Business journal newspaper edition 12 by BusinessJournalNG

1bn Women Worldwide Lack Access to Financial System •

$300bn Financing Gap Between Men & Women

inancial exclusion remains a major constraint for women, particularly in developing countries. More than one billion wom-

en still do not use or have access to the financial system, according to the World Bank Group’s latest Global Findex Report. IFC has estimated that worldwide,

a $300 billion gap in financing exists for formal, women-owned small businesses, and more than 70 percent of women-owned small and medium enterprises have inadequate or no access

to financial services. Furthermore, developing economies have 200 million more male than female cell phone owners. Without access

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Oil Prices Driving Lower Growth in Sub-Saharan Africa

atest report by the World Bank Group suggests that low oil prices have considerably reduced growth in commodity-exporting countries in Sub-Saharan Africa, especially in Nigeria and Angola etc. and have also slowed activity in non-oil sectors. The report says that although South Africa is expected to be one of the main beneficiaries of low oil prices, growth is being held back by energy shortages, weak investor confidence amid policy uncertainty, and by the anticipated gradual tightening

of monetary and fiscal policy. Growth in the region is forecast to slow to 4.2 percent, slower than previously expected. “This mainly reflects a reassessment of prospects in Nigeria and Angola following the sharp drop in oil prices, and in South Africa, because of on-going difficulties in electricity supply. For 2016-17, growth is expected to be only marginally higher as these challenges partially offset stronger trading partner growth and the continued expansion in the region’s low-income countries.” The World Bank said developing

countries face a series of tough challenges in 2015, including the looming prospect of higher borrowing costs as they adapt to a new era of low prices for oil and other key commodities, resulting in a fourth consecutive year of disappointing economic growth this year, says the World Bank Group’s latest Global Economic Prospects (GEP) report. As a result, developing countries are now projected to grow by 4.4 percent this year, with a likely rise to 5.2 percent in 2016, and 5.4 percent in 2017. “After four years of disappointing

performance, growth in developing countries is still struggling to gain momentum,” said Franziska Ohnsorge, Lead Author of the report. “Despite auspicious financing conditions, a protracted slowdown has been underway in many developing countries, driven by shortages in agriculture, power, transport, infrastructure, and other vital economic services. This makes the case for structural reforms all the more urgent.” “Developing countries were an engine of global growth following the financial crisis, but now they face

West Africa Needs Advanced Mobile Infrastructure, says IBM Nigeria Boss

CBN Defends Forex Ban Policy

12

07

‘Use N5trn Pension Fund to Bridge Housing Deficit’

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a more difficult economic environment,” said World Bank Group President Jim Yong Kim. “We’ll do all we can to help lowand middle-income countries become more resilient so that they can manage this transition as securely as possible. We believe that countries that invest in people’s education and health, improve the business environment, and create jobs through upgrades in infrastructure will emerge much stronger in the years ahead. These kinds of investments will help hundreds of millions of people lift themselves out of poverty.”

L-R: Managing Director, Euromoney, John Orchard; Group Treasurer, Access Bank Plc, Dapo Olagunju; Group Managing Director/CEO, Access Bank Plc, Herbert Wigwe and Editor, Euromoney, Clive Horwood at the Euromoney Awards for Excellence 2015 held at the Natural History Museum in London, UK where Access Bank Plc won the Best Flow House in Africa Award

Global Perspectives on Capital Market Integration

Marriot, Radisson Blu Lead New Hotel Developments in Africa

20 26

Business Journal July 13 - 19, 2015

News

www.businessjournalng.com

1bn Women Worldwide Lack Access

NSE Unveils Pension 40 Index for Market Optimisation

he Nigerian Stock Exchange (NSE) is pleased to announce the creation of NSE Pension 40 Index as part of key initiatives to drive market optimisation. The NSE Pension Index conforms with the requirements of the Pension industry as specified in the Pension Reform Act 2014 (as amended) and Regulation on Investment of Pension Fund Assets as prepared and amended by the National Pension Commission. The new index provides tracking mechanism for PFAs, CPFA, Fund Managers and others that Invest in accordance with the PENCOM guidelines. It can also act as a benchmark for measuring performance and reporting performance to Retirement Savings Account (RSA) holders. Commenting on the new Index, Mr. Haruna Jalo-Waziri, Executive Director, Business Development, NSE, said: "Investors want a diversified way of measuring

Continued from PAGE 2 to mobile technology, millions of women are further excluded from secure and convenient digital payment systems. Without access to finance, women face difficulties in collecting and saving income, growing their businesses, and pulling their families out of poverty. As a result, women remain largely excluded from the formal economy. IFC recognises that the Bank Group’s twin goals of eradicating extreme poverty and increasing shared prosperity cannot be achieved without the full and equal participation of women and men. Investing in women’s economic participation not only has a profound development impact, it makes good business sense for companies and economies.

market movements which has a wider coverage of companies as is the global practices. The NSE Pension Index will provide investors with additional tool to make the most of Nigeria's market. It will also encourage the development of other products such as Exchange Traded Products (ETP’s) and Index Futures in the Exchange." The NSE Pension Index will have the top 40 companies based on market capitalisation and liquidity. In addition, companies to be included must have Free Float Factor of at least five percent. The NSE Pension Index is a Total Return Index. Consequently, normal dividend payments will be reinvested and accounted for in the Total Return Index by a Divisor Adjustment. Similarly, special dividends from non-operating income require index divisor adjustments to prevent the distributions from distorting the index (same with price index). The NSE Pension Index con-

stituents would be reviewed, re-balanced, re-weighted and changed once in a year on the first business day in January whereby constituents are changed (added or deleted) based on their market capitalisation, liquidity in the previous twelve months and Free Float Factor. The Nigerian bourse began publishing The NSE 30 Index in February 2009 with index values available from January 1, 2007. On July 1, 2008, the NSE developed four sectoral indices with a base value of 1,000 points, designed to provide investable benchmarks to capture the performance of specific sectors. The sectoral indices comprise the top 10 most capitalised and liquid companies in the Banking, Insurance and Food/Beverage & Tobacco (now Consumer Goods) sectors and the top five most capitalised and liquid companies in the Oil & Gas (Petroleum Marketing) sector.

Nestle Central, West Africa to Strengthen Healthy Kids Programme

L-R: Divisional Head (Transaction Banking) Rob Giles, CEO, Uzoma Dozie, Head of Cards Services, Joachim Iloemezue, all of Diamond Bank, at the 2015 Card Expo exhibition in Lagos, recently.

IMF Cuts Global Growth Forecast for 2015

he International Monetary Fund has cut its forecast for global growth this year, as a result of a slowdown in the US economy. The IMF now says the global economy will expand by 3.3% in 2015, compared with a previous forecast of 3.5%. Last month, the IMF lowered is forecast for US growth to 2.5% in 2015 from an earlier estimate

of 3.1%. The US is a drag on the world economy, according to the IMF, because of "an unexpected output contraction." The US economy contracted at an annual rate of 0.2% in the first quarter of the year after being hit by bad weather. The IMF said Greece's crisis was having a only a marginal effect on the global economy and it left its euro-zone growth

forecast for 2015 unchanged at 1.5%. It predicted Germany would grow by 1.6% and France by 1.2%, also unchanged from the previous forecast. The IMF has left its forecast for growth in China unchanged at 6.8%, despite the recent stock market volatility. "The bubble has burst," Olivier Blanchard, Director of the Research Department at the

IMF, said of the Chinese stock market's wild swings. But he did not say that China's stock market volatility would drag down the global economy. The IMF also cited Greece's debt crisis as a continuing risk to the global economy, but said the events in China and Greece "have not changed the broad outlook picture for the global economy". In 2016, the IMF expects global growth to strengthen to 3.8%.

n the 3rd of July, Nestlé Central and West Africa (CWAR) held a workshop with the partners of its Healthy Kids programme to share best practices and discuss how to strengthen and scale up the initiative in the region. Nestlé seeks to promote healthy eating and active lifestyles to help children achieve and maintain a healthy body weight into adulthood. The Nestlé Healthy Kids programme forms an integral part of the company’s commitment to help children develop positive habits that will last a lifetime. In Central and West Africa, the initiative has already benefitted more than 75,000 school-aged children in Burkina Faso, Cameroon, Côte d’Ivoire, Ghana, Nigeria, and Senegal. The programme is developed and implemented in partnership with Ministries of Education, Health, universities or non-governmental organisations and tailored to local health and nutritional needs. “At Nestlé, we are convinced that for a company to be able to operate over the long term,

it needs to create value for the communities where it operates”, said Kais Marzouki, Market Head of Nestlé CWAR in his welcome address. “This is particularly true in our region where Nestlé cannot thrive without a healthy population. The Healthy Kids programme is part of our response to the malnutrition issues facing the countries in Central and West Africa”, he added. Nestlé and its partners discussed how to build sustainable and impactful programmes that contribute to the health of local schools and their surrounding communities. Topics addressed included developing scientific and evidence-based monitoring & evaluation; addressing teachers’ needs and teaching methods and moving beyond the classroom to engage the whole community. In 2014, there were 77 Healthy Kids Programmes taking place around the world, with 294 partners, including NGOs, nutrition institutes, national sport federations and local governments.

Business Journal July 13 - 19, 2015

Business Events www.businessjournalng.com www.businessjournal.com.ng

L – R Picture show the Special Guest of Honour, Nigeria Maritime Expo (NIMAREX) 2015), Admiral S.O Afolayan (Rtd); Member, NIMAREX, Chief (Dr.) Isaac M. Jolapamo; Chairman of NIMAREX, Barrister Margaret Orakwusi and Executive Director, Business Development, The Nigerian Stock Exchange, Mr. Haruna Jalo-Waziri at the NIMAREX 2015 exhibition in Lagos.

L-r: Executive Director, Access Bank Plc, Victor Etuokwu; Executive Vice President, Business Development and Global Product, Moneygram, Alexander Hoffmann; Regional Manager, Anglophone West Africa, Moneygram, Kemi Okusanya and Vice President, Africa, Moneygram, Herve Chomel, during the inauguration of ‘MoneyGram Send’ services at Access Bank in Lagos.

L-r: Chairman, Nigerian Institute of Public Relations (NIPR), Lagos State Chapter, Mr Joseph Okonmah (left); Chairman 26th AGM Planning Committee, Olusegun McMedal; Ag Registrar NIPR, Pastor Joseph Yemi Adeniran, and Secretary, NIPR, Lagos, Thelma Okoh, at the preAGM/Public Relation Week press briefing of the NIPR, Lagos Chapter.

L-r: The Publisher of TW Magazine, Mrs. Adesuwa Onyenokwe; Senator Chris Anyanwu; Honourable Abike Dabiri-Erewa; Group Head, Corporate Communications & CSR of First City Monument Bank (FCMB) Limited, Mrs. Uchenna Mojekwu and the convener of Women in Journalism Conference, Mr. Yomi Owope, during at a conference in Lagos.

L-R: Relationship Manager, International Remittances, Personal & Business Banking (PBB), Stanbic IBTC Bank, Mr. Olumuyiwa Akintolu; Head, Franchise Collections, PBB, Stanbic IBTC Bank, Mr. Solomon Olufemi; promo winners, Mr. Yinka Fagbohun and Mrs. Maureen Okonkwo and Assistant Marketing Manager, Western Union, West Africa, Mr. Ebere Nwaolikpe, at the prize presentation ceremony of the Western Union 20th anniversary promo in Lagos

L-r: Director, Sales and Strategy, Infrastructure Business Division, Inlaks, Mr. Precious Osegi; Regional and Country Director, Temenos, Suleiman Shaibu; Board Member, Keystone Bank, Mrs. Teju Phillips; Managing Director, Africa Operations, Inlaks, Mr. Femi Adeoti; and Regional and Country Director, Global Solutions Limited, Mr. Olufemi Muraino, during the Annual Temenos community forum at Istanbul in Turkey... recently

L-r: Regional Bank Head, Imo & Abia Regional Bank, Fidelity Bank Plc., Charles Okoro; Executive Director, South, Fidelity Bank Plc.,Aku Odinkemelu, Abia State Governor, Dr. Okezie Ikpeazu, and Managing Director/CEO, Fidelity Bank Plc, Nnamdi Okonkwo when Fidelity Bank management paid a courtesy call on the Governor in Umuahia, Abia State.

L-r: Head Corporate Marketing, Samsung Electronics West Africa, Mr. Koye Sowemimo; Overall Best Graduating Student, Samsung Engineering Academy Class of 2014, Sunday Oyelami; Head, Lagos Eko Secondary School Education Project, Mrs Folasade Fasehun and Managing Director, Samsung Electronics West Africa, Mr. Brovo Kim at the Samsung Engineering Academy graduation ceremony in Lagos.

Business Journal July 13 - 19, 2015

Editorial www.businessjournalng.com

The N714bn Bailout:

Matters Arising

t was good news the other morning when news filtered out that the federal government has graciously given cash-strapped states a bailout of approximately N714 billion to settle outstanding salaries and other forms of wages to workers in their states. To the workers, it was probably the best news of the year 2015, given that some that had fallen into arrears for upwards

of seven to nine months. To ordinary Nigerians not directly affected by the salary crisis in the affected states, the bailout represents a moment of relief from the plight of the workers. For the state governments, the bailout is only a temporary measure to relieve them of the scandalous inability to meet their obligations to workers in the states. It is important for state governments to look inwards

Business Journal Newspaper is published weekly by Egelon Communication Company. Suite B2, Glory Shopping Complex, 229, Ikotun-Idimu Road, Council Bus-Stop, Idimu, Lagos. Phone: 08023088874, 07058919138. Email: business.journal@yahoo.com. Publisher/Editor-in-Chief: PRINCE COOKEY.

to know why they fell into the arrears in the first instance. A lot has been said about the negative impact of the 2015 general elections in terms of funding of the campaigns of political parties, which according to media reports, amounted to billions, if not trillions of Naira. The alleged expenses on the part of the state governments were said to have contributed to their perilous financial status, leading to non-payment of salaries and

finally, the bailout from the federal government. Our position going forward is that state governors should take the welfare of their people into consideration before embarking on any type of financial jamboree that does not generate income for the state. There is need for state executives to respect public funds at their disposal for the simple that it is public funds that must be spent solely on public interest.

Publisher/Editor-in-Chief Prince Cookey 08023088874 07058919138 prince.cookey@yahoo.com

PH Bureau Darlington Igbokwe

Lagos Bureau Abraham Adewole

Head of Marketing/Advert Elvis Ebigwu

Snr. Correspondent Blessing Ikeme

Digital Consultant Bamidele Owotoke.

Abuja Bureau Chris Onwuka

Design Consultant Kelechi Okoro

Kaduna Bureau Haruna Mohammed

Logistics Consultant Godspower Cookey

Aba Bureau Larry Akunne

Finally, we want to commend President Muhammadu Buhari for lending a helping hand to the states to enable them to settle outstanding salaries. We also encourage him to put pressure on state governors to re-assess their priorities and place public funds at the disposal of the people. For now, we welcome the bailout and hope that the nation will not be compelled to grant another bailout in the foreseeable future.

Secretary/Admin Latifat Adedayo Body of Analysts Haniel Ukpaukure Chris Okeke Ola Gam-Ikon Ademola Akinbola Muideen Ibrahim Ayo Adekunle Board of Editorial Advisers Dr. Justus Uranta Engr. Titi Omo-Ettu Mr. Chike Mokwunye Mr. Chris Uwaje Mr. Gbolahan Olutayo Akin Ogunbiyi

Business Journal July 13 - 19, 2015

Banking & Finance www.businessjournalng.com

Development Banks Adopt Common Approach on Climate Finance

he world’s leading development finance institutions have taken an important step forward in tracking more consistently the flows of finance that help countries and people deal with the effects of climate change. The six large multilateral development banks (MDBs) and the International Development Finance Club (IDFC), a network of national, regional and international development banks, have agreed on a common set of principles to track financial commitments that help countries prepare for and build resilience to the impacts of climate change. The ability to track systematically the flows of finance that support climate adaptation makes an important contribution to helping societies deal more effectively with the negative effects of climate change Labelled, the Common Principles for Climate Change Adaptation Finance Tracking, the initiative builds on a similar agreement earlier this year to define and track mitigation finance, the funding aimed at combatting climate change. By increasing transparency of climate finance flows, the agreement on the two common principles for tracking climate finance will help to build confidence that money is flowing to

help deal with this major global challenge. It is an important signal ahead of this year’s COP21 conference in Paris that aims to deliver a global agreement on climate. The multilateral banks include the African Development Bank (AfDB), the

Asian Development Bank (ADB), the European Bank for Reconstruction and Development (EBRD), the European Investment Bank (EIB), the Inter-American Development Bank (IDB) and the World Bank Group. “This represents a significant milestone in global climate action.

It brings development finance institutions together on how we track finance flowing to countries, as they adapt to the impacts of climate change. The agreement paves the way for greater transparency in financial flows and hopefully will help underpin greater commitment in Paris,” said World Bank Group Vice President and Special Envoy for Climate Change, Rachel Kyte. ”This worldwide cooperation between national and international financial institutions brings a unique value to address the development needs of vulnerable countries” – International Development Finance Club. The document is aimed at achieving a common understanding of what to count as climate adaptation finance. Knowing how the money is flowing is critical for reaching areas of opportunity and need, because what gets measured gets managed. Last month, the MDBs said that they had delivered US$ 5 billion in financing last year to help developing countries and emerging economies adapt to the challenges of climate change. Similarly, IDFC members reported in their last green finance mapping report a contribution of US$ 15.8 billion to adaptation projects in developing countries in 2013. Nonetheless, IDFC and MDBs agree that increased support for more cli-

mate resilient infrastructure, natural ecosystem and other adaptation measures is urgently needed. According to the newly agreed common principles document, “the MDBs and IDFC are fully committed to promoting and supporting climate resilient development as an essential element of the sustainability of their investments.” They plan to do this, the document says “by integrating climate resilience and adaption into their investments, operations and initiatives.” The purpose of the principles is to set out an agreed approach for tracking adaptation finance. The principles are voluntary and set common definitions and guidelines. The implementation, reporting and quality control are each institution’s responsibility. In addition, IDFC and MDBs have committed to further develop their cooperation in the future and will continue to share practices and knowledge on climate finance. About the International Development Finance Club: The 22 Members of the International Development Finance Club (IDFC) share a similar background and vision regarding the promotion of low carbon climate resilient development pathways. IDFC unites global expertise and innovation with in-depth local knowhow and total assets of more than 2.1 trillion USD.

World Bank Report: China Adjusting to Slower Economic Growth

rowth in China is expected to decelerate to 7.1 percent in 2015 and 6.9 percent by 2017, reflecting a growth trajectory that is slower but more balanced and sustainable – a “new normal” for the world’s second-largest economy, according to the World Bank’s China Economic Update released recently. “In the short run, the slowdown in China’s economy growth means the government is making inroads with structural adjustments and policy efforts to address financial vulnerabilities. Over the medium term, these efforts are helping China gradually shift its growth model from manufacturing to services, from investment to consumption, and from exports to domestic spending,” said Karlis Smits, Senior Economist and main author of the report. How did the Chinese economy perform recently? What are the prospects for it? Karlis Smits, World Bank Senior Economist based in Beijing, provides an update. The government’s polices to slow rapid credit growth, contain shadow banking and limit borrowing by local governments have led to slower investment growth in areas such as real estate, the report says. To prevent growth from slowing down too much, China also announced a series of limited, targeted stimulus measures,

according to the report, a regular assessment of China’s economy. “In 2015, it remains a priority for China to balance reforms and shortterm growth, because large-scale, broad-based stimulus measures aimed at supporting growth may conflict with efforts to make the economy more sustainable in the medium run," said Chorching Goh, Lead Economist for China. China’s economic structure is slowly changing. On the one hand, economic activity remains constrained by overcapacity in heavy industries, decelerating export growth and regulatory tightening on nontraditional lending. The real estate market remains weak, with excess inventory and, in most cities, softening property prices. On the other hand, growth in services stayed robust, especially in advanced services such as banking and insurance. And in most recent years, consumption has grown slightly faster than investment. To keep the economy on the right track, the report recommends, for example, a better allocation of credit, which in turn requires financial sector reforms. The investment-driven growth model helped China’s economy take off, but reforms are needed to enable the financial system to support sectors that can maintain reasonable growth over the medium-term.

Group Managing Director/CEO, UBA Plc, Mr. Phillips Oduoza (middle), flanked by Divisional Head, IT Project Management, Mr. Lanre Bamisebi (l), and Director, Information Technology, UBA Plc, Mr Rasheed Adegoke during the press launch of the Bank’s simplified solution for Biometric Verification Numbers (BVN) registration, in Lagos.

