LPG stakeholders, to share a vision of a potentially golden age of African LPG demand.”

Investment Committee members Thierno Bocar Tall, Chief Executive Officer of ABREC; and Eddie Njoroge, former Chief Executive Officer of Kenya Electricity Generating Company (Kengen). Berkeley Energy’s Partner and Co-Founder, Alastair Vere Nicoll said: “We are very pleased to have reached our target fund raising and look forward to continuing our work focusing on the technical delivery of our projects with our project partners from concept to generating reality”. “AfDB is pleased to see that AREF is now fully capitalised to deliver on its pan-African mandate. We are also equally excited that SEFA and Global Environment Facility participation have been catalytic in mobilizing significant amounts of commercial capital into AREF over a short time-frame; this is key for accelerating deployment of modern, clean and affordable energy in the continent,” said Alex Rugamba, Director of AfDB’s Energy, Environment and Climate Change Department. “As one of the world’s largest investors in renewable energy, the European Investment Bank is committed to ensuring that new projects can be implemented around the world. This engagement is demonstrated through our support for the Global Energy Efficiency and Renewable Energy Fund, GEEREF. Our combined backing for the African Renewable Energy Fund will provide both financial support and share technical experience essential for smaller renewable schemes being implemented for the first time,” said Pim van Ballekom, European Investment Bank Vice-President.


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Energy

World Bank Approves $20m for Power Sector Reform in Nepal

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he World Bank today approved a credit of US$ 20 million for the Government of Nepal to implement the Power Sector Reform and Sustainable Hydropower Development Project. The project will help strengthen the capacity of power sector agencies in Nepal to plan and prepare hydropower generation and transmission line projects along international standards and best practice. The project will also help improve the readiness of power sector agencies to undertake regulatory and institutional reforms. The first project component will support the preparation of the Upper Arun Hydroelectric Project and the Ikhuwa Khola Hydroelectric Project, identified as priority public investments by the Government of Nepal. It will also support the preparation of transmission line projects to be identified by the on-going Transmission System Master Planning. A second component will finance studies and propose policy recommendations critical for power sector reforms. It will also promote river basin planning in an integrated water resource management approach for selected river basins and recommend improvements in water resource management and regulations.

The third component will support capacity building for safeguards management and sustainable hydropower development. “Reforms initiated under this project will underpin the agenda of transformational hydropower development that the World Bank Group intends to support in Nepal over the coming years,” said Julia Bucknall, Practice Manager for Energy and Extractives at the World

Bank. “This project will help identify and address key challenges that stand in the way of Nepal achieving its full potential in the power sector,” she said. “Hydropower development in Nepal involves many partners,” said Takuya Kamata, World Bank Country Manager for Nepal. “This project benefits from the inputs of a wide range of knowledgeable stakeholders which we hope can help

define a broadly owned vision for hydropower development in Nepal,” he said. “As coordination will be key to the success of the project, implementation will bring together a wide range of power sector agencies in Nepal including the Ministry of Energy, the Water and Energy Commission Secretariat, the Department of Irrigation, Ministry of Environment, Ministry of Water

Supply, academic institutions, civil society organisations and development partners” said Jie Tang, Programme Leader at the World Bank. In additional to concessional credit financing from the International Development Association (IDA), the project will also receive a $2.5 million grant from the South Asia Water Initiative (SAWI), a Multi Donor Trust Fund administered by the World Bank.

U.S. will be Net Exporter of Natural Gas by 2017, report says

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he United States’ natural gas demand is currently growing at the fastest pace since the early 1970s, and demand growth has now supplanted supply growth as the cornerstone for the outlook of the U.S. natural gas industry over the next five years, according to a new CoBank research report. The newly issued report, U.S. Natural Gas Outlook through 2020: Demand Is the New Captain of the Ship, points out that the promise of low-cost, reliable natural gas supplies has spurred major investments by all end-users. As a result, the demand for U.S. natural gas will grow 25% over the next five years, with gas exports

USA Invests $375m in Benin Republic Energy Sector

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he United States have awarded Benin through the Millenium Challenge Account (MCA), $375 million for the financing of electrical energy in the country. This funding will be used to produce and distribute electricity, monitor and reform the policy of the

country in terms of energy, as well as setting up energy installations outside of the national network. These funds were granted as part of the second part of the MCA. Its implementation which will cover five years will start in 2016. This agreement symbolises the biggest off-grid electrification

project financed by USA in a sole country. It will enable, according to American Vice-President Joe Biden, the promotion of economic growth. “Giving hope to people is sometimes more important than giving aid”, he declared during the signing ceremony.

accounting for over half the growth. A portion of the gas exported from the U.S. will be pipelined to Mexico, but most of it will be liquefied and then loaded onto tanker ships destined for overseas markets in Europe and Asia. The report projects that the U.S. will become a net exporter of natural gas within the next two years, transforming the U.S. into a major supplier to the global energy markets. “It’s definitely a game changer for the global gas markets,” Taylor Gunn, the author of the report, said. Vast quantities of natural gas have been unleashed since 2008 thanks to advancements in hydraulic fracturing and horizontal drilling.


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Total SA to Reduce Oil, Gas Production in 2017

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s oil prices remain low, oil and gas companies around the world are beginning to worry about their cash flow. According to The Wall Street Journal, companies are faced with the decision of whether they will cut costs. Companies considering this dilemma are concerned with consequences at both ends of the scale. However, too much cost cutting can result in lost growth, which will hurt bottom lines when prices finally begin to bounce back. On the other hand, not enough cost reductions can actually decrease revenue in the near term, potentially impacting dividend payouts to investors. Total’s Decision It is a tough decision - one that France’s major oil and gas company and second largest in Europe, Total SA, recently tackled. The company’s decision focused on their investors, according to Bloomberg. By cutting costs, Total predicts they won’t have to lower their payouts and will avoid going into debt at the same time. “We are preparing the group to face low oil prices for a long time,” Patrick de la Chevardiere, Total’s Chief Financial Officer said. “We don’t want to be the first group to cut the dividend.”

The Wall Street Journal reported Total will cut about 200,000 barrels of oil per day in 2017. The company also plans to incrementally decrease spending over the next few years. This year, the company spent $24 billion, but plans to spend no more

than $21 billion in 2016 and $19 billion in 2017. De la Chevardiere told The Wall Street Journal he expects Total to be able to pay the dividends’ full amounts in 2017, even with oil at $60 a barrel. Furthermore, he predicts the company

should be able to break even in 2019 if oil continues to drop to $45 a barrel. OPEC Could Slow Down, Too According to World Oil, Total isn’t the only one cutting back

on production. The Abu Dhabi National Oil Co. will be at least a year behind schedule in its plan to grow production to 3.5 million barrels per day. The United Arab Emirates now predicts by the end of 2017, production will rise to 3.4 million barrels per day. Plus, the company’s expansion could be pushed back as late as 2019. However, Ole Hansen, Head of Commodity Strategy at Saxo Bank in Copenhagen, told World Oil he is not surprised ADNOC is holding back on its expansion. “One of the richest oil nations out there is in no hurry to speed up production, instead opting to keep it in the ground for a later date,” Hansen told World Oil. “With Iraq and Saudi Arabia beefing up production, I don’t think a reduction from Abu Dhabi would have that big an effect at this stage.” According to Reuters, other OPEC countries are likely to reduce production, too. Currently, the Organisation of Petroleum Exporting Countries (OPEC) is producing 31 million barrels per day. However, as global demand decreases, OPEC could be forced to cut production to 28.2 million barrels per day in 2017. If OPEC and non-OPEC countries continue to produce oil at their current rates, prices aren’t likely to rise in the next few years.

Globeleq Unveils Reuel khoza as New Chairman

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lobeleq, the leading independent power producer (IPP) in sub-Saharan Africa, today announces the appointment of a new Chairman, CEO and other board positions.

Chair and CEO appointments: •Dr Reuel Khoza has been appointed Chairman of the Globeleq Board. He previously held chairmanships for Nedbank Group, Glaxo SmithKline SA, Corobrik (Pty) Ltd, and Eskom Holdings Ltd. Dr Khoza currently chairs Aka Capital (Pty) Ltd, an investment holding and private equity company. •Henry Aszklar, an energy industry expert with over 20 years of experience, has been appointed CEO of Globeleq. He has specialised in energy investments in emerging markets, including the development, acquisition and financing of IPP projects in Africa, Latin America and the US. Other new appointments to

the Globeleq Board of Directors include: •Eddy Njoroge, the former CEO of Kenya Electricity Generating Company (KenGen) and current Chairman of Telkom Kenya. •Jean-Louis Ekra, the former Chairman and President of the African Export-Import Bank. •Eivind Reiten, an economist and former Norwegian Petroleum and Energy Minister. •Edward (Ned) Hall, an experienced energy industry professional who most recently served as Executive Vice President and Chief Operating Officer of Atlantic Power Corporation. These appointments come as Globeleq enters its next phase of development under the direct ownership of CDC Group plc, the UK’s development finance institution (DFI), and Norfund, the Norwegian Investment Fund for Developing Countries. Having obtained the necessary government and lender consents, CDC and Norfund are now the sole shareholders of Globeleq with

70% and 30% holdings, respectively. Under its new ownership, Globeleq aims to boost power generation to Africa by adding at least 5,000 megawatts (MW) of generating capacity over the next 10 years. This electricity will enable the creation of over 1.5 million new formal and informal jobs across Africa*. In order to achieve this, Globeleq will pursue earlier-stage development as well as other development and project expansion opportunities in power generation in Africa, including renewables. Reuel Khoza, Globeleq Chairman said: “Africa’s industrial development is dependent on the availability of electricity. One cannot speak of mining, commercial agriculture and food security, ICT, or even health and education without energy. Electricity is, in very significant ways, a sine qua non for Africa’s socio-economic development.” CDC Chief Executive, Diana

Noble, said: “What is inspiring about this new chapter in Globeleq’s story is that it has the potential to be a truly transformational business that helps to bring reliable power to the lives of millions of people and their communities across sub-Saharan Africa. “As an original founder of Globeleq in 2002, CDC is proud that, together with Norfund, our vision and resources will combine with the new CEO, Board and high-calibre Globeleq team to deliver on a strategy to develop significant power generation capacity over the course of the next decade and beyond.” Norfund Chief Executive, Kjell Roland, said: “Inadequate and unreliable power supply is a major constraint on economic and social development in sub-Saharan Africa. An investment in Globeleq is strategically important for Norfund as investing in energy in

sub-Saharan Africa is one of our main focus areas. Together with CDC, our long-term plan is to strengthen Globeleq as an industrial energy developer in a market with significant regional growth potential. Based on the combination of financial capacity, industrial expertise, local partnerships and collaboration with authorities, CDC and Norfund are ready and eager to expand power production in Africa and widen our technology choice.” The Power Deficit in Africa Only 32% of the population in the region has access to electricity – this is roughly the same stage as the US in 1920 and UK in 1929 – and progress is slow. For example, in the decade between 2000 and 2010, generation capacity in sub-Saharan Africa increased by a total of 6,000MW, whereas in China, the total electricity capacity increased by 8,000MW every month in 2010.


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Insurance Pension www.businessjournalng.com

A.M. Best: European Insurers Continue Emerging Markets’ Growth

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n an attempt to deploy excess capital, some major European insurers have developed overseas operations over the past several years but are now taking a more cautious approach, as not all overseas strategies have proven successful, according to a new report published by A.M. Best. Well-capitalised insurers looked to overseas investments in order to improve margins during a time when traditional domestic markets remain mature and saturated, while low interest rates are hitting investment returns, said the report, titled “European Insurers Continue Overseas Expansion Drive but More Focused in Approach.” “European insurance markets have tended to be stagnant, with muted premium growth in 2014,” the report said. In response to these market conditions, the report said, in the past year there have been many instances where reinsurers have returned capital to shareholders through special dividends, increased pay-outs or share buy-backs. “Medium-sized companies have also used excess funds to finance the recent wave of mergers or acquisitions,” it continued. “While there has been some industry consolidation involving larger primary groups, for these companies the need to create scale is not a key driver and instead there is a greater focus on emerging markets to enable faster growth, higher margins and more capital efficient businesses.” Low Insurance Penetration There are certain emerging market countries that are proving particularly attractive to European insurers because of their low insurance penetration – in the low single digits –

and growing gross domestic product (GDP), the report said. “Economic development is expected to encourage the emergence of a middle class, which in turn is projected to increase demand for life products – particularly savings offerings – and non-life insurance, such as retail insurance linked to motor and household protection,” A.M. Best said. The ratings agency analyzed the expansion strategies of the 10 largest European insurance groups, according to

gross written premium. The key high growth markets (HGM) identified can be split into Asia Pacific, Central Eastern Europe (the CEE), Latin America and Turkey. In this report, HGM refers to underdeveloped insurance markets, characterized by their low penetration but fast-growing economies (usually emerging economies), “which the main European insurance groups have clearly identified as areas for expansion and can be measured separately

in their segmental reporting.” (Emerging market countries analyzed by the report were Brazil, Chile, China, Colombia, India, Mexico, Poland, Russia and Turkey). Emerging Market Challenges While European insurance groups have turned to emerging markets for more growth opportunities, it has not always been smooth sailing, the report indicated. Some of the common challenges encountered by European insurers

include market competition and limited control of joint ventures, as well as political and economic risks within a given territory, A.M. Best continued. Furthermore, it noted, there is the danger of treating each region as a homogenous bloc. “Insurers may face regulatory risks, for example, a need to invest their assets locally, but financial markets may not be as mature as in a company’s domestic territory. Additionally, where an insurer is involved in a takeover, merger or joint venture with a local entity, there could be integration difficulties linked to cultural differences and ease of doing business,” said the report. In addition, A.M. Best said, a company that is being taken over in an emerging market may not be listed and often can be family owned, which leads to potential issues regarding valuations and the future role for existing management. “In many cases, it will have become a target because of under-performance, leading to a debate as to whether a turnaround strategy should involve existing staff with local knowledge, or new senior appointments from Europe.” The report explained that in many cases, acquisitions are made largely to obtain licenses in a given country. Further, the report said, countries with low insurance penetration are often regarded as offering potential growth, but lack of insurance demand is a challenge. Yvette Essen, director, research & communications – EMEA and author of the report, added: “Frequently, insurers engaging in overseas expansion are large and want to create sufficient scale to justify their presence, so competition and margins can become squeezed.”

UK Insurers Call for Collective Action to Address Climate Change

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loyd’s of London and other UK insurers called for collective action to address climate change on Thursday, after a report from the UK regulator this week highlighted risks to their industry from global warming. In an open letter to Bank of England Governor Mark Carney, 15 senior insurance executives said they welcomed the Prudential Regulation Authority’s (PRA) report, which said the insurance industry could be hit by climate change in “diverse, complex and uncertain” ways. The UN’s climate chief warned last month that national promises to cut emissions so far would cap warming at an unacceptably high level, heightening concerns in the insurance industry about politicians’ lack of resolve. “The insurance leaders are also calling for the PRA’s report to lead to more urgent collective action to reduce the risks of climate change impacting society, and ultimately the insurance industry,” the insurers said in a statement.

