Business Journal Newspaper by BusinessJournalNG

NNPC May Tap N94.5bn Reserve to End Fuel Scarcity Ben Onyedika

here are strong indications that the Nigerian National Petroleum Corporation (NNPC) may sought relieve from the nation’s strategic reserve estimated at N94.5

billion worth of PMS (petrol) to cushion the effect of the current fuel scarcity nationwide. The NNPC says the nation has enough stock of petrol in Port Harcourt, Warri and Calabar to service the country for 27 days at a national consumption rate of 40 million litres per

day even as it has stepped up other efforts to end the distribution challenges in the fuel supply system. NNPC blamed the current scarcity on the strike action by the National Association of Road Transport Owners (NARTO) and the Petroleum Tanker

Drivers (PTD) who have refused to lift petroleum products from the coastal depots in protest of the huge amounts they are being owed by the major marketers. “We are however, working towards a speedy resolution of the issues to ensure a hitch-

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free distribution of products across the country”, the Corporation stated in a statement. It appealed to NARTO and PTD to call off the strike in the interest of the country and not unleash unnecessary hardship on Nigerians. Meanwhile, the Federal Gov-

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Nigeria’s GDP Projected on 7% in Coming Decade

he growth projection of Nigeria could lift to 6-7 per cent in the coming decade on the plank of growth-friendly policies by successive governments in the country. This is one of the key findings from a report from PricewaterhouseC-

oopers(PwC) economists on The World in 2050: Will the Shift in Global Economic Power Continue? The report presents long-term projections of potential Gross domestic Product (GDP) growth up to 2050 for 32 of the largest economies in the world, covering 84% of total global GDP.

Indeed, Nigeria, Vietnam and the Philippines are notable risers in the global GDP rankings in the long term, reflecting relatively high projected average growth rates of around 4.5-5.5% per annum over the period to 2050. Andrew S. Nevin, PwC Nigeria’s Chief Economist and co-author of the re-

port, comments: “According to our long term projections, Nigeria could sustain average growth of around 5-6% per annum in the long run, following projected growth of around 6-7% in the rest of this decade, assuming broadly growth-friendly policies are pursued. While foreign investment has in

absolute terms long been focused on the oil sector, portfolios are becoming increasingly diversified, moving towards the power, agriculture and mining areas of the economy that have demonstrated a comparative advantage in emerging markets vis-à-vis the West.” Continues on PAGE 2

IMF Projects 4.5% Growth for Sub-Saharan Africa in 2015

QUOTE “When businesses and people have more access to finance, everyone benefits.” Ban Ki-Moon UN Secretary-General

ernment says it had paid N156 billion debt to oil marketers in line with its commitment to prioritise payments in spite of revenue constraints. The Minister of Finance Dr Ngozi Okonjo-Iweala, said the payment had two components Continues on PAGE 2

L-R: Vice-Chairman, UBA Plc, Ambassador Joe Keshi; Group Managing Director/CEO, UBA Plc, Mr. Phillips Oduoza and Chairman, UBA Plc, Mr. Tony O. Elumelu, CON, at the 53rd Annual General Meeting of the Bank held in Lagos

nveiling the April 2015 IMF Regional Economic Outlook: Sub-Saharan Africa, Ms. Antoinette Sayeh, Director, IMF African Department commented: “Sub-Saharan Africa’s economy is set to register another year of solid economic performance with growth expected to expand 4½ percent in 2015. The region will continue being one of the fastest growing in the world— Continues on PAGE 2

Business Journal May 04 - 10, 2015

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NNPC May Tap N94.5bn... Continued from PAGE 1

comprising `I Owe You’ (IOU), given in March and

interest on payment. “The first consists of the cash backing of the N100 billion IOU which the marketers were given in March. The second is N56 billion in interest payments for the marketers according to the PPPRA template. This leaves a balance of N98 billion certified by PPPRA as the amount owed the marketers,” she said She explained that the N156 billion was the latest in a series of significant payments made to the oil marketers within the last five months. She explained that these included over N300 billion in two instalments in December last year and N31 billion in interest differentials recently. She said in all, oil marketers had received over N500 billion within the past five months. Okonjo-Iweala urged the marketers to appreciate the efforts being made by the government to meet up with their payments. “The Federal Government has made maximum effort, inspite of the wellknown fact that the fall in oil prices has significantly reduced national revenues, to prioritise payments to marketers. For the sake of Nigerians who are bearing the brunt of fuel scarcity, the marketers should reciprocate in the spirit of dialogue and co-operation in which we have always tried to engage them,” she said. The Executive Secretary, Major Oil Marketers Association of Nigeria (MOMAN), Mr. Obafemi Olawore, said the Association appreciates the gesture and commended the Federal Government for fulfilling its promises. Olawore, however, said the association will not take any corresponding action until its members receive payment alert from their respective banks. The MOMAN scribe said the association was ready to commence importation and distribution of fuel to end the suffering of Nigerians at fuel stations once the money hit their accounts. He emphasised that the members will not work with any paper promise without cash backing.

Nigeria’s GDP...

KPMG Rated High on 2015 World’s Best Outsourcing Advisors List

PMG International has received top performer ratings for its shared services and outsourcing advisory capabilities on the International Association of Outsourcing Professional’s (IAOP) 2015 World’s Best Outsourcing Advisors list. Using a rigorous methodology that scored applicants on size and growth, delivery excellence, and programs for innovation, the independent judging panel – which includes IAOP buyer members – granted KPMG the highest possible rating for delivery excellence and size/growth, and a distinguished rating for its cross-client innovation programs. The judges acknowledged KPMG’s delivery excellence per its examples of three longterm client engagements that collectively address the entire

sourcing advisory lifecycle – strategy, design and implementation of business processes in HR, finance and accounting, IT transformation, and Managed Governance Services (MGS). A key component of the application focused on programs for innovation area, which IAOP describes as “demonstrated through specific programs and resulting outcomes that produce new forms of value for customers.” KPMG’s response highlighted the following examples: • Its pioneering Pharmaceutical GBS Benchmark Group. The consortium’s objective is to extend knowledge of global business services (GBS) through open, peer-based discussions on key management and operational issues. Current members include most of the world’s top pharmaceutical

companies, and membership is open to all pharmaceutical and medical device organizations globally. • Its Managed Governance Services (MGS), a full-service approach to managing third party spend that balances operational effectiveness, compliance, and risk management. It combines governance experience, specialized resources, data, and a proprietary technology platform, Governance Workplace® to enable clients to enhance the value of their services portfolios and gain greater value from their provider relationships. • KPMG Lighthouse for Advanced Data and Analytics, a centralised solution center that supports KPMG globally. Its mission is to deliver targeted data and analytics solutions to clients in concert with the different functions and service

lines across the member firms within the global KPMG network. “Through our establishment of Centers of Excellence, acquisition of highly seasoned team members, and investments in innovative technology solutions, we continue to position ourselves as the clear choice for clients who want to achieve large-scale sustainable change,” said David J. Brown, Global Lead, Shared Services and Outsourcing Advisory, KPMG International and Principal, Advisory, KPMG in the US.. “The client references we obtained for use in our World’s Best Outsourcing Advisor application, and the scores we received from the IAOP judges, underscore the transformational value we deliver to our clients.”

R-l: Founder Zinox Group, Sir Leo-Stan Ekeh; Managing Director/CEO, VDT Communications and Keynote Speaker, Mr. Biodun Omoniyi, and President, Association of Telecoms Companies of Nigeria (ATCON), Mr Lanre Ajayi, at the Beacon of Information and Communication Technology (BoICT) Lecture and Awards 2015 organised by Nigeria Communications Week in Lagos

Continued from PAGE 1 The report also stated that emerging economies of Nigeria, Indonesia and Mexico could push the UK and France out of the top ten economies of the world by 2050 provided they are able to build their institutions to global standards, diversify their economies and sustain growth friendly policies. Nevin said: “Over the past decade, Nigeria has boasted superior economic growth and, with the right reforms and investments, Nigeria could become one of the world’s leading economies by 2030, with further progress by 2050. Nigeria’s potential advantages for future growth include a large consumer market, a strategic geographic location, and a young and highly entrepreneurial population.” The report also contains projections based on GDP at market exchange rates, without this relative price adjustment. On that basis, China is projected to overtake the US in around 2028, while India would clearly be the third largest economy in the world in 2050, but still some way behind the US. Overdependence on natural resources could also impede long-term growth in countries such as Nigeria, Russia, and Saudi Arabia unless they can diversify their economies over time. “In short, while our analysis confirms that emerging markets have huge potential, they can also be an institutional minefield – both managers and investors need to tread carefully. Overall, Nigeria continues to be an attractive place to invest not because it is an oil producer, but because of the immense size of its domestic market and the extraordinary commercial energy of its people, which remains largely untapped.”

IMF Projects 4.5%IMF Projects 4.5% Growth for... Continued from PAGE 1 second only to emerging and developing Asia. That said, the economic expansion will be at the lower end of the range experienced in recent years, mainly reflecting the impact of the sharp decline of oil and commodity prices over the last six months. But the impact of this shock will be highly differentiated across the region. Sayed explained that Sub-Saharan Africa’s eight oil exporters have been hard hit by the price decline, and expects their average growth in 2015 to be about 1¼ percentage points lower than in 2014 in response

to this shock. She added however, that for the rest of the region, growth prospects remain favourable as the countries are enjoying the benefits of lower oil import bills, although some are also feeling the impact of lower prices for their non-oil commodity exports. Growth is projected to be particularly strong in most low-income and more fragile countries, and this will help to reduce poverty levels. “In Guinea, Liberia and Sierra Leone, the Ebola outbreak is beginning to be controlled, with a sharp decline in the incidence of new infections. However, 2015 will be another

difficult year, with economic activity expected to be significantly depressed. The IMF has provided $390 million of assistance to help these countries, including $100 million of grants for debt relief—the first instance of such assistance by a development partner. “While the baseline scenario is for solid growth, policy makers need to remain mindful of risks that could still cloud the outlook. In particular, global financial conditions are tightening just as the region’s frontier markets are increasingly relying on Eurobonds to finance their large investment needs. The deteriorating security

situation in some areas could also strain budgets and have an adverse impact on the nearterm growth outlook, especially in the agricultural sector, while weakening prospects for foreign direct investment. “For the region’s eight oil exporting countries, fiscal adjustment is a priority; policy makers should support an adjustment by allowing exchange rates to depreciate, where flexible exchange rate mechanisms are in place. Most countries have already initiated policy adjustment. “The current circumstances also highlight the urgent need for policies that favor structur-

al transformation to diversify sub-Saharan Africa’s production base and promote greater integration into global trading networks. This will help the region create jobs for the rapidly growing young population as the region is set to experience a significant demographic transition in the next decades. By 2030 or so, the number of people reaching working age in the region will exceed that in the rest of the world combined. This offers a tremendous opportunity for sub-Saharan Africa, which, if properly tapped, could create a powerful engine for long-term growth.”