Access Bank Wins Euromoney Award as Best Flow

ccess Bank Plc has emerged winner of the Best Flow House in Africa in the Euromoney Awards for Excellence 2015, which held at the Natural History Museum in London on last Thursday. It is the first time an African Bank will be recognised as winner of this highly sought award. Access Bank's win comes in recognition of the Bank’s increasing transaction flows across Africa, particularly its dominance in the Nigerian financial markets According to Euromoney, the Best

Flow House award is given to honour firms that have demonstrated an ability to excel across the region in the key areas of foreign exchange, equities, rates and credit. The winning firm must also have shown commitment to providing liquidity and pricing in all market conditions. Also, such firm will have shown leadership in developing and integrating technology into its sales and trading businesses, as well as the importance of research. Speaking at the presentation ceremony, the Group Managing Director of Access Bank Plc, Mr. Herbert Wig-

we said: “We are delighted to be presented with this highly coveted award. This is recognition of our regional expertise; and our continuing ability to provide customised currency and fixed income solutions to our customers across Africa. This award is an attestation of the Bank’s determination to be the world’s most respected African bank by 2018.” Wigwe assured that the Bank will sustain this growth momentumwhile noting that the award is an honour not only for Access Bank, but for Nigeria. “This is just the beginning of

Business Journal July 13 - 19, 2015

Banking & Finance

7 Barclays Sacks CEO Antony Jenkins in Row over Strategy

A L-R: General Manager, NICON Insurance Limited, Mr. Steve Elue Ajudua; President, Nigerian Council of Registered Insurance Brokers (NCRIB), Mr. Ayodapo Shoderu in handshake with Managing Director/CEO, NICON Insurance, Mr. Bayode Samuel during a courtesy visit of NICON Management Team to NCRIB Secretariat

Swiss Banks Agree US Tax Evasion Deal

wo more Swiss banks have agreed deals with the US Justice Department over tax evasion by Americans. Banque Pasche will pay $7.22 billion and Arvest Privatbank $1.04 billion in penalties under a deal that means they will not face criminal charges. Fifteen Swiss banks have already cut deals with the department under a voluntary programme in which they could report suspected tax evasion. More deals are likely as about 100

banks have signed up to the programme. The Justice Department said that Banque Pasche, which has operations in Monaco and the Bahamas, helped US taxpayers evade taxes relating to 186 accounts from August 2008 to August 2013. Since August 2008, Arvest Privatbank has had 52 US-related accounts which the department felt were used to dodge taxes. The Justice Department and Inland Revenue Service (IRS) said information

provided by the two banks would help in future investigations. "Today's agreements are significant both individually and in conjunction with the previous Swiss bank programme agreements," said Richard Weber, of IRS Criminal Investigation. "Individually, each bank agreement provides additional information to the IRS to assist us in going after illegally concealed offshore accounts and the financial professionals who helped US taxpayers hide assets abroad," he said.

ntony Jenkins, the Chief Executive of Barclays, has been fired after falling out with the Board over the bank's cost cutting and profitability. Board members are believed to have wanted bigger cost cuts and more focus on the investment bank's performance. Chairman, John McFarlane said the bank needed to become more efficient: "What we need is profit improvement. Barclays is not efficient. We are cumbersome." In a statement, Barclays said a "new set of skills" was required at the top. Jenkins has been Barclays' chief executive since 2012. The bank said a search for his successor was under way. Barclays' chairman, John McFarlane has been named Executive Chairman until a new chief executive is appointed. In a conference call, McFarlane said the Board had decided the firm needed to change its strategy in order to boost revenue growth. Barclays needs to be "leaner and more agile" to improve the firm's capital performance, he said. Investors welcomed the news of the change, sending shares in Barclays up more than 2% in London. McFarlane applauded Jenkins' role in steering Barclays through the aftermath of the financial crisis, and through the fallout of Barclays' management shakeup three years ago. But he also said: "There is no question that cultural change was urgently required." McFarlane told the BBC that Jenkins' skill set had been suitable

when he took the top post, but that the firm's needs had changed. When asked about future job cuts, he did not rule them out. Nor did he rule out the possibility of branch closures. "Inevitably, banks are going to have fewer branches than they have now," McFarlane said. He also said that Barclays would not renew its sponsorship of the Premier League when it expires later this year. In Barclays' statement, McFarlane said the bank needed to boost returns to shareholders. "We therefore need to improve revenue, costs and capital performance." The Board said it recognised the contribution Jenkins had made over the past three years, and was "extremely grateful to him for bringing the company to a much stronger position." But the bank said its non-executive directors had "concluded that new leadership is required to accelerate the pace of execution going forward." Jenkins took over at Barclays in the summer of 2012 following the departure of Bob Diamond, who left in the wake of the Libor scandal. The bank said Jenkins had inherited a situation which "would have challenged anyone facing the same issues". Jenkins said when he had taken over as group chief executive in 2012, it was a "particularly difficult time for Barclays." "It is easy to forget just how bad things were three years ago both for our industry and even more so for us. I am very proud of the significant progress we have made since then," he said.

UK Cuts Equity in Lloyds Banking Group to Below 17% •

Lloyds Banking Group received £22.5bn of taxpayers' money during the financial crisis

he UK government's stake in Lloyds Banking Group has fallen below 17% after more shares were sold to investors. UK Financial Investments (UKFI), the body responsible for handling the government's stakes in the privatised

w House in Africa more things to come for our bank," he concluded. The Euromoney Awards for Excellence, now in their 25th consecutive year, continue to be the most respected awards in the financial services industry. The awards, which are based on independently verifiable date, recognize those institutions that have brought the highest levels of service, innovation and expertise to their customers. Access Bank Plc is rated B by Fitch, BB- by Standard &Poors and A+ by Agusto & Co.

banks, has been gradually selling down the Treasury's stake in Lloyds. The banking group received £22.5 billion from taxpayers during the financial crisis. Investment bank Morgan Stanley handled the share sales. The government originally owned a

41% stake in the bank, but started selling Lloyds shares in 2013. This latest sale means that about £11.5 billion has been returned to the taxpayer so far. "Today's announcement shows the further progress made in returning Lloyds Banking Group to full private ownership and enabling the taxpayer to get their

money back," Lloyds Banking Group said in a statement. UKFI's "trading plan", under which government-owned Lloyds shares have been sold to big institutional investors, was due to end at the end of June. But it has now been extended to 31 December.

The Treasury said the extra six months would help it meet Chancellor George Osborne's pledge to sell a further £9 billion of Lloyds shares in 2015-16. Before the general election, Osborne announced that a tranche of shares would also be made available to the public, possibly this year.

CBN Defends Forex Ban Policy Blessing Ikeme

r. Moses Tule, Director of Monetary Policy, Central Bank of Nigeria (CBN) has stoutly defended the recent restrictions placed on forex by the apex bank, saying it is a move to stem gradual erosion of value of the Naira. The CBN had placed a ban on importers of certain commodities from accessing foreign exchange from the

forex window. Tule was a guest speaker at a Forum organised by the Lagos Chamber of Commerce and Industry (LCCI) that sought to bring together the regulator and the private sector to discuss urgent and topical issues that have implications for the economy. Tule said without such forex policy, the country would have been in complete mess and would have required the kind of bailout Greece is suffering right now.

He condemned the practice of round-tripping of foreign currency by some unscrupulous manufacturers who obtain forex from the CBN at official rate, send the fund abroad without the intention of importing goods. He said such funds are never repatriated. “Some importers even demand for forex for items they want to buy in the next two years,” he said. Tule therefore enjoined the populace, particularly manufacturers and

importers, to support CBN’s efforts at sanitising the forex market and ensuring that foreign currencies only get to those who need them. He reiterated that there is a clear and present danger to the economy caused by falling oil prices and declining government revenue and that the managers of the economy must make hard choices that would lead to economic stability.

Business Journal July 13 - 19, 2015

Banking & Finance

Report: 10 Countries Move Up in Income Bracket

he World Bank’s latest estimates of Gross National Income per capita (GNI) continue to show improved economic performance in many low-income countries, with Bangladesh, Kenya, Myanmar, and Tajikistan now becoming lower-middle income countries, joining those with annual incomes of $1,046 to $4,125. Mongolia and Paraguay move from lower middle-income status to upper middle-income, a group with yearly income levels of $4,126 to $12,735. Beset by civil war and a national oil industry at a standstill, South Sudan has fallen out of the lower middle-income classification and back into low-income status, where average per capita incomes are $1,045 or less. The new GNI per capita rankings show that Maldives and Mongolia were the highest movers in the rankings – up 13 and 8 places, respectively. Oman and Timor-Leste fell most from their 2013 ranking – down 15 places for both. People living in low-income countries continue to fall behind those in the upper per capita GNI brackets, while they earn and consume significantly less than much of the world’s

population. Malawi has the world’s lowest reported GNI per capita at $250, while Monaco has the highest, at more than $100,000 – more than 400 times more per person on average than Ma-

lawi. In 1990, Malawi’s GNI per capita was $180 – in 24 years its average per-capita income has increased by just $70. In the same period Norway, one of the world’s wealthiest countries, has seen its per capita income

increase from $26,010 to $103,050, an increase of $77,040. Some countries have also made remarkable progress. In 1990, Vietnam was a low-income country at the bottom of the rankings, with a GNI per capita of $130. Today, the country is reliably lower-middle income, with a GNI per capita of $1,890 – moving up more than 50 places in the rankings over the last 25 years. The new World Bank figures also show that Argentina, Hungary, Seychelles, and Venezuela have now moved from the upper middle income category to high income, with average per capita income levels now of $12,736 or more. Gross National Income (GNI) is a broad-based measure of income generated by a nation’s residents from international and domestic activity. GNI per capita measures the average amount of resources available to persons residing in a given economy, and reflects the average economic well-being of a population. Each year on July 1, the World Bank revises the income classification of the world's economies based on estimates of GNI per capita for the previous year. The World Bank also uses the updated GNI per capita estimates in its operational classifi-

cation of economies that determines lending eligibility. “While we need to measure development progress in different ways, income-based measures, such as GNI, remain the central yardstick for assessing economic performance,”said Kaushik Basu, World Bank Chief Economist and Senior Vice President. “Our latest data show that in terms of this indicator, the world’s economic geography has changed a lot. In 1994, 56.1% of the world’s population – 3.1 billion people - lived in the 64 low-income countries. In 2014, this was down to 8.5%, or 613 million people, living in 31 countries. It is heartening to see that over the last one year itself four nations crossed over that critical line from the low-income to the lower-middle income category.” In addition to the new income-related data, other indicators have been updated in the World Development Indicators (WDI) database, including estimates of purchasing power parities for 2014, gross domestic product, balance of payments, monetary indicators, military expenditure, CO2 emissions, air traffic, foreign direct investment, merchandise trade, and more.

Kuwait Foreign Reserves Hit Record $592bn Apple Pay Set for UK

uwait's financial reserves defied a slump in oil prices to hit a record 179.2 billion dinars ($592 billion) at the end of the 201415 financial year, a report said. They grew by $53 billion in the year to March 31, Al-Qabas newspaper reported, citing figures released by Finance Minister, Anas al-Saleh to a closed session of parliament last week. Kuwait normally does not reveal the size of its assets which are invested mainly in Europe and the United States.

The reserves are held in two state funds, the State Reserve Fund and the Reserve Fund for Future Generations. Both are run by the Kuwait Investment Authority, the Gulf emirate's sovereign wealth fund. Years of high oil prices have given Kuwait healthy budget surpluses to invest in foreign assets. The finance minister told parliament last week that despite the sharp drop in oil prices since June last year, the emirate posted a surplus of $13 billion

in 2014-15. He said revenues fell by 21.6 percent to $82.5 billion from the previous year, while spending rose by 11.1 percent to $69.5 billion. Saleh warned, however, that Kuwait was likely to post a deficit of $23.2 billion in the current fiscal year. Oil income contributes more than 90 percent of public revenues in Kuwait, which pumps around 2.8 million barrels per day.

R-L: Executive Director, Commercial Banking, Access Bank Plc, Roosevelt Ogbonna; Vice President & Area Business Head, West Africa, MasterCard, Omokehinde Ojomuyide; Group Head, Channels Services, Access Bank, Segun Ogbonnewo, and Managing Director, Easy Taxi, Adaora Asala, during the launch of PayWithCapture, a new multi-banking payment solution by Access Bank in Lagos

Launch on July 14

pple Pay is widely expected to arrive in the UK on July 14 according to information from a number of retailers, reported 9to5Mac. The move confirms Apple's announcement in June at the Worldwide Developers Conference (WWDC) that the UK would become the second market after the U.S. to be able to use the NFC-based contactless payment service. Canada is expected to be next in line later this year. Apple Pay was first unveiled with the launch of the iPhone 6 and iPhone 6 Plus last year, and is set to compete with existing contactless payment services. It's becoming a crowded market, with services such as Android Pay also in the pipeline. Mobile operators in the UK already provide their own mobile payment services: Vodafone UK has the Vodafone Wallet service, EE offers Cash on Tap and O2 UK also recently took over the Weve payments joint venture. The Verge noted that Apple Pay would be available at 250,000 payment terminals across the country at launch. The online news site added that banks including HSBC, Santander, NatWest, Nationwide, First Direct, and others have already signed up, and Apple Pay will also work on the London transport system. Transactions will initially be limited to £20 ( 28/$31) or less. The UK is an obvious target market for Apple Pay as the country is already very familiar with the concept of contactless payments--not least thanks to the early introduction of contactless payment cards on the London Underground.

According to data from Visa Europe reported by the Telegraph, the UK has more contactless cards than any other country in Europe at 49.6 million cards. Visa Europe noted that this is more than twice the number of cards in second-placed France, which has 20.3 million. Poland is in third place with 14.5 million, followed by Spain with 11.5 million. "The popularity of contactless will only increase in future as we experience the next generation of digital payments, where the simplicity and convenience is extended to mobile and wearable near field communications technology," said Visa Europe's Sandra Alzetta, the Telegraph reported The credit card company also said that said contactless payment cards were used more than 1 billion times in the past 12 months in Europe. A total of 12.6 billion ($13.9 billion) was spent over the year, with 1.6 billion of that in March.

Business Journal July 13 - 19, 2015

Banking & Finance

Greece: Tapping on Diaspora Funds for Survival

s Greece’s politicians continue to debate potential bailout terms, regular citizens are officially in crisis mode. Many have seen their salaries slashed in half, or more and their savings dwindle. More recently, many Greeks have only sporadic access to cash in ATMs and some pensioners are no longer receiving their full allotments. In turmoil with little belief that there will be a quick resolution, some Greeks are calling on their theia and theios from abroad for emotional and financial support. With close-knit ties to home, many Greek expats and immigrants are finding creative ways to help relatives and friends back home, offering everything from mortgage payments and land to cold, hard cash. Greeks abroad have stepped up efforts in the last few months as the crisis that started back in 2009 has come to a critical point this summer. “A lot of people are helping their own extended families,” said Connie Mourtoupalas, President of Cultural Affairs at the National Hellenic Museum in Chicago. Many are visiting the country, bringing plenty of cash for those who have been shut out of the banking system, she added. Getting creative Some families have redirected their second homes or land they own — typically paid off and mortgage free — in Greece back to family that’s currently living in Greece, says Peter Jasonides, National Co-chair of the Australian Hellenic Council, based in Melbourne. “In many cases, this is land they have through their parents and they re-diverted the properties to give [relatives] a bit of a hand,” he said. Often, these relatives have lost

their jobs and can’t afford their own accommodations. What’s more, the land can typically be used to grow produce and cut down on food costs. Even Greeks who have permanently resettled outside of Greece still maintain ties back to the country and have a sense of responsibility to help, he said. “The connections are not only apparent with the first generation, but with the second, third and fourth generations,” of Greeks, Jasonides said. Greek Orthodox churches abroad also regularly mention Greece in their sermons. Jasonides and his daughter, a fourth generation Greek Australian, make the 21-hour flight to Greece at least once each year. Stefanos Livos, 31, an online learn-

ing coordinator and author living in London, said he has been helping family with some of their mortgage payments since he left the island Zakynthos more than four years ago. “I may not be there physically, but my soul never leaves my family and friends,” said Livos who communicates with people in Greece daily. To help keep morale up, Livos said he lets his Greek friends and relatives know what’s being said about the country around the world, something those living on the country’s smaller islands can’t always access. “I talk to my friends and family in an attempt to calm them down and offer them insight,” he said. Georgia Lachanidou, 44, a hotel employee in Perdika, Thesprotia, who

was born in Wales said many Greeks — including her friends and coworkers — have been forced to become expats and work abroad in order to support families back home. “A lot of families have split up to stay afloat,” she said. But not everyone is ready to take handouts or advice -- even during dire times. “My relatives, either they are proud or don’t need it and I don’t want to insult them,” said Mourtoupalas. Rather than working to help one-onone, Mourtoupalas has sought out local Greek organisations that help people on the ground in order to donate funds towards school lunches for children who are especially vulnerable, she adds.

Building solidarity abroad In addition to offering financial help, many expats say that they also have an obligation to help shape the country’s image abroad. Many are eager to show a personal side of what’s happened in the crisis while helping upend stereotypes. Mourtoupalas recently curated an exhibit at Chicago’s Hellenic Museum to show how street artists back in Athens are reacting to the crisis – she scouted street art back in Athens and assigned photographers to professional photograph the images. “We wanted to recognise and show how the Greek people are reacting to this and the range of emotions,” she said. The exhibit, which runs from April to October, has become popular with Americans who have no ties to Greece, she said. In the last few years, many expats are organising larger initiatives to help make a bigger impact on the economy. The Hellenic Initiative, a global organisation working to jumpstart the country’s entrepreneurial community, launched in 2012. The group is working with non-profits to provide crisis relief in addition to helping fund the country’s growing entrepreneurship community. The group, whose leadership includes CEOs of Fortune 500 companies, held its first venture fair in Athens in June to present start-up ideas to about 100 US and European investors. Livos said simply by being active on Twitter and communicating with his network in London has helped him to shed light on what’s happening back home in a way that focuses on ordinary people. “The best thing expats can do for Greeks back home is to destroy the stereotypes Europeans have for us,” he said. “We're not at all lazy.”

Financing for Development: The Role of IMF in Post-2015 Agenda

he International Monetary Fund (IMF) has approved a package of proposals to enhance financial support and intensify its policy advice, technical assistance and capacity building in strategic areas to better assist developing countries in their pursuit of the post-2015 Sustainable Development Goals. The measures were outlined in a speech by IMF Managing Director, Christine Lagarde at the Brookings Institution on July 8, and will be discussed further this week in Addis Ababa, Ethiopia during the Third International Conference on Financing for Development (FfD). Many of the key issues under discussion at the conference are already at the core of the IMF’s mandate. These include national policy issues such as domestic revenue mobilisation, expenditure efficiency and effectiveness, attracting and managing capital flows, prudent expansion of public investment and international policy issues such as maintaining global financial stability and international tax cooperation.

The IMF Executive Board on July 1 also approved the following changes to further bolster the IMF’s commitment to low-income countries: • Expanding access to all of its concessional facilities by 50 percent, which means making more money available for eligible low-income countries; • Targeting that concessional financing further towards the poorest and most vulnerable countries; and • Setting the interest rate at zero for all loans extended under the Rapid Credit Facility, which is targeted at countries hit by natural disasters and fragile/post-conflict states. “We have the opportunity to make a positive difference in the lives of billions of people in the world, especially the poorest,” said IMF Deputy Managing Director, Min Zhu, who is overseeing the Fund’s work on Financing for Development. “To achieve this, the IMF is delivering enhanced technical assistance, surveillance and lending.” The 2015 Global Development Agenda The Financing for Development

Christine Lagarde IMF Chief Conference is one of three major international events—including the Sustainable Development Goals summit in New York in September, and the United Nations Conference on Climate Change in Paris in December— that collectively make 2015 a pivotal year for global development. The FfD Conference is intended to produce a shared understanding on how the financing needed to achieve the Sustainable Development Goals (SDGs) will be mobilised. The SDGs,

set to be formally adopted at the summit in September, replace the Millennium Development Goals which expire this year. The SDGs now include 17 distinct goals focused on ending poverty, transforming all lives and protecting the planet by 2030. The first United Nations Financing for Development Conference took place in 2002 in Monterrey, Mexico; the concluding document of that conference is known as the Monterrey Consensus. As in 2002, the Fund is expected to play a key role in contributing to this year’s conference. “The IMF, with its global membership and mandate to promote economic growth and stability, is well positioned to contribute to the post-2015 development agenda,” said Sean Nolan, Deputy Director of the IMF’s Strategy, Policy and Review Department and the lead author of this effort. “We have looked at our loan facilities and our advisory and capacity-building services through the lens of the post-2015 development agenda and identified a number of areas where we believe that we can enhance our current contribution. Our Board has approved the proposed initiatives, including the increased access to IMF

resources for low-income countries.” Helping Low-income Countries Build Economic Resilience Beyond offering increased access and extended concessional terms for low-income countries, one of the biggest contributions the IMF will make will be in the form of increased policy advice, technical assistance and capacity building to help countries build economic resilience and meet their individual responsibilities for financing their development and achieving the Sustainable Development Goals. Expanded policy advice and analytical work will include issues related to poverty, equity and inclusion, where macro-economically relevant, with the aim of integrating this into IMF operational work, and collaborating across the membership and drawing on the expertise and experience of other relevant international institutions. The IMF will also continue its work on energy pricing and environmental tax issues and will seek to provide technical assistance to help developing countries design easy-to-administer carbon pricing schemes.

Business Journal July 13 - 19, 2015

Shelter www.businessjournalng.com

‘Use N5trn Pension Fund to Bridge Housing Deficit’

takeholders from different housing and construction sectors of the economy have urged the federal government to channel part of workers’ contribution into the National Pension Fund, which presently stands at N4.9 trillion to bridge the country’s 17 million housing deficit. The National President, Real Estate Developers Association of Nigeria (REDAN), Rev. Ugochuckwu Chime, the Executive Director, Policy and Corporate Strategy, Nigeria Mortgage Refinance Company (NMRC), Chika Akporji and other stakeholders made this call recently at a one-day multi-stakeholders Interactive Workshop on Housing Development in Abuja.

Chime and Akporji noted that the National Housing Fund (NHF), which has been workers’ contribution to own their houses through the Federal Mortgage Bank of Nigeria (FMBN) and the Pension Fund should be made into a pool to create jobs in the sector and at the same time bridge the housing deficit in the country. “The NHF and the Pension Funds are funds created to ensure that while in service or retirement, the average Nigerian worker is catered for. We know that three elements form the basic needs of man that is food shelter and clothing and now government have been intervening in the issue of food where we now have single,” Chime said.

Firm to Develop Affordable Homes for Calabar Residents

n indigenous firm, Turn – Over Plus Limited, is set to develop a housing estate, Green City Estate, Calabar, Cross River State, in an effort to boost the housing stock in the state. The Green City Estate is located in Ikot Offfiong, Ambia, said to be the most serene part of Calabar metropolitan city, with a clean, beautiful, well developed infrastructure, hospitable and good safety and security facility. The Green City Estate which will be fully flagged off in August, currently houses a number of two to three bedroom apartments spread over three bays, just as duplexes are also been developed. Apart from the planned modification of the existing structures to meet the green city codes, the management of the city plans to develop additional 140 future homes within the next 12 months. Dr. Adedayo Felix, Acting Managing Director of the firm, said the project is conceived out of determination and strong planning, and is set out to offer residents huge avenue of cozy, luxurious and healthy living. He further stated that

a stay in the city will guarantee total rejuvenation and access to neighbourhood centres. The estate will boast of clean environment, clean energy, sound infrastructure, green areas, neighbourhood parks and guests’ houses for visitors. It will also be all encompassing as it will also be a host to event centres, educational institutions for residents’ children, auto garage, pharmacy, city security, city – wide security fence and future homes to mention but a few. Adedayo, therefore, urged investors to take advantage of the opportunity by investing in its facilities like real estate, commercial stores, entertainment centres, hospitality/extended – stay facilities, staff housing scheme, student hostels and independent rental homes because it is offering the best opportunity to reap huge financial returns from minimum investment The minimum investment in the green city housing development opportunities is N5 million which is projected to generate 100 per cent return on investment by the end of five years.