They included Lloyd’s of London’s Chief Executive Inga Beale and RSA CEO Stephen Hester. In their letter to Carney, they also said they wanted a regulatory environment that “allows our industry to fulfill its full potential as society’s risk manager and to help maintain risk exposure within insurable levels.” Carney said in a speech at Lloyd’s on Tuesday that increasing levels of physical risk from climate change could present significant challenges to general insurers. At the United Nations Climate Change Conference in Paris in December, countries will try to hammer out a deal to slow manmade climate change by aiming to keep temperatures below a ceiling of 2 degrees Celsius [3.6°F] above pre-industrial levels. “An increase in temperature of more than 2 degrees could lead to a lack of affordable insurance,” Carmen Bell, policy advisor for personal insurance & general insurance at trade body Insurance Europe, told Reuters.

The PRA report also stressed that the repricing of carbon-heavy investments could hit insurers’ investment returns, a concern for insurers who

have increasingly relied on investment income in a competitive underwriting market. The report also said there were likely

to be increased liability claims under policies such as directors and officers’ (D&O) insurance as a result of climate change-related damage.


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Underinsurance in Property: Global, Growing Challenge, says Swiss Re study

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nderinsurance of property risks is a global challenge, says Swiss Re’s latest sigma study: “Underinsurance of property risks: closing the gap.” Much of the underinsurance is due to global natural catastrophe risk, which has risen steadily over the past 40 years. In the last 10 years, cumulative total damage to global property as a result of natural disaster events was $1.8 trillion, and about 30% of those losses were insured. In other words, the total shortfall in insurance cover – the protection gap[1] – was $1.3 trillion. The sigma research also reveals significant property underinsurance for perils other than natural disasters, and that many highgrowth markets are underinsured relative to the size of their economies. Here, while a rapidly growing middle class has been accumulating wealth, insurance buying still lags. The global property protection gap against natural catastrophe risk has widened steadily over the past 40 years, even though claims payments have increased significantly in that time. With economic development and ongoing urbanisation, particularly in emerging regions, the value of global property at risk has outpaced the purchase of insurance. Modelling the Global Protection Gap for Natural Catastrophes Complementing historical data, the global loss potential is estimated using models of the three main natural catastrope perils (earthquake, flood, windstorm). Low-probability events such as major hurricanes or earthquakes may not appear in recent historical data, and so loss models provide a more comprehensive view.

the level of expected claims which could have been pre-funded by a wider risk community rather than inflicting financial hardship on individual families, corporations and government entities.

For example, Florida has not experienced a severe hurricane in 10 years, but there is nevertheless a very high risk of property damage from hurricanes. The result of the modelling exercise is a current annual protection gap of $153 billion, assuming an average catastrophe loss year. In absolute terms, the US, Japan and China account for more than half of that with a combined insurance shortfall of $81 billion. In emerging markets, on average 80-100% of economic losses are uninsured, which means that natural hazards could significantly deplete resources of smaller and more vulnerable economies. “The greatest extent of underinsurance is in the world’s largest three economies,” says Kurt Karl, Chief Economist at Swiss Re. “Earthquake risk makes up the majority of the gap in the US and Japan. There are areas of high

property value concentrations in both, a large amount of which is uninsured against earthquake risk, despite the relatively high frequency of quakes.” In China, the main threats are floods in major industrial zones with high population and property values. Underinsurance Against other Property Risks Property is at risk from perils other than natural catastrophes. These “general property risks” include fire, water damage, and burglary, etc. Many countries are underinsured for these risks relative to their peers with similar income levels. Using these higher insured countries as a benchmark for less insured ones, the study finds an additional significant protection gap of $68 billion for these general

property risks. Among the countries most underinsured are many high-growth economies. Here, while a rapidly growing middle class has been accumulating substantial new wealth, insurance buying still lags. An increase in asset values without a concurrent increase in take-up of insurance could lead to yet further underinsurance. The estimated underinsurance for general property risk is conservative as it implies a zero protection gap in highly insured countries, which is not the case. There is still plenty of uninsured property arising from incumbent and recently emerging risks such as cyber and contingent business interruption. Adding the general property risk number to the modelled natural catastrophe-related losses suggests a global property protection gap of $221 billion per annum. That’s

EU to Ease Capital Regulations for Insurers, Banks to Revive Growth

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he European Union will ease capital rules it has imposed on banks and insurers since the financial crisis to help markets raise more funds for reviving sluggish economic growth. The bloc’s Financial Services Chief, Jonathan Hill, announced his “action plan” made up of 33 measures and legislative initiatives that will put in place the building blocks of “capital markets union” or CMU by 2019. European companies tap banks for up to 80 percent of the funds they need to grow, and Brussels hopes its planned reforms will switch some of this heavy lifting to markets. It would be the first instance of regulators going back on regulation introduced during the financial crisis in a sign of how policymakers concern has switched to reviving growth. “I want to knock down barriers to make it easier for capital to flow freely

across all 28 member states,” Hill said in a statement. Early initiatives include making it cheaper for banks to sell high quality securities based on the pooling of loans such as mortgages – known as securitisation – to institutional investors. He also wants to encourage insurers to invest in infrastructure such as roads and digital networks by cutting their capital charges on such investments by about a third. Reviving Europe’s securitisation sector to pre-crisis levels would raise €100 billion to €150 billion ($112$169 billion), the European Commission said. So far, regulators from elsewhere in the world have not said they will also cut capital charges on banks who originate securitised debt in their jurisdictions. Securitized debt based on low qual-

ity U.S. home loans became untradeable in 2007, helping to spawn the crisis, but Hill said the EU measure would focus only on the use of high quality loans to create “simple, transparent and standardised” (STS) debt to qualify for the 25 percent cut in capital charges. Banks will also be forced to retain at least 5 percent of the securities they create, to try to discourage the packaging and selling of bad loans seen as a key factor of the subprime crash in the United States. Some 70 percent of existing pooled debt would meet the “STS” criteria, the European Commission estimated. Hill’s other quick wins include making it easier and cheaper for companies to issue bonds and shares. Absent from the plan is any attempt to centralise supervision of markets further at the EU level, a step some policymakers see as necessary to drive

through changes, but which would go down badly in Britain ahead of its referendum of EU membership, due by the end of 2017. Hill said he wanted to avoid the huge political distraction that institutional changes would bring. CHANGING ATTITUDES More medium term aims include tackling politically sensitive issues such as trying to harmonize tax and insolvency laws in the EU, areas that are typically member state domains. Financial industry trade bodies generally welcomed the CMU plans with the British Bankers’ Association, representing lenders in Europe’s biggest market, saying it was “pragmatic” with clear deadlines. But policymakers have said that creating a CMU will be as much about changing attitudes as reforming market practices.

Closing the Underinsurance Gap There are different reasons for underinsurance, including factors like perception of risk, insurance knowledge, affordability, reliance on government post-disaster relief, lack of trust in insurers, and limited access and ease of doing business. Undervaluation of assets due to lack of information and awareness is another contributing factor. Certain risks – such as some peak natural catastrophe, terrorism, cyber or contingent business interruption risks – can challenge the bounds of insurability. The challenge for the insurance industry is to focus on the needs of those who are totally uninsured or insufficiently insured. Closing the underinsurance gap will require that the industry continues to develop data and analytical tools to track the evolving landscape of new risks and exposures, not only of natural catastrophes, but also of perils that are difficult to quantify such as terrorism, cyber, and supply chain risks. Further innovation in products, processes, and distribution are needed to reach previously uninsured consumers and risks. Insurers cannot act alone. They require supportive regulatory environments, risk information and, in specific cases such as terrorism or high-risk flood zones, government involvement to extend coverage capacity. Successfully addressing property underinsurance requires a coordinated effort and innovative thinking by both the public and private sectors. Critics also say Brussels will have to persuade consumers in Continental Europe, long accustomed to squirreling away cash in a deposit account, to invest in riskier shares and bonds. Burkhard Balz, a senior German member of the European Parliament, said banks should continue to play a central role in funding smaller companies and called on Hill to act faster. “We do not want to Americanize businesses’ access to finance. The desired results will not be reached if we act at a snail’s pace,” Balz said. Hill said there was no intention of “copying and pasting” the U.S. system onto Europe. “CMU is ambitious. I hope the Commission can maintain its resolve to make it work,” Wim Mijs, Chief Executive of the European Banking Federation, said. Insurers showed less enthusiasm. While welcoming the plan as a step in the right direction, Insurance Europe, the sector’s main lobbying group, warned that “these changes are not enough to remove the barriers to investment by insurers,” as capital charges remain too high.


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Insurance • Pension

Overcapacity Weighs on Middle East, North Africa Reinsurers

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special report from A.M. Best notes that the “low level of insurance penetration seen in many Middle East and North Africa (MENA) countries, combined with the robust, albeit deteriorating, profitability achieved by the leading primary insurers, has made the region a target for international and domestic reinsurers. MENA insurance premiums surpassed $50 billion in 2014, with the main markets being the United Arab Emirates, Saudi Arabia, Iran and Turkey.” Best explained that “many MENA markets, such as those of the Gulf Cooperation Council countries, are perceived to have relatively benign exposure to natural catastrophe events, allowing reinsurers to establish geographically diverse underwriting portfolios without exposing themselves to increased earnings volatility.” Best’s report – “Overcapacity Weighs on Technical Performance of Reinsurers in the Middle East & North Africa,” however, indicates that the “influx of reinsurance capacity in the region and the prevailing competitive market conditions that have grown ever fiercer over the past three years have begun to place pressure on the technical performance of regional reinsurers.” Although the size and the sophistication of the MENA insurance market has increased notably over the

past decade, “it remains developing and dependent on international reinsurance support, with local and regional reinsurers generally acting in a follower capacity,” Best said. Mahesh Mistry, Director, Analytics, noted that while “some reinsur-

ers have exited the market, but the number of new entrants is far greater than those leaving. Reinsurance capacity – both from international and regional reinsurers – remains well in excess of local demand, resulting in the continued exacerbation of the

current competitive pricing environment.” The report discusses how the introduction of financial hubs such as the Dubai International Financial Centre and Qatar Financial Centre, alongside well-regulated offshore centers

(including Bahrain under the Central Bank of Bahrain), “have helped to open the market and encourage international players to establish a physical presence in the region. “Close proximity to clients is increasingly being recognized as a fundamental mechanism for (re)insurers to better understand the characteristics of the markets they operate in and ultimately the risks they underwrite.” Best’s report also examines the fact that “domestic MENA reinsurers can be split into two distinct groups – established participants and new entrants – and whilst both groups have been faced with the prevailing landscape of overcapacity and soft premium rates, their profiles and performance vary considerably.” In the case of “established participants” they “typically benefit from local government support, whether via state ownership or through local legislation that generates compulsory cessions from the direct markets,” the report explains. Newer market entrants, however, “are more exposed to open market competition.” Over the last five years the technical performance has diverged between the two groups. Myles Gould, Financial Analyst, noted: “The variance in performance can be attributed to both higher loss and expense ratios for the new entrants. In part, this is driven by competition in the region, and challenges to grow market profiles to dilute expense bases.”

Benin, Côte d’Ivoire, Ethiopia Benefit from African Trade Insurance (ATI) Membership Scheme

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he African Development Bank (AfDB) Group has approved a combined US $30 million soft loan to Benin, Côte d’Ivoire and Ethiopia to be utilised for membership subscriptions in the African Trade Insurance Agency (ATI). This is a critical step and a prerequisite for ATI to commence its operations within these countries. Under the approvals, Benin and Ethiopia will each receive US $7.50 million, whilst Côte d’Ivoire will receive US $15.0 million. The ATI provides medium to long term credit and political risk insurance, as well as other risk mitigation products to the Bank’s Regional Member Countries (RMCs) and related public and private sector actors. These products directly encourage and facilitate foreign direct investment (FDI) and both intra- and extra-African trade through Trade Finance Facilitation. ATI catalyses private sector investment in infrastructure projects, thereby promoting the economic integration of participating RMCs into regional markets. Highlighted by the AfDB Board as an innovative use of ADF re-

sources to catalyze trade and investments in RMCs, ATI estimates that the combined facility will unlock up to US $1.8 billion of commercial, trade credit and political risk underwriting cover at any one time in the countries. The catalytic effect of using limited Bank resources this way is huge, sometimes at up to 60 times the amounts of the original investments. This facility is fully aligned with the Bank’s Ten Year Strategy (2013-2022), and a number of its sectoral strategies aimed at supporting regional integration, private sector and infrastructure development for sustainable and inclusive growth in Africa. The project also aligns with Country Strategy Papers of the respective RMCs on improving the financial sector so that it can support the expansion of productive activities (especially for SMEs) and development of export capacity, through access to risk capital and credit. According to the Director of the Financial Sector Department, Stefan Nalletamby, “the AfDB seeks to achieve its ambitious mandate as a Development Finance Institution by working with and

through other institutions and strategic partners, and where possible by supporting the develop-

ment of strong and viable African institutions such as the ATI. This programme provides additionali-

ty through scaling up the work of ATI by supporting the beneficiary RMCs to become members.”


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Sub-Saharan Africa Drawing Growing Insurer/Reinsurer Interest Despite Uncertainties

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ub-Saharan Africa continues to attract interest from insurers and reinsurers despite uncertainty about whether regional countries there can sustain robust levels of growth, A.M. Best concluded in a new report. Following years of strong economic activity, led in part by high commodity prices and foreign direct investment, there is now uncertainty about the sustainability of the robust levels of growth experienced in recent years, particularly with low oil prices, according to A.M. Best report “Capacity Flows into the Sub-Saharan Reinsurance Markets Despite Economic Challenges.” This uncertainty is boosting the levels of capital being repatriated as investors’ confidence in Africa’s economic prospects decreases, the report said. On the other hand, the report noted that the insurance/reinsurance markets of the sub-continent continue to attract interest from around the world as foreign investments in this sector seek growth, returns and diversity outside of their core markets. At the same time, domestic reinsurers remain focused on their strategies to expand beyond their borders as they look to strengthen their profiles and achieve critical mass. “A.M. Best estimates that there are between 35 and 40 reinsurers domiciled in the sub-continent,” said Deniese Imoukhuede, Associate Director. “This number is growing as lawmakers seek to supplement capacity

available to the insurance industry as a result of the increasing discovery of oil reserves and the numerous infrastructure projects being undertaken, thereby reducing premium outflows to the international reinsurance markets and domesticating more profits.” Imoukhuede added: “The number of national reinsurers established is also rising. These national reinsurers are typically government or quasi

state-owned entities that are entitled to the first refusal of compulsory treaty business arising from the country of domicile.” Despite the influx of new entrants into the reinsurance markets and regulatory influence in developing the re/insurance sector, the capital positions of domestic reinsurers remain low, the report continued. “This factor, combined with the

substantial shortage in the skilled workforce of the [insurance/reinsurance] sector, means that the industry as a whole remains reliant on the international markets to support its capacity needs, thereby restricting the sector’s ability to retain more insurance premium,” A.M. Best confirmed. From an earnings perspective, a rise in claims inflation, due to weakening local currencies and subsequent increase in the cost of imported assets — for example, spare parts for automobiles — will likely constrain growth in technical earnings if currency strengths continue to deteriorate, the report went on to say. However, the report noted that despite difficulties facing some economies in Sub-Saharan Africa, the medium to long-term prospects remain positive, “underpinned by strengthening economies and the higher disposable incomes of rising middle class segments, as well as the improving demographics.”