Business Journal May 04 - 10, 2015

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

; L-r: Senior Manager, Sales, Lagos/South-West Region, MTN, Gbenga Olalandu; MTN Retailer, Awobajo Olusegun; GM, Business Development, MTN, Kolawole Oyeyemi; MTN Retailer, Eze Edith, Sales and Distribution Executive, MTN, ‘Tsola Barrow, and another Retailer, Bakare Taiwo, at the unveiling of MTN TruTalk Win-a-Home promo for retailers in Lagos

L-r: Managing Director/CEO, Seagate Global Services Ltd, Dr. Wilson Arikpo; Security/Safety Officer attached to Exxonmobil, Chief Lawrence Onuigbo-Oriaku; Former President, Institute of Safety Professionals of Nigeria, Eze (Prof) Okunamiri Innocent F. and Zonal Director, (South West), Federal Ministry of Labour and Productivity, Dr. (Mrs) Ifeoma Igweze-Anyanwutaku, at the 2nd Nigeria Safety and Security awards/Lecture in Lagos

L-r: Product Manager, Access Bank Plc, Mr. Tosin Adeyemi; Founder of SPAN, Mrs. Sarah Boulos; Salsa winners, Korede Oyerrogba and Nneka Obiora; Brand Manager, PepsiCo, Segun Ogunleye and President, International Dance Organisation Nigeria, Mr. Ice Nweke, during the cheque presentation to winners of IDO Salsa Competition 2015 in Lagos.

L-r: Executive Director, Thompson & Grace Investment Ltd, (T&GIL), Engineer Ekemini Amos; President/Managing Director, Thompson & Grace Investment Ltd, Dr. Isaac Thompson Amos; Executive Secretary, Nigerian Content Development & Monitoring Board, Dr. (Eng.) Ernest Nwapa, and GM Monitoring, NCDMB, Engineer C.P. Okorie, at the commissioning of T&GIL multi-million Naira engineering facilities in Port Harcourt, Rivers State.

; L-r: Service Manager, Lenovo Technologies West Africa, Ms. Nkechi Okolo; Marketing Manager, Smartphones, Lenovo Technologies West Africa, Mr. Bolade Oyekanmi and Executive Director, Mobile Business Group, Lenovo Technologies Middle East & Africa (MEA), Mr. Shashank Sharma at Lenovo’s inaugural breakfast meeting and introduction of the Lenovo S90, Lenovo S60 and Lenovo P70 smartphones in Lagos

L-r; Commissioner for Market Competition and Rates, Nigerian Electricity Regulatory Commission (NERC), Mr. Patrick Umeh; Deputy General Manager, Engineering, Mr Abdul Mohammed and NERC Chairman, Dr Sam Amadi, at a meeting of Consumer Advocacy Groups in the Nigerian electricity supply industry in Abuja

; L-r: CEO, Chocolate City Group, Audu Maikori; Managing Director, Microsoft Mobile Devices and Services, Joseph Umunakwe; Winner #MakeItHappen# Microsoft Lumia 535 Dual SIM ‘Passion to Empire’ activation campaign, Emmanuel Okena; CEO, House of Tara, Tara Fela-Durotoye; and Co-founder Jobberman, Opeyemi Awoyemi at the announcement of the 5 winners of the campaign, held at Intercontinental Hotel, Lagos.

L-R: Perm. Secretary, Rivers State Ministry of Education, Michael West; Rivers State Commissioner of Education, Dame Alice Lawrence-Nemi, GM, External Relations, Nigeria LNG, Kudo Eresia-Eke; MD, Tianjin, Peter Lin and Assistant Company Secretary, NLNG, Ikechukwu Eke during an agreement signing ceremony of NLNG-funded N4.5bn construction of Bonny Model Secondary School in Port Harcourt.

Business Journal May 04 - 10, 2015

Editorial www.businessjournalng.com

Time to Work for Nigeria

fter all the tension unleashed by the Presidential election that threw up Muhammadu Buhari, a retired army General and former Head of state, as President-elect on March 28, it is now clear that change has already happened in Nigeria. However, how the in-coming government harnesses the massive goodwill conferred on it and drives with passion to accomplish greater change will count far more than the resonating euphoria that is now being witnessed all over. In response to the wind of change blowing across the country, the entire world is full of expectations that Buhari’s coming should launch Nigeria to

new thresholds of nationhood and prosperity. Certainly, his victory connotes a mandate given to him by the electorate to deal decisively with such loathsome issues as insecurity, corruption, culture of impunity and indiscipline that have been on the ascendancy nationwide. On the economic front, expectations are also high that deep-seated change needs to happen without delay in such critical sectors as power, oil and gas, financial and transport sectors. This is in addition to making the business environment a lot more competitive, while also urgently putting in place verifiable initiatives aimed at diversifying the economy to absorb the

shocks of the wild oscillations of the global oil market. While government needs to expedite the passage of a pro-Nigeria Petroleum Industry Bill (PIB) into law, adept policy steps now need to be taken to revive trade and industry, dilate productivity possibilities and address the country’s unconvincing exchange, interest and inflation rates. This is necessary if the badly depleted external reserves that can hardly support six months imports must be sustainably built up again. In addition, the new government needs to run at the gazelle’s speed to achieve the roads, rail, maritime and air aspects of the transport sector, while creating job opportuni-

ties to address the stifling reality of poverty, unemployment and inequality in the land and engage the country’s youth in more meaningful and regenerating endeavours. The new government must ensure that the scope of infrastructure and institutional deficits is not restricted to the economy. There is also the cardinal need to work on the social and interpersonal aspects of infrastructure. This implies that enormous work needs to be done in the areas of education, health, sports, recreation and youth development. Above all, we must not make the mistake of not working intensively on the infrastructure of the human mind to instil discipline and ensure Nigerians

truly believe in the country beyond singing the national anthem and reciting the national pledge. This is necessary if we must achieve real national rebirth. Addressing these challenges will definitely be Herculean, but the in-coming administration will have no excuses if it fails. This underpins our position that only able and willing race-horses must be appointed as members of the cabinet and dexterous kinetic managers as heads of departments and agencies of government responsible for policy transmission and implementation. Overall, Buhari must do everything humanly possible to work hard and walk the talk to finish well and strong.

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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.

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

PH Bureau Amaechi Okonkwo

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

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

Business Journal May 04 - 10, 2015

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UN Habitat Approves Int. Guidelines on Urban, Territorial Planning

rance, Japan, South Africa and Uganda co-sponsored the Resolution 25/6 of UN-Habitat Governing Council that approved the International Guidelines on Urban and Territorial

Planning. The Resolution calls upon ‘international financial institutions, development agencies, and UN-Habitat to assist interested member States in using and adapting the Guidelines to their territorial and national contexts, where appropriate, and further developing tools and monitoring indicators.’ The Guidelines are a source of inspiration and a global reference framework that will inform the New Urban Agenda and the unfolding Sustainable Development Goals. The Guidelines will act as a compass for decision makers and urban professionals while developing urban and territorial planning frameworks. In the lead up to its approval, the Guidelines were discussed with a broader audience during two side events that gathered around 120 persons representing national and local governments, development partners, urban professionals, research and academia and civil society organisations. The first side event was organised by the United Nations Centre for Regional Development (UNCRD)considered how the Guidelines can instill best practice in urban and territorial planning and foster engagement towards Habitat III. The second side event was organised by the Uganda, discussed the varying implementation strategies across the multi-scale continuum of planning, while looking at practical tools and services that can support the use and adaptation of the Guidelines. Dr. Joan Clos, Executive Director of UN-Habitat stated that ‘urban planning is in crisis today, but that, the principles and recommendations contained in the Guidelines can help to tie together different objectives while pointing to the crucial questions of equitable and sustainable development.’ The drafting of the Guidelines was supported by an Expert Group through a broad-based consultative and participatory process and based on evidence, good practices and lessons learnt from different contexts and at different planning scales. The Experts were nominated by their respective national governments, associations of local authorities, associations of professional planners and international institutions, representing experience and

practice from Africa, Asia, Europe and America. UN agencies and members of the Committee of Permanent Representatives at UN-Habitat were also consulted and briefed throughout the process of developing the Guidelines. The process of drafting the Guidelines had benefited from the financial and technical contribution from the government of France through the Ministry of Foreign Affairs, the government of Japan through the Ministry of Land, Infrastructure, Transport and Tourism the Prefectural Government of Fukuoka, the Municipal Government of Fukuoka and Seinan Gakuin University in Fukuoka.