UK Residential Prop

K house prices increased by 3.3% in the second quarter of 2015 compared to the previous quarter taking the average price to £200,280, according to the latest property price index. It means that the quarterly rate of change has picked up following two successive falls and prices in the three months to June were 9.6% higher than in the same three months a year earlier, the data from the Halifax shows. This was higher than May’s 8.6% and the highest quarterly rise since September 2014 when it was 9.6%, and on a monthly basis prices increased 1.7% between May and June, the fourth consecutive monthly rise. The steady increase in prices comes as home sales remain steady. Data from HMRC shows UK home sales increased by 1% between April and May and sales in the three months from March to May were 0.5% higher than

in the preceding three months, but were 4.2% lower than in the same period last year. According to Martin Ellis, Halifax Housing Economist, supply remains very tight with the stock of homes available for sale currently at record low levels. ‘This shortage has been a key factor maintaining house price growth at a robust pace so far in 2015,’ he explained. ‘Economic growth, higher employment, increasing real earnings growth and very low mortgage rates are all supporting housing demand with signs of a recent modest pick-up in demand,’ he added. Jonathan Samuels, Chief Executive Officer of Dragonfly Property Finance, pointed out that there are a lot of mixed signals in the property market at the moment as the latest index from the Nationwide shows prices falling slightly. He also pointed out that while prices in London have slowed, house prices per square metre have risen by 45% since 2010, highlighting the extent of the

Business Journal July 13 - 19, 2015

Shelter

Dubai Residential Property Prices Tumbling

esidential real estate prices in Dubai continued to fall in the first six weeks of the second quarter of this year compared to the first three months of 2015, according to the latest data. However, it is not necessarily bad news, according to the mid quarter research report from Phidar Advisory. ‘The on-going erosion of sale prices is a healthy correction. The more significant concern is the scale and nature of the upcoming launched and announced projects,’ said Jesse Downs, the firm’s managing director. The report shows that apartment lease rates decreased a nominal 2.4%, while sale prices decreased 1.5%, marginally tightening yields. Lease rates for villas decreased 0.6% and sale prices decreased 2.9%, which pushed up yields slightly. In the first five months of 2015, apartment transaction volumes were down a modest 1.5%, compared to the same period in 2014. SFH volumes contracted almost 25%, over the same period. This is based on initial transaction data from the Dubai Land Department, which is subject to revision.

The report references income specific supply-demand imbalances. The most vulnerable segment is housing supply with current annual rents of AED100,000 to AED160,000 per annum, which could be oversupplied by up to 40% in five years. ‘If we consider only under construction and launched projects, the majority of the development pipeline is justified due to sufficient total demand,’ said Downs, who added that over building in the middle high income segment is likely to increase competition and lead to supply reordering. The potential for total market disequilibrium increases significantly when adding announced projects into the supply pipeline, the report points out. Total market vacancy could reach 11% by 2020. Factor in a healthy frictional vacancy and the total vacancy rate converts to a 7% oversupply. ‘There is an opportunity to reposition upcoming products to meet the city’s anticipated housing needs. If current announcements convert into launches, the probability for instability by 2020 will increase significantly,’ concluded Downs.

11 Construction Starts on $10bn Riyadh Metro Project

onstruction has reportedly begun on Riyadh’s new $10 billion metro, in what is planned to be Saudi Arabia’s first underground rail system and one of the largest in the world. The work includes 39 stations, including two key interchange stations. “The metro, set to be the cornerstone of Riyadh’s new public transport network, will revolutio-

nise how people move around the city,” said Amjad Bangash, Project Director for Bechtel, a member of the consortium commissioned to build the network. “Sending our team’s first tunnel boring machine on its underground voyage is a significant step for all.” The first two of the six planned metro lines are expected to be the most challenging. Seven tunnel boring machines

will be deployed to dig and construct more than 35kms of tunnels beneath the city, Saudi Gazette reported. It is expected to take a year. The Riyadh Metro is at the centre of the capital’s plan to cater for a projected 50 percent increase in the population. The 176-km, driverless network is expected to carry 400,000 passengers daily. It is scheduled to open to passengers in 2018.

Abdullah Allohaidan, Assistant Director of the Riyadh Metro, looking at a model of a train at the company's operation building in the Saudi capital.

perty Prices Show Steady Growth growth in the capital in recent years. ‘With economic growth stronger than expected during the first quarter, a buoyant jobs market and people generally better off, you would expect the market to continue to improve throughout the rest of 2015, if at a more moderate rate compared to recent years,’ he said. There is also a potential effect from the current Euro crisis and how what happens in Greece could affect the UK property market. ‘We could see a flight away from equities into bricks and mortar, but at the same time if Europe as a whole is adversely affected then the UK economy will almost certainly suffer, too,’ he added. Thomas van Straubenzee of prime London prime property agency, VanHan, is expecting to see an influx of enquiries from wealthy Europeans looking to move their assets off the Continent and into London as they seek to avoid the effects of the euro crisis. ‘We have seen interest from the Middle East and India pick up again, which is not surprising as we had noticed that these buyers

were particularly affronted by the idea of a mansion tax. We do not see London house prices slowing down anytime soon, as demand continues to outstrip supply, particularly at the top end of the market,’ he added. According to Jonathan Hopper, Managing Director of Garrington Property Finders, seller expectations have been out-stripping what buyers are willing to pay in several parts of the UK and this over-confidence is finally being checked. 'Despite mortgages being at their cheapest level for years and the supply of homes for sale being tight in many price brackets buyers are still intensely value sensitive. Buyer demand is strong but sensible, and buyers are being much more sober in their offering behaviour than in the last boom,' he said. 'Though confidence among both buyers and sellers remains high, as the summer slowdown begins, sellers must be wary of letting their pricing ambitions run away from what the market will tolerate,' he added.

Business Journal July 13 - 19, 2015

Technology www.businessjournalng.com

West Africa Needs Advanced Mobile Infrastructure, says IBM Nigeria Boss

ncreased investments in relevant new technologies like mobile, cloud and big data analytics that offer advanced solutions and services are essential for West Africaâ&#x20AC;&#x2122;s socio-economic development. In practically all sectors of the regional economy, these advanced technologies allow economies and companies to ensure the integrity of their data assets, providing them with hitherto unseen levels of data mining capabilities which, allows them to derive fresh insights and business intelligence from these data. These salient points were made recently by Taiwo Otiti, Country General Manager for IBM West Africa, on the sidelines of the HR Leaders Africa Summit held recently in Lagos. Adoption of mobile and other technologies is one area public and private sector organisations need to look at with a view to injecting efficiency and new performance levels in their operations, Otiti said. â&#x20AC;&#x153;For African countries, new technologies allow the continentâ&#x20AC;&#x2122;s businesses and people to leapfrog through development stages/ phases.â&#x20AC;? He buttressed this particular point by referring to Nigeriaâ&#x20AC;&#x2122;s adoption of mobile technology over the last 12 years which has become a showcase of how well technology can help transform economies. The Nigerian environment struggled with barely 500,000 telephone lines as at the end of 2001. Today, thanks its fast adoption of modern cellular and other wireless technologies, the country boasts the largest online market for apparel and footwear in Africa, which is expected to grow from US$104 million in 2014 to $1billion in 2019, according to Euromonitor International Data. Only last week, Nigeriaâ&#x20AC;&#x2122;s National Bureau of Statistics has put the subscriber base of the mobile telecommunications sector at 143.05 million

Telco The regionâ&#x20AC;&#x2122;s telcos are perhaps the greatest beneficiaries f the mobile boom â&#x20AC;&#x201C; but they need to invest in better ustomer service and enterprise app capabilities to etain their edge. .BKPS SFHJPOBM UFMDPT MJLF "JSUFM BOE 4VSnJOF BSF QBSUOFSJOH XJUI *#. o boost their responsiveness, including through cloud infrastructure, nd social customer-care apps. #. .PCJMF'JSTU GPS J04 &YQFSU 5FDI BO BQQ MFUT UFMDP mFME XPSLFST ccess critical repair instructions and even video tutorials while in IF mFME o SFEVDJOH JOFGmDJFOU SFUVSOT UP IPNF CBTF

Financial Services Africaâ&#x20AC;&#x2122;s banks must play to their strengths â&#x20AC;&#x201C; like customer trust and broad product offerings â&#x20AC;&#x201C; when partnering with telcos to offer mobile services that grow margins and retain customers. IBM MobileFirst for iOS Advise & Grow, an app, lets bankers access relationship history and external insights for their SMB clients, helping them make more personalised product recommendations.

BANK

BM partners with more than 10 of the regionâ&#x20AC;&#x2122;s top universities to ain undergraduate mobile developers and offer them access to pen-source platforms, like Bluemix for cloud.

Security Cybercriminals often piggyback on the devices of end-users, like customers or employees, to gain access to otherwise-secure enterprise systems. Businesses need to think like attackers, focusing on speed and agility rather than the number of installed security features. Deploying end-to-end device and app security for a global IBM customer:

Developers Demand for enterprise mobile apps is growing fast, and evelopers in the region are up-skilling in mobile platorms, app management, and the other technologies â&#x20AC;&#x201C; like loud and analytics â&#x20AC;&#x201C; which give them global reach.

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The biggest threats to the mobile enterprise are either against the devices themselves, or â&#x20AC;&#x2DC;man in the middleâ&#x20AC;&#x2122; attempts that threaten connections between device and back-end system.

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M-Lab East Africa, a start-up accelerator focusing on â&#x20AC;&#x153;big solutionsâ&#x20AC;? or agriculture, health, and education, only accepts founders who ave mobile software development skills. The accelerator partners with IBM Softlayer to offer free hosting to its membersâ&#x20AC;&#x2122; start-ups.

Health Mobile apps can help speed up healthcare processes, all the way from diagnosis to containment of wide-scale pandemics. The founders of MedAfrica, a Kenyan self-diagnosis app, have plans for it to one day draw on Ministry of Health data about outbreaks and drug counterfeiting in its advice to patients.

For several of Africaâ&#x20AC;&#x2122;s major banks, offering enduser security features is now a core part of their sales and marketing proposition.

Government Citizens and Public Sector employees find it easier to engage with government services and get important public information via their mobile devices. Nairobi commuters get SMS and in-app updates on road conditions and alternate route suggestions, thanks to IBMâ&#x20AC;&#x2122;s â&#x20AC;&#x2DC;Twende Twendeâ&#x20AC;&#x2122;* system which VTFT OFUXPSL BOBMZTJT UP QSFEJDU USBGmD XIFSF EBUB feeds arenâ&#x20AC;&#x2122;t available. IBMâ&#x20AC;&#x2122;s researchers hope to one day incorporate data about public safety, weather, and road works into the app. *meaning â&#x20AC;&#x2DC;letâ&#x20AC;&#x2122;s goâ&#x20AC;&#x2122; in Swahili.

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planet and Letâ&#x20AC;&#x2122;s build a smarter planet are trademarks of IBM Corp registered in many jurisdictions worldwide. Other product company or service names may be trademarks or service marks of others. A current list of IBM he Web at â&#x20AC;&#x153;Copyright and trademark informationâ&#x20AC;? at www.ibm.com/legal/copytrade.shtml ÂŠ Copyright IBM Corporation 2015 All Rights Reserved.

as of the end of the first quarter of 2015. As the leading regional economy, the continuous advancement of enterprises in the nationâ&#x20AC;&#x2122;s public and private sector was crucial for growth, he said. He explained that IBM is helping African businesses, governments, NGOs and innovators recognise the power of big data and the unique opportunities before them to leapfrog their counterparts from more developed nations. In Ghana, the mobile market also continues to witness gradual progression notwithstanding the slow pace of macroeconomic growth. A recent study, â&#x20AC;&#x153;The Mobile Africa 2015â&#x20AC;? report, conducted by mobile surveying company GeoPoll and World Wide Worx, has shown that 51% of Ghanaians with mobile phones now use them to access the internet. Otiti says that mobile technology

has been adjudged to be the most powerful communications platform throughout the Middle East and Africa region, with the power to transform the delivery of services across all sectors of the economy, including healthcare (mHealthcare, Telemedicine), education (e-Education) and municipal services like traffic and waste management. A recent report by PricewaterhouseCoopers (PwC) notes that emerging mobile health solutions are already saving lives â&#x20AC;&#x201C; an estimated million lives by 2017. This positive trend is being driven by some of the fastest mobile subscriber growth in the world, cheaper mobile devices, and continued innovation. â&#x20AC;&#x153;Together with IBM, African innovators and entrepreneurs along with the broader African ecosystem are ideally placed to focus on some of Africaâ&#x20AC;&#x2122;s (and the worldâ&#x20AC;&#x2122;s) most important challenges and leapfrog, delivering new solutions, tools and

applications to harness the power of mobile data and analytics,â&#x20AC;? Otiti says. He stated that it was important for business and technology leaders to understand that the so called â&#x20AC;&#x2DC;big dataâ&#x20AC;&#x2122; when harnessed from the growing proliferation of mobile phones and tablets will enable them to transform â&#x20AC;&#x153;African societies through the creation of industry specific blueprints designed to see data patterns that help them anticipate needs and deliver improved services to become more competitive on the regional and global stageâ&#x20AC;?. Questioned on what was holding back technology adoption by organisations, Otiti stated that one key factor responsible for the slow rate of technology adoption in many African countries was cost or budgetary considerations. He however counseled that cost was not the only hindrance. â&#x20AC;&#x153;The first barrier in the business environment is the poor information or

misinformation about ICT services, solutions and products available in the market place,â&#x20AC;? he said. â&#x20AC;&#x153;The second headache is institutional inertia and red tape. Knowledge is not really power anymore, it is the right application of knowledge that is powerful and delivers the right impact.â&#x20AC;? â&#x20AC;&#x153;Technology can positively influence business and public administration. Business Strategy and new Public Policy formulation and administration can be relevant and eventually effective if it takes cognizance of the evolving impact of technology on Society and the new Social way that customers, companies and citizens now communicate and engage with themselves, their target audiences and members of the public.â&#x20AC;? IBM has established the world's deepest portfolio of big data technologies and solutions, spanning services, software, research and hardware. Otiti says that the leading global technology company has so far committed more than $100 million in Research and Development on new Big Data technologies and garnered more than 500 analytics-related patents. Last year, IBM partnered with Apple to launch IBM MobileFirst for iOS solutions, introducing a fresh wave of apps for the enterprise market sector. The partnership brings IBM's unmatched industry and analytics capabilities to iOS devices. IBM official statements note that the partnership seeks to transform enterprise mobility, reconstructing the way businesses and employees work, and enabling new levels of efficiency, effectiveness and customer satisfaction across a range of professions and industries, such as personnel management, retail, healthcare, banking, travel and transportation, telecommunications and insurance.

Business Journal July 13 - 19, 2015

Technology

Etisalat LagosPhoto Photography Competition 2015 Announced

igeria’s fastest growing and most innovative telecommunications company, Etisalat in association with the African Artist’s Foundation (AAF), organisers of LagosPhoto Festival, has announced the 2015 edition of the Etisalat Photography Competition themed ‘I love Nigeria’. This year’s competition will run between Monday, July 6 and Monday,

September 28, 2015 and photographers are expected to submit images in four categories: places, people, fashion and food through www.lagosphotoapp.net According to the Director, Brand and Experience, Etisalat Nigeria, Enitan Denloye “Since commencing operations in Nigeria over six years ago, Etisalat has remained committed to delivering innovative, life changing, products and services to customers and supporting creativity and innovation. This commitment has

ICANN to Present Developmental Impact of Internet to Commonwealth Policymakers

n 14 September, US-based Internet Corporation for Assigned Names and Numbers (ICANN), the organisation managing the Internet's domain name system, will be presenting to ICT policymakers and senior officials from Commonwealth countries areas where the Internet is achieving its biggest developmental impact. The presentation, which will also include key policy recommendations, will be made at the Commonwealth Telecommunications Organisation Forum 2015 to take place on 14 - 16 September 2015 in Nairobi, Kenya. Commenting on ICANN’s contribution to the event, Professor Tim Unwin, Secretary-General of the CTO said that he was "delighted to note ICANN’s engagement at this year’s Forum, which is evidence of further strengthening of the long-standing relationship between the CTO and ICANN as two organisations that are committed to leveraging the Internet for development. The inputs by ICANN at this event will contribute significantly to global efforts in strengthening the governance of the Internet, and we look forward to working with ICANN to improve inclusivity of these governance processes." ICANN will also hold a dedicated session to address the transition of Internet Assigned Numbers Authori-

ty (IANA), its division responsible for co-ordinating some of the key elements that keep the Internet running smoothly, allocating and maintaining unique codes and numbering systems that are used in the technical standards (“protocols”) that drive the Internet. This key session will highlight the importance of multi-stakeholder partnerships and cross-border collaboration between government agencies in the Commonwealth and beyond, and also help explain to delegates at the event the impact the IANA transition will have. The Commonwealth Telecommunications Organisation (CTO) Forum, the annual ICT event of the Commonwealth of Nations, will take place this year in Nairobi, Kenya on 14 - 16 September. The purpose of the event is to facilitate the exchange of ideas between senior country officials and private sector and civil society organisations within or outside of the Commonwealth but with an interest in telecommunications, broadcasting or the Internet. The Nairobi event will bring together senior policymakers, regulators and industry leaders to address the most pressing challenges in the ICT sector, such as international connectivity, Broadband access for all, the governance of the Internet, m-commerce, and applications in health, learning and banking.

led to our continuous support of the LagosPhoto Festival and the development of the arts in the Nigeria.” Between July and September, members of the public are required to vote for their favourite photos across the categories through the Official Lagos Photo App. Top 50 photos in each category will be judged by a panel to unveil top the 3 entries. Top 12 across all categories will move on to the final stage of the competition. The winning photographer in each

category receives a Nokia Lumia 630. The grand finale of the competition is scheduled for October 2015 where the first prize winner of the competition will receive a Canon Camera; the second prize winner will get, an iPad mini while the third prize winner will receive a is a high end Nokia Lumia device. The Etisalat Photography Competition is part of activities leading to the annual LagosPhoto Festival which kicks off in October 2015. This festival is the first and

only international arts festival of photography in Nigeria that aims to establish a community for contemporary photography and unite local and international artists through images that encapsulate individual experiences and identities from across all of Africa. It has featured images from Nigeria’s finest and award-winning photographers, as well as images from renowned international artists that capture the essence of Lagos State.

Samsung Forecasts 4% Decline in Q2 Earnings

econd quarter earnings for the world's biggest smartphone maker, Samsung Electronics, are likely to miss expectations, the tech giant has said. The South Korean company forecast that its operating profit from April to June is likely to fall 4% from a year ago to 6.9 trillion won ($6.13bn; £3.9bn), lower than forecasts of 7.2 trillion won. Its sales also fell 8% to 48 trillion won, below expectations of 53tn won. The company is struggling to see growth in a saturated smartphone market. The launch of its latest flagship smartphone, the Galaxy S6, has

been plagued with supply shortage issues, affecting its sales in the quarter, say analysts. But Samsung has said that it has resolved the supply issue and expects the combined sales for the flat-screen and curved screen S6 models to hit a new sales record for the firm. The earnings are expected to be the company's highest quarterly profit since the same period last year. Losing Ground Samsung has been facing stiff competition for its smartphones with US rival Apple at the top end and cheaper Chinese smartphone makers such as Xiaomi at the bottom end. Andrew Milroy, Tech Analyst at

consulting firm Frost & Sullivan said while Samsung had come out with innovative features such as curved edges on smartphones, the market was catching up with them. "Some of the other innovations they've had - the big screens - other manufacturers have caught with that," he told the BBC. "The larger screens was their biggest competitive differential in some of their models." Samsung shares closed up 0.8% after reversing early losses on the earnings guidance in Seoul. The company's final detailed results will be released at the end of this month.

ITU Telecom World 2015 to Prioritise Economic Development

range of hot topics, including the Internet of Things (IoT); 5G mobile technologies; fostering ICT start-ups, entrepreneurs and innovation; developing cloud infrastructure; attracting investment; and tackling questions around the creation of the European digital market, will feature at ITU Telecom World 2015, taking place in Budapest, Hungary, 12-15 October 2015. ITU Telecom World 2015, the global ICT innovation event, is an Exhibition for digital solutions, a Forum for sharing knowledge and a Networking hub for governments, industry and academia. Its aim is to

help ideas go further, faster and to promote the innovative, transformative ICT-enabled solutions that will make the world better, sooner. Through an interactive programme of debates, the Forum will tackle central issues affecting the ICT ecosystem today, opening with a top-level Leadership Summit on accelerating digital innovation for social impact. Discussions comprise panel debates, workshops, high-level round tables and keynotes, grouped around three main tracks: • Expanding access to digital opportunity – overcoming the digital divide in access, content and data through innovative connectivity

solutions, new regulatory approaches, monetizing big data, creating the infrastructure for cloud and attracting investment. • Building trust for a connected future – establishing trust between consumers, industry and government to realise the potential of the digital economy, from the technological possibilities of security applications to consumer trust in services and applications, international collaboration to protect against cyber threats and innovative trust and security hubs. • Accelerating digital transformation – from new developments in 5G mobile or international standards

and regulation in the Internet of Things to exploring how to bridge the innovation divide, how emerging markets can work to foster digital entrepreneurship, and establishing regional single digital markets. “The Forum’s world-class debate programme highlights new partnerships, new solutions and new approaches to innovation, as well as exploring the critical role of small and medium businesses (SMEs), startups, entrepreneurs, technology hubs and accelerators in driving innovation and ensuring sustainable, inclusive economic growth throughout the ICT ecosystem,” said ITU Secretary-General Houlin Zhao.

“Through the influential and diverse audience it convenes, and an inspirational debate agenda, the Forum at ITU Telecom World 2015 promises to be the pre-eminent platform for leaders to inspire and be inspired, and for innovative solutions to be shared.” Alongside the Forum, the event also comprises an Exhibition for digital solutions from emerging and developed markets, showcasing the smartest ideas and entrepreneurial spirit of start-ups from countries, regions and top industry names from across the world, plus a host of key networking opportunities.