Munich Re, Marsh Unveil Pharma Coverage for Regulatory Actions

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unich Re and Marsh & McLennan Cos., the largest insurance broker by market value, introduced a product to insure U.S. pharmaceutical companies against regulatory actions that could cause them to suspend manufacturing. The product would cover as much as $10 million in non-damage business-interruption costs tied to violations of federal manufacturing standards, Munich Re said in a statement. The Munich-based company is the world’s biggest reinsurer. “The question is always, ‘Where do you find kind of the next blockbuster?’” Claudia Hasse, Head of Special Enterprise Risks for Munich Re, said in a phone interview. “We saw that this is really a huge danger for pharmaceutical companies.” Traditional business-interruption insurance covers losses tied to events such as fires or natural disasters. The new coverage from Munich Re and New York-based Marsh protects against income loss from shutdowns like the one Johnson & Johnson’s McNeil-PPC Inc. experienced in 2011. The U.S. Food and Drug Administration barred the company from making drugs at a Pennsylvania plant because it failed to comply with manufacturing standards. “There is a need for this product as inspections that result in a suspension of manufacturing, whether voluntary or enforced, can be extremely costly for life-sciences companies,” Loretta Worters, Vice President of Communications at the Insurance Information Institute, said in an e-mail.

AIG, Swiss Re Execs Join US Terrorism Insurance Govt Advisory Committee

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xecutives from AIG, Swiss Re, XL Catlin and Lloyd’s of London are among the insurance industry executives who will serve on a new government advisory committee that will help shape private market risk-sharing mechanisms protecting against losses in the wake of terrorist attacks. The committee also includes broker representatives from Guy Carpenter and Willis, among other members. The U.S. Department of the Treasury announced the appointments on September 23. Treasury officials established the Advisory Committee on Risk-Sharing Mechanisms (ACRSM) following its authorization by the Terrorism Risk Insurance Programme Reauthorisation Act of 2015. ACRSM members will offer advice and recommendations to Treasury officials, via the Federal Insurance Office, involving the development and creation of private market risk-sharing mechanisms to protect against losses stemming from terrorist attacks. The Treas-

ury Department sought applications for the committee back in April, and members will serve up to two years. Here are the committee members: •Wendy Peters, Executive Vice President Terrorism Practice Group, Willis North America •John Seo, Co-Founder and Managing Principal, Fermat Capital Management LLC

•Jonathan Clark, Property Treaty Reinsurance Broker, Guy Carpenter & Company LLC •Sean McGovern, Chief Risk Officer, Lloyd’s of London •William Donnell, President US P&C, Swiss Re •Erik Nikodem, Property Executive, AIG •Gregory Hendrick, Chief Executive of Reinsurance Operations, XL

Catlin •Kean Driscoll, Chief Executive Officer, Validus Reinsurance, Limited •Michael Sapnar, President and Chief Executive Officer, Transatlantic Holdings, Inc. Eric Smith, President and CEO of Swiss Re Americas, said in a statement issued to promote Donnell’s appointment that the reinsurer was

eager to proceed with its work on the U.S. terrorism reinsurance issue. “Swiss Re looks forward to continuing our work on TRIA that lead to the successful long-term reauthorisation of the programme,” Smith said. “As we learned in the years leading up to reauthorization [in January], it is important to consistently maintain our advocacy on this issue.”


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Travel Tourism www.businessjournalng.com

Russia, China Partner on Wide-body Commercial Jetliners

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he joining of forces of the industrial might of both Russia and China are set to take a bit out of the vast wide body commercial airline industry. Russia and China are expected to sign an inter-governmental agreement on the joint development of a wide-

body jetliner before the end of the year, according to the President of Russia’s United Aircraft Corporation. The agreement would specify each country’s responsibilities and profits from the project, Yury Slyusar said. “So far, the project has proceeded well, and we plan to determine the technical requirements, specifications

and outsourcing methods in March.” Slyusar dismissed speculation that the new jetliner will be a rival to China’s domestically developed C919, whose maiden flight is scheduled for next year. “The new jetliner is totally different from the C919 in terms of passenger volume and flight range. The two aircraft are aimed at different markets, so

they will not compete with each other,” he said, adding that the new plane will be able to carry 210 to 350 passengers, depending on the seating arrangements. This new plane by Russia and China is expected to directly compete with both Boeing and Airbus widebody commercial aircraft. The power plants for these new aircraft are to be from either Rolls-Royce out of the UK or GE from America. This will help speed up the testing process of the new aircraft since only the body of the plane itself will be new. China is already producing a smaller aircraft, the C919 that has a seating capacity of 150 passengers. This aircraft is designed for short flights and will not compete with the new larger long haul aircraft being developed. Also part of this new agreement is the leasing of Russian Sukhoi SS 110’s to China. This leasing is part of a project by the Russian aircraft manufacturer to sell over 100 planes to not only China but other countries in Southeast Asia in the next 3 years. Co-operation between these two airline manufacturers is not something that is new. Presently, both companies are already producing components for aircraft in the Chinese city of Shenzhen. According to the China’s outlook for civilian aircraft for the next 20 years, about 37,900 passenger aircraft will be required globally and the Chinese mainland market will acquire more than 5,500 passenger planes.

Lufthansa Plans Broadband Internet on Short, Medium Flights in 2016

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rom early summer 2016, Lufthansa will be the first network airline in Europe to offer broadband on board its short and medium-haul flights. This will enable passengers on continental flights and flights within Germany to enjoy the full freedom to communicate and to use the Internet with a wide bandwidth above the clouds. The first aircraft will be fitted with the new technology in early summer 2016. Carsten Spohr, Chairman of the Executive Board of Deutsche Lufthansa AG, comments: “Lufthansa has always been a pioneer of Internet services on board its aircraft. Having equipped all planes in the Lufthansa intercontinental fleet with our successful FlyNet® system, we are now continuing our success story by providing Internet on board our short and medium-haul flights. We are therefore the first airline in Europe able to offer its guests an Internet surfing experience boasting the same quality and speed as they are used to at home.” The new service from Lufthansa and its technology partner Inmarsat is based on the most modern broadband satellite technology from Inmarsat’s Global Xpress network (Ka-band) and offers seamless, reliable coverage on short and medium-haul flights.

Inmarsat recently successfully launched the third satellite in this global constellation and Lufthansa will be its first aviation customer. The service will enable passengers to make the most of broadband Internet access on their own mobile devices via a wireless network. They will not only be able to use simple e-mail services, but also superior applications and even streaming. On top of all this, passengers will also be able to use their mobile phones to send and receive text messages and for the transfer of data based on their own mobile phone contract. Telephone calls on board, however, will still not be allowed due to customer preference. Lufthansa Technik will integrate all systems and components into the aircraft thanks to its many years of experience in the field of plane modification. This work will not only include installation activities, but also all tasks required in terms of aviation and licensing law. Lufthansa Systems will provide the technical infrastructure needed to establish a well-functioning Internet connection on board. This work will include tasks such as setting up network operations in the aircraft, which is the main technical requirement for a wireless network on

board and providing the software required for the operation of an Internet portal. Lufthansa Systems and Lufthansa Technik are additionally planning a long-term global partnership in order to also be able to offer other airlines a modern on-board IT platform (BoardConnect) with Broadband Internet access that can be used for a number of different purposes. Both the Lufthansa Group and future clients in the third-party market will benefit from the additional services and lower risks provided by this strong partnership.

With regard to the future, Lufthansa is also committing to a flight trial programme for a new hybrid network being developed for Europe. The European Aviation Network combines an S-band satellite from Inmarsat with a complementary LTE ground network being provided by Deutsche Telekom. This promising and innovative technology offers potential in terms of costs and can be flexibly adapted to suit the Broadband transmission demands of the future. From 2017 onwards, Lufthansa will commence a flight trial programme of the new technology.

IATA Premium Air Travel Monitor:

July 2015 Key Points:

•Passenger travel on international markets was up 6.8% in July yearon-year, reflecting an upward bias due to the timing of Ramadan; •Both travel classes showed an above-trend rise in July year-onyear – premium travel was up 8.5% and economy travel rose 6.6%. But the July year-on-year comparisons reflect the impacts of the timing of Ramadan, which fell only partly in July this year but took place mostly in July in 2014. The holy month tends to subdue demand for air travel; •International passenger numbers, as presented in the first chart below, continue to show a broadly positive trend for both economy and business travel classes in 2015. But economy class travel - the more price sensitive travel market – has experienced stronger growth so far this year, supported by lower fares over recent months; •Growth in premium international travel has been relatively slower due to weakness in business travel demand drivers, with global business confidence being dragged down by emerging markets; •For the second consecutive month, we are seeing slow growth within the Far East. This result could be early signs of weakness in air travel demand following months of sluggish economic performance in some parts of Asia; •Looking ahead, although improvements in the Eurozone economy have translated into stronger demand for travel in both premium and economy classes over recent months, weakness in emerging markets could counter this positive trend. The July data for some markets suggests downside risks may already be materialising.

IATA Cargo Market Analysis-Q3 2015 Key Points:

•Modest gains in global economic growth expected in 2015 but vulnerabilities in emerging markets present downside risks •On aggregate, the cargo market has shrunk this year compared to the levels achieved at the end of 2014 •Inventory overhang in US and a drop in semi-conductor shipments point to weakness in key air freight demand drivers •Reduced freighter aircraft utilisation and plunging load factors are other indications of underlying demand weakness •Relative to oil prices, yields have held up but lower load factors and aircraft utilisation may compromise profitability


Business Journal October 5-11, 2015


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Political Economy www.businessjournalng.com

Saraki’s Albatross:

The Need to Sheath Animosity

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Prince Idris Afegbua

hen the 2015 general elections were approaching, the ruling All Progressive Congress (APC) preached and campaigned transformation and transition from the status quo that the former ruling People’s Democratic Party (PDP) used in administering the affairs of the nation for nearly two decades. The APC clamoured for substitution of the then state of affairs. They adduced reasons why it was good for Nigeria to make the 2015 election and its aftermath different in some particular ways, without permanently losing former characteristics or essence of nationhood to replace what they described as slow pace of development which is change. Since the commencement of the 8th Senate however on June 9, 2015, the nation’s apex legislative body has not known respite to settle down for it primary function of making good laws for the growth of the nation. Hardly has it recovered from one crisis than another raise its ugly head. When Abubakar Bukola Saraki emerged as the Senate President, many that know the erudite politician well congratulated the Senate and the nation that the sermon of “change” preached by the APC was going to indeed head the right direction. They said that Saraki’s antecedence as governor of Kwara State was a good omen to lead the highest law making body in the nation for development. But soon after he assumed office, maybe arising from emerging against preferred candidate of some party leaders, the ill wind that has been blowing around the Senate since then has blown no one any good in the country. Nigeria no doubt, is a very religious country and every religion knows that power belongs to God and that he gives it to whom he wishes. The much touted change has come, what needs to be done, is that whoever wishes the nation well needs to embrace it and contribute his or her quota in making the country a better place for its citizens and generations yet unborn. There were predictions that our country shall become a failed state by 2015 and every citizen of the country that was aware of the prediction concluded that the 2015 poll was the gateway but God was on the side of Nigeria and the doom prophesy seems to have failed or is failing but the persistent ardour of bickering in the ruling party shows that it is not yet uhuru for the prophesy to be wished away.

Bukola Saraki Senate President The Senate is a very important organ of any democracy and emergence of Saraki as Senate President should be seen as an Act of God which need not be challenged. What needs to be done is for all Nigerians, stakeholders and particularly the ruling APC, to have a rethink as to why God allowed Saraki to emerge as Senate President. The All Progressive Congress (APC) may be basking in the euphoria of victory, but it should also know that Nigeria has become a country where any party that fails to deliver can be voted out. Caution should be taken in that when senate presidents were being elected and impeached at will has gone and also the circumstances that was prevalence then was at variance from what is obtainable today. The APC should know that Nigerians are eager to have a Senate that will equal the record of the out-gone Senate or even surpass it. And this can only be done by electing a sound technocrat politician that is in-depth in state craft to pilot the apex legislative chamber. If the truth should be told therefore, experience counts in shaping

good legislative business. Also, a person versed in the principles or art of governance, especially one actively engaged in conducting the business of government or shaping its policies. It goes to say that should be a person who exercises political leadership wisely and without narrow partisanship, a man who is a respected leader in national and international affairs, an experienced politician, especially one who is respected for making good judgments should be the one imbued with such task, this is what God has done in Saraki’s

emergence as Senate President. The hand-writing on the wall against the Senate President either blurs or clears, should be weighed on the scale of equity and justice because like an adage says, he who ignites the fire may not know where the ember will terminate. While going through the statement issued by the senate president’s spokesperson on why the Senate President did not appear before the Code of Conduct Bureau (CCB), something struck me. The spokesman said: “We want to emphasise the fact that this is not

part of any war against corruption but using state institutions to fight political opponents and seeking to achieve through the back door what some people cannot get through the democratic process. ‘We need to caution here that in a desperate bid to settle political scores and nail imaginary enemies, we should not destroy our democratic institutions and overheat the polity for our selfish reasons. Let us learn from history.” This is the crux of the matter. According to report, charge number ABT/01/15 dated September 11, 2015 was filed before the CCB accusing the Senate President of offences ranging from anticipatory declaration of assets to making false declaration of assets in forms he filed before the CCB while he was governor of Kwara State. The report further said that the charges which were prepared by M S Hassan, a Deputy Director in the Office of the Attorney-General also said that the Senate President failed to declare some assets he acquired while in office as governor. It also alleges that the Senate President allegedly acquired assets beyond his legitimate earnings, operating foreign accounts while being a public officer as governor and senator. The offences the charges said, violated sections of the fifth schedule of the Constitution of the Federal Republic of Nigeria 1999, as amended. It also breached Section 2 of the CCB and Tribunal Act and punishable under paragraph 9 of the said fifth schedule of the Constitution, the report further explained. However, the question is why did all these wait till Saraki became Senate President against the will of some people to bring the charges against him? Where were these charges when Saraki contested twice as governor of Kwara State and even tried to contest for the presidency in 2011? The war against corruption should take its real course but not on vendetta. Prince Idris Afegbua, amedia consultant based in Kaduna

Caution should be taken in that when senate presidents were being elected and impeached at will has gone and also the circumstances that was prevalence then was at variance from what is obtainable today


Business Journal October 5-11, 2015

ThePovertyGap www.businessjournalng.com

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International Financial Institutions Back New Global Sustainable Development Agenda

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ultilateral Development Banks (MDBs) and the Int e r n at i o n a l Monetary Fund (IMF) hailed the recent adoption of a sustainable development agenda for the next generation and are fully committed to stepping up their support to ensure its success. At the United Nations General Assembly in New York taking place from 25-27 September, world leaders endorsed new Sustainable Development Goals, an ambitious agenda that aims to end poverty, promote prosperity and to protect the environment. Leaders of the MDBs – the African Development Bank, Asian Development Bank, European Bank for Reconstruction and Development, European Investment Bank, Inter-American Development Bank, World Bank Group

-- and the IMF described the agreement as an historic landmark. “The well-being of our planet and its people are at the heart of the new goals. They point the way towards greater prosperity and equality and will ensure more robust and sustainable economic growth,” the leaders said. In July this year, at a Financing for Development conference in Addis Ababa, the institutions unveiled plans to scale up their finance and support for countries seeking to achieve the development goals, pledging to increase their financial contribution to more than $400 billion over the next three years. They vowed to examine how they could increase their own financing and also to work to ensure a greater mobilisation of domestic resources and expanded funding from the private sector.