The Guidelines complement the International Guidelines on Decentralisation and Strengthening of Local Authorities (2007) and the International Guidelines on Access to Basic Services for all (2009), which were also adopted by the Governing Council of UN-Habitat and implemented in a number of countries Nigeria Ship with oil rig. In the background is the Nigerian city of Lagos. • Total value of UN-Habitat investments (2008-2015): US$

4,348,613 • Total number of UN-Habitat projects (2008-2015): 8 projects • Main donors: Government of Nigeria, ECOWAS, Germany, Federal University of Technology, European Commission and, the Africa, Caribbean and Pacific Secretariat • Implementing partners: government agencies, Ministries of Housing and Urban Planning, Youth and Sports, Planning and Budget, Energy; ECOWAS, UNIDO, BMZ/GIZ, UNDP

The drafting of the Guidelines was supported by an Expert Group through a broadbased consultative and participatory process and based on evidence, good practices and lessons learnt from different contexts and at different planning scales

Business Journal May 04 - 10, 2015

Shelter

More Americans Spending Half of Pay on Housing • Analysis finds 26% surge since Great Recession in US families who face burdensome rents

he surging cost of rental housing has squeezed a rising proportion of U.S. families since the Great Recession struck in 2007. For more than one in four renters, housing and utilities consume at least half their family income, according to an analysis of Census data by Enterprise Community Partners, a nonprofit that helps finance affordable housing. The number of such households has jumped 26 percent to 11.25 million since 2007, a sign that the 6½-yearold recovery from the recession has given scant relief to much of the country. The government defines housing costs in excess of 30 percent of income as burdensome. “It means making really difficult trade-offs,” said Angela Boyd, a vice president at Enterprise Community Partners. “There are daily financial dilemmas about making their rent or buying groceries.” The crisis reflects one of the shortcomings of the recovery: Wages have failed to match rising rental prices. At the same time, construction has failed to keep pace with demand from renters. The recession pushed more millennials, former homeowners who faced foreclosure and low-wage workers into rental housing. A result is that 2.3 million more families face pressures that leave them perilously close to homelessness. It’s a reality faced by Lisette Duarte, a 37-year-old living in a two-bedroom apartment with her family in northeast Los Angeles. Duarte’s husband lost his job as an electrician more than three years ago. With both their son and daughter on the autistic spectrum and in need of care, he chose to stay at home while she worked a job requiring a 90-minute commute each way. The lost income forced them out of a three-bedroom house and eventually into a hotel, where vouchers over the course of five months helped them save for a security deposit for an apartment. About a year ago, the family moved into a two-bedroom apartment in the Highland Park neighborhood where Duarte had grown up. Two-bedrooms in that gentrifying community rent for an average of about $1,600 a month, according to the online service Apartment List. The expense, along with utilities, consumes half of Duarte’s paycheck. The family relies on prepaid cellphones. They don’t dine out or go on vacations. Whatever extra

income they have often goes for health care. More than 30 percent of renters in California, Florida, New Jersey and New York state devote at least half their incomes to housing and utilities, according to the analysis. Other than Alaska, South Dakota and Wyoming, at least 20 percent of renters in every state face similarly high costs relative to income. The analysis was developed for a “Make Room” awareness campaign sponsored by Enterprise Community Partners. As part of the campaign, pop stars such as Carly Rae Jepsen of “Call Me Maybe” fame, who sang for the Duartes, are performing concerts in the homes of financially distressed tenants. Decades of barely rising pay has contributed to the problem. Average hourly wages have risen just 2.1 percent in the past 12 months, according to the Labor Department, while rental prices have climbed 3.7 percent, the real estate firm Zillow said last week. Many renters lack the income to pay the cost of maintaining and operating these buildings, said Barry Zigas, director of housing policy at the Consumer Federation of America and a trustee at the nonprofit Mercy Housing.

Mercy Housing has a portfolio of 12,000 units for low-income people and senior citizens. It costs an average of roughly $500 a month to manage each unit, Zigas said. A monthly rent of $500 would mean that anyone working full time for

a minimum wage would devote more than a third of his or her income to housing. Either the tenants must fork over a greater share of their pay each year or landlords may let buildings fall into disrepair.

“Low-income renters are getting caught in a total squeeze play, as are the owners of the properties,” Zigas said. The Great Recession caused waves of foreclosures and layoffs that pushed more Americans into renting. More than 36 percent of people now rent, compared with 31 percent before the recession began in late 2007. The increased demand has yet to be matched by construction and renovations. In March, the National Low Income Housing Coalition reported a shortage of 7.1 million apartments for low-income renters. The shortages are most pronounced in Nevada, California, Arizona, Oregon, Florida, Colorado and Utah. Construction firms are building apartment complexes at an annual pace of roughly 321,333 this year, according to the Commerce Department. The rising rental prices suggest that construction hasn’t kept pace with demand, according to economists. For renters such as Duarte, the plan is that her husband can eventually return to work as their children reach adulthood, easing some of their financial pressures. “I hope that we never encounter homelessness again,” she said

Business Journal May 04 - 10, 2015

Banking www.businessjournalng.com

Universal Financial Access 2020:

The Role of Private Sector, Govts, Multilaterals Nina Vucenik

hat needs to happen for everyone in the world to have access to a transaction account by 2020? And, more importantly, why does it matter? This was the issue the president of the World Bank Group, UN Secretary-General, UN Secretary-General’s Special Advocate for Inclusive Finance for Development, private and public sector leaders discussed at an event, Universal Financial Access 2020, during the 2015 World Bank Group-IMF Spring Meetings. Some 700 million people worldwide gained access to an account between 2011 and 2014, but 2 billion still remain outside the formal financial system. The Universal Financial Access goal envisions that all adults will have access to a transaction account by 2020 to store money, pay bills, and send and receive payments. Such access can help people better manage risks and escape poverty. The panelists stressed the importance of public-private partnerships to expand financial access to millions of people, and discussed what role each can play to make it happen. All panelists committed to what they can do and how many financially excluded people they plan to reach by extending their work and services. Other private-sector coalition partners, not present at the event, also pledged considerable commitments which were read onscreen. The Bank Group will support governments and private sector to reach up to 1 billion people who are financially excluded. “The World Bank Group’s role is to convene and energize a coalition of partners -- and also to step up our work. Over the next five years, our institution commits to enabling as many as 1 billion adults who are now financially excluded to gain access to a transaction account,” said World Bank Group President Jim Yong Kim. “Financial inclusion is a lynchpin for

huge role in enabling sustainable and scalable financial access, said H.M.

achieving other development goals” said Ban Ki-moon, UN Secretary General, noting that “without stronger part-

Singapore Designates 7 Banks as ‘Systemically Important’ • Banks including Citibank, Standard Chartered required to locally incorporate retail operations and subjected to higher capital requirements

nerships, we cannot make our priorities successful.” Public-private partnerships play a

Queen Máxima of the Netherlands, the UN Secretary-General’s Special Advo-

ENLARGE The Monetary Authority of Singapore said all banks in the country would be assessed for their systemic importance annually. Singapore’s central bank last Thursday named seven local and international banks that it considers “systemically important” to the island nation and said that it would increase supervision of them. The banks named by the Monetary Authority of Singapore

in its initial list include Citibank, Standard Chartered Bank, Hongkong and Shanghai Banking Corp. among the international banks. In addition, three local banks—DBS Group Holdings Ltd., Oversea-Chinese Banking Corp. and United Overseas Bank—and Malaysia’sMalayan Banking Bhd. are also on the first list. The identified banks will be required to locally incorporate their retail operations and will

cate for Inclusive Finance for Development, noting the role that regulators have in creating an environment for the private sector to innovate. Jaime Caruana, General Manager of Bank for International Settlements, talked about complementarity, proportionality, and co-operation as being are critical for a balanced approach. However, as Ajay Banga, CEO of MasterCard, pointed out “It’s not just access to accounts that matters, but usage of those accounts.” He added that technology isn’t the issue, but that the focus should be on business models and scale. Benno Ndulu, Governor of Central Bank of Tanzania, talked about the need to develop financial products that meet the needs of the unbanked. Tanzania cut in half the number of financially excluded in four years with new technology. “Innovation takes courage!” he said. These accounts will benefit people and change the course of their lives, explained Arundhati Battacharya of State Bank of India, a country where 415 million adults are unbanked. “If we reach Universal Financial access by 2020, we have a better change to end poverty by 2030,” concluded President Kim. “When businesses and people have more access to finance, everyone benefits,” summed up Ban Ki-Moon.

be subjected to higher capital requirements, the Authority said. These banks are “assessed to have a significant impact on the stability of the financial system and proper functioning of the broader economy,” the Authority said. All banks in Singapore will be assessed for their systemic importance annually based on several factors including their size, interconnectedness and complexity, it said.

Business Journal May 04 - 10, 2015

Banking

UNITY BANK PLC: Reaping the Fruit of New Brooms

arnings Update: Surpasses Estimates on Impressive Growth in Non-Interest Income Unity Bank Plc (“Unity” or “the Bank”), recently released its audited FY:2014 and unaudited Q1:2015 results on March 19, 2015 and April 9, 2015 respectively on the floor of the Nigerian Stock Exchange (NSE). The results show strong and impressive growth in both top and bottom line. We present the highlights of the FY: 2014 and Q1:2015 results as well as our post capital reconstruction FY:2015 forecast below. Gross Earnings up 23.0% and 10.3% Y-o-Y in FY: 2014 and Q1:2015 The Bank’s topline grew 23.0% Y-o-Y from N62.8bn (+17.7% higher than our N65.7bn FY:2014 estimates) in FY:2013 to N77.3bn in FY:2014 defying the odds that pervaded the sector. In the same line, Unity sustained its positive form in Q1:2015, with a 10.3% Y-o-Y topline growth (N15.0bn in Q1:2014 to N16.5bn Q1:2015). The telling gross earnings growth in FY:2014 was achieved on the back of a strong expansion in non-interest income (+38.4%) and interest income (+19.9%), bolstered by 16.2% Y-o-Y upsurge in loans and advances. However, the gross earnings’ growth recorded in Q1:2015 is principally due to the 127.8% Y-o-Y spike in non-interest income as interest income dropped 8.3% Y-o-Y. Similarly, the Bank returned to profitability (N10.7bn in FY:2014) as against a loss (-N22.6bn) in FY:2013. Sustaining the positive momentum, the Bank posted a 35.7% Y-o-Y growth in PAT to N3.6bn in Q1:2015 from N2.7bn in Q1:2014. That said, the trailing EPS settled at N1.00 in Q1:2015 (Post capital reconstruction). A further review shows the ROAE and ROAA settled at 20.5% and 2.6% respectively in FY:2014 from negative positions in the previous year. However, in Q1:2015, the annualised ROAE and ROAA moderated to 14.9% and 2.8% respectively. Improved Efficiency as CIR down to

Henry Semenitari MD/CEO, Unity Bank Plc 62.7% in Q1:2015 Unity’s Cost to Income Ratio (CIR) improved significantly over the period to settle at 62.7% in Q1:2015 from 69.1% in FY:2014 and 271.1% in FY:2013. The consistent improvement may be attributed to the significant growth recorded in both interest and non-interest income in FY:2014. Despite the stiff competition for deposits in the banking space, the Bank’s Cost of Funds declined to 5.9% in FY:2014 from 7.7% in FY:2013 however grew marginally to 6.1% in Q1:2015. Consequently, Unity’s Net Interest margin (NIM) improved from 13.0% in FY: 2013 to13.4% in FY:2014 and 13.5% in Q1:2015.