Business Journal July 13 - 19, 2015

Technology

Bharti Airtel Taps MTN Executive to Boost African Operations

harti Airtel has poached a senior MTN executive to head up some of its African operations. Airtel named the now former CEO of MTN Ivory Coast, Wim Vanhelleputte as a Regional Manager for its operations. Vanhelleputte will be responsible for Gabon, Congo B, Burkina Faso, Niger, Chad, Madagascar and the

UK Firms Embracing Enterprise Mobility to Drive Business Growth

early two thirds 60 percent of firms in the United Kingdom provide smart phones to their increasing contingent of mobile workers, according to Strategy Analytics. The SA Report polled over 300 businesses and found that a growing mobile workforce requires mobile solutions to span across geographic regions, vertical markets, and mobile worker types. The Report outlines the key findings from IT decision makers related to investments in mobile devices, mobile applications, mobile security, mobile cloud and mobile UC in the UK. Other key findings from the survey include: • Nearly half - 48% - of the UK workforce is mobile and mobile workers travel at least 20 percent of the time. • The majority of businesses support Apple iOS and Google Android smart phones and tablets but 23% of UK firms indicated they will support Microsoft's Windows Phone within 12 months. • Corporations and employees keep current on their smart phones and tablets, upgrading and replacing them every one-to-three years. • Spending on Mobile Devices, SaaS, and IaaS have increased the most in 2014 compared to 2013. • The UK employee base is more mobile today across all devices & applications types; more than 50% of mobile workforce use smartphones and mobile email very frequently. • Cost savings and user device choice are the top reasons employees are allowed to purchase and use their own mobile devices in the UK. • Among UK firms adopting BYOD and securing corporate information are the most important challenges faced by IT. "Consumerisation of IT is one of the factors driving mobility in the U.K. market, and employees are increasingly using personal mobile devices for work purposes. The rise of BYOD has created a massive need for mobile security and management solutions as a means to control BYOD's security vulnerabilities," said Gina Luk, Senior Analyst of Mobile Workforce Strategies.

Seychelles. Airtel Africa's chief executive officer, Christian de Faria said, "Vanhelleputte's appointment seeks to accelerate Airtel's market leadership opportunities and develop the team capabilities across the cluster." "Vanhelleputte has distinguished himself with his exceptional understanding of the African telecoms land-

scape. I believe he will use his experience, leadership and understanding of the African market to accelerate our market leadership opportunities and develop the team capabilities as we seek to take our brand to the next level," said Christian de Faria. In Africa, Bharti Airtel has operations in 17 countries.

Huawei Names Charles Yang New Middle-East Head

uawei has announced a new head for its operations in the Middle East, Charles Yang. The company said that Yang will oversee the company's operations, guiding its strategic direction, leading its business development and customers' relations. Shi Yaohong, former president, Huawei Middle East, commented:

"Yang will add strategic value to our team following his years of experience working within the ICT industry overseas and across the Middle East." Yang joined Huawei in 1999 and has over 16 years of experience in the telecoms industry. Over the past three years, Yang has been based in Saudi Arabia.

Africa Suffers 16.6% Fall in Hardcopy Peripherals in Q1

hipments of hardcopy peripherals (HCP) to Africa suffered a substantial year-onyear decline in both volume and value during Q1 2015, according to the latest insights by global technology consulting firm, International Data Corporation (IDC). The on-going currency volatility experienced across the region saw the market shrink to 470,000 units worth $190 million, down 16.6% and 12.7% year on year, respectively. While most of the continent’s HCP markets contracted in Q1 2015, Nigeria bucked the trend by recording year-on-year growth in both volume and value on the back of successful vendor promotions in the color inkjet space. Government tenders and demand from the SMB segment also

helped the country's laser market to grow, a scenario that was replicated in South Africa. "We have seen consistent demand from SMBs within the continent and we project this will continue over the coming few years, despite significant challenges remaining due to continuing currency fluctuations" says Roberto Alunni, Research Manager for Imaging, Printing, and Document Solutions at IDC Middle East, Africa, and Turkey. "IDC believes that despite the yearon-year decline seen in Q1 2015, Africa will continue to offer strong growth potential across all the hardcopy technologies in the medium to long term. The growth will be led by businesses, as regardless of their size, reliance on physical documents

Cote D'Ivoire Nationalises Three Mobile Networks over Debts

he government of the Ivory Coast (Cote d'Ivoire) has nationalised three of the country's mobile networks, and plans to merge them into a single operator. The three mobile networks, Comium, Cafe Mobile and Lap Greenwere all said to be deeply in arrears on taxes and license fees, and not expected to make good on their debts. Communications Minister, Bruno Kone said that the three networks had missed a May 5th deadline to pay the collective USD155 million that was outstanding. "We decided to fuse the defaulting companies to make a single entity that we will restructure and seek a financial and technical partner," Kone told journalists.

He added that following the restructuring, a 51% stake would be sold to an outside investor, leaving the government as a minority shareholder. Kone said the plan aimed to reimburse the state for the lost tax revenues while preserving the jobs of the three companies' employees. India's Bharti Airtel and Nigeria's Globacom are said to have already expressed interest in bidding for the company. The three nationalised networks had 1.5 million customers, out of a total mobile subscriber base of 23 million in the country. The country's other mobile network operators are France's Orange, South Africa's MTN and Etisalat's Moov.

continues" Overall inkjet shipments to Africa fell by a quarter in Q1 2015 to total just over 210,000 units, with a corresponding decline in value to approximately $21.0 million. While inkjet devices priced below $100 remained the most popular due to their affordability, devices aimed at the small office/home office (SOHO) segment were one of the few to show robust growth, mirroring the performance seen in the laser segment. Laser shipments declined in volume and value for Q1 2015, with a drop of 8.2% and 10.3%, respectively, to just under 250,000 units worth $162 million. A decline in the entry-level A4 segment was the main reason for the overall decline in the

laser market, as this segment is focused on retail channels and reflects the pressures that consumers have faced due to the currency fluctuations. However, demand remained stable for higher speeds and in the A3 segment, which reflects continued investment in IT infrastructure from businesses. Serial dot matrix (SDM) shipments dropped considerably from a year ago to just over 9,500 units, while there was a corresponding decline in value to approximately $6.50 million. Migration by the major users of SDM technology (such as banks and government institutions) to newer and more efficient technologies continues to be the principal driver of this decline.

South Korea Plans 4th Mobile Network Licence

outh Korea's government is reportedly considering making another attempt at issuing a fourth mobile operator license in an effort to boost competition in the local market. There are currently three mobile networks, and a number of MVNOs, but attempts to issue a fourth full operator license reguarly failed as the bidders failed to meet technical requirements. "If a new business enters the market, it will spark competition, which

will lead to a cut in subscription costs," the Ministry of Science, ICT and Future Planning said. "It will also contribute to the emerging segments, such as the Internet of Things and financial technologies." To ensure the latest attempt to issue a license succeeds, the Ministry will be relaxing the previous conditions and may make it easier to roll out the network infrastructure. The ministry said it will receive applications for a fourth mobile operator in August and review the applicants from October to December.

Business Journal July 13 - 19, 2015

Technology

U.S. Mobile Worker Population to Surpass 105m by 2020

he U.S. mobile worker population will grow at a steady rate over the next five years, increasing from 96.2 million in 2015 to 105.4 million mobile workers in 2020, according to a forecast from IDC. By the end of the forecast period, IDC expects mobile workers will account for nearly three quarters (72.3%) of the total U.S. workforce. Key drivers behind the growth in the U.S. mobile worker population include the increasing affordability of smartphones and tablets combined with the growing acceptance of cor-

porate bring your own device (BYOD) programs. In addition, innovations in mobile technology such as biometric readers, wearables, voice control, near-field communications (NFC), and augmented reality are enabling workers in completely new ways, increasing productivity by enhancing communications and business workflows. In a recent IDC survey, 69.1% of enterprise mobility stakeholders polled saw a reduction in opex or capex costs as a result of implementing BYOD programmes. "Mobility has become synonymous

with productivity both inside and outside the workplace, and the mass adoption of mobile technology in the United States has cultivated an environment where workers expect to leverage mobile technology at work," said Bryan Bassett, Research Analyst, Mobile Enterprise Device Solutions at IDC. "This expectation will be supplemented by new solutions specifically intended to manage the challenges associated with the growing needs of the mobile workforce." Key findings from IDC's mobile worker forecast include: • Office-based and non-office-

based mobile worker populations will stay in relative balance to one another throughout the forecast, with non-office-based mobile workers representing more than two thirds of the total mobile worker population. • Manufacturing, construction, retail and healthcare workers are inherently more mobile and these industries are expected to see faster growth in their mobile worker population than other vertical markets over the forecast period. • Healthcare workers represent the largest segment of the mobile workforce, accounting for 18% of the total U.S. mobile worker population when

office-based and non-office-based healthcare workers are combined. IDC defines office-based mobile workers as those whose primary workplace is an office environment, including both corporate and home locations. This category includes mobile professionals, occasionally mobile workers, mobile non-travelers, and telecommuters. Non-office-based mobile workers are those whose primary workplace is on location or in the field, not in an office environment. The two types of non-office-based mobile workers are mobile field workers and mobile on-location workers.

Mobile Gender Gap: GSMA, Orange, Ericsson Partner to Empower Women Anne Morris

Oxfam partner Women for Prosperity. The solution was to make the phones bright pink.

oday, more than three billion people in low- and middle-income countries do not own mobile phones, and 1.7 billion of them are estimated to be women, according to the GSMA's 2015 report on Connected Women. Women on average are 14 per cent less likely to own a mobile phone than men, which translates into 200 million fewer women than men owning mobile phones, the GSMA added. However, the overall figure also masks greater inequalities at regional and country level. For example, the gender gap for Sub-Saharan Africa is 13 per cent, but the GSMA report found there was a 45 per cent gender gap in mobile phone ownership in Niger and a 33 per cent gender gap in the Democratic Republic of Congo (DRC). In some markets, the problem could be even greater still, but data is not as easily obtainable. In Ghana, for example, "the gender gap is huge but there is no data to support this…that is one of the difficulties we have," said Daniel Kwaku Ganyoame, the director for a non-governmental organisation (NGO) in Ghana called Africa ICT Right. The benefits to getting these women connected are huge. For example, the GSMA claims that ensuring women in low- and middle-income countries own and use mobile phones on a par with men could unlock an estimated $170 billion ( 149.4 billion) market opportunity for the mobile industry in the next five years. What's more, mobile phones and access to mobile services and content provide significant social and economic benefits for the women themselves, as well as their families and local communities. "Gender equality is important for us because we believe it is important for women themselves," said Anne Maclaren, a member of the group Corporate Social Responsibility (CSR) team at Orange. "We know that giving them a mobile will make their lives easier on a day-to-day basis." No 'Silver Bullet' to Closing the Gen-

Ericsson's Connect to Learn programme seeks to improve girls' secondary education over mobile Broadband. der Gap Despite these benefits--and despite the growth in mobile phone ownership globally over the last five years--women in many regions are still being left behind. This is due to a variety of reasons ranging from affordability through to cultural barriers, and indicates that much more needs to be done. "The gender gap won't close on its own," said Claire Sibthorpe, director of the GSMA Connected Women programme. "But there is no one silver bullet," she warned, noting that service innovation is required to tackle the different hurdles in different markets. There is already evidence that services specifically designed for women can help, whether by accident or design. In Kenya, for example, the success of mobile money thanks to services such asSafaricom's M-Pesa has indirectly helped to reduce the gender gap in this market "by offering a relevant product that overcame barriers to mobile ownership for women," said the GSMA report. Yet the Consultative Group to Assist the Poor (CGAP), housed at the World Bank, still finds that despite the "tre-

mendous opportunity" of mobile money services to drive financial inclusion, "in many markets access and usage of digital financial services among women lag quite a bit compared to men," said Wameek Noor, financial sector analyst at CGAP. CGAP found that the reasons for this are varied. They range from the simple fact that fewer women have phones than men through to cultural reasons, such as sensitivity around sharing phone numbers with other men, who may use the numbers to call them inappropriately or harass them. CGAP now works with mobile companies with the ultimate goal of driving access and usage of financial services globally, Wameek said. In Iraq, mobile operator Asiacell, which is majority owned by Qatar Telecom, also found that a barrier to entry for women was the number of harassment calls they received. The company therefore introduced a call-blocking service and doubled the number of women in its subscriber base. In Cambodia, meanwhile, there was a huge problem with men taking phones provided to women under a mobile technology project launched by

What it Means to Empower Women In Ghana, Africa ICT Right has launched a programme called Girls in Tech (GTech) to inspire and motivate girls to take up careers in ICT. Ganyoame said the NGO is also now trying to get mobile phones to more women in rural communities to help with pregnancies and reduce the number of fatalities during pregnancy and childbirth in the country. The NGO hopes to secure help from local operators such as Vodafone Ghana and MTN, and already works with Google on the GTech programme. "It's very context-specific," said the GSMA's Sibthorpe, noting that it is important to understand the reasons why women do not buy or use mobile phones before trying to address the problem. Like the GSMA, Mark West, an Associate Project Officer at UNESCO Paris, also highlights the importance of addressing mobile phone usage and not just access to phones. For example, there have been instances when women are given mobile phones but not allowed any credit, meaning that they can be contacted but are unable to make use of the services themselves. "That is disempowering," said West. "We need to be careful about what it means if someone has access." As well as designing services that are relevant and affordable, UNESCO, Africa ICT Right and companies such as Orange and Ericsson place a strong focus on education and improvements in literacy among women to ensure they have the skills to benefit from the advantages that access to mobile services and content can bring. These advantages include being connected to critical services and remote learning by text, as well as the opportunity for women to create their own businesses and become ICT specialists themselves. UNESCO, for example, runs a mobile learning programme that looks directly at how mobile technology--whether in the form of basic handsets or the new-

est tablet computer--can help "nudge the world toward greater gender equity," both in education and beyond it. Specifically, UNESCO is exploring how gender sensitive content and training, literacy support, and skills development can advance the education of women and girls. In Myanmar, for example, UNESCO is working with state-owned operator MPT as well as Ericsson. The Swedish vendor in turn has launched the Connect to Learn programme to address some of the challenges relating to access to and quality of secondary education in developing markets, particularly for girls and young women. The objective of Connect to Learn is to provide scholarships and bring ICT to schools in remote, resource-poor, parts of the world over mobile broadband. To date the initiative has been launched in 21 countries, with Myanmar the largest project to date. Elaine Weidman-Grunewald, VP of sustainability and corporate responsibility at Ericsson, said the programme was launched because it was apparent that a lot of young women were not going into secondary education, especially in Asia and Africa. People in secondary education tend to be aged anywhere from 15-24 years old, which is "the age when youth are getting involved in technology," said Weidman-Grunewald. "So there is a good correlation between education and technology." Weidman-Grunewald said Ericsson works with operators in all markets and noted they are generally very interested in the programme as they often are not in a position to invest in such initiatives themselves. "They like that this is…thought through," said Weidman-Grunewald. "We provide the programme and the partners, and we ask operators to deal with the subscriptions. We have a solution." The Role of Operators Operators with a larger global footprint also engage in their own efforts to connect more women in low- and middle-income markets, and are driven by both economic and social imperatives.

Business Journal July 13 - 19, 2015

Energy

www.businessjournalng.com

Cheap Oil Causes 5-Year Drop in Global Food Prices

nternational food prices decreased by 14% between August 2014 and May 2015, dropping to a five-year low, according to the latest edition of Food Price Watch. Cheap oil contributed to abundant global supplies of food in 2014 and prospects of a bumper crop for wheat, maize and rice in 2015— factors that are driving the sharp decline in international food prices. The agriculture and food sector continue to benefit from less expensive chemical fertilizer, fuel and transportation costs brought on by the previous year’s oil price declines, with food prices holding steady despite recent oil price hikes. Between August 2014 and May 2015, wheat prices plunged by 18%, rice prices dropped by 14% and maize prices declined by 6%. However, the arrival of El Nino, the

appreciation of the U.S. dollar and the recent increase in oil prices could drive up food prices in the coming months. The demand for maize by the biofuel industry and developments in rice support policies among major producers are other factors that could impact food prices. The decline in food prices is welcome, because more poor people can potentially afford to buy food for their families,” said Jose Cuesta, Senior Economist, Poverty Global Practice at the World Bank Group. “However, unexpected domestic food price fluctuations remain a possibility so it is crucial that countries are prepared to address dangerous food price hikes when and if they unfold.” Domestic grain prices also remained mostly stable or declined between August 2014 and May

2015, due to abundant supply. However, food prices increased in Ebola-hit countries, as well as areas that were affected by conflict, floods and drought such as Northeastern Nigeria, Malawi and Zimbabwe. How the World Bank Group is Helping • The World Bank Group is committed to boosting agriculture and agriculture-related investment. In 2014, new commitments to agriculture and related sectors were $8.3 billion. For IBRD/IDA, assistance to agriculture and related sectors rose to $4.3 billion in FY14 from $3.6 billion in FY13. • IFC made $4.0 billion in private sector investments across the food supply chain in FY14. These investments supported projects that promote access to finance, access to inputs like seeds, equipment and advice, and access to markets through

infrastructure and food-processing facilities. • Launched by the World Bank in 2008, the Global Food Price Crisis Response Program (GFRP) provides relief to countries hit by high food prices. The GFRP has reached nearly 70 million people in 49 countries—through $1.6 billion in emergency funds for farming, seeds and fertilizer, and emergency school feeding programs. • The WBG supports the

Global Agriculture and Food Security Program (GAFSP). Ten countries and the Bill & Melinda Gates Foundation have pledged about $1.4 billion with $1.2 billion received. • Co-ordinating with UN agencies through the High-Level Task Force on the Global Food Security Crisis and with non-governmental organizations, and supporting the Partnership for Agricultural Market Information System (AMIS) to improve international food market

Scatec Solar Plans First Solar Plant i

• Mali now becomes the ﬁrst country to install the largest solar grid-connected p

n historic agreement to Build-Own-and Operate West Africa’s first utility-scale solar power plant was signed recently by Norwegian company Scatec Solar and its partners, the Malian Ministry of Energy and Water and Electricité du Mali (EDM), the electricity utility of Mali. To be located near the ancient city of Segou in South-East Mali, 240 kms from Bamako, the 33 MW solar project is being developed in partnership with IFC InfraVentures and the local developer Africa Power 1. Speaking on the occasion, the Malian Minister of Energy and Water, Mr. Mamadou Frankaly Keita said “This landmark agreement signals the Government’s commitment to meet the nation's growing energy demand and to provide clean, renewable and affordable energy to our people.” The agreements include a Power Purchase Agreement (PPA) between EDM and Segou Solaire SA, the

local project company controlled by Scatec Solar, for the delivery of solar power over the next 25 years. The PPA with the utility is complemented by a Concession Contract with the Government of Mali, granting license to Segou Solaire to operate. With this PPA, Scatec strengthens its position as the leading, integrated solar IPP (Independent Power Producer) in Africa. The Oslo-headquartered company’s CEO Raymond Carlsen says “This project is another great milestone for Scatec Solar. After several years of development efforts in the region, we can now move forward with the first utility-scale solar plant in West Africa. The Malian Authorities have demonstrated decisive will to tackle the nagging issue of power supply.” Scatec Solar (‘SSO) will own 50 percent of the power plant and World Bank’s project development fund, IFC InfraVentures will hold 32.5 percent, while the local project development company, Africa Power

1, headed by Dr Ibrahim Togola, will hold 17.5 percent. Scatec Solar will construct the plant, and in addition provide operation and maintenance services after the plant is connected to the grid. “One of the pillars of the World Bank’s Country Assistance Strategy for Mali is to increase access to energy, a development fundamental. IFC InfraVentures’ partnership with Scatec Solar and Africa Power 1 helps advance this strategy through Scatec Segou, part of a series of renewable energy projects we are developing in the country,” said Alain Ebobisse, Global Head of IFC InfraVentures. Dr. Ibrahim Togola, the Chairman of Africa Power 1 SA and General Administrator of Scatec Solar West Africa says: “Today’s event is historic because Mali now becomes the first country to install the largest solar grid-connected power plant in the region. This high profile joint-venture in which Malian citizens participate will

serve as a model to launch the solar era in West Africa.” Annual production from the 33 MW solar power plant is estimated to be 60,000 Megawatts hour (MWh). The ground-mounted photovoltaic (PV) solar plant will deploy approximately 130,000 PV modules on a fixed tilt system and will connect to an existing transmission line. This will provide clean and affordable energy to a country in dire need for more power generation capacity to support further economic growth. The power generated from the plant represents five percent of Mali’s total electricity consumption, equal to the electricity consumption of 60,000 households. During the construction phase, the project will provide 200 local jobs. As part of Scatec’s corporate philosophy, special emphasis will be put on transferring technical expertise to the local community. In an era of climate change

concerns, the 33 MW Segou power plant is an important initiative to reduce carbon emissions by about 46,000 tons once completed. Scatec Solar and EDM will jointly register the project with the United Nations CDM (Clean Development Mechanism) under Scatec Solar’s programme for solar projects in Africa. The project with a total cost of Euro 52 million is to be financed through 45% senior project finance debt. IFC InfraVentures will arrange the Debt for a total amount of Euro 23 million. Further, the project has already been granted a concessional loan that will cover 30% of the Capex from Climate Investment Fund through the programme “Scaling Up Renewable energy in Low Income Countries Programme” (SREP). The remaining 25% is provided as equity by the project partners. Financial close is expected before the end of this year.

Business Journal July 13 - 19, 2015

Energy

Oil, Gas Output Boosts UK Industrial Production

rise in oil and gas output boosted UK industrial production in May, official figures show, but manufacturing output continued

to fall. Industrial production rose 0.4% in May, helped by a 7.3% rise in oil and gas output and higher mining output. However, manufacturing continued to lag behind, falling by 0.6% last

month after a fall of 0.4% in April. Manufacturers have struggled against the strength of the pound and weak demand in European markets. The numbers suggested "a persistent weakness" developing in manufacturing, said UBS Economist, David Tinsley. "The last few months' readings of manufacturing output have been soft,

and surveys such as the PMI are also suggesting slower growth," he added. Compared with a year earlier, industrial output rose by 2.1%, the strongest annual growth since April of last year, and manufacturing was up 1.0%. George Osborne announced more help for manufacturers in his budget presentation last week.