Quotes from the Heads of Multilateral Development Banks and the IMF: Akinwumi Adesina, President, AfDB “The African Development Bank is fully committed to the successful implementation of the SDGs. We will work with our member countries, the private sector, civil society and other partners to deliver on the SDGs for Africa. The SDGs must work -and they must work for Africa.” Takehiko Nakao, President, ADB “We are committed to supporting the 2030 agenda and helping our member countries in achieving these ambitious new goals in Asia and the Pacific. We will increase our support for inclusive

and sustainable development by up to 50% from 2017 to around $20 billion a year. By 2020, ADB will double its climate financing to $6 billion a year, about 30% of its overall financing. We will also increase co-financing with other development partners, catalyze private sector investment, and help mobilize greater domestic resources.’’ Sir Suma Chakrabarti, President, EBRD “The new goals overlap with core areas of the EBRD’s operations and with its strategic priorities. As a development bank specialised in working with the private sector, the EBRD is well placed to support the delivery of an agenda in

which private firms will play a key role.” Werner Hoyer, President, EIB “The adoption of the SDGs shows our collective determination to safeguard the future of our planet. At the EIB we stand ready to work with our peers, other public authorities, and the private sector, and put our finance and expertise at work to support the implementation of the new goals.” Luis Alberto Moreno, President, IDB “The Sustainable Development Goals are ambitious, but the citizens of our countries expect no less than our full commitment to end poverty, promote

sustainable and equitable economic development, and protect the environment. The IDB pledges to work closely with governments and with the private sector throughout Latin America and the Caribbean to ensure a prosperous future for all.” Christine Lagarde, Managing Director, IMF “The SDGs are ambitious, but achievable with determined implementation. We all have a responsibility to achieve these goals, at the country level and through our collective action at the global level. The IMF, with its 188 member countries, will play its part.”

Jim Yong Kim, President, World Bank Group “The international community showed wisdom and courage fifteen years ago in adopting the Millennium Declaration, which set out eight ambitious goals to improve the lives of billions and bring the world together in closer cooperation and partnership. We cut poverty in half five years earlier than the declaration’s deadline, so I am confident we can achieve the great aspirations of these new global goals – particularly the first, which is to erase the scourge of extreme poverty from our planet by 2030. We can, and must, end this terrible blot on our collective conscience.”

China Pledges $12bn in Development Aid to Poor Nations by 2030

Chinese President Xi Jinping addresses the 2015 Sustainable Development Summit

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resident Xi Jinping of China has pledged over $12 billion in aid to developing nations by 2030 and said Beijing will also forgive debts due this year in an effort to help the world’s poorest na-

tions, as world leaders begin to seek the trillions of dollars needed to help achieve sweeping new development goals. President Xi Jinping spoke at a global summit in New York where he launched the non-binding goals for the next 15 years. As world leaders met quietly behind the scenes, others lined up to express support for the new development push that aimed to eliminate both poverty and hunger over the next 15 years. They replace a soonto-expire set of development goals whose limited success was largely due to China’s surge out of poverty over the past decade and a half. China’s president vowed to help other countries make the same transformation. Xi said China will commit an initial $2 billion to establish an assistance fund to meet the post2015 goals in areas such as education, health care and economic development. He said China would seek to increase the fund to $12 billion by

2030. And Xi said China would write off intergovernmental interest-free loans owed to China by the least-developed, small island nations and most heavily debt-burdened countries due this year. He said China “will continue to increase investment in the least developed countries,” and support global institutions, including the Beijing-backed Asian Infrastructure Investment Bank that is due to launch by the end of the year and is seen as a Chinese alternative to the more Western-oriented financial institutions of the World Bank. Ban made a major pitch to the private sector Saturday for its help in financing the development goals. “In a sense, September 26th is even more important than September 25th,” he told dozens of global business leaders from companies including Google, Unilever, Siemens and Sinopec. “Today, we begin the hard work of turning plans into reality.”


Business Journal October 5-11, 2015

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Shelter Infrastructure www.businessjournalng.com

Ghana Reaps ADB’s $120m Facility for Airports Expansion Project

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n September 30, 2015, the Board of Directors of the African Development Bank (AfDB) approved a US $120-million corporate loan to support Ghana Airports Company Limited’s (GACL) capital investment programme. The programme entails the construction of a new terminal at Kotoka International Airport (KIA) in Accra, and rehabilitation of other airports managed by GACL including Kumasi, Tamale, Ho and Wa Airports. The loan is the first private-sector investment that the AfDB has financed in Ghana’s transport sector. The total loan facility for the programme is US $400-million to be financed with corporate loans from AfDB and other development financial institutions as well as commercial banks. The programme will support the country’s ambitions of modernising vital infrastructure in Ghana through upgrading the airport to a gateway for West Africa and a regional aviation hub. The programme will also increase air passenger handling capacity and improving airport safety standards and efficiency at KIA and the regional airports. Through strengthening the coun-

try’s airport infrastructure, the programme is expected to boost the country’s economy, in particular the growing tourism and oil and gas sectors, through facilitating connectivity to markets and reducing the cost of doing business. Developing national airport infrastructure will be critical building blocks for regional integration as Ghana has been serving as a platform in connecting regional landlocked countries to international markets and support inter-African trade. The expansion of KIA is expected to generate an estimated 900 temporary jobs during the two-year construction period and about 760 permanent jobs during operations and maintenance phase. This project aligns well with both internal and external policies and strategies. It supports the Ghana Shared Growth and Development Agenda which emphasizes the need for rehabilitating and expanding infrastructural facilities especially in the transport sector. At sector level, the programme is in line with the priorities identified in the National Airport System Plan 2014. The AfDB’s financing will play an important role by providing much needed long-term finance, enforcing

Kotoka International Airport Accra, Ghana environmental and social standards and working to enhance the development impact of the Project.

The infrastructure nature of the programme aligns it well with AfDB’s Ten-Year Strategy as well as the Bank’s

Country Strategy for Ghana, which focus on improving infrastructure and integration to regional markets.

Co-operating Partners Seek Strategic Collaboration on NEPAD Infrastructure Projects

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o-operating partners who provide financial support to the New Partnership for Africa’s Development (NEPAD) Infrastructure Project Preparation Facility (NEPAD-IPPF) hosted by the African De-

velopment Bank (AfDB) have called for enhanced partnerships in strengthening the capacity of NEPAD-IPPF to increase the Facility’s scope to prepare infrastructure projects for financing and implementation. This was at the Special Oversight

Committee (OC) meeting of the NEPAD-IPPF in Abidjan. Edmond Wega from Canada’s Department of Foreign Affairs and Trade (DFATD) who is the current Chairperson of the NEPAD-IPPF’s OC – the decision making body made of

representatives of co-operating partners, the AfDB and the African Union Commission (AUC) – said: “Project preparation will remain key to unlocking investment because financing can only go to projects which are economically, financially, environmentally and socially viable.” He said donors are committed to supporting a stronger, more efficient and better resourced NEPAD-IPPF. Birgit Holderied-Kress from Germany’s KfW (German Development Bank) said Germany has and will remain a strong sponsor of NEPAD-IPPF because its role was critical. Joining other donors, Brian Baxendale of the UK Department for International Development (DFID), observed that “the need for project preparation in Africa is so fundamental that even if NEPAD-IPPF as an institution did not exist, a similar institution would have had to be created.” NEPAD-IPPF which has been in existence for the past ten years, having been established in 2005, has committed $100 million to preparation of projects in energy, transport and ICT which have generated investments of $7.33 billion, which is a huge leverage effect. With respect to projects in the trans-boundary water sector, NEPAD-IPPF works closely with another Bank-hosted project preparation facility, the Africa Water Facility (AWF). Donors supporting NEPAD-IPPF

are Canada, Germany, the UK, Spain, Norway and Denmark. Solomon Asamoah, the AfDB’s Vice-President for Infrastructure, Private Sector and Regional Integration, informed the Special OC meeting that the Bank was committed to transforming NEPAD-IPPF into Africa’s premier infrastructure project preparation facility and that in this regard the Bank has started to address some of the issues impacting on the performance of NEPAD-IPPF. These include release of $12 million into the capital operations of NEPAD-IPPF in addition to hosting the Facility; two key appointments – that of Moono Mupotola as the new Director of the Bank’s Regional Integration and Trade Department (ONRI), and the appointment of Shem Simuyemba as the new Manager of NEPAD-IPPF; and increased engagement with African Governments including African Regional Development Banks to make contributions to NEPAD-IPPF to complement donor financing. He called on NEPAD-IPPF to engage with Bank Sector Departments, potential financiers and policy-makers to ensure that projects that are prepared have a higher chance of reaching financial closure and therefore, moving to implementation bearing in mind that the ultimate aim of projects was development impact to improve the lives of people.


Business Journal October 5-11, 2015

Maritime www.businessjournalng.com

VESSELS EXPECTED AT LAGOS PILOTAGE DISTRICT

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Entrepreneur www.businessjournalng.com

Anzisha Prize Celebrates 5 Years: Unveils 2015 Finalists for $75,000 African Youth Entrepreneurship Award •The 12 finalists were selected from an impressive initial pool of 494 young entrepreneurs

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frican Leadership Academy in partnership with The MasterCard Foundation is proud to announce 12 accomplished young entrepreneurs as finalists for the 2015 Anzisha Prize. The Anzisha Prize team scoured far and wide in an extensive search for African entrepreneurial talent between the ages of 15 and 22. The 12 finalists were selected from an impressive initial pool of 494 young entrepreneurs, up from 339 applications in 2014. The Anzisha Prize is proud to have attracted applicants from 33 African countries, with finalists from Zimbabwe and Ethiopia identified for the first time. Applications were also received from a diversity of sectors, with agriculture having the most applicants. Now in its fifth year, The Anzisha Prize will be celebrating these outstanding young people during Global Entrepreneurship Week joining the worldwide festivities. Finalists for the Anzisha Prize win a share of US$75,000 and access to on-going support to scale their enterprises and expand their impact. The 12 finalists will be flown to Johannesburg, South Africa for the 2015 Anzisha Week taking place from 12 – 18 November 2015 during which they will receive intensive training from African Leadership Academy’s renowned Entrepreneurial Leadership faculty and engage with industry leaders as mentors. A panel of judges from across the entrepreneurial sphere will deliberate to select the grand prize-winners at a gala function to be held on the evening of 17 November 2015. The finalists will grow the pool of Anzisha Fellows to 57 and receive ongoing support in the form of business consulting, professional development training and access to broader networking opportunities to accelerate the growth of their ventures and impact. For the first time ever, the Prize is delighted that finalists have been selected from Zimbabwe and Ethiopia.

Farai Munjoma, 18, provides courseware and career guidance to other youth in Zimbabwe. Hidaya Ibrahim, 21, co-founded an education venture that organises capacity building activities for students to increase their critical thinking, analytical research and writing skills. Hidaya is among five female finalists, with four others originating from Cameroon, Ghana, Nigeria, and Rwanda. This year’s finalists have started ventures in a diversity of sectors including agriculture, technology, youth empowerment, education, and fashion. The large number of applicants in agricultural ventures reinforces the notion that Africa’s young entrepreneurs are focused on sectors that drive economic value in the African context. Says Grace Kalisha, Manager for the Anzisha Prize: “Entrepreneurship has significant potential to drive economic growth and improved livelihoods for African youth. We are proud to be celebrating and supporting these inspiring young leaders during Global Entrepreneurship Week, making them part of the global entrepreneurship narrative.”

The 2015 Finalists are:

1. Blessing Fortune Kwomo, 19, Nigeria. Co-founder of De Rehoboths Therapeutic Studio which extends home-based health care through tailored family action plans for treating illness and addressing root causes to empower families to live healthier within the context of their surroundings/ circumstances.

2. Chantal Butare, 21, Rwanda. Founder of Kinazi Dairy Cooperative (KIDACO) offering market access to 3,250 farmers through 10 milk collectors. Chantal packages and sells the milk for cattle owners in the community who have received cows in a government program, but have no market access. 3. Chris Kwekowe, 22, Nigeria. Founder of Slatecube, an e-learning platform that allows learners to study ICT-related course work and be certified at their convenience, with 200 active users on the platform this year. 4. Daniel Mukisa, 21, Uganda.

About African Leadership Academy African Leadership Academy (ALA) seeks to transform Africa by developing a powerful network of entrepreneurial leaders who will work together to achieve extraordinary social impact. Each year, ALA brings together the most promising young leaders from all 54 African nations for a pre-university program in South Africa with a focus on leadership, entrepreneurship and African studies. ALA continues to cultivate these leaders throughout their lives, in university and beyond, by providing on-going leadership and entrepreneurial training and connecting them to high-impact networks of people and capital that can catalyse large-scale change.

Co-founder of Transporter Company, provider of delivery services in Kampala using own branded fleet of 30 motorbikes, carrying out around 150 deliveries daily for corporate clients. 5. Fabrice Alomo, 22, Cameroon. Founder of MyAconnect, which is a web platform that aims to ease trade in Africa by digitizing what and how people buy, sell, and pay, through four user-friendly applications, with 128 companies currently utilizing the platforms. 6. Farai Munjoma, 18, Zimbabwe. Co-founder of Shasha Iseminar, providing access to courseware content, past examination questions and answers, and career guidance to high school age kids. He also offers school fees contribution to kids from revenues earned, and carries out projects at orphanages. 7. George Mtemahanji, 22, Tanzania. Co-founder of SunSweet Solar, which designs, plans, organizes and brings solar energy to rural Tanzania. One of his projects was the construction of the largest solar energy system in Kilombero, at Benignis Girls Secondary School of Ifakara. 8. Hidaya Ibrahim, 21, Ethiopia. Co-founder of Qine Association for Promoting Education Quality, an education venture that organizes capacity building activities for students to increase critical thinking, analytical research and writing skills, and convenes educational sector players for unique consultation on the quality of Ethiopian education. 9. Karidas Tshintsholo, 20, South Africa. Co-founder of Push Ismokol’, a clothing brand that employs six people in the Ekangala township of Pretoria, with significant pent up demand due to savvy marketing techniques.