The new management of Unity has made substantial improvements to the Bank in the last year as observed in the consistent Q-o-Q growth in both top and bottom line.

Risk Assets Grew 16.2% in FY:2014; 4.3% in Q1:2015

In a bid to stay above waters, the Bank grew its risk assets by 16.2%

Y-o-Y from N202.6bn in FY: 2013 to N235.5bn in FY: 2014. In line with other banks in Q1:2015, the Bank grew its loan book marginally by 4.3% from N219.3bn in FY:2014 to N228.8bn in Q1:2015. Surprisingly, the Bank’s impairment charges reduced 30.5% Y-o-Y, from N21.6bn in FY:2013 to N15.0bn in FY:2014 on the back of write backs. As a result, the Bank’s Cost of Risk moderated to 6.4% in FY:2014 from 10.7% in FY:2013. However, in Q1:2015, impairment charges increased 12.8% to N0.3bn as Cost of Risk inched up slightly to 6.7%. Loan to Deposit ratio grew significantly from 66.8% in FY:2013 to 85.0% in FY:2014, higher than the 80.0% statutory requirement. This limits Unity’s ability to take advantage of lending opportunities in 2015 except significant capital (Tier-1 & Tier-2) and deposits are mobilised. “SELL” rating despite Reconstruction of Share Capital The new management of Unity has made substantial improvements to the Bank in the last year as observed in the consistent Q-o-Q growth in both top and bottom line. In addition, the unrelenting efforts of the management to recover its non-performing loans and improve its risk management process on fresh loans have been yielding positive results. Against this backdrop, we have projected an 11.0% growth in gross

earnings to N86.1bn in FY:2015, to be boosted by impressive growth in non-interest income. We forecast a conservative growth of 12.8% in loans and advances on the back of increased retail lending to bolster interest income. That said, we forecast a 26.3% growth in PAT to N13.5bn, translating to an EPS of N0.28 in FY:2015. Following a recent share reconstruction of one (1) new share for every ten (10) shares, Unity’s shares outstanding reduced to 11.7bn from 116.9bn, hence trailing EPS jumped 989.2% (N1.00 per share as Q1:2015 vs. N0.09 per share in FY:2014). We expect the Bank’s ability to pay dividend to shareholders in the coming years to improve given a compressed shares outstanding. As a result of the reconstruction, the share price of Unity is currently at N4.52 from the previous N0.50. The Bank currently trades at a P/BV and P/E of 0.7x and 4.9x relative to Tier-2 average of 0.7x and 5.2x respectively. We have applied both the relative and absolute valuations to value Unity and we arrived at a 12-month Target Price of N1.88. Based on the current price of N4.52 as at April 28, 2015, the counter offers a downside of 58.4%, hence we have placed a SELL recommendation on the Bank. Source: Afrinvest Research

Business Journal May 04 - 10, 2015

Insurance Pension www.businessjournalng.com

Prestige Assurance Plc: 60 Years of Prestigious Service

MD/CEO WHY PRESTIGE IS A PREFERRED INSURER: • The Company is managed by three experienced Indian Expatriates and run by well experienced Nigerian Team of 76 employees. • The Company is blended with Indian and Nigerian Insurance market experience. • Prompt claims settlement • Customer friendly relations WHY INDIAN EXPERIENCE IS OF USE? • Indian Market size of NonLife Insurance Premium is INR: 700 Billion ($12 Billion) • New India’s contribution is

• Claims are being attended on Specified Time Lines

around 16% ($2.33 Billion) • We have various channels for business procurement • We have Network of office up to the tire 7 in nook and corner of the Country. • We have different other lines of business such as Health Insurance, Bancassurance, Agricultural Insurance in a big way. PRESTIGE STRENGTHS: • Is equipped with an IT platform called GIBS and is Web based • Three ways of communication by personal contact, email and SMS is activated now. • Portal services available for major business partners to provide effective services

OUR FOCUS ON: • Product innovation • Technology • Customer service • Intermediaries

Dr. Balla Swamy MD/CEO

• Automatic online upload of Motor and Marine Certificates to NIID

OUR PROPOSAL: • Quotes will be attended on time • We provide competitive Rates in line with the Risk and Market • Our Marketers will patronise you and our Management Team will be in touch with you. • Renewal Reminder shall be by three way communication

• Claims

Prompt

settlement

Vision ‘ To be the most respected, trusted and preferred non-life insurer in Nigeria’ Our Charter ‘Highest priority to customer needs, Courtesy and caring occupies pride place in our work culture. Our ‘commitments’ are to ‘act courtesy, fairly and reasonably in all our dealings with the customers’ Insurance Market: The Indian Experience

Business Journal May 04 - 10, 2015

Insurance Pension

Munich Re, HP Co-operate on Cyber Security

n order to arrive at an overall assessment of the digital risks of large companies followed by the effective minimisation of these risks, Munich Re has concluded a partnership agreement with Hewlett-Packard, the American technology company. The two companies have joined forces to offer a combination of risk assessment, defensive measures and insurance cover to provide the most comprehensive possible protection against cyber risks. Munich. Cyber crime costs German companies an average of USD 8.1 million per year; in the USA the annual cost per company is as high as USD 12.7 million. If the best possible protection is to be achieved, both the technical and organisational security arrangements and the insurance cover must be customised and coordinated to suit the particular situation. It is only in this way that companies can protect themselves effectively against cyber risks and their consequences. Munich Re is therefore working with Hewlett-Packard and other selected technology partners so that it is in a position to understand and assess the specific digital risks of major companies as precisely as possible. Major industrial clients gain multiple benefits from this new collaboration with Hewlett-Packard (HP): “By having an outstanding partner for information security we can offer our clients much, much more than just

insurance” explained Nils Diekmann, Underwriter for Cyber Risks at Munich Re. “Optimal protection for our clients requires the right balance of IT security measures and a cyber insurance solution.” HP’s principle contribution is its technical and organisational expertise in risk identification, measures for risk minimisation and forensic investigation in the event of a claim. Munich Re’s principle strength is its ability to assess digital risks from an underwriting point of view, to develop a customised insurance solution and to provide the client with rapid support in its recovery after a claim. The insurance solution is based on a modular approach and affords not only financial support for the company’s own losses or third party losses after data theft. The very detailed analysis also enables Munich Re to offer clients insurance cover, for example against lost sales resulting from reputational loss, business interruption or contractual penalties. Jürgen Seiter, Regional Sales Director of HP Enterprise Security Services, also sees the collaboration as a win-win partnership: “The modular approach of Munich Re is an ideal fit with our security services which create an individualised map of the specific risk profile of our customers. By using the combination of our services and Munich Re’s insurance cover, our customers achieve the greatest possible protection against cyber risks.”

Swiss Re Reports $1.4bn Income in Qtr1 2015

wiss Re reported a strong Group net income of USD 1.4 billion for the first quarter of 2015. Property & Casualty Reinsurance again led the positive contributions from all Business Units. Life & Health Reinsurance net income increased to USD 277 million and the segment is on track to meet its return on equity target for the year. Corporate Solutions continued to generate profitable growth with

a net income of USD 167 million. Admin Re delivered excellent net income growth and gross cash generation in line with expectations. Despite the on-going challenges from further declining interest rates and market uncertainty, Swiss Re delivered a strong return on investments of 3.9%. Swiss Re is on track to reach its 2011-2015 financial targets by the end of this year. Michel M. Liès, Swiss Re’s Group Chief Executive Officer, says: “The current market and interest rate environment continues to be

very challenging. For that reason, I am all the more pleased to say that we have been able to further grow our business profitably and achieve strong results thanks to our client-centred, differentiated approach and diversified business model. In addition, the result shows our ability to manage our risk portfolios to better mitigate challenges and seize market opportunities.” Swiss Re’s Group net income of USD 1.4 billion in the first quarter of 2015 was 17% higher than

the USD 1.2 billion reported for Q1 2014. Premiums earned and fee income of USD 7.6 billion for the Group was in line with the prior-year quarter. Measured at constant foreign exchange rates, premiums earned and fee income increased by 7%. The investment result was strong at USD 1.1 billion (vs USD 1.1 billion in Q1 2014). The annualised return on investments increased to 3.9% in the first quarter of 2015 (vs 3.7%). The Group’s Swiss Solvency Test (SST) ratio was 223% as reflected

in the submission to FINMA at the end of April 2015, reaffirming the Group’s very strong capital position. David Cole, Swiss Re’s Group Chief Financial Officer, says: “The first quarter has seen all Business Units deliver a very good start to the year. We’re especially pleased that our Life & Health business is on track to meet our profitability target. We’ve also been able to achieve a strong investment result despite ongoing low interest rates amid an environment of financial repression.”

Business Journal May 04 - 10, 2015

Energy

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Africa’s Short-term Priority:

Tackle Shock of Lower Oil Prices

ority, Sayeh declared. Fiscal spending cuts among oil exporters should focus on non-priority recurrent spending, although cuts in public investment would also be unavoidable. “The drop in oil prices also provides a unique opportunity to advance politically difficult energy subsidy reforms across the region,” Sayeh observed. The fall in commodity prices was also a reminder to advance economic diversification.

anaging the impact of sharply lower oil prices is sub-Saharan Africa’s shortterm policy priority, IMF African Department Director, Antoinette Sayeh said. She told a news conference during the 2015 IMF–World Bank Spring Meetings in Washington D.C. that the sub-continent is set to remain one of the world’s fastest-growing regions this year. But although the economic outlook continues to be favourable, growth would this year likely settle in the lower end of the range of the past few years, Sayeh stated, mainly reflecting the impact of the sharp decline in oil prices on the region’s oil exporting economies such as Nigeria and Angola. Sayeh said sub-Saharan Africa is set to post another year of solid performance in 2015, and an expected growth rate of 4 ½ percent this year would leave the region’s growth performance second only to that of emerging and developing Asia. “That said, the economic expansion this year will be at the lower end of the range experienced in the recent years. This mainly reflects the impact of the sharp decline of the oil and commodity prices that we have witnessed over the last six months,” Sayeh stated. Hard-hit Oil Exporters The oil shock would have very differentiated effects on sub-Saharan Africa’s diverse economies, she said. Oil exporters would be hard hit and, with generally limited room for maneuver on budgets, significant fiscal adjustment would dent their growth outlook. Oil importers, conversely, stand to benefit from lower oil prices, although gains would be partly offset by lower prices for their non-oil commodity exports. But infrastructure investment and strong consumption would likely support growth there—particularly in low-income countries. Another, more domestically induced problem area for the region is the Ebola outbreak that has affected Guinea, Liberia, and Sierra Leone. While slowly abating, the disease continues to exact a heavy economic and social toll in those countries. In addition, security-related risks have recently come to the forefront, including in the Sahel and Kenya. “Beyond the unbearable humanitarian costs they have on societies, these incidents, if they were to escalate, would also pose serious fiscal risks and further deter domestic and foreign investors,” Sayeh said.