U.S. Wants 75,000 Solar Jobs by 2020

P transparency. â&#x20AC;˘ Advocacy for more investment in agriculture researchâ&#x20AC;&#x201C; including through the Consultative Group on International Agriculture Research (CGIAR) â&#x20AC;&#x201C; and monitoring trade to identify potential food shortages. Supporting improved nutrition among vulnerable groups: During the past decade (2003-2013), the International Development Association (IDA), the World Bank's fund for

the poorest, has ensured that more than 210 million pregnant/lactating women, adolescent girls, and/or children under age five were reached by basic nutrition services. The Bank is also an active member of the Scaling Up Nutrition Global Movement and leads the Secure Nutrition Knowledge Platform, which aims to improve nutrition outcomes through increased nutrition-sensitive investments and activities across all key underlying drivers of nutrition.

in West Africa

power plant in the region

resident Obama has announced an initiative to help the solar industry. The White House said the initiative's goal is to help cut net greenhouse gas emissions 26-28 percent by 2025, and expects to do so with plans to train 75,000 solar workers by 2020. The initiative also includes plans launch a Solar Ready Vets programme; utilise the GI Bill for solar workforce training; and educate veterans and service members about opportunities to gain solar workforce training. The training for veterans are to be included in the 75,000 solar workers trained. In May 2014, the Department of Energy (DOE) announced plans to train 50,000 solar workers by 2020 -which will be a part of DOE's SunShot Initiative's Solar Instructor Training Network. The network includes 400 community colleges that have already trained more than 1,000 solar instructors and 30,000 students in the last five years. "Since President Obama took office, solar electricity generation has increased 20 fold, doubling last year alone -- just as the cost of solar has continued to fall as a result of investments in research and manufacturing innovation," the White House said in a statement. "The solar industry is adding jobs 10 times faster than the rest of the economy, creating a source of good paying American employment. To continue progress, the Adminis-

tration is announcing actions to drive growth in the solar industry while also supporting our veterans." The initiative also includes a Solar Ready Vets programme, which is presented by a partnership between the DOE and Department of Defense (DOD). The programme will take place at 10 military bases in the United States. According to a statement by the White House, "The Solar Ready Vets programme will train transitioning military service personnel to enter the solar workforce by joining with SunShot's Solar Instructor Training Network and leveraging the DOD's Skill bridge transition authority authorised by Congress in 2012. Consistent with the Vice-President's job-driven training agenda, the programme is based on the specific needs of high-growth solar employers, is tailored to build on the technician skills that veterans have acquired through their service, and incorporates work-based learning strategies." Through the program, veterans and service members will take estimates and install solar, connect electricity to the grid, and learn local building codes. The GI Bill programme will be presented by the Department of Veterans Affairs (DOVA) to fund the Solar Ready Vets initiative -- along with DOE and state agencies. "The Department of Labor (DOL), will work with DOD to ensure that

transitioning service members are made aware of solar workforce training programmes available to them in their last months of military service," the White House said. "In addition, to better serve unemployed veterans, DOL will partner with state workforce agencies and American Job Centers to better inform unemployed veterans about the opportunity to participate in available solar trainings." The new initiative builds upon the White House's solar energy commitment, which they credit in part for decline in the price of commercial and residential solar by more than 12 percent in 2013. President Obama announced the initiative during a speech at Hill Air Force Base in Utah, where he also met with staff and students of Salt Lake Community College (SLCC). Obama met with SLCC's Judy Fisher, who manages the Rocky Mountain division of the SunShot Solar Instructor Training Programme. He also met with Michelle Fisher, an Air Force Veteran who has served in Iraq, Saudi Arabia, Jordan, Qatar and the United Arab Emirates. She is currently attending SLCC while participating in the VA's Vocational Rehabilitation programme. The White House submitted new levels for emissions reduction to the United Nations Framework Convention on Climate Change (UNFCCC), which included a 26-28 percent decrease from 2005 levels by 2025.

Business Journal July 13 - 19, 2015

Energy

2025 Prediction:

$300bn Wasted on Natural Gas Projects

arbon and natural gas could soon be at odds, according to a new report by the Carbon Tracker Initiative. The report found that by 2025, there will be $283 billion of surplus liquefied natural gas (LNG), based on projects currently underway. The report found that gas can continue to grow, but not at the rate the gas industry believes -- due to numerous factors, including carbon-emission rules. "We certainly don't see any prospect of a 'golden age of gas', as the International Energy Agency suggested a few years ago," said Anthony Hobley, CEO of Carbon Tracker, in a statement. The UN target limits global warming to a 2 C target, and the report said that in order for this to happen, the energy industry needs to be more selective in gas projects. "Gas is a complex fossil fuel," Hobley added. "The gas industry argues that coal is the enemy and gas is part of the solution. Obviously there is a push to position it as a bridge to a low-carbon future and there is some basis for that, particularly in North America and Europe. There is some room for growth, but nowhere near as much as the gas industry would have us believe. Certainly in the LNG sector, most of the capacity that will be needed for the next 10 years has already been built." Natural gas is considered carbon-emitting because production results in leaked methane.

Hobley explained: "Gas can be efficient, but more needs to be done, particularly on fugitive emissions. We have a very hazy understanding of these fugitive emissions in regions such as China and Russia. This is an area where the industry clearly has to work harder if gas is to be perceived as a cleaner fuel." However, Jake Rubin, Director of Public Relations with the American Gas Association, told Fierce Energy that "Natural gas is clean, domestic, abundant, efficient and affordable, making it the perfect foundation fuel to help strengthen America's economic recov-

Energy Snapshot of the Week Taxes on Oil Production The graph above illustrates the inter-country variations in the average price of one litre of oil across G7 countries as well as the OECD average during 2013. It is important to note that these price variations are mainly due to the widely varying levels of taxes (highlighted in red) imposed by major oil consuming nations. These can range from relatively modest levels - like in the USA - to very high levels in Europe and Asia/Pacific. For example, in the UK the government in 2013 earned about 58% of the price charged for every litre of pump fuel sold to consumers. On the other hand, oil producing countries (including OPEC) earned about 33% of the total pump fuel price.

ery, meet our environmental challenges and improve our overall national security by reducing our dependence on foreign energy sources." Rubin explained that the abundance of natural gas in the United States has created a landscape that can help "address many of the challenges facing our economy and environment," but that the regulatory environment has not yet caught up to the abundance of natural gas. "It is critical that business models, fuel choices, regulation and energy policy be re-evaluated in light of the new opportunities presented," Rubin told

FierceEnergy. "Natural gas utilities, through their roles in communities across the nation, are already bringing the benefits of natural gas to homes and business. We are fueling the future where wise and efficient growth of natural gas consumption will help address many of our energy challenges." The report found that certain aspects of LNG infrastructure, including the production of US shale gas or Australian coal-bed methane, emit high levels of greenhouse gases (GHG) -- and only 17 percent of LNG produced by North American Shale

gas or Australian coal-bed methane is needed. Of the planned projects that will cause a surplus, the report found $82 billion in Canada, $71 billion in the United States, and $68 billion in Australia -- all in the next 10 years -- due to carbon regulations. "Many parts of the world do not have the infrastructure needed to take advantage of gas," Hobley said, "and we are getting to the stage where renewables are becoming more viable. If we can scale renewable energy to the level needed, then there will be a jump straight from coal to renewables. If there is a breakthrough on energy storage, it will be a game-changer." The study also looked at the 20 largest LNG companies in the world, and found that 16 of them are looking at major future projects that are unneeded. Three -- by Eni, Cheniere, and Noble -- are working on projects that are needed to meet demand by 2025. Only one company, Total, is not planning on developing any new LNG projects by 2025. "Investors should scrutinise the true potential for growth of LNG businesses over the next decade," said James Leaton, Carbon Tracker's Head of Research, in a statement. "The current oversupply of LNG means there is already a pipeline of projects waiting to come on stream. It is not clear whether these will be needed and generate value for shareholders."

Charging Ahead with Electric Vehicles

Business Journal July 13 - 19, 2015

Energy

OPEC Upstream Investments Regardless of all the challenges and uncertainties, OPEC Member Countries continue to invest in additional upstream capacities. On top of the huge capacity maintenance costs that Member Countries are faced with, they continue to invest in new projects and reinforce their commitment to the oil and gas market and as well as to the security of supply for all consumers. Needless to say, this is only a reflection of OPEC’s well-known policy that is clearly stated in its Long-Term Strategy and its Statute. In the medium term, about 117 projects, with an overall estimated cost of some $270 billion, are being undertaken by OPEC Member Countries Additional refining capacity in OPEC Member Countries will come from new ‘grassroots’ projects, supplemented by expansions at existing facilities. The largest new refineries are expected to come on stream in Saudi Arabia and the UAE, with several expansion projects under construction in other countries. The single largest refinery worldwide that started its operations in 2013 was a joint venture of Saudi Aramco and Total which partnered for the 400,000 b/d refinery in Jubail, Saudi Arabia. This project led a series of new grassroots refineries in the Middle East. The next addition will be in Yanbu, Saudi Arabia as a joint venture of Saudi Aramco and Sinopec which is also designed for an operational capacity of 400,000 b/d targeting primarily ultra-low sulphur diesel and gasoline as final products. Early 2015, an expansion of the Abu Dhabi Oil Refining Company’s (Takreer) existing facility in Ruwais, UAE, is expected to be fully operational.

Policy Context Fully electric and hybrid electric vehicles could significantly reduce CO2 emissions in the transport sector. In addition, electric vehicles have the capacity to enable intelligent electricity grid management by filling the gap between electricity produced from intermittent renewable sources and consumer demand. Framework policies aimed at providing incentives for automobile manufacturers, consumers, municipalities and electricity networks, combined with continued R&D to reduce the costs of batteries will lead to successful deployment of electric vehicles. Background The aim of the ETI focusingon hybrid and electric vehicles (HEV) is to provide governments, local authorities, large users and industries with objective information on electric and hybrid vehicles and their effects on energy efficiency and the environment. This is accomplished through collaborative, pre-competitive research projects and related topics and to investigate the need for further research in promising areas. There are currently 18 Contracting

Palito, Venezuela, among others. The cumulative investment required for the realization of these projects to 2018 is estimated at around $60 billion. This is part of OPEC’s on-going efforts to support market stability by supplying required products to consumers.

This will put on-stream another 417,000 b/d of distillation capacity in the region. Other large projects include new

Parties. Spotlight Widespread acceptance of battery and plug-in hybrid electric vehicles (EVs) will require overcoming several obstacles. Infrastructure investments, charging interoperability and urban planning are key issues. Achieving successful implementation will require cooperation between public and private stakeholders in a multitude of sectors. And one size will not fit all. While longer recharging is a prerequisite for plug-in hybrid electric vehicles (PHEV), for EVs there is a greater need for public infrastructure to recharge away from work places and residences, and interoperability at all charge points, including quick-charging. As a result, three recent studies are addressing these important challenges: Plug-in Hybrid Electric Vehicles (PHEV), a study of the HEV; Quick Charging Technology, a study of the HEV; and the EV City Casebook, an Electric Vehicles Initiative study to which the HEV provided significant contributions. The PHEV study underlines the important role of fuel prices to the business case for EVs. However,

refineries in Lobito, Angola, Tiaret, Algeria, Manabi (Refinery del Pacifico), Ecuador, Fujairah, UAE, Jazan Industrial City, Saudi Arabia and El

further R&D is needed to develop the next generation of batteries and lower production costs. Plugin hybrid electric vehicles with ranges of 15 km to 50 km were found to be the most cost-effective in terms of converting electricity to kilometres travelled. Case studies of electric vehicle deployment compare the networks, charging points and the incentives used to expand EV networks in 13 cities and three regions worldwide. The report concludes that increasing industry participation, cross-border standardisation, interoperability between charging stations and data collection will be needed. The Treaty of Vaals1 is highlighted as best practice in this regard. A new HEV study, E-Mobility and Business Models, will examine the drivers of growth in EV markets and charging infrastructure, and the role of investments in EVs and

infrastructure in creating opportunities for economic growth. The Paris public service plan for short-term EV hire, Autolib, is leading the way. The plan has expanded to many cities in the Paris region

According to current estimates, almost 81% of the world's proven oil reserves are located in OPEC Member Countries, with the bulk of OPEC oil reserves in the Middle East, amounting to 66% of the OPEC total. OPEC Member Countries have made significant additions to their oil reserves in recent years, for example, by adopting best practices in the industry, realizing intensive explorations and enhancing recoveries. As a result, OPEC's proven oil reserves currently stand at 1,206.17 billion barrels.

Business Journal July 13 - 19, 2015

Travel Tourism

www.businessjournalng.com

Marriot, Radisson Blu Lead New Hotel Developments in Africa Kate Douglas

otel group, Marriott is leading the way this year in terms of new hotel developments in Africa, according to Lagos-based consultancy, W Hospitality Group. In its 2015 Hotel Chain Development Pipeline Survey, the group revealed that Marriott has 36 hotels planned. Carlson Rezidor, with brands such as Radisson Blu and Park Inn, comes in second with 32 hotels, while Hilton Worldwide takes third place with 29 in the pipeline. Starwood, whose brands include Westin and Sheraton, has 21 new properties planned, while the African-focused hotel group Mangalis (a new chain with brands such as Noom, Yaas and Seen) has 17 hotels on the horizon. Mangalis was launched in 2013 and its first hotels are expected to open this year – its flagship Noom Hotel in Guinea’s capital Conakry and Yaas Hotel in Senegal’s capital Dakar. However, in terms of number of rooms in the pipeline, Hilton Worldwide takes the lead with 7,250 planned, followed by Carlson Rezidor (6,953) and Marriott group (6,412). Radisson Blu: The Leading Hotel Brand Carlson Rezidor’s Radisson Blu brand leads in terms of both number of hotel developments (22) and rooms (5,372) in the African pipeline. The Hilton hotel chain comes in second with 16 planned developments and 4,965 rooms, followed by the Marriott hotel with 11 new properties and 2,316 rooms. Nigeria has Highest Number of Planned Developments Africa’s largest economy, Nigeria, has the most number of hotels in the pipeline across all the chains, with over 8,500 rooms in 51 new hotels. The survey highlights that this is “more than the entire pipeline in Central Africa and East Africa combined.” Morocco follows with 5,474 rooms in 31 hotels and then Egypt with 6,440 rooms in 18 new establishments. The hotel development pipeline for sub-Saharan Africa, with 49 countries, is growing much faster than the North African region, with only five countries. However, it was only in 2011 that the sub-Saharan region marginally overtook North Africa in terms of new hotel developments, and only in 2013 did it overtake in terms of planned number of rooms. “As another benchmark of interest, there is an increasing number of hotel investment conferences on the continent,” stated Trevor Ward, Managing Director of W Hospitality Group.

Radisson Blu Hotel in Lagos, Nigeria

AIRLINES FINANCIAL MONITOR KEY POINTS: May-June 2015 • Airline share prices have been falling because of investor profit taking, particularly in the US, but in June they were still up by 10% compared to a year ago; • Q1 financial results show large improvement in profits, especially for US carriers but also in Asia Pacific; • Crude oil prices fell in June after a little rally in May, pushed down by expectations of supply increases from Iran and the US – levels are now down 45% on 2014 highs; • Passenger yields in the US are down 5% year-on-year and fares in other regions have fallen further, reflecting downward pressure from declines in fuel costs, stronger growth in capacity relative to demand as well as exchange rate distortions; • Air transport volumes continue to expand robustly, while trend in FTKs stays flat on weakening trade activity; • Growth in seats accelerated in May as more aircraft came out of storage, surpassing expansion in demand; • Air freight load factors fell further in May, sinking to levels not seen since mid-2009, but passenger loads were sustained above 80%.

Business Journal July 13 - 19, 2015

Travel Tourism

Boeing Raises Plane List Prices by 2.9%

oeing released its 2015 price list recently, and the most expensive commercial jet the company sells is the 777-9X, which carries a list price of $400 million. Boeing raised prices 2.9% on all its commercial planes. The most expensive commercial plane on the market is the Airbus A380-800, which has a list price of $428 million. The nearest competitor Boeing has to that plane is the 747-8, which now carries a list price of $378.5 million. The A380 can carry as many as 555 passengers, nearly 90 more than the 747-8. The competition between Boeing and Airbus is hottest in the single-aisle market, where Boeing’s 737 family of planes goes against the A320 Airbus family. The largest of Boeing’s 737 Next

Generation (the current version) family still available is the 737900ER, which carries a price tag of $101.9. The largest of its new, re-engined planes the 737 MAX 9, has a new list price of $116.6 million. Among dual-aisle, twin-engine planes, the Boeing 787-9 Dreamliner now carries a list price of $224.6 million, where the Airbus A350800 costs $269.5 million and the A350-900 costs $304.8 million. The new A330-900neo, which seats 310 passengers in a standard two-class arrangement, costs an average of $284.6 million. The catalog prices don’t reflect the discounts that are customary in the industry. Boeing has 286 orders for its 777X series, which was introduced in late 2013 at the Dubai Air Show and won’t begin commercial service until 2020.

Airbus to Build A330 Completions Plant in China

irbus and its Chinese partners, namely the Tianjin Free Trade Zone Investment Company Limited (TJFTZ) and the Aviation Industry Corporation of China (AVIC), have signed a framework agreement on setting up an A330 Completion and Delivery Centre (C&DC) in Tianjin, China, taking the partnership between Airbus and China a further step forward following the successful establishment of an A320 Family Final Assembly Line and Delivery Center in the Chinese city. The agreement was signed by Fabrice Brégier, Airbus President and CEO, Yang Bing, President of the TJFTZ and Pang Zhen, Vice President, Commercial Aircraft, AVIC representing the Chinese parties, at the Airbus site in Toulouse, France. The signature was witnessed by visiting Chinese Premier Li Keqiang and French Prime Minister Manuel Valls. Premier Li has had a tour of the Airbus facility, accompanied by Prime Minister Valls after they have presided over a Europe-China Economic Forum held in Toulouse. The framework agreement firmsup the Letter of Intent signed by the three parties last year. “Building on our successful cooperation with China, highlighted by the A320 Family Final Assembly Line in Tianjin, our partnership keeps growing and expanding. The signature of this framework agreement on the A330 Completion and Delivery

Centre will open a new chapter of strategic cooperation on wide-body aircraft with China. Together, we will develop new facilities and capabilities, and attract new suppliers and businesses in China,” said Fabrice Brégier, Airbus President and CEO. The A330 C&DC Tianjin will be located near the site of the Airbus A320 Family Final Assembly Line in Tianjin. The C&DC will cover the aircraft completion activities including reception, cabin installation, aircraft painting, engine run and flight test, as well as aircraft delivery and customer flight acceptance. Under the project, the A330 Family aircraft to be completed at the A330 C&DC Tianjin will be assembled in Toulouse but will be painted

and have their cabin furnished and installed in Tianjin. On the same occasion, Airbus has also signed a Letter of Intent with AVIC on cabin development cooperation and procurement frame contract with Zhejiang Xizi Aerospace Fastener Co., Ltd for design, development, manufacturing, and supply of standard fastener parts. At present, the in-service Airbus fleet with Chinese operators comprises over 1,150 aircraft (over 150 A330 Family and over 980 A320 Family aircraft). In the 20 year period between 2014 to 2033 Airbus forecasts a demand in China for more than 5,300 new commercial aircraft over 100 seats plus freighters.

Greek Crisis Scares Tourists

ourists are starting to worry about Greece's economic crisis—a sign that the country's tourism industry, which accounts for nearly 20 percent of GDP, could experience a slowdown if the financial situation worsens. But visitors shouldn't necessarily cancel their plans, according to travel experts. "A lot of people are very nervous," said Pauline Frommer, Editorial Director of Frommer's and Co-host of "The Travel Show," a national radio show. "The currency issue is a real one." Multiple travel companies said that a wave of people calling with concerns about traveling to Greece started last week after the country's debt talks with European leaders stopped. But most travelers still went. "We actually didn't have one cancellation, and everyone who traveled said they had an excellent time," said Kimberly Wilson Wetty, Co-president and Co-owner of Valerie Wilson Travel, which saw a number of its clients call in last week expressing concern. Over the weekend, Greece voted in a referendum to reject the current proposed bailout measures. Damian McCabe, CEO of McCabe World Travel, said most travelers are waiting to see if the situation in Greece improves or worsens before making any decisions on whether to cancel their trips booked for later in the summer. "I will say that we have not had any further new requests to go to Greece since the news broke that the Greek government might not accept the EU's deal," noted McCabe. For now, going to Greece is still a fine travel decision, experts said. "Greece has been in turmoil for a couple of years now, and tourists have never gotten harmed," said Frommer. Greeks

continue to welcome tourists, she added. The U.S. Department of State does not have any current travel alerts or advisories on its website. The main piece of advice? Bring extra cash and store the euros in a hotel safe. "Visitors to Greece should be aware of possible banking service disruptions and should bring extra euros and more than one means of payment," the U.K. government said on its website. Greek banks have been closed for more than a week to avoid a massive outflow of money that could lead to their collapse. Gretel Dennis, a property consultant based in London who visited the Greek island of Corfu earlier this week, said that the island felt safe and removed from the economic tension in Athens. But she added, carrying "euros was a must and the smaller denomination you had, the more likely you were to be served." Tourists should also book as much of their plans before arriving in Greece in order to lock down their expenses beforehand and take advantage of a historically good U.S. dollar to euro exchange rate, according to Robert Firpo-Cappiello, Editor-in-Chief of BudgetTravel.com. Experts say buying travel insurance is also an option. "Cancel for any reason policies," as they are referred to in the tourism industry, go beyond typical insurance policies and usually cover up to 75 percent of a trip's cost. "For example, a comprehensive travel insurance plan available at InsureMyTrip with the cancel for any reason benefit included might cost around $275 for a spur-of-the-moment, twoweek trip to Greece for one adult that costs $5,500," said Jim Grace, CEO of InsureMyTrip.com, in an email.