About the Anzisha Prize

The Anzisha Prize is delivered by African Leadership Academy in partnership with The MasterCard Foundation. Through the Anzisha Prize, the organisers seek to catalyse innovation and entrepreneurship among youth across the continent. 10. Mabel Suglo, 22, Ghana. Co-founder of Echo Shoes, foot-wear business specializing in designing and making shoes from recycled waste, producing 30 pairs of shoes a month, and engaging persons with disabilities in the production process. 11. Sirjeff Dennis, 21, Tanzania. Founder of Jefren Afgrifriend Solutions (JAS) Poultry farming, raising 1,500 broiler chickens a month, and selling100 150kg bags of organic fertilizer a month. 12. Vanessa Zommi, 19, Cameroon. Co-founder of Emerald Moringa Tea aimed at managing diabetes in her community by providing products which contain key antioxidants, currently producing 15 kg of output per month. “Given the continued success of Anzisha at identifying a diverse pool of finalists that is representative of the potential and promise of Africa’s young entrepreneurial talent, The MasterCard Foundation is pleased to celebrate five years of the Anzisha Prize and continue in its partnership with African Leadership Academy until 2020. I am excited to welcome this year’s finalists to the Anzisha community” says Koffi Assouan, Programme Manager for the Youth Livelihoods Programme at The MasterCard Foundation.

AFIF Entrepreneurship Award 2015 Open to African-based Entrepreneurs

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n order to encourage innovation and entrepreneurship in Africa, EMRC will present the “AFIF Entrepreneurship Award 2015”, providing an African existing small-medium business with a financial contribution and exposure/visibility for the winning project. The award winner, an existing African small-medium business, will receive a US$5.000,00 cash prize, yearlong media promotion support in and out of Africa, free AFIF 2015 participation, including the Training Workshop, and travel expenses to the AFIF 2015 covered by EMRC. “This year we are boosting the

Award, by offering the chance to all those remarkable entrepreneurs based in Africa to submit their business project. We are facilitating their presence which in turn will ensure that SMEs are strongly represented at the event,” Inês Bastos, EMRC Senior Project Manager, explains. AFIF 2015, entitled “Access to Finance & Entrepreneurship” is organised in collaboration with the European Investment Bank (EIB), DEG (German Development Finance Institution) and in partnership with Agri Academy, ECOWAS-TEN, Pfizer, Rabobank, BlueCloud, ICD (Islamic Corp. for the Development of the

Private Sector), IFC (World Bank) amongst others. The forum will be held in Cape Town, South Africa, from the 24th to 26th November 2015. An unforgettable moment which receives considerable international press coverage, the Award has been won by a unique group of African entrepreneurs which include: Magloire N’Dakon (2014) awarded the prize for his innovative project, Extended Finance, in Ivory Coast; Marie-Claire Matamba (2013) head of Agrimat Gabon; Anastácio Roque representing CESACOPA (2012) from Angola, Suzanne Belemtougri (2011) head of Sophavet and

hailing from Burkina Faso as well as Derek Kwesiga (2009) head of Derekorp from Uganda. “Participating in the Award brought me visibility. A visibility which is rather exceptional because I present the project to an assembly full of investors and business people who work with and in Africa. I told myself I had to jump on this occasion in particular because I really believe in my project and I worked hard to make it what is today”, highlights 2014 winner Magloire N’Dakon. “Nothing beats sharing your achievements and your vision to like-minded people who could be-

come eventual partners or investors,” Inês Bastos says. With an expected 300 people from all over the world, the three-day event will see North & South policymakers, investors and private sector entrepreneurs discuss and find practical business solutions. The forum brings to the table financiers who are looking to find real projects, investment opportunities and long-term partnerships. There is a spirit to get things done which is demonstrated through the B2B sessions, tailor-made one-onone sessions, which are organised throughout the forum.


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www.businessjournalng.com

Why Africa Is Becoming More Accessible for Investors

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Debbie Carlson

hen it comes to investing in markets outside of the U.S., Africa is often ove r l o oke d. But investing interest in the continent is starting to grow, particularly with investors who have a long-term focus. In April, The Wall Street Journal reported that the New York State Common Retirement Fund, a U.S. pension fund, planned to invest as much as 3 percent of its assets in the region. And in November, private-equity firm The Carlyle Group bought an 18 percent stake in the Nigerian-based Diamond Bank. Multinational firms are also entering the region. Like a lot of emerging and frontier markets, Africa’s positives are a young demographic, a growing consumer class and vast opportunities to build infrastructure, including roads, seaports and airports. Inflation is also low, and a few recent elections have occurred without incident, such as when Muhammadu Buhari won the Nigerian presidential election over incumbent Goodluck Jonathan. Buhari was the first opposition candidate to win a Nigerian presidential election, and the peaceful handover was seen as a big step for democracy there. Africa offers promise of long-term growth, but investors need to remember that just as with other emerging and frontier markets, it’s a risky place to put money. Growth can falter, and corruption is still an issue for many African countries.

It’s a Continent, Not a Country.

Africa is not one big economy, but is made up of many markets. “Depending on who is counting, there are 48 to 53 different economies in Africa and about 40 separate equity markets. So there’s a wealth to choose from when you’re trying to take ad-

vantage of the positive investment thesis,” says Joel Wells, Portfolio Manager at Boston-based Alpine Funds. Those positives are the higher growth outlook and a young demographic, but, Wells says, “on the other side of the coin, there is still corruption, there are worries about governance, diseases like Ebola [and terrorist groups such as] Boko Haram.” Like most emerging markets, especially those that rely on commodity exports, Africa has suffered from the problems of slowing Chinese growth, says Ryan Hoover, Founder of Investing in Africa, which focuses on African stock markets. Many observers see Africa as a commodities play since countries like Nigeria and Angola are petroleum exporters, and South Africa exports precious metals such as gold and platinum. And countries like South Africa are struggling because of the commodities bust, along with currency depreciation, making imports more expensive. But Hoffman says Africa is more than just commodities. “It is a commodity play, but there’s also a lot more development going on for the internal consumer base. Kenya is a good example of that. You’ve seen growth in the service sector, such as telecom companies and technological entrepreneurs,” he says.

What Rates?

about

Interest

There are some concerns about the impact on Africa -- and emerging markets in general -- when the Federal Reserve eventually raises rates. Some caution that the historically low global interest-rate environment and the commodities boom of the past decade have papered over the Africa’s long-time problems. They say the commodities bust and the likelihood of rising U.S. interest rates will reveal that not much in Africa has changed. However, Robert R. Johnson, Pres-

he says.

How to Invest in Africa

ident and Chief Executive Officer of the Pennsylvania-based American College of Financial Services and author of the book “Invest with the Fed,” says when the Fed was raising rates from 1996 through 2013, the African frontier markets returned nearly 25 percent. “It appears that investors may want to consider emerging markets, particularly the African frontier, when the Fed finally moves to raise rates. Many investors are hesitant to go into emerging markets when rates are rising, but my research shows that is just the time that emerging markets have done well over the past few years,” he says. William Hoyt, Managing Director at Lattice Strategies, a San Francisco firm that has exposure to South Africa in its Emerging Markets Strategy

exchange-traded fund, says generally, people who invest in emerging markets should understand the market’s liquidity, meaning how easy is it for an investor to put in or take out money. Hoyt says South Africa has mature and well-developed capital markets, which makes them less risky from an operational standpoint. One of the next biggest African capital markets, Nigeria, is a fraction of the size of South Africa. “In our assessment, South Africa, while still an emerging market from an economic perspective and certainly a geopolitical perspective, but it has a quite deep and wide market that’s suitable for emerging market investors. But Nigeria ... is roughly a tenth of the size of South Africa, so we are less ready to embrace [that] country,”

Hoffman says because African markets can be very volatile, he cautions investors to devote a small percentage of their portfolio to Africa -- maybe about 5 percent. The easiest way is with ETFs, he says. The most common ETF is the Market Vectors Africa ETF (AFK). “It’s a great way to get low-cost exposure to Africa,” Hoffman says. There are also a few country-focused ETFs, such as one from iShares MSCI South Africa (EZA) as well as Global X MSCI Nigeria (NGE), a newer ETF, he says. One mutual fund, the Nile Pan-Africa (NAFAX), focuses three-quarters of the portfolio on sub-Saharan companies outside the mining and energy sectors. For investors considering individual stocks, U.S. investors need to buy American Depository Receipts. ADRs are stocks that trade in the U.S. but represent a specified number of shares in a foreign company. Hoffman’s top picks, which he says he owns, include MTN Group (MTNOY), a cellular provider for much of the continent. He also owns Standard Bank (SGBLY), which has subsidiaries all over Africa, and Shoprite Holdings (SRGHY), the biggest grocer on the continent. For investors who might only want a small percentage of African exposure as part of a larger frontier-market position, Johnson says two examples of frontier-market ETFs include the iShares MSCI Frontier 100 ETF (FM) and the Guggenheim Frontier Markets ETF (FRN). Wells says investors need to consider the current investment cycle before jumping in. “You have to consider the risk and reward. It’s something you have to look at with a three- to five-year horizon. It’s good to start paying attention to and do some homework. Also, don’t be moved by the headline risk,” he says.

Driving Continued Growth: The Ethiopia Summit 2015

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ver the past decade, Ethiopia has experienced solid economic growth—GDP growth has averaged 10% a year and foreign direct investment reached almost $1billion in 2013/2014—but what more needs to be done for the country to achieve its full potential? Is Ethiopia on course to achieve its ambitious goals with its second Growth and Transformation Plan? •What are Ethiopia’s future growth prospects? • Is the state-led development model sustainable? •What are the challenges currently faced by the private sector? •What opportunities exist for pri-

vate equity firms looking to enter the Ethiopian market? •Will Ethiopia fully join COMESA’s Free Trade Area to achieve further growth through collaboration? Organised under the theme “Driving continued growth” The Economist Events’ Ethiopia Summit will bring together more than 150 of the country’s leading policymakers and business leaders with international executives active or interested in expanding in Ethiopia to explore opportunities and tackle challenges. Along with His Excellency Prime Minister Desalegn, the summit will feature speakers and panellists from government and industry including: •HE Dr Arkebe Oqubay, Minister

and Special Advisor to the Prime Minister, Federal Democratic Republic of Ethiopia •HE Dr Abraham Tekeste Meskel, State Minister, Ministry of Finance and Economic Development, Federal Democratic Republic of Ethiopia •Fitsum Arega, Director General, Ethiopian Investment Commission (EIC) •Sindiso Ngwenya, Secretary-General, Common Market for Eastern and Southern Africa (COMESA) •Greg Dorey, British Ambassador to Ethiopia and British Permanent Representative to the African Union and UN Economic Commission for Africa •Tewolde GebreMariam, Chief Ex-

ecutive Officer, Ethiopian Airlines •Haddis Tadesse, Country Representative, Ethiopia and Representative to the African Union, Bill & Melinda Gates Foundation •Andualem Admassie, Chief Executive Officer, Ethio Telecom •Tewodros Ashenafi, Founder, Chairman and Chief Executive Officer, SouthWest Energy •Khalid Bomba, Chief Executive Officer, Ethiopian Agricultural Transformation Agency •Reg Hankey, Chief Executive Officer, Pittards •Francis Agbonlahor, Managing Director, Meta Abo Brewery Share Company, Diageo •Rana Sengupta, Vice-president, Africa Emerging Markets and Customer

Development, Africa Business and Managing Director, Ethiopia, Unilever • Brian Herlihy, Chief Executive Officer and Founder, BlackRhino •Fitsum Arega, Director General, Ethiopian Investment Commission (EIC) •Munir Duri, Chief Executive Officer, Kifiya •Mayur Kothari, Founder and Chairman, Mohan Group of Companies •Sergei Stankovski, Managing Director, Goldman Sachs •Gabriel Negatu, Regional Director for Eastern Africa , African Development Bank •Sergei Stankovski, Managing Director, Goldman Sachs


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Manufacturing www.businessjournalng.com

Banks And Smes In Nigeria: Prospects, Challenges And Success

By Mr. Rasheed Olaoluwa Managing Director/CEO Bank of Industry 1.It is my honour and privilege to be invited to deliver the keynote address at this august gathering of members of the fourth estate of the realm, financial institutions, the Organised Private Sector, entrepreneurs and development partners. 2.The theme of this conference: Banks and SMEs in Nigeria: Prospects, Challenges and Success Stories” is most apt as it touches the heart of the challenges confronting Small and Medium Enterprises (SMEs) in Nigeria. This conference I believe is designed to ultimately proffer solutions to some of the problems militating against the development and growth of SMEs. However, the impression created by the theme of the conference is that access to finance is the major challenge confronting SMEs and banks hold the key to addressing that challenge. It is important to note that banks are just one of the key actors in the SME ecosystem. The other stakeholders include government, development partners and the SMEs themselves. 3.Permit me to take a few moments to emphasise the importance of SMEs. Globally, SMEs are acknowledged for their ability to propel the economic growth, productivity and competitiveness of developed and especially developing economies. They have a high propensity for job and wealth creation, as well as, a major catalyst for rapid industrial development and dispersal. The United Nations Conference on Trade and Development (UNCTAD) summarized the roles of SMEs as follows: •Promotion of national and regional development through local resources mobilization and generation of employment and creation of wealth. •Poverty alleviation and a more equitable distribution of income and opportunities through empowering specific groups of people such as women and youths or those on the margins of society. •Provision of a more flexible, innovative and competitive economic structure, as SMEs have considerable competitive advantage over larger enterprises, which enable them to respond more quickly and effectively to changing global trends. •SMEs are easily amenable to structural adjustments in response to technological development and they have revealed the ability to absorb lay-offs occasioned by large enterprises. 4. Constraints to the Development of SMEs in Nigeria The strategic importance of SMEs to the Nigerian economy is under-

scored by the 2013 survey by the Small and Medium Enterprise Development Agency of Nigeria (SMEDAN) and the National Bureau of Statistics (NBS), which states that there are over 37 million Micro, Small and Medium Enterprises (MSMEs) in the country. These enterprises account for over 90% of all businesses in Nigeria and also account for an estimated half of Nigeria’s GDP, while employing almost 60 million people, representing 84% of the total labour force. However, SMEs in Nigeria have been operating below their potential for many years. This weak performance can be attributed to internal and external constraints, including production technology, lack of access to available markets, entrepreneurship, poorly conceived Business Model, firm characteristics, management structure, marketing strategies, poor infrastructure (electricity, roads, water,

tries. Access to finance allows SMEs to undertake productive investments to expand their businesses and to acquire the latest technologies, thus ensuring their competitiveness and that of the nation as a whole. Poorly functioning financial systems can seriously undermine the macroeconomic fundamentals of a country, resulting in lower growth in income and employment. Despite their dominant numbers and importance in job creation, SMEs traditionally have faced difficulty in obtaining formal credit or equity. For example, maturities of commercial bank loans extended to SMEs are often limited to a period far too short to pay off any sizeable investment. This is due to the short-term nature of their funds, with the attendant mismatch if granted as long-term facilities to SMEs. Meanwhile, the tendency is for access to competitive interest rates to be reserved only for prime custom-

communication), production inputs, government policies (multiple taxation, high cost of obtaining land titles and bureaucracy surrounding the issuance of consent to mortgage, high cost of legal documentation at the Corporate Affairs Commission(CAC) and State Land Registries) and lack of access to affordable finance. 5.Access to Finance by SMEs I will like to dwell a little on the issue of access to finance by SMEs, which is the main thrust of this conference. Finance has been identified in many business surveys as a critical factor for the survival and growth of SMEs in both developing and developed coun-

ers, while loan interest rates offered to SMEs remain high. Accordingly, bank credit in Nigeria is characterised by limited availability of medium- to long-term credit tenors, short moratorium, and high collateral requirements. Recent surveys of SMEs and banks by the World Bank and other stakeholders have identified several factors limiting access to bank finance for SMEs. In recent years, deposit money banks (DMBs) have continued to dominate Nigeria’s financial system. With relatively under-developed corporate bond and alternative securities markets, bank credit has constituted