Tremendous Opportunity for Longterm Growth Beyond the immediate challenges, long-term growth prospects remain very favorable for the region. But the current commodity price shock is a powerful reminder of the need to

Rapid Reversal Externally, global financial conditions could tighten as U.S. monetary policy normalisation proceeds. The large fiscal and current account deficits in some sub-Saharan African countries could leave them vulnerable to a

rapid reversal in market sentiment and to a cut in external financing. The uneven global recovery could also disappoint, notably in Europe and China—which are sub-Saharan Africa’s main trade partners. In the short run, dealing with the oil shock will be the region’s policy pri-

make rapid progress toward economic diversification. Demographic trends are on the side of the region: by 2030 or so, the number of people reaching working age in sub-Saharan Africa will exceed that of the rest of the world combined. “This offers a tremendous oppor-

tunity for sub-Saharan Africa which, properly tapped, can be a strong engine for growth going forward”, Sayeh said. Responding to reporters’ questions, Sayeh said energy subsidy reforms are politically difficult because consumers have to be convinced that whatever savings arise from cutting subsidies will be put to good use. Show Examples “We certainly encourage our member countries to make sure that they communicate clearly to their populations about what they intend to do with the gains from subsidy reduction, and to actually show some examples of how they might use those resources, to convince people that it is worth going down that path,” Sayeh said. Asked about policies to offset the impact of electricity shortages in sub-Saharan Africa, Sayeh noted that power outages are affecting both low-income and emerging market economies in the region. Sayeh urged governments to make space in their budget for these and other essential development expenditures, both by boosting revenue mobilisation and improving the efficiency of spending. Sayeh also cited the use of public-private partnerships to free up infrastructure financing and to introduce private sector innovations that can improve performance. Such partnerships have risks that would also need to be properly managed in a regulatory framework that takes account of those risks, and in which procurement practices maximise returns for the public sector. Other policy options could include power utilities generating more of their own revenue. Sayeh noted that several countries in the subcontinent have public sector power utilities that are not permitted to recover their costs through tariffs. Sayeh said electricity tariff reforms would be an important part of a package of energy sector reforms that countries can take forward to provide more electricity. Debt Limits Asked to identify a tipping point between ramping up infrastructure investment and possibly eroding debt sustainability, Sayeh cautioned that the bond financing tapped by some countries in the region in recent years might become more costly as the United States normalises its monetary policy. Sayeh noted that the IMF has been working on revisions to its debt limits policy, partly in light of countries’ need to make more room for borrowing to finance infrastructure, while at the same safeguarding borrowers’ debt sustainability.

Business Journal May 04 - 10, 2015

Energy

Cheap Oil’s Make-Or-Break Moment for Clean Energy Maria van der Hoeven

he plunge in oil prices may be good for consumers and the global economy, but it could also encourage greater use of fossil fuels and thereby hurt efforts to make our planet’s energy system more sustainable. Policy makers from around the world -- many of whom are meeting this week at UN climate talks in Lima -can prevent this by taking advantage of cheaper oil to make meaningful changes in the way we price energy. But this moment will not last forever: the time to act is now. Today’s bear market in oil is merely reflecting the changes in supply and demand that were set loose by the bull market of the last several years. The more than 50 percent increase in U.S. oil production in recent years resulted at least in part from high prices. Similarly, prices played a key role in efforts to make cars and trucks consume less fuel, which has translated into lower oil demand growth worldwide. As supply has outpaced demand, oil prices have fallen nearly 40 percent from their June peaks. Some observers are likening this era to the bear market in oil that began in the mid-1980s. Back then, policy makers in certain countries could have taken advantage of the plunge in oil prices to tighten vehicle fuel-efficiency standards, which would have protected motorists from the inevitable run-up in prices. But instead they generally took a laissez-faire approach, and consumers

flocked to larger, thirstier vehicles. When oil prices began rising, owners of those vehicles paid dearly at the pump. What a difference a protracted spell of high prices makes. Formerly a laggard, the United States raised fuel efficiency standards for new light-duty vehicles by more than 14 percent between 2008 and 2013; standards will be tightened further in the years to come, reducing U.S. dependence on oil by 2 million barrels a day by 2025, according to the U.S. government. This will improve U.S. energy security and curb emissions of the greenhouse gases that are causing the planet to warm. And if past experience

offers any lessons, now is not the time to ease up -- especially given the pressing need to transform our planet’s energy system. With its heavy reliance on fossil fuels, the current system is on course to deliver at least a 4-degree Celsius increase in global temperatures if no changes are made. It is no secret that we need radical action, but efforts thus far have been sluggish at best. In the International Energy Agency’s annual assessment of efforts to transform the energy system, renewables represent the only bright spot in an otherwise-bleak picture of clean-energy progress.

But now there is a ray of hope: with the drop in oil prices delivering a shot of economic stimulus to consumers around the world, policy makers have leeway to take actions that even a year ago would have been unthinkable. It all depends on national circumstances, of course, but two areas spring to mind. The first is eliminating subsidies to fossil-fuel consumption. In 2013, governments around the world spent $550 billion on these subsidies, which encourage waste. Reforming such subsidy schemes is difficult, as the short-term costs imposed on certain groups of society can be burdensome and induce political

opposition. But such opposition may well be muted now, in the current climate of lower oil prices, than it would have been a year ago. By the same token, policy makers in major energy consuming countries should take advantage of the oil market’s collapse to introduce carbon pricing, taxes or low-carbon mandates, or to strengthen existing schemes. Such actions would encourage more efficient use of energy, would boost the economic case for carbon capture and storage, and would promote low-carbon energy sources such as renewables and nuclear power. Moreover, higher taxes on transport fuels would help finance clean energy research, development and deployment. If such schemes are designed properly, and put in place in an environment of lower energy prices, economic discomfort can be minimised. Indeed, many studies suggest they can yield a net economic benefit. The worst course of action would be complacency in the face of low oil prices. We saw this 30 years ago, but back then the prospect of climate change barely registered as a policy concern. Today, we know otherwise: policy makers must keep a long-term perspective. They have a once-in-a-generation chance to get us back on track. Let’s hope they seize this moment. -Maria van der Hoeven is Executive Director of the International Energy Agency (IEA), an autonomous organisation which works to ensure reliable, affordable and clean energy for its 29 member countries and beyond.

The IEA Oil Market Report for April 2015

mproving Economic Outlook Lifts Demand Growth Forecast; Supply Increases on OPEC Surge The IEA Oil Market Report for April raised its forecast of 2015 global oil demand by 90 000 barrels per day (90 kb/d) to 93.6 million barrels per day (mb/d), a gain of 1.1mb/d on the year, informing subscribers that the notable acceleration from 2014’s 0.7mb/d growth builds on cold first-quarter temperatures and a steadily improving global economic backdrop. Global supply rose by an estimated 1mb/d during March, to 95.2mb/d, as OPEC production recorded its highest monthly increase in nearly four years. Year-on-year gains totalling a whopping 3.5mb/d were split between OPEC and non-OPEC production. OPEC crude oil output soared by 890 kb/d in March, to 31.02mb/d, on sharply higher Saudi Arabian, Iraqi and Libyan supplies. The OMR “call on OPEC crude and stock change” was revised marginally higher for the current quarter, to 30.35mb/d, above the group’s official production ceiling, but left unchanged for full 2015 from the March Report, at 29.5mb/d. OECD industry stocks slipped by 1.7mb in February, despite a massive 36.4mb build in crude oil stocks.

Preliminary data show OECD inventories up a counter-seasonal 29.2mb in March, as US crude holdings extended recent builds and refined products defied seasonal trends. Global refinery crude demand is expected to fall seasonally to 77.3mb/d in the current quarter, from 78mb/d

in the first quarter of the year. While Atlantic Basin refiners mostly completed turnarounds in the last quarter, Asian refinery maintenance is set to ramp up sharply this quarter, with up to 2.5mb/d of distillation capacity offline at its peak in May.

Business Journal May 04 - 10, 2015

Manufacturing

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Why APC Must Tackle Power Challenge for Industrial Growth

Blessing Ikeme n a recent interview on a radio station, Metro FM, the spokesperson for the All Progressives Congress (APC), Alhaji Lai Mohammed, assured Nigerians that the in-coming APC government will guarantee at least nine hours of electricity supply in the first 6-12 months of the Muhammadu Buhari administration. According to Mohammed, the APC government will prioritise power supply, which it has identified as pivotal to a robust economic transformation. However, considering that such promises of regular power supply by successive administrations have been made in the past and repeatedly unfulfilled, this latest assurance counts for little with Nigerians. To be sure, Nigerians will definitely love to have regular power supply as that will astronomically transform the country’s economy, but they are wary of promises. They would prefer the government dispense with promises and just get right to work and make it happen. The promise by the party’s spokesperson underlines how important the issue of power supply is to our national life. Indeed, as Nigerians set an agenda of immediate issues to tackle for the in-coming government, power generation features as number one on everybody’s list. Experts say the administration needs to fully appreciate the challenges bedeviling the sector if it must succeed where others have failed. The first step to tackling the power supply challenge, stakeholders say, is to complete the power sector reforms started by the out-going government of President Goodluck Jonathan. The industry experts called for the review of the reforms in such a way as to identify lapses that could immediately be corrected. They argue that the objective for the privatisation of the power sector has not been met, which explains why the economy is still struggling to generate 4,000MW of power almost two years after the privatisation exercise. The out-going government had projected that by 2014, the country would be generating over 10,000MW of power from the privatised power sector. Unfortunately, the reality on ground, four months after the 2014 deadline, is discouraging. According to recently released figures by the Federal Ministry of Power, as of April 12, 2015, the country’s peak generation was 3,263.6MW, while the energy sent out was 2,988.72MW. Prof. Charles Ofoegbu, former Head of Exploration, Nigerian National Petroleum Corporation (NNNPC), said it is an irony that today, the country has generating power plants and yet power generation keeps dropping. “The privatisation of the power sector needs to be reviewed. The in-coming government needs to do this before it can get the issue of power supply right. We keep inau-