Business Journal July 13 - 19, 2015

Insurance Pension

www.businessjournalng.com

African Drought Pool Records Successful First Year

he renewal of reinsurance programme for African Risk Capacity Insurance Company Limited has been completed with Munich Re as one of the leading

reinsurers. The African Risk Capacity (ARC), through its financial affiliate, ARC Limited, has expanded its pioneering catastrophe insurance pool to provide up to $192 million in parametric drought cover for the 2015/16 policy year. More than $70 million of that risk will be transferred to the global reinsurance markets. Munich Re provides reinsurance capacity to ARC Ltd via NewRe. “We are very happy to be part of this programme, and again to support this new sovereign insurance pool. The recipe for success of African Risk Capacity is the combination of risk assessment, contingency and implementation planning,

risk transfer, and rapid availability of funds. The combination of these elements make it a new innovative approach to drought risk mitigation and food security,” says Andreas Molck-Ude, CEO at NewRe. He sees a considerable potential for growth of this type of cover, as additional African countries are likely to join the programme, and the cover

will be extended to flood and wind risk and potentially also pandemic risk. Burkina Faso, Malawi, Mali, The Gambia and Zimbabwe are expected to join the catastrophe pool this year. With these countries expected to join, the total coverage is set to rise to US$ 192m. In its first year (2014/15), ARC Lim-

ited insured Niger, Senegal, Mauritania and Kenya for aggregate limit of $129mn, $55mn of it placed with reinsurers by Willis Re who are brokers to the programme. For Michael Roth, from Munich Re’s Public Sector Business Development, the strength is that this insurance mechanism allows for different development goals to be reached:

“It is not only about adaptation to climate change, disaster resilience and food security. It is also about good governance and cooperation between the participating states. ARC demonstrates that risks of developing countries can be insured in an efficient and market oriented way.” Germany has set climate protection at the top of the agenda during its G7 presidency, as climate change and extreme weather events are a huge challenge for developing countries and can push them deeper into poverty. ARC is a specialised agency set up by the African Union to help member states to cope better with extreme weather events. Through its financial affiliate, catastrophe insurance pool ARC Limited, participating countries can buy parametric drought insurance to protect their vulnerable population against the negative impact of drought. ARC is targeting a total of 20 to 30 African countries to become Members over the next four years.

TOP 10: Global Health Insurance Providers

ith healthcare costs going up every year, it is imperative that every citizen have health

insurance. Here are the biggest and the most well known health insurance providers from across the world. 10. Humana- It is one of the biggest healthcare insurance providers in USA, with more than 11 million members. Humana enjoys a sterling reputation among customers, and provides health insurance services in all 50 U.S. states, D.C., and Puerto Rico. Humana also has international business interests in Western Europe and Asia. 9. Allianz- One of the biggest insurance providers in the world, Allianz is a Germany company. It is well known for its international reach, and for providing international health insurance for employees. The company says that claims are processed within 48 hours, and that 95% of their clients renew with them. 8. AIA Insurance Group- This Hong Kong based pan-Asian group is offers a comprehensive range of health insurance plans ranging from medical, hospitalisation and long term care to critical illness. Basic critical illness plans in the market provide cover-

age for 30 common critical illnesses such as cancer, stroke, heart disease and kidney disease, and usually terminate after the first claim is made. The company also has plans that help compensate for lost income. 7. Aetna Foundation- USA’s Aetna Foundation is one of the most prom-

inent healthcare insurance providers in the country. Aetna offers health care, dental, pharmacy, group life, disability, and long-term care insurance and employee benefits, primarily through employer-paid (fully or partly) insurance and benefit programmes, and through Medicare. 6. Blue Cross Blue Shield- The Blue Cross Blue Shield Association (BCBSA) is a federation of 37 separate health insurance organisations and companies in the United States. Combined, they directly or indirectly provide health insurance to over 100 million Americans. In terms of number of people covered, BCBSA is one of biggest health insurance providers in the world, and also act as administrators of Medicare in many states or regions of the US. 5. Axa- Axa is one of the most well known and biggest health insurance providers working in the UK. The company provides a wide range of private medical insurance

plans for individuals, families and businesses. Axa PPP Healthcare caters to the international market, and was the winner of best international private medical insurance provider in the UK’s 2012 health insurance awards. Axa is also well known in the Gulf region and has a strong presence in Asia. 4. Aviva- A British multinational, Aviva is the sixth-largest insurance company in the world measured by net premium income and has around 43 million customers across 21 countries. Aviva provides health insurance in countries like Ireland and India, and offers a number of unique benefits to its members like nurse on call, treatment of back and neck injuries and screening for various diseases. 3. United Healthcare- United Healthcare is an operating division of UnitedHealth Group, the largest single health carrier in the United States; and covers more than 7 million people. Apart from personal health insurance, United Healthcare also offers programmes for employers, and manages and facilitates United Healthcare healthcare services for state-sponsored public and Medicaid programmes and their beneficiaries. 2.Express Scripts- Express Scripts is an American company which provides integrated phar-

macy benefit management service, benefit-design consultation; drug-utilization review; formulary management; and medical and drug data analysis services to manage drug plans for health plans, self-insured employers and government agencies; including the Department of Defence. 1. Zurich Insurance Group- As of 2013, Zurich Insurance Group was ranked as the 75th largest company in the world. Zurich Insurance Group is the biggest company working in Switzerland, and is well known for providing insurance for healthcare organisations; apart from personal healthcare for various demographic segments. Their plans vary around the world; and they also offer lifestyle plans, coverage for broken bones and fractures for seniors, holiday travel insurance, safeguard plans and ‘peace of mind’ plans, which safeguards a policyholder's current standard of living in case of redundancy, disability or Accident Death & Disability. Zurich Insurance Group also provides coverage for families; safeguarding them from financial difficulties caused by accidents, as well as Accident Death & Disability, accidental hospital income (senior care) and accidental medical expenses.

Business Journal July 13 - 19, 2015

Insurance

Pension

Global Risk Experts: Role of Insurance in Turbulent Decade Ahead

new report from the World Economic Forum identifies the biggest risks facing the world – and the important role insurance can play in mitigating them. International conflict is the biggest threat to world stability in the next 10 years, according to the 2015 edition of the Global Risks report published by the World Economic Forum (WEF). The annual report, which condenses the views of 900 experts, was released in advance of the World Economic Forum meeting in Davos. Interstate conflict with regional consequences – or asymmetric war – is the number one most likely risk and the fourth most serious in terms of impact. Extreme weather events and climate change is ranked in second place in terms of likelihood, followed by failure of national governance systems, state collapse and high unemployment. In terms of potential impact, water crises is rated the greatest risk facing the world. The other high impact risks include disease pandemics, weapons of mass destruction and failure of climate change adaptation. Launching the report in London, WEF’s panel agreed that 2015 stands out as the year when geopolitical risks returned to the fore, having been in the background for the last five years. “Twenty five years after the fall of the Berlin Wall, the world again faces the risk of a major conflict between

and serious vulnerabilities have been highlighted just recently. The cost of cyber attacks is estimated now at $400 billion annually,” Drzik said. “That’s equal to the GDP of Thailand.”

states,” said Margareta Drzeniek-Hanouz, WEF’s Lead Economist. “However the means to wage such a conflict, whether through a cyber attack, competition for resources or sanctions is broader than ever.” Climate Climbs the Agenda Risks to the environment outnumbered economic threats in the report this year, with experts negatively assessing the preparations in place to cope with extreme weather and climate change. Three of the top 10 risks in terms of impact over the next ten years are

environmental risks: water crises, failure of climate-change adaptation as well as biodiversity loss. The report cites forecasts that global water requirements could exceed sustainable water supplies by 40% by 2030. Water scarcity will impact more strongly on food production in the future and could even spark interstate conflict, the report warns. The WEF report stresses the cascading effects that could result from the interconnection of risks. Increasing urbanisation is a danger for different reasons, for example, the report says, noting that by 2025 two thirds

of the world’s population will live in cities. Too rapid urbanisation will touch all risks, exposing vulnerabilities to do with pandemic disease, infrastructure and utilities. Also, many of tomorrow’s mega cities will be located in coastal areas that are prone to flooding and in the so called ‘ring of fire’ belt of earthquake epicentres. Interconnected risks resulting from the rapid pace of innovation were highlighted by John Drzik, President of Global Risk and Specialties at Lloyd’s broker Marsh. “Cyber is the most visible example

Bio Hazards Multiply Other emerging technologies that pose new socio-economic threats include synthetic biology, which is increasingly used in medicine, food production and bio-fuels, according to Drzik. Innovation is critical to global prosperity but synthetic biology presents new hazards, he said, reiterating the interconnection of risks, this time to do with “bio-error and bio-terror” and lack of adequate governance. Nanotechnology and artificial intelligence are other emerging technology risks that could have far reaching socio-economic risk implications, the report says. Speaking to Lloyds.com on the sidelines of the WEF press conference, John Drzik said that insurance will help to mitigate the financial effects of many of the socio-economic risks identified. But insurers can also contribute to the development of public/private partnerships that strengthen risk resilience. “The insurance industry has a strong role to play in enforcing common standards that help improve risk assessment and management, from cyber security to flood defences, for example,” he said.

Dubai's Abraaj Group Sells Stake in Old Mutual

ubai-based Abraaj Group has announced the sale of its stake in an African insurance company to London-listed Old Mutual Plc. In a statement, Abraaj said it has completed the full exit of its investment in UAP Holdings Limited. Under the terms of the agreement, Abraaj sold its 13.6 percent stake. Old Mutual Plc, an international investment, savings, insurance and banking group, has bought the stake in UAP, a pan-African insurance holding company with subsidiaries in Kenya, Uganda, Tanzania, Rwanda and South Sudan, as well as an insurance brokerage arm in the Democratic Republic of Congo. UAP has been operating in Sub-Saharan Africa since 1977 and its general insurance subsidiaries hold dominant market positions in its main markets. In March 2012, Abraaj invested, through one of its Funds, in UAP alongside Africinvest and Swedfund, using a convertible debt instrument. Simultaneously with a limited public offer conducted in November 2012, Abraaj converted its instrument into equity shares in the company. Abraaj said it has worked closely with UAP's board and management team to expand the company's regional footprint.

Over the course of Abraaj's investment, the company's gross written premium and book value increased at compound annual growth rates (CAGR) of 25.5 percent and 18.8 percent, respectively, Abraaj said. UAP also expanded organically into Rwanda and via an acquisition into Tanzania. Davinder Sikand, Partner, The Abraaj Group, said: "We invested in UAP based on the Company's strong brand and well established business lines. With a surge in demand driven by the rapid expansion of a young, urban middle class across Sub-Saharan Africa, UAP has developed in key African markets, and is well positioned to lead the insurance sector in the region." Dr Joseph B Wanjui, Chairman, UAP-Old Mutual Group, added: "Abraaj played an important role in developing UAP's business, enhancing corporate governance and positioning the company for further growth. Our partnership created many opportunities for UAP and we take this opportunity to thank Abraaj for their support." Abraaj said it has helped pioneer the growth and development of the private equity industry in Africa with more than a decade of investing experience and deploying $3 billion across the continent.

Business Journal July 13 - 19, 2015

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Business Journal July 13 - 19, 2015

Capital Market www.businessjournalng.com

Global Perspectives on Capital Market Integration

G Jose Vinals

ood afternoon to all of you. It is my pleasure to participate in the launch of Target2-Securities. I would like to congratulate the European Central Bank on reaching this important milestone and to thank President Mario Draghi and Executive Board member Yves Mersch for their kind invitation to contribute to this event. Also, let me say “grazie” to Governor Ignazio Visco for welcoming us to Italy in what I am told is a magnificent setting. Italy provides splendid venues for events, given its architectural beauty. And Italy is a particularly fitting place to launch a new securities undertaking. It is a cradle of capital markets. Stock trading in Italian cities is documented from at least the early 14th century. Back then, of course, there was no financial integration, and individual cities had their own—rather illiquid—markets. Capital markets have come a long way since, but an integrated European capital market has remained an elusive dream for long. What we are witnessing today is an important step toward making that dream a reality. Today’s celebration gives me the opportunity to provide you with a global perspective on three key questions related to today’s launch: • What is the right balance between bank-based and market-based financial systems? • What are the opportunities and challenges of capital market integration? • How can Target2-Securities contribute to making European capital markets more integrated, accessible to foreign investors, and beneficial for economic growth? • Balance between Bankbased and Market-based Financial Systems First, to put today’s event in a broader perspective, let me address the long-running debate on bankbased versus market-based financial systems. Bank-based systems are inherently good at mobilising savings, identifying good investments, and exerting corporate control. At the same time, capital markets can also play a vital role in allocating capital, providing risk-management tools, and mitigating the problems associated with oversized banking systems. In a recent study, we at the IMF have re-examined the international evidence on the effects of financial systems on economic growth and stability.1 We find that there is no one-size-fits-all when it comes to prioritizing banks or markets. Bankbased systems are not uniformly better than market-based ones, or vice versa.

This, together with implementation of the necessary measures to address the remaining non-performing loans, is a key pre-condition for banks to play their role in adequately supporting the ongoing European economic recovery.2 At the same time, market-based finance needs to become more important in supporting funding through both debt, and particularly equity. But increasing the depth of capital markets in Europe requires greater integration. Only a handful of European economies are big enough to support capital markets that reach critical mass in a full range of asset classes. For Europe’s many small economies, cross-border integration of markets is especially valuable. Against this background, the IMF is very supportive of the European Capital Markets Union.

Jose Vinals Financial Councellor and Director, Capital Market Division International Monetary Fund

• Opportunities and Challenges of Capital Market Integration This brings me to the second question that I want to tackle today; the opportunities and challenges of capital markets integration. Cross-border financial integration

Oscar Onyema CEO, Nigerian Stock Exchange However, the evidence is clear on one point: as economies develop, they can reap benefits in terms of both growth and financial stability by relying less exclusively on banks and moving toward a more balanced financial system with capital markets playing an increasingly important role. But even more fundamental than achieving the right balance between

banks and markets is that banks be strong and capital markets be efficient and resilient. Let me turn now to the European financial system. Banks are substantially better capitalized nowadays, following the successful comprehensive assessment carried out by the European authorities and the actions taken by the Single Supervisory Mechanism.

offers a number of important economic benefits. Growth is enhanced through better allocation of savings while stability is enhanced through better risk sharing. For instance, regarding the latter, in economies like the United States where capital markets are both deep and fully integrated, nearly 40 percent of shocks to states within the

country are smoothed through capital markets, three times more than what is smoothed through the Federal Budget.3 These numbers suggest substantial potential for capital markets to enhance risk-sharing in Europe. As regards the challenges associated with capital markets integration, there is always potential for the cross-border transmission of shocks. This underscores the need to accompany the increasing role of non-bank financial intermediation and market-based financing by adequate regulatory and supervisory frameworks to safeguard financial stability. • How Does Target2Securities Fit into all of This? Let me now turn to the third question: where does Target2-Securities fit into all of this? An essential feature of a deep, smoothly functioning, well-integrated capital market is a clearing and settlement system that provides for the efficient and safe transfer of ownership from the seller to the buyer. In this context, Target2-Securities is a vital part of the Capital Markets Union. One of its objectives is to reduce the cost of settlement of securities, in particular for cross-border transactions, some of which have been ten times more expensive than domestic transactions. Target2-Securities will be a catalyst for further harmonization of posttrade practices and regulations across Europe. Not only that, but due to reduced settlement costs, increased competition and greater harmonization, it is also expected to have a broader positive impact on efficiency. Issuers will gain easier access to a more diversified investor base, and investors will benefit from more diversified bond and equity portfolios. Yet, the concentration of settlement transactions at the Target2-Securities platform calls for strong oversight and supervision to effectively identify and manage any potential legal and operational risks. Close cooperation among all relevant authorities is essential to promote the safety and efficiency of Target2-Securities. Conclusion Let me conclude by emphasizing that the progress achieved thus far bodes well for the future but there is still much work ahead in fully developing and integrating European capital markets. And we should not forget that the economic benefits from deeper and more integrated capital markets will be much greater if other needed structural reforms are also carried out in labor and product markets. These are key for finance to be channeled to the most efficient activities and thus to elevate potential growth. Thank you. Speech by José Viñals, Financial Counsellor and Director, IMF at the Launch of Target2-Securities by European Central Bank in Milan, Italy

Business Journal July 13 - 19, 2015

ThePovertyGap

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UN: Co-operatives as Vehicle for Sustainable Development

o-operatives will play an “invaluable role” in the international community's roll-out of a sustainable development goals, said United Nations Secretary-General Ban Ki-moon, who today marked the International Day of Cooperatives with an appeal for all to recommit to the business model, which could help make the vision of a sustainable future a reality for everyone. “Inequality is a fundamental obstacle to development, depriving people of basic services and opportunities to build better lives for themselves and their children,” the Secretary-General declared in his message for the Day, which is on the theme 'Choose Co-operative's, Choose Equality.' “The cooperative model helps meet this challenge. Cooperatives strive to uphold the principles of equality and democratic participation,” says Mr. Ban According to Co-operatives and Sustainable Development Goals, a recently-produced study by the UN's International Labour Organisation (ILO) and the International Cooperative Alliance (ICA), co-operatives contribute to sustainable development and hold the potential to do much more: from creating employment and enhancing gender equality to providing clean energy and financial inclusion to ensuring food security and extending social protection. Co-operatives are strongly committed to the communities they serve, Mr. Ban continued. “This business model, built on inclusion and sustainability, offers a pathway toward economic, social and political justice for all.” At the same time, the UN has long noted that the benefits of the cooperative model expand well beyond its contribution towards sustainable development.

Members of the Co-operative Agriculture Maraicher for Boulbi, water and hoe their vegetable fields in Kieryaghin village, Burkina Faso. Ranging from small-scale to multi-million dollar businesses across the globe, cooperatives operate in all sectors of the economy, and provide 100 million jobs worldwide – 20 per cent more than multinational enterprises, according to 2011 figures from the UN Food and Agriculture Organisation (FAO), the UN International Fund for Agriculture Development (IFAD) and the UN World Food Programme (WFP). In 2008 alone, in the midst of the global financial crisis, the largest 300

cooperatives in the world had an aggregate turnover of $1.1 trillion, comparable to the gross domestic product (GDP) of many large economies. In his message, the Secretary-General pointed to a wealth of research showing how cooperatives have helped lower wage difference between men and women and promote greater equality in the work place and training opportunities. With an estimated one in every six people in the world either a member

or client of a cooperative and some 2.6 million cooperatives employing 12.6 million people globally, the potential contribution to sustainable development is “enormous,” he added. “In this crucially important year in which the world will commit itself to an inspiring new development agenda, including a set of sustainable development goals, let us recommit to the cooperative business model and use its many benefits to fulfil our vision of a life of dignity for all,”

concluded Mr. Ban. In his message message on the Day, Guy Ryder, Director-General of the International Labour Organisation (ILO) said that as people-centered, principle driven, member owned businesses, cooperatives have a long tradition of promoting equality. Their values of “equality and equity” are translated into members' equal voting rights and access to the products and services of the co-operative, as well as to an equitable distribution of surpluses. “In addition to creating a viable enterprise model that generates productivity and income, cooperatives are well placed to help tackle social inequalities, discrimination and exclusion based on gender, age, race, ethnicity, sexual orientation and differential abilities,” he said, adding that not surprisingly, co-operatives have also proved to be effective vehicles for realising decent work for all. For example, Mr. Ryder noted that in the rural and informal economies “we have seen first-hand how women, youth and indigenous peoples are increasing their income and their standard of living by using the cooperative way of working,” and in low income communities, cooperatives of housing, tourism and renewable energy can help to achieve an equitable distribution of economic returns. The ILO is examining how co-operative arrangements for the provision of care services can improve the well-being of care workers, care beneficiaries and the community at large. “And, as the world of work evolves, the co-operative model can be used to bring technological, social and organisational innovation through pooling of people, knowledge, technology and resources helping to bridge the gaps that perpetuate economic and social inequality,” he said.

Anti-poverty Pioneer Wins 2015 World Food Prize

he founding chairman of a leading rural development and anti-poverty organisation, based in Bangladesh, has won the 2015 World Food Prize. Sir Fazle Hasan Abed established Brac in 1972, which has since helped nearly 150 million people out of poverty. The judging panel recognised his lifetime commitment to empowering women and helping small-holding and subsistence farmers out of poverty. The announcement was made at the U.S. State Department in Washington DC. "The selection committee chose Sir Fazle because [he has built] an institution in a very difficult environment where many people thought that very little could be achieved," explained World Food Prize President, Kenneth Quinn. "Not only that but he has built it into the largest and, many would say, the most impactful non-profit organisation in the world which now operates in 10 or more other nations."

Sir Fazle Hasan Abed was recognised for his work to empower women among Bangladesh's rural poor Dr Quinn told BBC News that the judges were also impressive by the anti-poverty innovations developed by Sir Fazle and Brac (formerly know as the Bangladesh Rural Advancement Committee) and the vast number of people it has helped lift out of poverty. "The other element that really stood out to our selection committee was the

approach he took towards educating girls and empowering women," he added. Shortly after founding Brac 43 years ago, Sir Fazle focused on the social and economic empowerment of women, which - at the time - was a radical departure from the conventional approach. Sir Fazle commented: "The real he-

roes in our story are the poor themselves and, in particular, women struggling with poverty. "In situations of extreme poverty, it is usually the women in the family who have to make do with scarce resources. When we saw this at Brac, we realised that women needed to be the agents of change. He observed: "Only by putting the poorest, and women in particular, in charge of their own lives and destinies, will absolute poverty and deprivation be removed from the face of the Earth." The US$ 250,000 World Food Prize has been awarded annually since 1987 to "outstanding individuals who have made breakthrough achievements contributing to improving the quality, quantity or availability of food throughout the world". Dr Quinn, former US Ambassador to Cambodia, said the prize was established by Plant Biologist, Dr Norman Borlaug, described as the father of the Green Revolution and winner of the Nobel Peace Prize in 1970 in recognition of his contribution to world peace via in-

creasing global food supplies. "Dr Borlaug foresaw the burgeoning world population of the 21st Century and that we would be moving towards a population of seven and nine billion people," Dr Quinn explained. "And there would need to be the kind of innovation and breakthroughs that could increase the amount of food produced, the quality of food in terms of nutrition and also that it could be done sustainably, in a way that could preserve or enhance resources. "He thought that there should be a prize that was equivalent of the Nobel Prize he received for agriculture and food. "Since 1987, there have been 40 individuals who have won the World Food Prize and they come from a broad array of specialisations, from presidents to seed scientists and irrigation pioneers. Dr Quinn added: "The prize has evolved and developed into the sort of recognition and, hopefully, the inspiration for this generation and the next generation of scientists."