Rasheed Olaoluwa, MD/CEO, Bank of Industry the main source of formal financing for Nigerian companies. According to the results of a World Bank survey of Nigerian SMEs in 2011, only an estimated9.5% of Nigerian SMEs had a loan or line of credit in 2011, and bank financing of working capital and fixed assets was estimated to fill respectively only 3% and 2% of outstanding needs. Based on later survey of MSMEs in 2014, only

6.7% of enterprises in Nigeria reported having a loan or active line of credit, compared to the global Enterprise Survey average of36.5%. In terms of segmentation, only 3% of micro enterprises had access to finance, while for SMEs, it was 7%; and for large enterprises it was 44%. Moreover, access rate by SMEs lags well behind other countries such as Brazil (30%), Ghana (36%), China (30%), Kenya (24%) and South Africa (21%). 6.Key Reasons for Poor Access to Finance by SMEs Banks generally have been reluctant to service SMEs for a number of wellknown reasons. These include the fol-

lowing: •Perception of SMEs by creditors and investors as high-risk borrowers due to insufficient assets, low capitalisation, vulnerability to market fluctuations and high mortality rates. •Absence of bankable Business Plans and lack of clear Business Models. •Information asymmetry arising from SMEs’ lack of accounting records which makes it difficult for creditors and investors to assess the creditworthiness of potential SME proposals. •Absence of corporate governance and sound management. •Lack of relevant skills and experience in the businesses they undertake. This factor accounts for the high mortality of SMEs as an estimated 80% of them fail within five (5) years of operation. •Inability to meet Collateral and Equity contribution requirement. •Protracted legal processes that undermine debt recovery. •Lack of access to quality support services. •Issue of integrity among business promoters. The foregoing hindrances to access to finance, call for innovative approach to SME lending by financial institutions. Such innovations which should be both financial and non-financial, must be SME-centric, aimed at efficient service delivery to them. It is, however, gratifying to note that a number of Nigeria banks are gradually becoming SME-friendly with the various SME-centric products they have pushed into the market, which is in recognition of the growing importance of SMEs to the Nigerian economy and the global trend that points to SMEs as the future of banking. 7. Bank of industry’s SME Finance Initiatives Talking about innovation and customer-centric service delivery for SMEs, I would like to cite examples of what the Bank of Industry (BOI) has done in this regard. The Bank in order to boost access to finance for SMEs and in consonance with its Mission Statementof “…..transforming Nigeria’s industrial sector by providing fi-


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Manufacturing

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Chinese Manufacturing Continues Downward Spiral in Sept. PMI Factory activity in China continued to contract in September, according to the government’s official manufacturing survey.

ANZ believe that growth could pick up again later this year as stimulus measures and higher government spending gradually take effect. Julian Evans-Pritchard, Economist at Capital Economics, said: “We expect sentiment to begin to improve gradually over the coming months as the stock market stabilises and recent policy support measures continue to feed through into stronger economic activity.” Official vs Private The official PMI data looks at activity amid larger manufacturers, while a

A

lthough the manufacturing Purchasing Managers’ Index (PMI) rose slightly to 49.8, up from 49.7 in August, the sector contracted for the second consecutive

nancial and business support services to enterprises”, came up with the following business support initiatives: a. Engagement of Business Development Service Providers (BDSPs) The Bank engaged the services of 122 Business Development Service Providers (BDSPs) with State, Regional and National coverage. Their mandate is to assist SMEs in packaging bankable loan proposals that have a high probability of loan approval. The BDSPs also provide post-finance services such as capacity building, hand-holding and mentorship for the entrepreneurs to ensure sustainable growth of their businesses. Indeed, this initiative has served to largely de-risk SMEs thereby making them attractive for loan consideration by banks. b. Partnering with Ten SME-Friendly Commercial Banks: BOI is partnering with ten (10) SME-friendly commercial banks to provide working capital for its SME customers at a negotiated interest rate of Monetary Policy Rate (MPR) + 6%. The banks are: Access Bank, Ecobank, Diamond Bank, Fidelity Bank, First Bank, First City Monument Bank, Skye Bank, Stanbic IBTC Bank, Standard Chartered Bank and UBA. c. Branch Expansion: BOI has expanded its branch network from 7 to 14 in order to bring its services closer to SMEs nationwide. d. Process Automation: which is meant to enhance service delivery efficiency to the Bank’s customers by drastically reducing process down time. e. Accreditation of Audit Firms, Estate Valuers and Insurance Companies to provide professional services at reasonable costs for SMEs customers.

month. A number below 50 indicates that factory activity contracted. China’s vast manufacturing sector has been struggling to regain momentum. The official PMI figure was a touch better than the 49.6 expected by economists.

f. Digital Products: Ina global economy largely driven by the internet, BOI recently launched five (5) SME-centric digital offerings. These are: •SME Mobile App to provide members of the public, especially entrepreneurs, easy access to information about the key activities and products of the Bank, as well as, how to avail themselves of its services. •SME Accounting Application (SAAPP) Software to address the problem of poor record keeping. SAAPP provides SMEs with a user friendly and simplified accounting tool that does not require formal accounting knowledge by the entrepreneur. This way, SMEs will be transformed into better-structured entities applying best practices in their operations. This application has been

Cloudy Outlook Even though this month’s reading was slightly better than forecast, it still shows that economic conditions in China remain under a cloud. The world’s second-largest economy

deployed online and is obtainable at a cost of N20,000. •Online Loan Application Portal created for the convenience of BOI’s prospective SME customers to enable them apply for loans online without leaving the comfort of their homes or offices. It has the advantage of shortening the loan processing Turn-AroundTime (TAT) of the Bank. •Online Loan Application Tracking Portal to enable customers obtain online, real time updates on loan requests submitted to the Bank through an innovative loan status tracker on the Bank’s website. •SME Customer Portal which is a platform that that addresses the access to market challenges of SMEs as it showcases their products thereby providing business-to-business (B2B)

is on track to expand at its slowest pace in a quarter of a century. The government expects China to grow by 7% this year, but a spate of weak economic data has raised questions about whether that target will be achieved. “Two straight months of manufacturing sector contraction with a depressed equity market suggests China’s third-quarter GDP growth is likely to have slowed to 6.4%,” economists at ANZ said.

private survey from Caixin and Markit focuses on smaller to medium-sized companies in the sector. The final Caixin/Markit manufacturing PMI for September fell to a sixand-a-half year low of 47.2, but it was better than a preliminary reading of 47 released last week. Asian markets reacted positively to the closely watched Chinese data, with the Hang Seng in Hong Kong rising 1.4% in afternoon trade and Tokyo up 1.9%.

linkage opportunities among SMEs as well as between SMEs and their key partners such as suppliers, distributors, Large Enterprise off-takers, etc. g. SME Product Programs BOI has commenced the use of Product Programs in its lending to SMEs. The advantage of this strategy is that it is product specific and it focuses mainly on the Business Model of the SME rather than on collateral. The primary source of loan repayment is from the business’ cash flow. In this regard, the Bank has identified 35 SME Clusters in the country to which lending will be driven by Product Programs. Some of the Cluster Product Programs that are so far being implemented by the Bank include: (i) Cottage Agro Processing (CAP) Fund for Agro-processors.

(ii) Nolly Fund for the Creative Industry (Nollywood). (iii) Fashion Fund for the Fashion cluster. h. Collaboration with Research Institutions in the Country BOI is currently partnering with research institutions in the country in order to expose SMEs to modern indigenous and innovative technological developments for greater efficiency and competitiveness. The research institutes include the Federal Institute of Industrial Research, Oshodi (FIIRO), National Agency for Science and Engineering Infrastructure (NASENI), Project Development Institute (PRODA), etc. 8. Distinguished Ladies and Gentlemen, from the foregoing, it is evident that SMEs in Nigeria have bright prospects. However, concerted efforts must be made by all stakeholders: Government, the Organised Private Sector, the Financial Institutions and the SMEs themselves to play their respective roles in pursuit of sustainable growth for the SMEs. This way, SMEs will be in a position to live up to the expectation as a key vehicle for job and wealth creation. 9. In conclusion, I wish you a most successful and fruitful discourse at this conference. It is my hope that at the end of the two-day event, there will be a clearer understanding of the roles of the various stakeholders in the SME ecosystem and you the gentlemen of the press will be better equipped to carry out incisive analysis of the dynamics of the SME sector and also disseminate qualitative information to the public. NB: The Keynote Address by Mr. Rasheed Olaoluwa, Managing Director/CEO, Bank of Industry (BOI) at the FICAN Annual Conference in Lagos.


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Healthcare www.businessjournalng.com

WHO Removes Nigeria from Polio-Endemic List

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he World Health Organisation (WHO) has announced that polio is no longer endemic in Nigeria. This is the first time that Nigeria has interrupted transmission of wild poliovirus, bringing the country and the African region closer than ever to being certified polio-free. The Global Polio Eradication Initiative (GPEI), the public-private partnership leading the effort to eradicate polio, called this a ‘historic achievement’ in global health. Nigeria has not reported a case of wild poliovirus since July 24, 2014, and all laboratory data have confirmed a full 12 months have passed without any new cases. As recently as 2012, Nigeria accounted for more than half of all polio cases worldwide. Since then, a concerted effort by all levels of government, civil society, religious leaders and tens of thousands of dedicated health workers have resulted in Nigeria successfully stopping polio. More than 200 000 volunteers across the country repeatedly immunised more than 45 million children under the age of 5 years, to ensure that no child would suffer from this paralysing disease. Innovative approaches, such as increased community involvement and the establishment of Emergency Operations Centres at the national and state level, have also been pivotal to Nigeria’s success. The interruption of wild poliovirus transmission in Nigeria would have been impossible without the support and commitment of donors and development partners. Their continued support, along with continued domestic funding from Nigeria, will be essential to keep Nigeria and the entire region polio-free. Polio, which can cause lifelong paralysis, has now been stopped nearly everywhere in the world following a 25-year concerted international ef-

fort. Polio remains endemic in only 2 countries – Pakistan and Afghanistan. The eradication of polio globally now depends primarily on stopping the disease in these countries. As long as polio exists anywhere, it’s a threat to children everywhere. Nigeria has made remarkable progress against polio, but continued vigilance is needed to protect these gains and ensure that polio does not return. Immunisation and surveillance activities must continue to rapidly detect a potential re-introduction or re-emergence of the virus. After 3 years have passed without a case of wild poliovirus on the continent, official ‘certification’ of polio eradication will be conducted at the regional level in Africa. Eradicating polio will be one of

the greatest achievements in human history, and have a positive impact on global health for generations to come. Nigeria has brought the world one major step closer to achieving this goal and it’s critical that we seize this opportunity to end polio for good and ensure future generations of children are free from this devastating disease.

Statements:

“We Nigerians are proud today. With local innovation and national persistence, we have beaten polio. We know our vigilance and efforts must continue in order to keep Nigeria polio-free.” - Dr Ado Muhammad, Executive Director, National Primary Health Care Development Agency, Nigeria. “Stopping polio in Nigeria has

been a clear example that political engagement, strong partnerships and community engagement are the engines that drive the momentum of public health programmes, enabling them to achieve great things. I would like to congratulate everyone, particularly political, religious and community leaders in Nigeria and across Africa, for reaching a year without cases of wild polio.” – Dr Matshidiso Moeti, WHO Regional Director for Africa. “This is a clear example of success under very difficult circumstances. It shows we can eradicate polio if proven strategies are fully implemented. Combined with the news of the eradication of type 2 wild polio virus last week, we are moving decisively toward ending a disease that has paralyzed tens of millions of children. In

this final mile, we must remain committed to providing the resources and the support to the front lines to make this worthy goal a reality.” – Dr Tom Frieden, Director of the U.S. Centers for Disease Control and Prevention, and Chairman of the Polio Oversight Board. “Rotary congratulates Nigeria on its tremendous accomplishment in stopping polio. On behalf of the entire Global Polio Eradication Initiative, we thank volunteers, health workers and parents in communities across Nigeria for their tireless commitment to ensuring every last child is protected against this devastating disease. In the months ahead, their dedication will remain as important as ever, as we work to keep Nigeria polio-free and to eliminate polio from its final strongholds in Pakistan and Afghanistan.” - K.R. Ravindran, President, Rotary International. “This is a significant milestone for the global polio eradication effort and the health workers, government and religious leaders and partners should be proud of this accomplishment. While the progress in Nigeria should be celebrated, it is also fragile. It is critical that Nigeria goes two more years without a case of polio which will require the support of partners, increased accountability at all levels of the program led by President Buhari, and increased domestic funding commitments.” – Chris Elias, President, Global Development, Bill & Melinda Gates Foundation. “The removal of Nigeria from the list of polio-endemic countries is a major victory for Nigeria’s children. It is a testament to the commitment and dedication of the Government of Nigeria, local leaders, and front line workers. And it is proof positive that if we work together in partnership to reach every community and immunize every child, we can finish the job of eradicating this evil disease everywhere, once and for all.” – Anthony Lake, Executive Director, UNICEF.