A Power Plant gurating power generating plants, but I had warned in the past that power supply would keep diminishing and we have discovered that we are not making progress but rather retrogressing in the sector. This is beginning to happen because we are getting shorter hours of power supply whereas we are inaugurating many distribution and generation firms,” Ofoegbu said. Ofoegbu is of the view that the power situation has remained poor despite the best efforts of the Jonathan administration because an adequate gas master plan was not implemented to complement the privatisation of power assets. “The reason for this is because we did not implement an adequate gas master plan. It has not been fully implemented and you are beginning to put in place generating points on a master plan that is not implemented. We don’t have adequate gas supply. There are some power stations that we have in this country that don’t have pipes that take gas to them.” Indeed, the issue of gas supply for power generation continues to be a key area neglected in the power supply equation. Inadequate supply of gas for power generation is a major problem to achieving the desired megawatt target. Often, we are told that sabotage of gas pipelines constitute a major supply obstacle. The Buhari administration must find a way to address this. Chairman of Transcorp Group which operates the Transcorp Ughelli Power Limited, a power generating company, Tony Elumelu, said gas availability remains the second biggest challenge to adequate power supply. According to him, “many plants in the country can produce more than

The Reign of Generators they currently do, but limited availability of gas makes it difficult to produce according to the companies’ individual capacities.” Commentators have identified the need to unbundle the Transmission Company of Nigeria (TCN) for the privatisation exercise to make any sense. They argue that the usual inefficiency that characterises government institutions will not allow it function efficiently. And considering that it is the final piece of the power supply puzzle, it would be counter-productive for the government to continue to hold on to it. Elumelu had at a power industry conference last year called for the privatisation of the TCN, because, according to him, it is “grossly inefficient” because of the out-dated transmission systems in use. Elumelu said for every 100MW of power generated and sent to the transmission company, 40 percent is lost. The Chief Executive Officer, Nigeri-

an Electricity Regulatory Commission (NERC), Dr. Sam Amadi, agreed that there is need to review the power sector reforms to improve the process and the industry. “A government that comes into power has a responsibility of making policies. It can change policies, improve existing ones or can more vigorously pursue existing policies. So, through due process, the National Electric Power Policy, which also led to privatisation, can be reviewed by the in-coming government to meet certain demands and improve the industry.” Analysts believe once the power sector is decisively addressed to ensure regular power supply, the much talked-about industrial revolution will become a reality. They point to the fact that industrial growth can only occur if the necessary infrastructure, such as regular power supply, has been put in place. The need for electricity, whether for personal or industrial use, is para-

mount for the growth of a nation. Many industries have died and many continue to hemorrhage from high costs due to huge overheads on power generation. For instance, the tyre making industry, which used to be vibrant, with many players such as Dunlop and Michelin, died from unsustainable cost of doing business, which made their products uncompetitive compared with imported ones. The textile industry is another sorry story. The industry used to be one of the highest employers of labour few years ago. Unfortunately, high overheads from cost of power generation led to the collapse of hundreds of textile mills. Today, the few remaining players continue to run at a loss. According to the erstwhile President of the Manufacturers Association of Nigeria (MAN), Chief Kola Jamodu, 40% of the production cost of manufacturers goes into the provision of electricity, as against 5-10% in other similar economies. The lack of reliable power supply and the constant blackouts cause severe economic damage. The cost of alternatives such as petrol or diesel generation is at least six times the cost of a reliable power supply. This affects productivity, efficiency and ultimately growth. A regular power supply will impact both the formal and informal sectors of the economy and kick-start the industrial growth. The modern world is dependent on access to information, which in turn is only possible with a reliable and constant source of electricity. Many cottage industries that can drive economic growth will need regular power supply to survive. For instance, shoemaking, furniture making, printing presses, and clothe making are some of the businesses that will benefit hugely from regular power supply. A report in The Guardian newspaper of UK by Adam Smith argued that “the reliable provision of affordable electricity has the potential to tackle both the symptoms and the causes of poverty.” Indeed, many artisans such as carpenters, welders, iron benders, etc, who have had to abandon their trade for commercial motorcycle (Okada) business, will easily pick up their trade. The army of unemployed youth will be gainfully employed as overheads fall and businesses become profitable and are able to expand their operations. The multiplier effect on the economy of a regular power supply is very huge and cannot be ignored. As Nigerians await the in-coming government with high expectations, the Buhari administration will lay an indelible marker and win doubters over if it can re-engineer the power sector and ensure regular supply of electricity. Nigerians will certainly be waiting to get the 9-hour daily supply power in 6-12 months as promised by Lai Mohammed.

Business Journal May 04 - 10, 2015

Special Report The 42nd AIO Conference & General Assembly 2015

TUNISIA 2015 Special Report on Leading Insurance & Reinsurance Companies in Nigeria We have the pleasure to invite Insurance & Reinsurance Firms in Nigeria to participate in the Special Report: Leading Insurance & Reinsurance Companies in Nigeria for the 42nd AIO Conference and General Assembly slated for May 24-27, 2015 in Tunis, Tunisia. The AIO is the largest gathering of insurance regulators, professionals, investors and financial media from Africa, Asia, Europe and North America. THEME “African Insurance in the Face of Mass Events” The Conference and General Assembly will be jointly hosted by the Fédération Tunisiennes des Sociétés d’Assurances (FTUSA) and Société Tunisienne de Réassurance (TUNIS RE).

Welcome Address by President of the Local Organising Committee

The conference will be organised under the auspices of the African Insurance Organisation “AIO”. This conference presents a good opportunity for a valuable exchange of ideas and experiences in order to support

Requirements for Participation

SA” and Tunisian Reinsurance Company “TUNIS RE” are honored to host the 42nd AIO Conference and General Assembly from 24th to 27th May in Gammarth, Tunisia.

• Corporate Profile • Current Annual Report (quoted companies) • Corporate Photograph of MD/CEO • Advert Support

Lamia Ben Mahmoud Chairperson, 42nd AIO Organising Committee

The Tunisian Federation of Insurance Companies “FTU-

geria to International Audience • Opportunity for Firms to Market Services to Global MarMrs. Lamia Ben Mahmoud ket President of the Local Com• Enhance Corporate & mittee Brand Image of Participating Chairman of the Tunisian Rein- Firms among Global Operators surance Company “TUNIS RE” • Opportunity for Professional Networking & Business Engagement • Opportunity to Attract Foreign Investment/Players into the Nigerian Market Wishing you a pleasant stay in Tunisia!

business exchange between the different partners of our industry. On behalf of all members of the Organising Committee, we would like to welcome you to Gammarth.

Objectives of Special Report The objectives of the Special Report include:

• Showcase Leading Insurance & Reinsurance Firms in Ni-

DEADLINE: Monday, May 11, 2015. For further enquiries and participation, pls call 08023088874, 07058919138 or email business.journal@ yahoo.com.

Business Journal May 04 - 10, 2015

16 Manufacturing Only Quality Infrastructure Will Help Diversify Economy -Aganga Blessing Ikeme

he Minister of Industry, Trade and Investment, Mr. Olusegun Aganga, has said the economy can only achieve the much desired diversification if quality infrastructure are put in place. The minister made this observation in Abuja at the opening of the new office complex of the Standards Organisation of Nigeria. The minister lamented the unusually high rejection rate of Nigerian exports in the international market and attributed the development to lack of accredited laboratories in the country where the products could be tested before being shipped abroad.

“We all say we want to diversify the economy with a view to increasing our income from non-oil products. But there is no way we can achieve this without having quality infrastructure such as the laboratory, Aganga said. He said within the last five years, over 103 Nigerian products exported to other countries were rejected for not meeting acceptable international quality standards. Aganga said the high volume of rejected products was not acceptable. He said when compared with other countries like South Africa with only about six rejects or Ghana with seven rejects, the country’s high number of rejects does not augur well for the economy. The minister, however, said that

with the reforms that had been carried out by the current admin-

istration within the last four years, Nigeria now has an internationally

accredited laboratory in Lagos which would help to check the drift. “For instance, we could not export yam to the United Kingdom because we do not have a laboratory to test it here. Those who export products in Nigeria take them to Ghana to test them and the credit goes to Ghana. If you compare the 103 Nigerian products rejected to that of other African countries like South African and Ghana, who only have between six to seven rejects, ours is unacceptable.” He explained that hopefully, since the laboratory in Lagos meet international standard, any product tested there would be acceptable anywhere outside the country, thus saving the huge revenue being lost by manufacturers and the country.

BOI Recovered N1.3bn NPL in 4th Qtr 2014, Target Below 3%

he Managing Director, Bank of Industry (BOI), Mr. Rasheed Olaoluwa, has stated that the bank will soon reduce its non-performing loans (NPL) portfolio to below the global benchmark of 3%. Olaoluwa revealed this at a recent induction of 10 Nigerian companies into the Hall of Fame,an initiative introduced in October 2014 to reward customers of the bank who did not default on loans given to them by the bank. The Hall of Shame was also established to punish loan defaulters. At the induction, Olaoluwa announced that 24 companies were blacklisted for failing to repay their loans. The bank also threatened to publish the names of directors of the defaulting companies on its website to serve as a warning to members of the public and other financial institutions.

The Bank of Industry said it recovered N1.3 billion in non-performing loans in the last quarter of 2014 after the establishment of the Hall of Fame and Hall of Shame for customers. The Chief Risk Officer, BOI, Dr. Ezekiel Oseni, said the programme had hastened the pace of recovery of non-performing loans by the bank. He said between October and December when the programme was initiated by the bank, the total amount recovered from non-performing loans stood at N1.3 billion. He added that the rate of recovery of NPL by the bank had been generally impressive. He said: “As of December 31, 2013, our NPL ratio was 12.98 per cent. By the end of December 2014, the ratio improved to 5.81 per cent.At the end of March, 2015, the non-performing loan ratio came down to 4.09 per cent.” Oseni said the total amount of non-performing

loans recovered by the bank between January and March 2015 was N403 million. “Our target is that our non-performing loan ratio should not go beyond three per cent in accordance with global best practices,” he stated. He attributed the improvement in the NPL ratio to a lot of measures put in place by the bank to checkmateloopholes associated with lending. Oseni said: “First, we started the implementation of the enterprise-wide risk management framework which brought up some other departments within the division. Then the staffing was improved.We have more experienced staff. Almost every employee has gone through risk management trainings.Where we do not have the capacity for some of the trainings, the management engages or collaborates with organisations that can provide that capacity.”