Business Journal July 13 - 19, 2015

Healthcare www.businessjournalng.com

WHO: Govt Tax Action Needed to Curb Tobacco Epidemic

oo few governments levy appropriate levels of tax on cigarettes and other tobacco products. They therefore miss out on a proven, lowcost measure to curb demand for tobacco, save lives and generate funds for stronger health services, according to the "WHO Report on the global tobacco epidemic 2015." The report focuses on raising taxes on tobacco. Although 33 countries impose taxes that represent more than 75% of the retail price of a packet of cigarettes, many countries have extremely low tax rates. Some have no special tax on tobacco products at all. “Raising taxes on tobacco products is one of the most effective – and cost-effective – ways to reduce consumption of products that kill, while also generating substantial revenue,” says Dr Margaret Chan, WHO Director-General. “I encourage all governments to look at the evidence, not the industry’s arguments, and adopt one of the best win-win policy options available for health.” Strategies to support the implementation of demand reduction measures contained within the WHO Framework Convention on Tobacco Control (WHO FCTC), such as the “MPOWER” package, have helped save millions of lives in the past decade. MPOWER was established in 2008 to promote government action on 6 tobacco control strategies – 1 for each letter of the MPOWER acronym – to stamp out the tobacco epidemic, namely to: • Monitor tobacco use and prevention policies; • Protect people from tobacco smoke; • Offer help to quit tobacco use; • Warn people about the dangers of tobacco;

• Enforce bans on tobacco advertising, promotion and sponsorship; and • Raise taxes on tobacco.

The main findings of the report, funded by Bloomberg Philanthropies, include the fact that raising taxes is the least implemented MPOWER mea-

sure in terms of population coverage, and the one that has seen the least improvement in terms of government action since 2008. However, by 2014, 11 countries had raised taxes so that they represent more than 75% of the retail price of a packet of cigarettes, joining the 22 countries that had similarly high taxes in place in 2008. Dr Douglas Bettcher, Director of WHO’s Department for the Prevention of Non-communicable Diseases (NCDs), says higher tobacco taxes and prices are proven methods to reduce consumption and promote quitting the use of tobacco products. “Evidence from countries such as China and France shows that higher tobacco product prices linked to increased taxes lead to declines in smoking prevalence and tobacco-related harm, such as lung cancer deaths,” says Bettcher. Dr. Vera da Costa e Silva, Head of the WHO FCTC Secretariat, notes that the Convention offers governments policies to curb illicit trade in tobacco products to reduce demand and boost tax revenues from tobacco sales.

“Countries should consider implementing the provisions of the Protocol to Eliminate Illicit Trade in Tobacco Products to confront the illegal market,” she adds. Tobacco taxation could also be a key source of funding for implementing the post-2015 Sustainable Development Goals. Tobacco-related illness is one of the biggest public health threats the world has ever faced. Approximately 1 person dies from a tobacco-related disease every 6 seconds, equivalent to around 6 million people a year. That is forecast to rise to more than 8 million people a year by 2030, unless strong measures are taken to control the epidemic. Tobacco use is also one of the 4 main risk factors behind the global epidemic of non-communicable diseases, primarily cancers, cardiovascular and lung diseases, and diabetes. In 2012, these diseases killed 16 million people prematurely (before the age of 70 years), with more than 80% occurring in low- and middle-income countries. Other findings from the 5th "WHO Report on the global tobacco epidemic 2015"include: • 40% of the world’s population (2.8 billion people) are covered by at least 1 MPOWER measure at the highest level, more than doubling the number of countries and nearly tripling the number of people covered since 2007; • 20% of the world’s population are covered by 2 or more MPOWER measures at the highest level, tripling the number of people to 1.4 billion people since 2007; and • 7 countries, including 5 lowand middle-income, have implemented 4 or more MPOWER measures at the highest level, namely Brazil, Islamic Republic of Iran, Madagascar, New Zealand, Panama, Turkey and Uruguay.

Experts on Solutions to ‘Brain Drain’ in East Africa’s Healthcare Industry

he migration of health workers from countries of East Africa presents a critical challenge to the provision of healthcare. It is a growing concern that urgently needs to be addressed. The Healthcare Management Conference at Medic East Africa, supported by the Kenyan Medical Association, will provide 10 CPD points for all healthcare professionals who attend. The conference will feature some of East Africa’s prominent figures in the healthcare industry and further discuss the issue of ‘brain drain’ in East Africa. Medic East Africa is the largest healthcare event in the East Africa region and will take place from 1-3 September 2015 at the Oshwal Centre, Nairobi, Kenya. The event

will showcase the very latest medical breakthroughs and technological developments in healthcare, and feature the leaders in the healthcare industry in Kenya and East Africa. According to Dr James Mwanzia, Chief of Party Funzo Kenya, IntraHealth (USAID), “in order for East African countries to achieve Universal Health Coverage, we must ensure an adequate workforce in terms of their availability, accessibility, acceptability and quality. We must, therefore, seriously address the issue of migration of health workers.” Currently, the retention rate of healthcare workers in East Africa is a lot less than the World Health Organisation (WHO) recommendations. The population ratio for all cadres is significant, and the emigration only worsens the situation. “Certain retention strategies can

be put in place to address the loss of medical talent such as scaling up the training of nurses and clinical officers, continually investing in staff recognition and motivation, improving human resources management policies, practices, governance, using salary survey results and recommendations to review their structures, staff motivation, retention, and teamwork, and institutionalising staff exit feedback and acting on issues,” says Mwanzia. More than 250 healthcare and medical laboratory companies will showcase their products and services to more than 2,500 attendees during the three-day Medic East Africa exhibition. The exhibition will host leading healthcare companies such as Alvo Medical, Hill-Rom, Medel, Mindray, Olympus, and more.

Business Journal July 13 - 19, 2015

Entrepreneur www.businessjournalng.com

Women: Changing the Face of Global Entrepreneurship

omen-owned entities represent over 30 percent of registered businesses worldwide. But all too often, women—already facing social and cultural barriers, and the pressures of raising a family—find it more difficult than men to gain access to finance. While many investors are increasingly looking to the BRICs and beyond for growth opportunities, the fact is that women represent the largest emerging market on the planet. Societies with greater gender equality and diversity are more productive and efficient. Breaking down gender barriers can help businesses and institutions perform better, boost competitiveness, and promote economic growth—thereby helping reduce poverty and improving development outcomes for the next generation. The private sector plays a critical role in advancing equal opportunities for women and men, through the provision of access to finance, jobs, and technology. IFC’s Gender Secretariat helps World Bank Group staff develop projects and initiatives to strengthen businesses by including women and men equally. We help clients build robust business performance by making them aware of the value women can bring either as a defined consumer segment, as employees in particularly male-dominated sectors, as business leaders, or as entrepreneurs and suppliers. To increase access to finance for women-owned small and medium enterprises, we leverage our extensive global network of more than 800 financial intermediaries and work with corporations that share our objective to strengthen and broaden their outreach to women and have more women in management roles.

Women entrepreneurs are changing the face of the global economy, helping sustain job creation and economic growth

Through our Banking on Women programme, IFC has invested in 29 projects since its inception, in 2010— in nearly 20 countries and with commitments totaling about $800 million. One of the companies benefitted through this initiative was Miniprix,

a small private enterprise in Romania owned and operated by two sisters. Eighty percent of the company’s employees are women, who work filling ever-increasing orders of clothes, shoes, and other accessories that the company imports and resells both lo-

cally and abroad. “When we decided to expand online, we didn’t expect that it would be so fast and that it would be so big a demand. And so we realised that we need more money to develop software,” says Miniprix Co-Owner, Ana Maria Cristina. The sisters were able to get a loan from Romania’s Garanti Bank, to which IFC had provided $15 million to target women-owned small companies. Their business is now booming, after an investment in a new software, logistics, and better warehouse management. Banking on Women is also benefitting women entrepreneurs in the Democratic Republic of Congo, which has one of the world’s lowest rates of access to finance. A combined programme of investment and advisory services to Rawbank helped it boost not only lending to women entrepreneurs but also the provision of legal advice and business training. Rawbank customer Jacqueline Mavinga was able to get a $6,000 loan to

open a clothing shop, as well as receive training on how to create a business plan and keep accounts. “People take you much more seriously when you are backed up by a bank,” Mavinga says. In partnership with the Goldman Sachs Foundation, we launched in 2014 another initiative that is benefitting women-owned small and medium companies. The Women Entrepreneurs Opportunity Facility has a goal to reach 100,000 of these enterprises, with $600 million in investments. It has already committed to eight investment projects, in countries as diverse as Ecuador and Kenya, and recently announced China’s first internet-based gender-finance programme. Working with key partners including the EDGE Certified Foundation, International Labour Organisation (ILO), and the UN Global Compact, IFC launched also in 2014 SheWorks, an initiative aimed at enhancing quality employment opportunities for more than 380,000 women worldwide over the next two years.

Women: Bridging Gender Gap in Access to Finance

inancial exclusion remains a major constraint for women, particularly in developing countries. More than one billion women still do not use or have access to the financial system, according to the World Bank Group’s latest Global Findex Report. IFC has estimated that worldwide, a $300 billion gap in financing exists for formal, women-owned small businesses, and more than 70 percent of women-owned small and medium enterprises have inadequate or no access to financial services. Furthermore, developing economies have 200 million more male than female cell phone owners. Without access to mobile technology, millions of women are further excluded from secure and convenient digital payment systems. Without access to finance, women face difficulties in collecting and saving income, growing their businesses, and pulling their families out of poverty. As a result, women remain largely excluded from the formal

to expand women’s access to finance, financial knowledge, and products such as insurance to mitigate risks.

economy. IFC recognises that the Bank Group’s twin goals of eradicating extreme poverty and increasing shared prosperity cannot be achieved without the full and equal participation of women and men. Investing in women’s economic participation not only has a profound development impact, it makes good business sense for companies and economies. Strengthening women’s private sector participation is at the core of IFC’s opera-

tions. Through initiatives such as Banking on Women, Better Work, SheWorks, and Women on Boards, we are strengthening the capacity of women entrepreneurs to grow their business, improving their employment opportunities and working conditions, and amplifying women’s voices as business leaders. Most importantly, along with other global organisations, the Bank Group has made universal access to finance by 2020 a top priority, making concerted efforts

Focus on Women IFC has recently recognised three projects that are innovatively bridging the gap in women’s access to finance at its annual Gender & the Economy event. The Australia New Zealand Bank’s Mobile Banking project is improving the lives of low-income, unbanked women and expanding their access to mobile banking in Solomon Islands, reaching scale in a challenging aid-dependent, post-conflict environment. Launched in late 2013, the project had signed up more than 24,000 new mobile banking customers by December 2014, almost half of whom were women. By December 2017, ANZ expects to reach a total of 65,000 new customers. In the East Asia and Pacific, our Women in Business program is helping Rizal Commercial Banking Corporation (RCBC)

become the region’s first commercial bank to implement a women-focused program. As of December 2014, RCBC had provided nearly 1,400 loans worth $70 million to women-owned businesses in a region where the credit gap for women entrepreneurs is more than 60 percent greater than that for male entrepreneurs. RCBC also established the region’s first network of relationship managers specifically trained to advise women entrepreneurs. In the Middle East and North Africa, where women workers constitute 25 percent of the workforce compared with 40 percent worldwide, IFC has launched the Women Banking Champions programme. The programme, which consolidates IFC’s five gender-related bank advisory projects in the region, has supported access to financial and non-financial banking services through IFC client banks for more than 2,000 women. IFC aims to work with six more banks in the coming five years, serving more than 12,000 women.

Business Journal July 13 - 19, 2015

Manufacturing www.businessjournalng.com

Labour in Support of FG’s Bailout of States T he Nigeria Labour Congress (NLC) has thrown its weight behind the recent move by the federal government to bailout states by releasing about N714 billion to state governors to fund their recurrent expenditure, particularly the backlog of salaries owed to workers. In a statement signed by the General Secretary of NLC, Dr Peter Ozo-Eson, the congress said: “We would want to register our appreciation to the government of the federation for releasing intervention fund to the states. This intervention, no doubt, is a gesture that will go a long way in enabling the states to discharge their obligations to the citizenry. In our submission to the Presidential Transition Committee, we had made the point that Mr. President needed to intervene in resolving the issue of backlog of salaries. We are happy that President Muhammadu Buhari has made this happen.” Buhari had last Tuesday approved

Ashaka Cement Sues FIRS over $6.9m Tax Controversy

shaka Cement has filed a suit against the Federal Inland Revenue Service (FIRS) before the Tax Appeal Tribunal, North West Zone over a US$6.94m tax dispute. In its statement of claim, Ashaka Cement faulted the tax assessment made by the FIRS and urged the tribunal to review the decision. It alleged that, in December 2014, the FIRS commenced a tax audit exercise on Ashaka Cement with respect to its year 2013 finances. "Subsequent to the exercise, the respondent issued an invitation/demand notice dated 2 December 2014 on the appellant (Ashaka Cement), assessing unpaid tax liabilities, which the appellant representatives attended on 15 December 2014. The invitation/demand notice contained the breakdown of the assessment made by the Respondent (FIRS). The Appellant received the said letter on the 4 December 2014. The Appellant responded to the said notice by an objection letter dated 22 December 2014 and served on the Respondent on 29 December 2014," said Ashaka Cement. According to Ashaka Cement, the service of the objection letter was preceded by a reconciliation meeting held between its representatives and the FIRS' representatives on 15 December 2014. It said that vital issues contained in the FIRS' notice were discussed and 'ironed out.' Ashaka Cement argued that the ground of objection raised in its notice was a reflection of issues raised, canvassed and agreed upon at the reconciliation meeting. It noted that it had assessed its tax liability on technical fees based on estimate only and all supporting documents were attached in form of Appendixes 1-12.

the release of N714 billion intervention fund to state governments to pay the arrears of workers’ salaries. The NLC said the intervention could be appropriately viewed within the prism of legitimacy and normal duty of sharing. It said it was worth pointing out that it was one thing to disburse funds to the states; it was another thing to ensure that the funds were appropriately applied. It therefore, urged the president to bring the full weight of his office to bear on the governors in order to ensure that the funds disbursed were well applied. The statement also said that as a matter of priority, the Federal Government should pay the full arrears of salaries and pensions owed workers and retirees. It said that NLC would ensure that its state councils across the country monitored the disbursement and utilisation of the fund. The labour union also stressed that the NLC would ensure that any reported case of misapplication elicits an appropriate response from the congress.

Mouka Foam Acquired by Abraaj Group

stablished in 1959, Mouka is one of Nigeria’s largest firms producing a wide range of mattresses and bedding products. Abraaj is partnering with the founding family to strengthen Mouka’s domestic leadership position and enhance the company’s product offering, distribution network and geographic presence. The Abraaj Group has announced that it has acquired a major stake in mattress maker Mouka. Abraaj is a leading investor operating in global growth markets. The acquisition was made possible through one of Abraaj’s Funds. In partnership with the Moukarim Family (the ‘founding family’), Abraaj acquired its stake from previous shareholders, Actis and the founding family, with the latter retaining a minority stake in the company. Moukarim Metalwood Factory Limited, the precursor of Mouka Limited, was established in Kano, Nigeria in 1959, producing furniture and allied metal products for the bedding industry. In 1972, it started supplying raw materials to the industry and built a foam manufacturing plant in Lagos. The company acquired an additional foaming plant in Benin in 2005 and built a third plant in Kaduna, Nigeria in 2009. Today, Mouka is a household brand name in Nigeria and a leading manufacturer in the Nigerian foam and bedding space. The company has an extensive distribution network across the country, partnering

with over 500 distributors who operate through more than 1,000 outlets. Abraaj, in partnership with the Moukarim family, will draw on its significant regional investment expertise to consolidate Mouka’s leadership position in Nigeria, and will look to expand the business further into the West African market. Abraaj and the Moukarim family will focus on enhancing Mouka’s product offering, customer service, as well as its sales and distribution strategy by increasing its market

penetration across the region. Abraaj, which invests with a rigorous approach to sustainability, plans to further strengthen the corporate governance structures already in place within the company, and optimise the health and safety standards at Mouka’s production facilities, including key areas pertaining to fire safety and chemical storage, amongst others. Mustafa Abdel-Wadood, Partner at The Abraaj Group, said: “Abraaj is one of the most active investors on the African continent,

with a particularly strong track record in Nigeria. We continue to see significant upside potential across the country in tandem with the fast growth of its population and the expansion of its middle-class. We’ve long been interested in the mattress-manufacturing space, and have carefully reviewed a number of opportunities in the past. The market opportunity for high quality sleeping products offers good potential for growth, and we believe Mouka is very well positioned to capitalise on this.”

Business Journal July 13 - 19, 2015

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Business Journal July 13 - 19, 2015

Special Nigeria Report

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Economic Alert | 30 June 2015

Nigeria – June BSI indicates near-term challenges, future growth

Razia Khan

Economic Research Standard Chartered Bank

▪ Business sentiment in Nigeria fell 1.1% m/m to 60.7 in June ▪ The bigger picture reveals that activity likely accelerated in Q2-2015 as elections lifted sentiment ▪ Future expectations remain strong, consistent with our view of a ‘year of two halves’ for Nigeria Summary The Standard Chartered-MNI Business Sentiment Indicator (BSI) for Nigeria fell modestly in June by 1.1% m/m to 60.7. Following the relative euphoria of the elections, confidence corrected – albeit modestly – to its lowest level since February. Nonetheless, the BSI may see some recovery in the months ahead. While 10 of 15 current conditions indicators improved in June, nine of 15 future expectations indicators also picked up, with four of these future expectations indicators (new orders, inventories, financial position and overall business confidence) reaching new series-highs. We believe the softer BSI for June indicates ongoing economic challenges. Inflation is likely to remain a problem. Despite weak demand, with firms reporting some difficulty in passing price increases on, input prices reached a new series high in June. Rising costs continue to pressure margins. Moreover, businesses still point to weak FX availability as a constraint on activity. The current conditions assessment for the ‘effect of the naira exchange rate’ remains in deeply contractionary territory – despite picking up to 21.7 in June from 16.8 in May. This implies that FX availability is hurting businesses. Even at 21.7, this indicator remains well under the more neutral 50 breakeven level. Given the introduction of further FX controls by the Central Bank of Nigeria (CBN) in late June – a period not yet covered by the survey – we expect to see further deterioration in businesses’ assessment of FX availability when the July BSI data is published. In all, our BSI indicates that confidence reached its lowest level since February, suggesting that some of Nigeria’s post-election euphoria is starting to fade. This is a new development. The bigger picture still indicates that elections and a recovery in oil prices likely played a role in lifting sentiment in Q2. The three-month average BSI reading of 61 for Q2 is consistent with some economic recovery, up from the slightly weaker 59.2 in Q1. Both prints are lower than the average of 63.3 in 2014, when oil prices were higher. We believe a recovery in H2-2015 is plausible. This is consistent with our thinking that 2015 will be a ‘year of two halves’ for the Nigerian economy, with a weak H1 giving way to more robust activity in H2 (see Nigeria – Reform Priorities, Global Focus Q3-2015, ‘When perception is not reality’). The strength of the future expectations indicators in Nigeria suggests that businesses remain optimistic on the likelihood of an economic turnaround. Most future expectations indicators are holding up well above the 50 breakeven level, suggesting businesses continue to

number of key business metrics, including orders, production, pricing, inventories, credit availability and the impact of exchange rate trends. Details of how to interpret the questions are provided at the end of this report (Figure 19). Data collation for Nigeria was initiated in March 2014. The short survey history means that it is not yet possible to adjust for seasonality. Nonetheless, we can still observe how sentiment might be changing from month to month, based on our representative panel of companies. Overall business conditions strengthened slightly Overall business conditions continue to reveal the discrepancy between Nigerian businesses’ view of the economy currently, compared with future expectations. Overall business conditions continued on an upward trend in June, although they remain rangebound, increasing just 2.9% m/m to reach 79.2. Future expectations rose further above last month’s series high, reaching a new high of 98.5 in June. As challenging as current conditions are, Nigerian businesses remain optimistic

anticipate the resumption of stronger growth even now, despite the economy’s many challenges. A quick recap on the BSI methodology The Standard Chartered MNI Business Sentiment Indicator – or BSI – for Nigeria is a diffusion index, summarising in a single number how optimistic businesses feel about current and future economic conditions. We partner with MNI, a well-known data provider that has long produced the Chicago PMI among other indicators, to construct the Standard Chartered-MNI BSI. Each month, up to 200

formal-sector businesses, active in different segments of Nigeria’s economy, respond to questions on Nigeria’s current and future economic conditions. Although c.80% of the respondents polled are Lagos-based, the businesses that they represent are active across Nigeria. Their responses are collated to generate a single number that captures sentiment. The headline BSI (current conditions index) for Nigeria is made up of a number of components, with different weights assigned: new orders (a 35% weight), production (25%), employment (15%), order backlogs (15%) and supplier delivery times (10%).

Respondents are asked whether business activity has increased, decreased, or remained the same, compared with the previous month. They are also asked about their expectations over the next quarter. We use this information to calculate a diffusion indicator, by adding the percentage share of positive responses to half of the percentage of respondents reporting no change. An indicator above 50 shows an expansion. An indicator below 50 indicates a contraction. A result of 50 means no change. Questions are asked regarding a

about the short-term outlook. Future expectations for overall business conditions reached a series high in June. Production languishes at low levels Businesses still report relatively soft current production trends. Current conditions increased 1.3% m/m in June to 69.6. However, the three-month average of 67.6 remains below 2014 levels, highlighting deceleration in Nigerian growth in 2015. Future expectations fell slightly to 97 in June from a series high of 97.9 in May. As weak as the economy might be currently, businesses still express a high degree of optimism about future production levels.