Sub-Saharan Africa Accounts for 57% of Under-five Deaths Globally Emi Suzuki

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ew child mortality estimates released recently by the United Nations Inter-agency Group for Child Mortality Estimation (UN IGME) show major progress globally. Between 1990 and 2015, the global under-five mortality rate dropped 53 percent from 91 to 41 deaths per 1,000. But this drop is still not enough to meet the global MDG4 target of a two-thirds reduction between 1990 and 2015. In this final year of the Millennium Development Goals (MDGs), two out of six regions have met the MDG4 target : East Asia and the Pacific, and Latin America and the Caribbean, whereas the Europe and Central Asia, and Middle East and North Africa regions fell slightly short. In Sub-Saharan Africa and South Asia, progress remains insufficient to reach the target. At the country level, about a third of low and middle-income

countries (46) have reduced their under-five mortality by two thirds or more and achieved the MDG 4 target. This includes 12 low-income countries, 12 lower-middle income countries, and 22 upper-middle income countries. Sub-Saharan Africa has the highest under-five mortality rate. In 2015, 1 in 12 children in Sub-Saharan Africa died before age 5 - more than 12 times higher than the 1 in 147 rate seen in high-income countries. South Asia has the second-highest rate where 1 in 19 children dies. Fifty percent of global under-five deaths occur in Sub-Saharan Africa , and 31% occur in South Asia, accounting for 81% of global under-five deaths. The report mentions these two regions for focus. The 44% decline in under-five mortality over the past 15 years has saved the lives of 48 million children It’s not just the rates that have fallen – the absolute number of under-five deaths worldwide has declined from 12.7 million in 1990 (35,000 deaths per day) to 5.9 million in 2015

(16,000 deaths per day). This is the first year when fewer than 6 million children under five died . The decline in under-five mortality since 2000 has saved the lives of 48 million children - children who would not have survived to their 5th birthday if under-five mortality rates remained unchanged from 2000 onward. Globally, the rate of progress has also been increasing. Between 1990 and 2000, the annual rate of reduction in the under-five mortality rate was 1.8 percent. But between 2000 and 2015, annual reductions have averaged 3.9 percent. This acceleration has also been observed in Sub-Saharan Africa where the under-five mortality rate is highest. 45 percent of under-five deaths occur within children’s first 28 days of life. While both under-five and neonatal (the first 28 days of life) mortality rates have come down, neonatal mortality rates are declining more slowly, so the proportion of neonatal deaths has been increasing.

The share of neonatal deaths among overall under-five deaths has increased from 40% in 1990 to 45% in 2015. The neonatal mortality rate fell from 36 deaths per 1,000 live births in 1990 to 19 in 2015 and the number of neonatal deaths declined from 5.1 million in 1990 to 2.7 million in 2015. The report notes that the biggest challenge remains in the period at or around birth. Most child deaths are easily preventable by proven interventions The report and press release emphasise the tremendous progress, but also the work that still remains in the Sustainable Development Goal (SDG) era. Most child deaths are easily preventable by proven and readily available interventions. The rate of reduction of child mortality can be sped up considerably by concentrating on regions with the highest levels – Sub-Saharan Africa and South Asia – and ensuring a targeted focus on newborns. The previous UN IGME report noted the leading causes of death among

children under age five include preterm birth complications, pneumonia, intrapartum-related complications, diarrhea and malaria. Globally nearly half of under-five deaths are attributable to under-nutrition. The MDGs have brought statisticians together to produce better data Lastly, on the occasion of the MDG’s target year, I would like to acknowledge large effects that the MDGs brought to monitoring work. Following the adoption of the Millennium Declaration by the United Nations General Assembly in 2000, various international agencies including the World Bank resolved to invest in using high-quality harmonised data to monitor the MDGs. These efforts included fostering international collaboration through establishment and participation in the inter-agency groups to monitor the progress towards MDG target. The MDGs brought many statistical workers together to produce increasingly better data. I believe the UN IGME has been one of the most successful efforts in MDG monitoring.


Business Journal October 5-11, 2015

Stock Market www.businessjournalng.com

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Business Journal October 5-11, 2015

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Digest

Non Oil Sector

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Endeavour Mining, La Mancha in Strategic African Gold Partnership

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ndeavour Mining Corporation is pleased to announce that it has entered into a long term strategic partnership with La Mancha Holding S.àr.l., a privately-held gold investment company controlled by the Sawiris Family. As part of the transaction, Endeavour will acquire La Mancha’s indirect 55% interest in Société des Mines d’Ity S.A. (“SMI”), which operates the Ity Gold Mine in Côte d’Ivoire, plus various regional exploration properties, and La Mancha will contribute $63 million cash into the acquired businesses. La Mancha has also expressed an in-principle commitment to invest up to US$75 million in additional funds to support Endeavour’s growth. Upon completion of the transaction, La Mancha will be issued approximately 177.1 million Endeavour ordinary shares representing 30.0% of the enlarged share capital. On a pro forma basis, Endeavour will have an annual gold production rate of 580,000 ounces from five operations across West Africa, a strengthened balance sheet and further growth opportunities in Africa. Among other conditions, this transaction is subject to approval from Endeavour’s current shareholders. Neil Woodyer, CEO of Endeavour, stated: “We are pleased to welcome La Mancha and Naguib Sawiris as our

About Endeavour Mining Corporation Endeavour is a Canadian-based intermediate gold mining company producing 500,000 ounces per year from four mines in West Africa. Endeavour is focused on effectively managing its existing assets to maximise cash flow as well as pursuing organic and strategic growth opportunities that benefit from its management and operational expertise.

Gold mine long term strategic partner with the shared vision of building a leading, Africa-focused gold producer. This transaction will immediately add to Endeavour’s operating cash flow, increase our attributable Mineral reserve and resource base by 22% and 23%, respectively, while also strengthening our balance sheet and funding position to pursue further growth. The Ity Mine and resource base has grown significantly under the leadership of La Mancha. An aggressive exploration program at Ity has increased M&I resources since 2011 from 0.2Moz to 2.9Moz. With

our successful track record in building and operating mines, together we will have the expertise and the funding to grow across Africa. By adding the brownfield Ity CIL development project alongside our Houndé project, we will have strengthened our pipeline for near term growth. With the additional exploration properties, we will become the mining company with the largest exploration package in Côte d’Ivoire, which is one of the most prospective greenstone belts in the world. I am delighted to announce that Sebastien de Montessus will be joining Endeavour as President where

Equatorial Guinea Hosts 2nd Meeting of Extractive Industries Transparency Initiative

he adds his proven management skills as former CEO of Areva Mining and current CEO of La Mancha, and experience in African mining operations. Most importantly, the transaction is value accretive to shareholders and the in-principle commitment of up to $75 million in additional funding puts Endeavour in a stronger positon to continue its growth strategy at a low point in this gold price cycle. The industry has seen the successful role La Mancha has played in the growth of Evolution Mining Limited in Australia, including the A$112 million equity capital support for the Cowal acquisition – in excess of the A$100 million in-principle commitment made, and we see similar opportunities across Africa.” Naguib Sawiris, Chairman of the La Mancha Group, stated: “I am committed to the future of Africa and the gold mining industry. My

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before the next EITI Global Conference, to be held in Lima, Peru in February 2016. Participants discussed on-going developments in the EITI standard and the impact it is having on African countries to be compliant. The EITI member countries participating in the meeting are: Congo, Senegal, Guinea Conakry, Ivory Coast, Liberia, Cameroon, Burkina Faso, Niger, Togo, Central African Republic, Sierra Leone. Equatorial Guinea and Gabon attended as observers. All African members of the EITI Board also

attended the meeting. Cesar Augusto Hinestrosa Gomez, EITI Director General, said: “That all countries have selected Equatorial Guinea to host this important meeting reinforces our commitment to become a member of EITI.” The Extractive Industries Transparency Initiative is an international organisation that manages financial transparency and improved governance in extractive industries such as mining and oil and gas. Equatorial Guinea is currently applying to join EITI.

Sebastien de Montessus, CEO of the La Mancha Group, stated: “Following the success of our strategic partnership with Evolution Mining in Australia, which quickly created a leading Australian gold producer, we are now excited to partner with Endeavour and support their growth in Africa in order to create a leading African-focused gold producer. Given the tremendous opportunities in Africa, I’m very pleased to be joining, with some of my team, the talented leadership team of Endeavour and look forward to working with Neil and his team to create value for all shareholders through the execution of our extremely attractive organic growth pipeline including the Houndé and Ity CIL Projects and by taking advantage of the current market conditions to seize external growth opportunities in the region with the support of La Mancha and the Sawiris family as a new shareholder.”

Guinea Bissau: Cashew Nut Revolution Cushions Impact of Political Crisis

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n the morning of September 14, His Excellency Fidel Mañé Ncogo, Delegate Minister of Mines, Industry and Energy, appearing on behalf of the Minister, opened the Second Meeting of National Coordinators of EITI (Extractive Industries Transparency Initiative). The meeting is held September 14-15 in Malabo, Equatorial Guinea. This meeting is a continuation of a first gathering held last June in Yamoussoukro, Ivory Coast. The objective of these meetings is for African countries to find a common position

strategic goal is to create value with a long-term approach. The Endeavour board and management shares this objective and has a successful track record of building and acquiring assets in Africa. I have been particularly impressed by the success of the Endeavour team in building new mines. By combining our African assets and management skills we will grasp future opportunities to create a leading African gold producer.”

he record level of the cashew crop in Guinea Bissau this year softened the economic impact of the political crisis that the Portuguese-speaking country is currently experiencing. Indeed, the International Monetary Fund (IMF) stresses that, “up until now, there is no clue pointing to the fact that the latest developments of the political news have had a significant impact on the economy which was able to benefit from the effect of a record crop”, said a leader of the institution. According to Geraldo Martins, who was still minister of Finance last month, exports have reached 170,000

tons, beating the previous record set in 2011. This new performance comes in a context where the price levels for cashew are at their highest. “If the current political crisis is resolved within the next few weeks, its impact on the economy would be minimal”, he confided to Reuters. Guinea Bissau has been in turmoil since President José Mario Vaz dismissed Prime Minister Domingos Simoes Pereira and its entire government, creating a situation that the Economic Community of West African States (ECOWAS) qualified as “a threat to the achievements of the 2014 elections”.


Business Journal October 5-11, 2015

Diplomatic Zone www.businessjournalng.com

Letter from

Farai Sevenzo In our series of letters from African journalists, Film-maker and Columnist, Farai Sevenzo considers why the UN matters to Africa. f the 70th UN General Assembly had a face, it would not only be showing its age, but it would be covered in the cuts and bruises from unending wars, new coups and the perennial problems of poverty, hunger and the new open, weeping sores that are the movements of the desperate and despairing across oceans and borders. For African leaders, the UN in New York is the place to be seen and heard every September. They are there under the magical veil of diplomatic immunity, not only because their leadership is recognised but also because it allows those who are older than the General Assembly to attend, as well as those who have been ostracised by international opinion, those who have been targeted by the International Criminal Court, and those who wish to plead for special attention or show that they are tackling corruption. Small budgets are prepared from the national coffers for the delegates accompanying the Heads of State and first ladies fond of shopping; who mark the General Assembly dates in their diaries long in advance. This year’s gathering has even featured a rock star

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Pope, and the Catholics among Africa’s leadership may have wanted to touch that holy hand, though they may not have been so keen on confession.

Keeping the Peace?

Still, it does not help to be too cynical, for Africa needs the UN more than any other continent. A brief scan of the UN’s history will show us that while its predecessor, the League of Nations, threw South West Africa - present-day Namibia - from the frying pan of

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Why Africa Needs the United Nations “From rising prices, to lack of pasture for cattle to drought and floods - food and hunger remain the continent’s major worry” German occupation into the fire of apartheid jurisdiction; the UN has been largely present in tumultuous events in Africa these past 70 years. A UN Secretary General - Swedish Statesman, Dag Hammarskjold - lost his life in a plane crash in the Zambian town of Ndola in 1961 on his way to peace talks in the Congolese breakaway province of Katanga. Since then UN peacekeeping forces in Africa have been a regular and needed part of the continent’s story: 19,000 troops are currently serving in the Democratic Republic of Congo; 12,000 are trying to restore order to the Central African Republic, another 10,000 are deployed in Mali and the UN mission in Liberia is due to end in June 2016 - having been there since 2003.

Current UN Peace Missions in Africa

•Central African Republic: Launched 2014, 12,000 currently deployed - Minusca •Democratic Republic of Congo: Launched 1999, 19,000 deployed Monusco •Ivory Coast: Launched 2004, nearly 7,000 deployed - Unoci •Liberia: Launched 2003 - nearly 6,000 deployed- Unmil •Mali: Launched 2013, 10,000 deployed - Minusma •South Sudan: Launched 2011, 12,500 deployed Unmiss •Sudan: Hybrid mission in Darfur with Af-

rican Union launched 2008, nearly 16,000 deployed Unamid •Abyei - disputed territory between South Sudan and Sudan, 4,000 deployed - Unisfa •Western Sahara 200 deployed Minurso

Buhari addressing the UN General Assembly in New York The relationship between peacekeepers and Africa has been fraught with accusations of mineral theft and more seriously the sexual abuse of women and children by the international UN forces, but the security situation without them does not bear contemplation. In 2015, a look at the headlines shows us that from Libya downwards, violence prevails. It reveals that the fight for self-determination in South Sudan has resulted in increasing deaths after independence; Burkina Faso’s presidential guard has become addicted to power and that economies wrecked by Ebola cannot do without international assistance. World leaders have now agreed on the Sustainable Development Goals (SDGs), which replace the Millennium Goals, and feature many of the issues that the 20th Century grappled with.

But paramount amongst the 17 SDGs is the struggle to end hunger. “While the number of people suffering from hunger in developing regions has fallen by half since 1990, there are still close to 800 million people under-nourished worldwide, a majority children and youth,” said Mogens Lykketoft, President of the 70th session of the UN General Assembly. Of course hunger has not arrived unannounced, the state of the planet and the effects of global warming have been playing havoc with people’s crops all over southern Africa. Malawi, the UN World Food Programme (WFP) has warned, faces its worst food crisis in 10 years. The WFP says 2.8 million people are at risk and that an astonishing four out of every 10 Malawian children are suffering from stunted growth. Poor rainfall affected the crops in 2013/2014 and then floods com-

pounded the problem in early 2015 by destroying homes and wiping out food supplies. USAid’s Famine Early Warning System has also listed food shortages in Ethiopia and Somalia, as well as in Sierra Leone and Liberia following the outbreak of Ebola. From rising prices, to lack of pasture for cattle to drought and floods - food and hunger remain the continent’s major worry. Those attending the Sustainable Goals event spoke of its wide scope; UN Chief, Ban Ki-Moon said the new development blueprint was designed to “resonate with people across the world”, while UN Development Programme Head, Helen Clark said the goals called “for a paradigm shift in how the international society understands development”. Development, if truth be told, has sometimes been hampered by some of the very people who gather every September in the autumn sunshine. But it is their solemn duty - and ours - to try and develop ourselves. At its worst, the UN is a grey monolithic beast that is overstaffed with career diplomats and “angels of mercy” who run around African cities in their 4x4s on behalf of Western charities and their own ambitious career paths. But at its best, the UN is the last refuge for the powerless, the hungry and the needy. And Africa has far too many people in all three categories to do without it.


Business Journal October 5-11, 2015

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Sports

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Premier League: Transfer Window Proves Richest Ever at £870m

The summer transfer window was the richest in Premier League history as total spending for the calendar year reached £1bn for the first time.