Rasheed Olaoluwa MD/CEO, Bank of Industry

Business Journal May 04 - 10, 2015

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The 10 Technologies Shaping Future of Aviation

he difficulties experienced by aviation industry‘s players in the crisis period have certainly affected speed of overall industry development. New efficient engines, 3D printing, Google Glass, iPads on board and many other stuff is affecting the way we fly - the struggle for survival have launched a whole bunch of new technologies, a process which is not likely to stop in the nearest future. Now almost no one doubts the fact that the aviation industry is on the verge of a new round of evolution. As the industry continues on its rapid growth path, AeroTime is delighted to guide our readers through top 10 most several fundamental challenges that will probably shape industry‘s future. 1.

The Game of Drones Do not be surprised when once you will hear massive buzzing around. No, these are not a swarm of mosquitoes – these are the drones. In his lab at Pennsylvania, Vijay Kumar and his team build flying quadrotors - small, agile robots that swarm, sense each other, and form ad hoc teams — for construction, surveying disasters and far more. The researchers at General Robotics, Automation, Sensing, and Perception Lab (GRASP) are developing “swarms” of unmanned aerial vehicles (UAVs) that work in a team. Some of these unmanned aerial vehicles (UAVs) are capable of flying their entire mission without any human interaction at all except possibly for the landing where a person intervenes using remote control. These devices take hundreds of measurements each second, working cooperatively toward particular mission. Kumar says that the convergence of computation, communication, and consumers has a huge potential for the industry. While a single drone has limited battery life, a swarm could overcome this limitation. The robots would be ideal for future work in search and rescue, first response, and law enforcement fields. 2. The Big Bang Data How does the vast quantity of data collected from each aircraft get integrated with that from other aircraft and satellites? How will it be streamlined and delivered to allow for effective decision-making? With 35 million flight departures per year, data is critically important for any planning decision made by airlines and airports. Sponsored by the Defense Advanced Research Projects Agency (DARPA) and funded by $25 million annually for four years, XDATA is a research effort to develop new computational techniques and open-source software tools for processing and analyzing big data, motivated by defense needs, but applicable across many government agencies and other civilian purposes without depending on the satellite-based Global Positioning System. Brining a revolutionary approach, big data would reduce deviations for

airlines and airport operations, compose taxi times from one side of the pier to another, reducing the likelihood of ramp conflicts or numerous delays. By combining these key elements of data management, MRO operations can be greatly economised as well. 3. The Walking Undead Imagine ejecting from aircraft without a parachute – sounds like something from a Die Hard or a superhero movie, does not it? Yet, this could be the future of pilots, made possible by hi-tech exoskeletons. These babies have polymer gel muscles five times stronger than natural ones, so you could literally buy clothing that gives you superhuman strength. How about that, Wolverine? Lockheed Martin has received a contract through the National Center for Manufacturing Sciences (NCMS) to evaluate and test two FORTIS exoskeletons. This marks the first procurement of Lockheed Martin’s exoskeletons for industrial use. The FORTIS exoskeleton is an unpowered, lightweight exoskeleton that increases an operator’s strength and endurance by transferring the weight of heavy loads from the user’s body directly to the ground. The benefit of this newfound strength (aside from feeling like a superhero) is that it enables workers to go for long periods without needing a break. The suit minimises muscle fatigue, which increases productivity – could be much of use both for engineers, maintenance, rescue, military use and more. 4. Supernatural Do you remember about the augmented reality in the Matrix or Inception? Seems like augmented reality is the next big step in safety and information for pilots. Mainstream flight simulation developers have discovered some fantastic methods of circumventing or enhancing basic limitations, bringing a super-duper natural and realistic experience in pilots training. From Google Glass to Garmin’s new D2 pilot watch, we’re beginning to get

a preview of the trend toward wearable electronics that very well could transform the whole experience of how we fly in the future. Some pilots have already started testing next step after Google Glass, a miniaturized computer in a pair of eyeglasses, for a number of flight-related functions, including completing electronic checklists, viewing charts and maps, and calling up weather information. Traffic display will be more realistic and show other aircraft in a super natural framework rather than as target diamonds on a panel display or tablet computer screen. 5. The Breaking Bad Fuel Technological advances in electric-powered flight today will not only make the act of flying cheaper. Crucially, they also promise to revolutionise how the aeronautics industry impacts the global environment. Today, Boeing’s 747 use five gallons of fuel every mile. This means that about 36,000 gallons of fuel are being burned during a 10-hour flight. Companies such as Safran S.A., Boeing, Airbus, and Raytheon have already revealed plans to re-conceptualise the modern airplane. At Boeing, engineers have created the SUGAR Volt concept plane which combines electricity and fuel to power flight, much like a hybrid automobile does. Airbus recently unveiled a battery-powered aircraft called an E-Fan, which the company is hoping to sell in the recreational market by 2017, and eventually create commuter planes within 20 years. There is a lot at stake in the race to innovate: the electric aircraft market is projected to reach over $22 billion in the next fifteen years. 6. The Scanner Diaries Beware-one day airport security will actually see what you are thinking about! The Neurocam being developed by the Tokyo-based team constantly scans your brain waves and records 5-second animated GIF. Those clips are date- and location-stamped, and stored in a video diaries for subsequent review. In its

current prototype form, the neurocam uses an integrated smartphone as its brains, storage medium, and camera. In the future, the project team aims to create an emotional interface, which could link a range of devices and services to people’s individual thoughts and feelings, creating unlimited potential not only for airports surveillance. 7. The Lord of the Helmets It appears that soldiers using Android and Windows systems during missions is a thing we’ll see in a notso-distant future. The Raytheon Company has developed a wearable device and display to help pilots navigate and see where their foes are even after they leave the cockpit. Raytheon’s new ‘Aviation Warrior’ system is helping to make pilots all-knowing and all-seeing, with stateof-the-art situational awareness technology that can be worn by the pilot. The Aviation Warrior system consists of a wearable, centralized data processing computer that provides maps, sensor imagery, video and messaging data from multiple military networks. The device is integrated with a survival radio and GPS. The data processing computer couples with a razor-thin, wearable display that controls all solider-worn equipment and aircraft systems. While inside the cockpit, the system communicates with a helmet that features hostile fire indicators, 3D audio and the ability to show critical flight information in a heads up display. 8. Fast and Furious: Mach 2 A 4 hour hypersonic plane trip from Sydney to London, the stuff of science fiction, is about to take a step closer. Hyper airliners have been the objects of numerous recent and ongoing design studies. JAXA, Japan’s national aerospace agency, proposed its long-term vision JAXA2025 to develop a jet that can carry 300 passengers at Mach 2 speed and cross the Pacific Ocean within two hours. JAXA is developing the pre-cooled turbojet engine (PCTJ), which can operate from take-off to Mach 5 continu-

ously. The engine has already demonstrated at ground experiments and a flight experiment. The economic success of such a project is still unclear, and as a consequence the project has been met with limited interest from Japanese aerospace companies like Mitsubishi Heavy Industries so far. 9. Print Wars: Episode I – The 3D Strikes Back Additive manufacturing is already transforming the way aircraft are done throughout the world. Unlike traditional manufacturing methods that mill or cut away from a slab of metal to produce a part, additive manufacturing (also referred to as 3D printing) “grows” parts directly from a file using layers of fine metal powder and an electron beam or laser. Distributing engines along the trailing edge of wings and in the rear of the fuselage can theoretically cut fuel consumption by 20 percent and decrease an aircraft’s weight. The aircraft of the future will have a “bionic” fuselage, composed of complex parts printed using additive layer manufacturing. 10. Transformers: The Revenge of the Roads You’ve always known it was just a matter of time before the world demanded some kind of flying machine which would replace the automobile. One such novel approach is the PAL-V (personal air land vehicle), a sort of flying motorcycle conceived in Europe that converts from a road-going three-wheeler into a gyrocopter that appears to fly as well as it drives — which is to say very well in both regards. Where the Transition and other proposed flying cars have suffered from a lack of lateral stability in flight and mechanical complexity on the ground, the PAL-V flies as well as any gyrocopter you’re likely to see and, thanks to its ingenious suspension system, drives like one of the best three-wheel motorcycles to hit the streets.

Business Journal May 04 - 10, 2015

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MTN: The 21-Nation Telecom Brand Profile and Structure Launched in 1994, MTN Group is a leading emerging markets mobile operator which is at the forefront of the technological changes sweeping the world. We invest significantly in advanced communications networks, connecting more than 203, 8 million people in 22 countries across Africa and the Middle East. In the past five years alone, our capital expenditure has exceeded R130 billion in the countries where we operate. In pursuit of our vision to lead the delivery of a bold, new Digital World to our customers, and our mission to make our customers’ lives a whole lot brighter, we leverage the talent of our 25 424 employees to offer innovative products and a quality customer experience. We recognise the value of diversity within a group with a solid organisational culture. Working with integrity, we value our relationships with the communities in which we work, our customers and employees, our shareholders and the media, governments and regulators, as well as suppliers and business and industry partners. We recognise the importance of these stakeholders, among others, in the sustainability of our business. MTN Group Limited’s head office is in Johannesburg, South Africa, where the Group is listed on the exchange operated by the JSE Limited under the share code “MTN.”

Dabengwa Group President & Chief Executive Officer MTN has operations in Afghanistan, Benin, Botswana, Cameroon, Ivory Coast , Cyprus, Ghana, Guinea Bissau, Guinea Republic, Iran, Liberia, Nigeria, Republic of Congo (Congo Brazzaville), Rwanda, South Africa, Sudan, South Sudan, Swaziland, Syria, Uganda, Yemen and Zambia.