Business Journal July 13 - 19, 2015

Economy www.businessjournalng.com

Borrowing Responsibly: Africa’s Debt Challenge

t’s been a rough year for the West African countries most affected by the Ebola virus that has ravaged their communities and crippled their economies, disrupting agriculture and trade. Forecast to lose a combined US$1.6 billion in predicted economic growth in 2015, the people of Guinea, Liberia and Sierra Leone breathed a collective sigh of relief when the International Monetary Fund (IMF) forgave a combined $100 million in loans, shortly after disbursing $130 million in aid last September. The intention was to free up funds for relief and recovery efforts. But with the need to overhaul their health systems, these countries are once again accumulating debt – like the $160 million interest-free loan awaiting approval by the IMF Executive Board. The acquisition of new debt is an emerging pattern among beneficiaries of the world’s most comprehensive debt reduction programme to date. The 1996 Heavily Indebted Poor Countries (HIPC) Initiative, supplemented by the 2005 Multilateral Debt Relief Initiative, has helped 35 sub-Saharan African countries cancel $100 billion in external debt. These internationally co-ordinated relief programmes, managed by the World Bank, IMF and the African Development Bank, were designed to find a sustainable solution to Africa’s debt burden. No longer forced to divert scarce resources to repay costly loans amassed during the Cold War period by corrupt and repressive regimes, the poorest and most indebted countries on the continent were able to lower their public debt and increase social spending by almost 3.5% of their gross domestic product between 2001 and 2012, the World Bank and IMF claim. For example, Benin used its savings from debt to invest in rural primary healthcare and HIV programmes. Tanzania abolished primary school fees and Mozambique began offering free immunisation to children. Freeing up additional resources for development was another aim of the HIPC initiative. However, a lot of the money forgiven was already tied up in arrears, meaning it was owed but had not yet been reimbursed, so there was no new cash flow and no real savings in terms of resources. In some countries the write-off just helped mop up overdue debt. And while the initiative did erase most of the foreign debt of these countries, it did not clear all of it. What the whole process did achieve, according to a Huffington Post article by Marcelo Guigale, a World Bank Director, was instilling “discipline” that came in handy when the price of oil, gas and minerals climbed in the mid-2000s and the technologies to look for these natural resources got better. To qualify for a debt cancellation, countries had to be transparent in their operations

and open to scrutiny, and they had to monitor and report their poverty reduction strategies, invest savings into social programmes and refrain from accumulating expensive debt. Which is why, according to Guigale, African governments had “more money to spend and new offers to borrow – this time from private bankers.” Faced with the phasing out of the HIPC initiative and a decline in official development assistance, some countries seized the opportunity provided by their healthier balance sheets and continued economic growth to explore new sources of funding. China, leading the group of emerging economies called BRICS (Brazil, Russia, India, China and South Africa), has been investing heavily in infrastructure. International bond markets provide another avenue. According to Amadou Sy, the Director of the Africa Growth Initiative at the Brookings In-

stitution, a U.S. think tank, 12 countries in sub-Saharan Africa have issued a total of $15 billion in international sovereign bonds. Investors are also keen to snatch up these bonds, seduced by the continent’s favourable growth outlook and promise of high returns. The World Bank reports average GDP in sub-Saharan Africa is projected to remain broadly unchanged at 4.6% in 2015, rising gradually to 5.1% in 2017. Some observers worry that countries are borrowing too much and too fast. “Africa may have the fastest-growing continental economy on the planet,” freelance journalist Richard Walker writes in the Economist, “but growing fastest of all is debt – personal, corporate and government.” Walker points to Ghana’s issuance in late 2014 of $1billion in euro-denominated bonds, although the coun-

try is deep in debt and has what he calls Africa’s “worst-performing currency”. The West African nation was one of the first beneficiaries of the HIPC initiative. Côte d’Ivoire, the Democratic Republic of the Congo, Gabon, Namibia, Nigeria, Rwanda, Senegal and Zambia also beneficiaries of the debt cancellation programme, have also issued similar bonds. Even with the recent surge in borrowing, most of the post-HIPC countries are not at risk of “debt distress”, a group of economists with the World Bank insists. Dino Moretto, Tihomir Stucka and Tau Huang concede that “some countries may be borrowing too quickly”, but they also specify that “overall, governments have been borrowing responsibly since receiving debt relief”. The trio explains that one of the objectives of the debt relief programme was to clear debt overhang and allow countries to borrow again, responsibly. Many countries have been careful in taking on loans at commercial terms, and the World Bank and other development banks have been giving grants in lieu of loans to riskier, poorer countries. Africa’s Current Debt Africa’s current debt is the lowest it has been in decades, Oxford University professor Mthuli Ncube and Economic Advisor at the African Development Bank Zuzana Brixiova concur in their review for the European Centre for Development Policy Management. The fastest decline, they stress, is posted by the most indebted countries, because of debt relief and accompanying prudent policies. Aid has been critical in helping low-income countries lift people out of poverty, but financing to the re-

gion has also increased in quality and quantity, spurred by the 2002 Monterrey Consensus and subsequent 2008 Doha Conference. These UN-backed global conferences brought together heads of state and top leaders in finance, business and humanitarian groups to realise a vision called Financing for Development (FfD). The Monterrey Consensus was also the impetus behind the HIPC initiative, since it called for innovative mechanisms to address the debt owed by poor nations. Meanwhile, the FfD July 2015 conference in Addis Ababa is intended to advance the debate on “responsible lending and borrowing” by tabling issues on improving domestic resource mobilisation, including strengthening tax administration, curbing illicit financial flows, scaling up infrastructure investment and attracting private sector financing. “Despite misgivings about certain countries, Africa is still in a fundamentally different place than it was 20 or 30 years ago when old debts were taken on,” Todd Moss, a Senior Fellow at the Washington-based Centre for Global Development, told Reuters, adding that taking out loans from private creditors puts a “higher burden” on leaders to be responsible. To keep from reverting to old ways, analysts say, post-HIPC African countries will have to be smart with their handling of new loans. Borrowing strategies need to be put in place so governments can get a return on their investments in order to service their debts. Governments also need to be prepared to withstand shocks from price fluctuations on the natural resource markets and must reduce their dependency on commodity exports. Diversifying borrowing sources is another way to sensibly manage public debt, says Citigroup Economist, David Cowan in the Africa Research Institute publication, Counterpoints, referring to sovereign bonds as an alternative to concessional loans. While concessional loans come with no strings attached, help raise a country’s debt profile and put it on the radar of international debt markets, Cowan cautions that they do present currency risks and can expose a defaulting borrower to specific legal risks, notably from hedge funds or private equity funds, also known as “vulture funds.” Good old-fashioned tax collection, transparency and tapping into local currency debt markets are avenues that should not be ignored. In the end, sound fiscal and complementary monetary policies will prevail. It’s too soon to predict whether the post-HIPC African countries will maintain sustainable levels of public debt while wrangling with bottlenecks such as weak institutions, infrastructure investment gaps, poverty and (in some places) instability. Only time will tell.

Business Journal July 13 - 19, 2015

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Vincent Kompany: Manchester City, Family & Giving Back as Part of DNA

e's a multimillionaire who captains one of the world's wealthiest football clubs, but Vincent Kompany is grounded by the most important factor in his life -- his family. His father was a political refugee from Zaire, and his mother was a trade union leader, so there was no chance that the boy who would go on lead his country at the 2014 World Cup would ever fall for the trappings of fame on offer for soccer stars. "I never thought I could enjoy all this wealth without putting it to good use," the Manchester City and Belgium skipper tells CNN's Human to Hero Series. "I always said to my mother, 'The richer I get, the better it is for a lot of people, so don't worry about it.' "I've kept that since I was 17, I've always done it. I started looking after my family first and then I moved on to look after people in my neighborhood where I came from, and now I am happy to say that I put more than 1,000 kids out to play football every single week." Kompany spent most of his early career with Anderlecht, a Brussels-based team which is the most successful of any Belgian club. But after securing his first overseas move, to German side, Hamburg, the commanding central defender suffered what he describes as the pivotal moment in his life. "Within my first year of moving abroad living on my own, my sister got ill -- she got cancer -- and at the same time my mum got cancer and she passed away," he recalls. "I think at that time it was a hard challenge for me to deal with it, but in a way I have always taken strength out of anything that has come at me." While his sister Christel's treatment was successful, Kompany had to cope with the loss of the woman who had helped shape his life philosophy. He says he gained perspective when he went to the African homeland of his father Pierre, now known as the Democratic Republic of Congo, as part of his charity work. "It made me realise I had 20 years with my mum -- some kids don't even get to see their parents," he says. "Everything they told me became even more important at that stage ... all of a sudden, all the things they said started making sense." His parents' ideals have kept him focused during his trophy-laden time at Manchester City, owned by oil-rich Abu Dhabi royals who pay him a reported ÂŁ120,000 ($188,000) a week. While many footballers seem to spend as much time being photographed in nightclubs as on the pitch, father-of-two Kompany is coming to the end of a part-time business administration course which has helped him in his off-field ventures. "My mum was always more pushing me towards the academic side, she wasn't really interested in me having

Vincent Kompany (with Cup): Savouring Premier League Victory!

"When 'Kun' Aguero scored the goal it was probably the most defining moment in my career," Kompany says. "I am forever grateful to him and it's something I will never forget." Kompany shared that special moment on the pitch with his wife Carla and young daughter Sienna. Their son Kai was born in October 2013 -- and several months later Kompany would be celebrating another Premier League title. "My kids have given me so much joy and stability -- all the things I was hoping for in my life have only come true when my kids were there," he says. "Everything I do is to set an example for them. It's hard -- nobody's perfect, and certainly not me -- but there's good things I do in my life and I want them to pick up on it and take it in their lives as well." His outlook might be humble, but his success on the pitch has earned him lofty nicknames such as "Vince the Prince" and "King Kompany" -- while City's fans pay tribute to him with a chant that appropriates Simon and Garfunkel's song "Mrs. Robinson." "Football is my life. It's a game to some, but to me it's my life," says Kompany, whose younger brother Francois played for Belgian second division

The Family Man a professional football career," says Kompany. A sports bar venture in Belgium proved short-lived -- his two Good Kompany outlets shut this year -- but he has become an international ambassador for the charity SOS Children's Villages and bought a financially-struggling local lower-league club, installing his sister as chairwoman and renaming it BX Brussels. "The most important thing I get out of it is that if I do succeed it gives me this belief that anything I want or I set my mind to, I can do it," Kompany says of his studies. "This is out of my comfort zone, it's not something I have done because I thought I was good at it." This desire to challenge himself has been a constant theme of his career. From his early days learning to play football with his father outside the tower block where they lived ("I wasn't very good") to proving his coaches

wrong -- and ultimately helping transform Manchester City from an also-ran to one of the top teams in Europe. "I was extremely competitive, so for me becoming a footballer was not necessarily because it was about being the best -- it was about winning," Kompany says. "I learned a lot really quickly. Coaches were telling me, 'Stick to what you can do, stick to what you are good at,' and I hated this. "So every single time I would do what I can't, and eventually I would catch up on players that were more advanced than me. I started becoming the best in my team and going into teams above ... then you start believing." He describes his home municipality of Uccle in Brussels as "not an easy neighborhood." "We had to deal with a lot of racism when we were kids, but again it became part of our character -- we deal

Living His Dream with it, we fight it and we move on." While Kompany won two Belgian league titles with Anderlecht, his two Premier League crowns in England have helped him fulfill his childhood fantasies. The first, in the 2011-12 season, ended City's 44-year wait for a domestic championship. Kompany headed a crucial winning goal against local rival and defending champion Manchester United two weeks beforehand, but the title was not clinched until the dying seconds of the final match when Sergio Aguero scored a last-gasp winner against Queen's Park Rangers to deny Alex Ferguson's team by the narrowest of margins.

team Seraing last season. "I don't take it too serious but at the same time I know what an opportunity it can be to a lot of people. When I started this football club in Belgium, it's been about creating something for kids to put their minds off their daily routine -- it's not a hobby. "I don't really feel as if I have to give back, but I naturally want to do it because it's part of my DNA, I suppose. "It's allowed me to support a lot of good causes, so it's something that I just felt was compulsory to me. If I had earned a lot less money, I still would've done it." Source: CNN Human to Hero Series

Business Journal July 13 - 19, 2015

Automobile www.businessjournalng.com

Ferrari Targets $11bn Market Value in IPO

aximising the value of Ferrari through an IPO is crucial to funding a 48 billion-euro investment plan aimed at lifting Fiat Chrysler's global deliveries to 7 million cars by 2018. Sergio Marchionne, CEO of Fiat Chrysler Automobiles NV, expects the company's Ferrari supercar unit to be valued “at least” at $11 billion (10 billion euros) in an initial public offering scheduled this year. “There are clear expectations from ourselves as Ferrari brand is unique,” Marchionne said Friday at the presentation of the new subcompact Fiat 500 in Turin, Italy. “There is also a scarcity value as we are just selling a 10 percent stake.” Fiat Chrysler announced plans last year to sell 10 percent of Ferrari and distribute its remaining 80 percent stake to Fiat Chrysler investors. Piero Ferrari, the son of founder Enzo Ferrari, also owns 10 percent and plans to keep his holding. Getting the most out of the listing is crucial for Marchionne’s plans to

fund a 48 billion-euro investment plan aimed at lifting Fiat Chrysler's global deliveries to 7 million cars by 2018. Fiat Chrysler shares have risen about 33 percent this year, boosting its market capitalization to 16.6 billion euros. Valued at 10 billion euros, Ferrari would represent about 60 percent of the value of the group. Ferrari, whose logo features the flag colors of its home nation Italy, plans listing on the New York Stock Exchange as a Dutch holding with its fiscal residence in the U.K., Marchionne said Friday. The plan would mirror the multi-national structure used for parent company Fiat Chrysler. Marchionne said the operative Ferrari unit will continue to be based in Italy and pay taxes there. Creating a Dutch Ferrari holding shows “the world has changed and required capacity from countries to adapt,” Marchionne said. Marchionne said last month that Ferrari could be listed in New York, October 13 after the IPO was delayed for a tax issue.

Honda to Make English Official Language by 2020

ormer Honda Motor Co. CEO, Takanobu Ito famously said five years ago that it was “stupid” to make English the official work language of a Japanese company. Now that he’s left the building, however, Japan’s No. 3 carmaker is changing its tune. Honda, in its annual sustainability report issued June 29, announced that English will soon be the official language for all interregional communications at the Tokyo-based company. The move is part of a new global human resources management plan meant to cultivate an international workforce that better represents the company’s far-flung and diverse customer base. It is also a reflection of that fact that Honda, the first Japanese automaker to assemble vehicles in the United States, now produces 81 percent of its vehicles outside Japan. Indeed, for the first five months of 2015, Honda exported a paltry 9,620 vehicles from Japan, down 27 percent year on year. North America alone accounts for 40 percent of its global sales. “While Japanese associates [expatriates] led management at Honda’s sites in each region in the past, we have now shifted to a system of management by local associates,” Honda’s report said. “It is vital to develop an environment that achieves close communication between associates in six regions worldwide.” Honda aims to make English

its interregion work language by 2020. By then, employees working across regions, such as a Japanese engineer from Tokyo speaking with an American plant manager in Ohio, will have conduct their business in English. English also will be the lingua franca for documents shared internationally, and presentations and interoffice queries. To make sure everyone is up to the task -- especially the outnumbered Japanese employees back in the home country -- Honda said it will step up its language training and

make English proficiency a requirement for promotion to the management level. Japanese employees account for 32 percent of the Honda’s global workforce of 204,730. And their share is only shrinking. Last year, Honda hired only 719 new employees in Japan. In North America, by contrast, it added 4,778 new workers. In North America, native employees already account for 59 percent of the senior management at Honda’s regional operations.

New Boss, New Rules Honda’s outreach to the outside comes as a new president steeped in international experience takes the reins from Ito. Takahiro Hachigo took over last month, while Ito stepped down to be an advisor following a rash of quality problems and a derailed global sales driver critics called overly ambitious. In contrast to Ito, who logged just two years overseas at Honda’s Ohio r&d Center, Hachigo is a

veritable globetrotter. Hachigo has served stints on three continents. And until he was called back this year to president, the veteran engineer had been working overseas since 2012, most recently in China. He played a key role in Ito's single-biggest initiative: a still-unfinished realignment of Honda's global operations around six regional hubs, each wielding its own r&d and production power. Hachigo helped set up those regional centers as president of Honda's European r&d operation in 2012 and then as head of purchasing, production and development in China from 2013. Back in 2010, Ito called out internationalists whom, he thought, had taken the idea of radical globalism too far. When large Japanese retailer Rakuten Inc. tried to reach out to global markets by adopting English as an internal working language, Ito called the idea “stupid.” But his main point: forcing Japanese engineers to speak English to one another is not a recipe for success. But being open to outsiders is. Hachigo hosted his debut meetand-greet July 2 at a Tokyo hotel, a formality to exchange name cards with suppliers, politicians, bureaucrats, dealers and other business contacts. True to form, the new CEO not only had a greeting prepared in English but also an interpreter on standby for foreign guests.

July 13 - 19, 2015

TheLantern

I don’t want to leave a legacy of somebody who killed a bank. But my responsibility today is to create financial system stability by ensuring that we support the banking and financial system so as to grow the economy. I will try as much as possible not to suspend a bank, but we would try as much as possible to try to make them do the right thing. ”

Godwin Emefiele CBN Governor

PRINCE COOKEY 0802 308 8874 prince.cookey@yahoo.com.

BUHARINOMICS

Charting Path to Sustainable Economic Renaissance

he presidential election was over on Saturday, March 28, 2015. It is now a historical document for academic research and street political analysis. On March 28, CHANGE triumphed over TRANSFORMATION AGENDA, leading to the emergence of General Muhammadu Buhari as President, Federal Republic of Nigeria. On May 29, Buhari assumed the leadership of the nation, bringing to an end, the regime of Goodluck Jonathan. For Buhari, it is a long road to Aso Rock. Three times he contested and lost. And three times he dusted the stinking ashes of defeat to rise again to seek for the same office. And on the fourth effort, he won. Either fortune smiled on him or the Gods took pity on him and handed him the office to break the cycle of defeat and save him from the poisoned pen of harsh historians and political propagandists. Now the election is history. The victory drums shall cease their resonant tunes on May 28. On May 29, Buhari will commence the hard journey of running a nation facing multiple socio-economic and security challenges. For Nigeria, Buhari will be a real CHANGE agent if he is able to get the economy right. It is therefore imperative for the in-coming administration to avoid the beaten path and forge a new pathway to sustainable economic renaissance. The Oil Curse That economic renaissance must begin with rejection of oil as the Saviour of Nigeria. We must innocently pretend that oil died yesterday after a brief illness and was buried last night in the forbidden forest like a cursed soul. The more oil remains alive, the more Nigeria will continue to die per second. Oil is the Number One enemy of Nigeria-it must die for Nigeria to live. Since 1958, oil took away the independence of Nigeria-sapped the energy of Nigeria-dried the creative spirit of Nigeria. The Miracle of 2014 2014 must remain a historical milestone for Nigeria. In that glorious year, the price of oil began to tumble in the international market, leading to economic uncertainty and budget reversals in the land. Many decried the oil shock as a bad omen for Nigeria.

In my candid opinion, it is a Gift from God to turn this nation away from easy but unpredictable source of daily bread. It represents a golden opportunity for Nigeria and Nigerians to tap into our natural mindset to create sustainable wealth. Path to Economic Renaissance Our path to better life is through diversification. Even before the oil shock, there existed and still exists in Nigeria, a mysterious and severe disconnect

between rising oil revenue, official growth in Gross Domestic Product (GDP) and growing high level of unemployment and poverty. This scenario clearly presents an economic nightmare for the government and other concerned stakeholders in the Nigerian economy and business community. Accordingly, the Buhari Administration must re-draw the economic architecture of Nigeria through invigoration of 5 key sectors: • Tourism: Tourism is a silent generator of wealth and employ-

ment. According to official figures, tourism currently contributes about 1% to the GDP and employs an estimated 800, 000. It can do better than that. Developing the available tourist resources will unearth the sector to more local and international visitors. The World Tourism Organisation (UNWTO) stated in its recent report that international tourist arrivals grew by 5% in 2013 to 1.087 billion while international tourism generated US$ 1.4 trillion in export earnings in the same 2013. Going forward, the UNWTO forecasts growth in inter-

national tourist arrivals of between 4% and 4.5% in 2014. The question is: where does Nigeria, with all of its tourism potential, stand in all of these? • Manufacturing: A nation that lives on what others produce is not worthy of its independence. The government must checkmate the porous borders to control indiscriminate dumping of cheap goods and then provide strong liberal support to the manufacturing sector to produce alternative goods for consumption. We can take a cue from Germany and Japan after the Second World War, and then to China, which is today, the second largest economy on earth. The message is simple: manufacturing creates sustainable wealth and jobs, not oil. • Agriculture: In real terms, agriculture is the king of the Nigerian economy. Besides providing food to sustain the population, it generates valuable jobs and raw materials to power the few surviving industries. Greater investment will create modernised agriculture sector, away from subsistence farming. It is estimated that agriculture employs 70% of Nigerians and contributes to rural economic growth. Greater investment in agriculture will generate more value for the nation. • Mining: Since the black gold was discovered, Nigeria blindly forgot the economic importance of other mining resources quite abundant in our soil. Retreating to harness coal, gold, barite,iron-ore, lead-zinc, bitumen, limestone etc would be a pragmatic effort towards reducing the uneven reliance on oil. In 2012, KPMG did a report on the Nigerian Mining Sector and listed the challenges as project funding, infrastructure, security, illegal mining and community agitations. The government can initiate efforts to leagfrog these challenges and let the nation reap from these natural endowments. • Technology: The journey of a thousand miles begins with just one step. We cannot remain consumers of foreign technological products and services forever. Already, some Nigerians have taken up the challenge of initiating the first steps in form of computer and vehicle assembly plants, including home-grown software. As the Buhari administration has taken stage now, reworking the economy of Nigeria should be a major priority to reduce poverty and unemployment, and more importantly, create sustainable wealth.

Business Journal Newspaper is published weekly by Egelon Communication Company. Suite B2, Glory Shopping Complex, 229, Ikotun-Idimu Road, Council Bus-Stop, Idimu, Lagos. Abuja Bureau 08035977833 PH Bureau: 08099573476 Phone: 08023088874, 07058919138. Email: business.journal@yahoo.com. Publisher/Editor-in-Chief: PRINCE COOKEY.