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ummer outlay passed £870 million, 4% up on the record set last year. The biggest spenders, Manchester City, paid the two biggest fees, £55 million for Kevin De Bruyne from Wolfsburg and £49 million for Raheem Sterling from Liverpool. Manchester United’s £36 million signing of Monaco teenager Anthony Martial was the biggest deadline-day move. That fee could rise to £58 million with a number of incentive-based add-ons. Since the introduction of the transfer window system in 2002, gross transfer spending has exceeded £7.3 billion, with over 80% of this being spent in summer transfer windows, according to financial analysts Deloitte. Manchester City broke their club record twice this summer to bring De Bruyne and Sterling to Etihad Stadium as they became England’s highest gross spenders in a single window. Their total spend of approximately £160 million beat the near £150 million outlay of Manchester United in summer 2014, including deals

What happened on deadline day itself?

for Fabian Delph, Patrick Roberts and Nicolas Otamendi. The Premier League leaders were boosted this summer by having restrictions on their transfer spending lifted after meeting their Financial Fair Play target. City’s spending in 2014 was capped at £49 million and they were also fined £16.3 million for breach-

ing Uefa rules. The four Premier League clubs competing in this season’s Champions League - City, United, Chelsea and Arsenal - had a combined gross transfer spend of around £340 million, representing around 40% of the aggregate gross transfer spend by Premier League clubs. The signing of 19-year-old Mar-

tial, Everton’s £9.5 million capture of Argentine defender Ramiro Funes Mori and Papy Djilobodji’s £4 million arrival at Chelsea from Nantes helped the 2015 window overtake the £835 million set last year. Liverpool have used the Sterling money (and more) to sign seven players, with Christian Benteke (£32.5million), Roberto Firmino

Jordan Spieth: $22m Prize Money Breaks Golf Season Record

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ecord-breaker and history-maker, Jordan Spieth has reaped the rewards of becoming golf ’s new superstar this year -- and now the American is planning to share his riches. His spectacular season culminated in landing an $11.5 million jackpot, when he regained the world No. 1 ranking by winning the PGA Tour’s FedEx Cup finale. Spieth’s four-stroke victory at the Tour Championship clinched the $10 million prize for winning the four-tournament series, and took his total earnings for 2015 past $22 million. It surpassed the record of $20.9 million set by Tiger Woods in 2007. “For me, it’s important to give it back to not only the people that need it, but also to our team who made it possible,” the 22-year-old told CNN. “This is a bonus that isn’t just for me, I promise you that. “This is going to a lot of various places because this season was magical and there was a lot of behind the scenes work done by a lot of people, and I want to be able to share that with them.”

(£29 million) and Nathaniel Clyne (£12million) the most expensive. Manchester United have also been busy, spending £139 million to bring in Martial, Memphis Depay, Matteo Darmian, Bastian Schweinsteiger and Morgan Schneiderlin, while Chelsea left it late in the window to conduct their serious business, signing Pedro, Baba Rahman and Djilobodji. Newly promoted Watford have been the busiest club, signing 15 players.

With Australian Jason Day failing to finish in the top five, Spieth took the PGA Championship winner’s place at the top of the rankings. The Texan was able to celebrate his incredible weekend of success with his whole family and says it was made all the more special by the presence of his autistic sister Ellie, who missed out on his previous wins. “It was really cool, it was great. When she came out I didn’t even see her,” he said. “I wasn’t expecting it, she just kind of ran into me and gave me a hug. It was awesome. “It was special to have everybody here, it was just like the Masters except that Ellie was added in too. “I owe everything to my family. They’re my inspiration, they’re the ones who put in the sacrifice to allow me to be here so I’m able to now celebrate with them and it’s going to be fun.” Spieth’s season started with victories in the opening two majors -- the U.S. Open and the Masters -- and he fell just short of becoming the first player since Ben Hogan in 1953 to win the opening three when he missed out on a playoff at the

Jordan Spieth, 2015 FedExCup Champ British Open by one shot. He then tied for second at the PGA Championship, but missed the cut in the opening two FedEx Cup playoff events before bouncing back when it most mattered at East Lake.

The Atlanta venue was the home course of golf legend Bobby Jones, the only man to win a calendar grand slam -- in 1930, when two of the majors were amateur championships. “It’s amazing. It’s almost like a

•Premier League clubs spent approximately £90m on deadline day, £5m more than last summer. •Manchester United’s £36 million signing of Martial made the 19-year-old the world’s most expensive teenager, with the fee potentially rising to £58 million. He becomes United’s third most expensive signing after Angel Di Maria (£59.7million) and Juan Mata (£37.1million). •Other big-money signings on deadline day included Argentina defender Ramiro Funes Mori joining Everton from River Plate for £9.5m and Virgil van Dijk moving to Southampton from Celtic for £11.5 million. •West Brom turned down a fourth bid for Saido Berahino , causing the striker to hint that he would never play for the Baggies again.

major championship,” Spieth said of the elite 30-player event. “What an unbelievable venue this is, the scene of a lot of Bobby Jones’ history. “It’s cool to come back here and attack this golf course and play it the right way. I didn’t make it easy on myself but all in all that last walk up 18 was pretty fun.” Spieth has been widely dubbed “the new Tiger Woods” -- and he is now the second-youngest golfer behind the 14-time major winner to win both the PGA of America Player of the Year award and the Vardon Trophy for lowest scoring average in the same year. Day was runner-up in both categories. Woods, meanwhile, won his first such double at the age of 21 in 1997. The PGA of America award is determined by a points system, as opposed to the PGA Tour Player of the Year Award -- which is determined by a vote of the organisation’s members. Spieth is nominated for the latter prize along with Day, former No. 1 Rory McIlroy and Players Championship winner Rickie Fowler. •Spieth earns $22 million in one season •Sunday’s double triumph earned him $11.5M •Eclipses previous record, regains No. 1 ranking •Spieth also wins two PGA of America awards


Business Journal October 5-11, 2015

Automobile

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Volkswagen to Refit 11m Vehicles Affected by Emissions Scandal

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olkswagen Group signaled that it will recall up to 11 million vehicles globally as it tries to address the scandal over its admission that it cheated U.S. diesel emissions tests. New CEO Matthias Mueller said the automaker had drawn up a “comprehensive” refit plan to be submitted to regulators aimed at ensuring its diesel models complied with emissions standards. VW will ask customers “in the next few days” to have diesel models equipped with manipulated software refitted and brief authorities on technical fixes in October, Mueller told a closed-door gathering of about 1,000 top managers at the company’s Wolfsburg headquarters in Germany.

The recall will affect models fitted with group’s Euro 5 EA 189 diesel engines. VW is under huge pressure to tackle the biggest business-related crisis in its 78-year history. Germany’s KBA regulator had set an October 7 deadline for it to present a plan to bring diesel emissions into line with the law. Volkswagen has said previously about 11 million vehicles were fitted with software capable of cheating emissions tests, including 5 million at its namesake brand, 2.1 million at luxury brand Audi, 1.2 million at Czech division Skoda and 1.8 million light commercial vehicles. “We are facing a long trudge and a lot of hard work,” Mueller said in the speech. “We will only be able to make progress in steps and there will be setbacks.”

Separately, Mueller said VW Group’s troubled core VW division, struggling with high fixed costs and low profit margins, would in future be able to act as independently as luxury brands Audi and Porsche. “The new company structure is a first step and the basis for a modernisation of VW, for a new a n d better comp a ny,” he said.

Breaking Down the Rumors: Is Apple Really Building a Car?

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Daniel Howle

pple is building a car, and it’s going to revolutionise the automotive world. Or it’s not building anything, in which case: Move along, folks, there’s nothing to see here. The rumors surrounding Apple’s alleged expansion into the auto industry with its own car, codenamed Project Titan, have been percolating for years. And with a recent report that Apple will have its car ready by 2019, those rumors are gaining more steam than ever. Of course, given that this is Apple, we won’t know for certain the company’s doing a car until said vehicle actually rolls onto a stage in Cupertino. But, still, we have clues. Here are the latest and most credible rumors, reports, whispers, and tidbits. Apple to Deliver Car by 2019 The most recent rumor about a potential Apple Car comes by way of the venerable (if not 100% reliable) Wall Street Journal, which reports that Apple wants to ship its own car by 2019. That’s just four years from now, and that timeframe sounds incredibly ambitious. Still, it could be doable, as The Journal says that Apple has tripled the number of people working on its automotive initiative from 600 to a whopping 1,800.

It Will be Self-driving In addition to hiring away employees from battery makers, Apple has reportedly been busy luring autonomous driving experts from a variety of companies. The Daily Mail reports that Apple has hired people from Tesla’s self-driving program, as well as from Ford, Volkswagen and BMW. Further fueling the rumors that Apple’s car will be autonomous is a report from The Guardian, which says that Apple’s Senior Legal Counsel, Mike Maletic, met with several officials with the California Department of Motor Vehicle including the department’s self-driving car experts. Apple’s Car Will be Electric Of course, to build a car from the ground up in less than five years requires experience and expertise. So Apple has reportedly been poaching employees from a variety of automotive technology companies to fill its ranks. One company Apple is alleged to have hired away employees from is Massachusetts-based battery maker A123 Systems. According to a lawsuit filed by the company against Apple, the tech giant ran an “aggressive campaign to poach” A123 Systems’ employees, Bloomberg Business reported. Bloomberg adds that Apple has also hired experts from companies including Samsung, LG Chem, and Panasonic.


October 5-11, 2015

Millions of people are left behind. Most of them are women and our young people. They do not feel the impact of economic growth in their lives. Our collective challenge is to drive inclusive growth – growth that will lift millions out of poverty. Africa can no longer be content with simply managing poverty. Dr. Akinwumi A. Adesina President African Development Bank Group

Still on Entrepreneurship! ‘ ‘

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n the past three editions, l dwelt on the topic of entrepreneurship because readers kept asking for more. In this edition however, l consider it pertinent to showcase real-life successful entrepreneurial CASE STUDY-away from all the grammar! A case of practical example-indeed.

Konosuke Matsushita: The $73 Billion Story! In 1917 in Japan, a 23-year-old apprentice (Konosuke Matsushita) worked at the Osoka Electric Light Company without any form of formal education. He came up with an improved light socket system but his boss dismissed the device as amateurish. Undaunted, young Matsushita stuck to his guns, and began making samples at the basement of his home. Later, he expanded his invention streak to battery-powered bicycle lamps and other similar electronic devices. What eventually came out of his curiosity and untiring effort was Matsushita Electric Company, which later changed its corporate identity to Panasonic in 2008. Today, Panasonic generated revenue of over $73.46 billion as at March 31, 2015. Humble Beginnings Konosuke Matsushita was born into a well-off landowning family in 1894. A decline in the family’s fortunes during his childhood meant that Matsushita’s education was cut short. At age 9 he became a brazier’s apprentice, then a year later a bicycle shop apprentice. He stayed five years at the bicycle shop, picking up basic metalworking skills. At age 16, he went to work in the Osaka Electric Light Company. Inventor and Entrepreneur Konosuke Matsushita began the Panasonic’s journey by inventing a two-socket light fixture. This very important, yet elegantly simple, breakthrough led to what is now one of the world’s largest electronics companies. Since its founding in 1918, Panasonic Corporation grew to become the largest Japanese electronics producer. One of the traits that followed Matsushita throughout his career was a willingness to take risks. When Konosuke Matsushita began working for himself, in 1918, at the age of 23, he had almost nothing: no money, no real formal education, no connections. Yet, his small firm Matsushita Electric Appliance Factory flourished under the guiding hand of a clever, wise, and inspired entrepre-

Konosuke Matsushita (1894 – 1989) Founder of Panasonic Corporation (formerly known as Matsushita Electric Industrial Co.)

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The main purpose of production is to manufacture items of good quality for daily use in abundant supply, thereby enhancing and improving the life for everyone and it is this goal that I am dedicated.” – Konosuke Matsushita neur. In the late 1980s, Matsushita’s revenues hit a whopping $42 billion. With nearly 20,000 employees, Matsushita grew such household brand names as National, Panasonic and Technics. Matsushita’s success has made him Japan’s biggest yen billionaire. He has also made himself the most widely admired businessman in Japan. Matsushita Basic Business Philosophy The Matsushita Basic Business Philosophy consists of three elements. 1. Basic Management Objective – expresses the corporate goals of the company: “ Recognising our responsibilities as industrialist, we will devote ourselves to the progress and development of society and the well being of people through our business activities, thereby enhancing the quality of life throughout the world.” 2. Company Creed – expresses the basic attitude of employees to their daily work: “ Progress and development can only be realized through the combined efforts and cooperation of each employee of our company. United in spir-

it, we pledge to perform our corporate duties with dedication, diligence and integrity.” 3. The Seven Principles – set the standard for the employees’ proper mental attitude for their daily work: Contribution to society; Fairness and Honesty; Cooperation and Team Spirit; Untiring Effort for Improvement; Courtesy and Humility; Adaptability; Gratitude. Paternal Management Philosophy Matsushita believed that a company should create wealth for society as well as for shareholders, and should always work to alleviate poverty. His business philosophy led to the Japanese “paternal management” tradition, whereby employees are viewed as being part of a “family” within the

company, and are assured of lifetime employment, without fear of layoffs. Devising a New Management System In 1933, Matsushita devised a new management system, dividing the company into three autonomous business units: radios, lighting & batteries, and synthetic resins/electro-thermal products. Enriching the Society To Matsushita, his mission of manufacture was to overcome poverty, to relieve society as a whole from misery, and bring in wealth. Business and production, to Matsushita, were not meant to enrich only the business owners, investors, employees or shops, but all the rest of the society as well. Matsushita never talked narrowly about maximizing shareholder value as the proper goal of an enterprise. Although he did speak often about generating wealth, he emphasized the psychological and spiritual aspects of being – for the good of all people. “Big idealistic / humanistic goals and beliefs are not incompatible with success in business. They may even foster achievement, at least in a rapidly changing context, by supporting those habits, which encourage growth,” Matsushita said. 7 Core Principles of Panasonic Management Philosophy Panasonic’s standards are still firmly grounded in the philosophy of the company founder. The Seven Core Principles of Panasonic were established by Konosuke Matsushita back in the 1930s. These principles, which are also called the seven objectives, comprise the foundation of Panasonic’s man-

agement philosophy. Matsushita’s powerful ideas are about the roots of life-long learning. One can, he often told people, learn from any experience, and at any age. With ideals that are big and humanistic, Matsushita emphasized, one could conquer success and failure, learn from both, and continue to grow. “In a changing environment, lifelong learning maybe more related to great success or unusual achievements than IQ, parental socio-economic status, charisma, and formal education… Life-long learning is closely associated with humility, an open mind, a willingness to take risks, a capacity to listen, and honest self-reflection,” Matsushita said. One piece of advice Konosuke Matsushita gave to his employees in the early days of the company was: You may be a well-educated, clever and virtuous person, but those qualities will not necessarily make you a successful businessman. In addition, you must acquire the knack for business. This is to be done “by giving your best to each and every task you take on, and by reflecting on your performance with an honest and unprejudiced eye. If you do this constantly, day after day, eventually you will be able to do your job unerringly.” In other words, you acquire the secret to business success gradually by applying yourself with conscious effort from day to day. Courtesy: www.1000ventures.com


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