MTN also has ISP licenses in Namibia and Kenya and a Value Added Service licence in Ethiopia. Vision and Strategy Strategy The role that telecommunications plays in people’s lives has changed

Ikpoki CEO, MTN Nigeria rapidly in the last decade. Not so long ago, traditional voice services defined the telecommunications industry. Now they are just one of a growing range of services that impact many areas of our lives. The need for a broader digital offering has led MTN to refresh its

vision and mission and refine its strategic objectives. This is to ensure that we maintain our leadership position in communications in emerging markets and sustain a business model that maximises value for all our stakeholders.

Business Journal May 04 - 10, 2015

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China, Equatorial Guinea in $2bn Infrastructure Pact

hina’s biggest lender by assets, Industrial and Commercial Bank of China, said recently it had signed an infrastructure pact worth $2 billion with the oil-rich West African nation of Equatorial Guinea. The agreement was signed following a meeting in Beijing between Chinese President Xi Jinping and Equatorial Guinea President Teodor Obiang Nguema, marking the latest Chinese investment in the continent and its resources. The deal will include providing “financial support” to Equatorial Guinea’s government as well as Chinese enterprises there, ICBC said in a statement. China has sought to broaden financial support for its companies investing abroad as part of a policy drive known as “going out”. “There are growing numbers of cooperation areas between our two countries, and the prospects are very bright,” Chinese Premier Li Keqiang told Obiang on Wednesday, according to a government statement. The two countries should deepen their “traditional friendship”, Li added. ICBC called Africa the “strategic and developmental heart of ‘going out’” for firms the bank supports. “Equatorial Guinea is a central African country that has developed relatively well,” the government said. “The government in recent years has

Obiang, in power since 1979, is Africa’s longest-serving head of state. Rights groups say he has enriched himself and his family while many of his people go hungry. China is Africa’s biggest trade partner, and has sought to tap the continent’s rich resources to fuel its economic boom. Critics, including some African leaders, have said Chinese projects bring little benefit to Africans, with materials and workers brought in from China.

PICTURES: (Top)Equatorial Guinea’s President Teodoro Obiang Nguema Mbasogo (L) shakes hands with Chinese Premier Li Keqiang before a meeting at the Great Hall of the People in Beijing, China, April 29, 2015. (Below) A section of African Map supported expanded investment into infrastructure development, and the need for infrastructure projects is enormous.” Many Chinese development and aid projects have drawn condemnation from rights groups for their support of governments with poor rights records and lack of transparency, including Zimbabwe, Sudan and Angola. China has said it will not follow the path of “Western colonists” in Africa by sacrificing countries’ long-term interests or environments.

Beijing says it follows a policy of non-interference in other countries’ domestic politics that is welcomed in Africa. Equatorial Guinea, a tiny Sub-Saharan African nation, boasts the highest GDP per capita in Africa, thanks to a hydrocarbon boom. But it is also notorious for corruption and ranked 144 of 187 states on the U.N.’s 2014 Human Development Index. A 2004 U.S. Senate probe showed millions of dollars channeled by Obiang and relatives into the disgraced Riggs Bank.

‘Ghana Can Continue Development in $5bn Ivory Coast Oil Dispute’

n international maritime tribunal has ruled that Ghana can continue developing a $4.9 billion dollar offshore oil project in an area caught up in a border dispute with Ivory Coast but must not start new drilling. The decision is positive for the government of Ghana and for British firm Tullow, which leads a consortium developing the “TEN” field and has already drilled the wells it needs to begin production in mid-2016. A moratorium would have denied the West African state’s government revenue it needs as it seeks to restore economic stability with the help of an International Monetary Fund aid programme. Ivory Coast in February asked the Hamburg-based International Tribunal for the Law of the Sea (ITLOS) to issue a moratorium on oil activity by Ghana in the disputed area while legal hearings are held.

The decision did not judge the merits of the case and the court is expected to make a final ruling in 2017. Analysts have said that precedent suggests it is unlikely to redraw the customary equidistant boundary. “Following this ruling, the TEN Project can move ahead and we will now await instructions from the Government of Ghana with regard to implementing those provisional measures that have been ordered by ITLOS,” said Tullow spokesman, George Cazenove. The tribunal said Ivory Coast had not provided evidence to show that continued oil development at the Tweneboa, Enyenra and Ntomme (TEN) Project would harm the marine environment. It also accepted Ghana’s contention that the environmental impact of the project was adequately monitored and to suspend operations would, in fact, harm the environment by allow-

ing wells and other equipment to fall into disrepair. “An order suspending all exploration or exploitation activities conducted by or on behalf of Ghana in the disputed area, including activities in respect of which drilling has already taken place, would therefore cause prejudice to the rights claimed by Ghana,” the ruling said. It directed all parties to take the necessary steps and to cooperate to prevent harm to the marine environment in the disputed area. Revenue from TEN is important for the government as it seeks to rebalance an economy whose GDP growth is expected to slow to 3.9 percent in 2015. For years, the economy grew strongly through exports of gold, oil and cocoa but a fall in commodity prices and problems including a stubborn budget deficit have curbed its development.

Business Journal May 04 - 10, 2015

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UNILEVER PLC: Time to Adjust the Gear for Better Performance Chris Okeke

tockholders of Unilever Plc are betting their lives over the future of their stock following record impressive performance in the Q1 of 2015 just announced. Ahead of its Annual General Meeting coming up Tuesday, May 12, 2015, the company had announced a 7 and 8 per cent dip in revenue and operating margins respectively for the 2014 full year against the 13.1 percent of the 2013 financial year but the trend was reversed in the Q1 2015. But why would investors stake their interest in a company that has just posted a below par performance after the full 12 months of the 2014 financial year even when it is obvious the company is over geared? The answer is in the future outlook of the conglomerate that has made tough business decisions which would evolve a Unilever that is better placed to thrive within the ever increasing volatility, uncertainty, complex and ambiguous operating business environment. The company has deliberately refocused on the route to market consumer needs and aspirations, product quality, capacity expansion and zero business waste. The route to market transformation according to the company involved rationalisation of trade inventories which obviously introduced one off pressure to the 2014 performance. However, in the medium to long term, Unilever is expecting an upward trend in all critical parameters. The Board Chairman, HRH Igwe Nnaemeka Achebe in a statement to shareholders of the company pre-empts any backlash of its fundamentals and says the company would be doling out N378.3 million which amounts to 10k per share as dividend to its shareholders. In his words: “The Board was caught between delivering shareholders expectation on dividends and providing the right financing platform for it to deliver its growth targets. It is not however clear if the decline in dividend pay-out resulted in any form of improvement in the company’s dividend yields which the ultimate is for every investor. Dividend yield is a financial ratio that shows how much a company pays out in dividends each year relative to its share price. In the absence of any capital gains, the dividend yield is the return on investment for a stock. It is also a way to measure how much cash flow you are getting for every Naira invested in an equity position. For instance, if two companies both paid annual dividends of N1.50 per share, but company A’s stock is trading at N10 while X’s company’s stock is trading at N30, then A has a dividend yield of 15 percent while X is only yielding 5 percent. Thus, assuming all other factors are equivalent, an investor looking to supplement his or her income would likely prefer A as stock over that of X because of its high yield though X has a higher stock price. For Unilever, it is however not certain if the 10k at N43 share price it is paying

Mr. Yaw Nsarkoh Managing Director/CEO, Unilever Nigeria Plc

this year would be better than the yield for last year. The company’s fundamentals looked nothing but benign in 2014, no thanks to a spike in cost of sales which accounted for 66 percent of turnover, the company’s turnover declined to N56 billion from the N60 billion recorded in the 2013 financial year. The N5 billion decline or 7 percentage points dip was the highest in the company’s last 5 years of operation. This development resulted in a significant decrease in profitability. Gross profit was down by more than N2 billion or 10.15 per cent while operating profit was further depressed by 40 percent to N4.614 billion from N7.790. PBT slumped further by almost N4 billion to N2.87 billion from N6.793 billion achieved the previous year. According to the statement, PAT also declined by 49 per cent to close at N2.412billion from N4.724 billion. The performance was not without costs as Cost of Sales went down by 5.24 per cent to N35.584 billion and accounted for 64 per cent or N64 of every N100 of turnover when compared with the N63 of every N100 in 2013. Operational Cost to Income Ratio for the year was also on the rise by 92 per cent against 87 percent of previous year. Margins- the much profit the company was able to squeeze out of every Naira of

turnover was down by 8 percent when compared with 13 percent of 2013 but current ratio was up. PAT margin also nosedived within the 12 months of 2014 to 4 percent. But how efficient and liquid is Unilever? The current ratio which measures the ability of a company to pay its short term debts could be used as a gauge. The ratio is mainly used to give an idea of the company’s ability to pay back its short-term liabilities (debt and payables) with its short-term assets (cash, inventory, receivables). The higher the current ratio, the more capable the company is of paying its obligations. A ratio under 1 suggests that the company would be unable to pay off its obligations if they came due at that point. In the 2014 financial year, Unilever was only able to boast of 59 per cent its total liabilities. In other words, additional liquidity or gap of over 41 percent still needs to be bridged if the company were to meet up with its obligations for the period under review. The task before the Board on May 12, 2015 is to convince its shareholders that the N12 billion short term facility which is attracting 14 percent interest will not put their investments at risk even after the restructuring and rationalisation exercise.

Business Journal May 04 - 10, 2015

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ITU: Our Future Built on Broadband

net connectivity, at faster speeds, to more people than ever. Emarketer anticipates that 1.76 billion people will use smartphones by the end of this year 4, while Ericsson estimates that, by 2019, there could be 5.6 billion smartphone subscriptions, of which 2.6 billion will relate to LTE.

en years on from the World Summit on the Information Society (WSIS), the Information Society is today truly with us. By the end of 2014, some 2.9 billion people or 40% of the global population will be online (ITU, 2014). At current growth rates, half of the world’s population will be online by 2017. Technology commentators are often seduced by the promise of a hyper-connected world, focusing on embedded ambient intelligence, automated Machine to Machine (M2M) traffic, ubiquitous connectivity and the ‘Internet of Everything.’ However, the real information revolution may lie in the growing day-byday use of Internet-enabled devices in all parts of our lives. And it is this era of mass connectivity – delivering small, but incremental changes to the ways in which each individual does things – that promises to transform development and global welfare. Mass connectivity with broadband can improve our lives in a myriad of ways – by providing better access to health services, enabling financial inclusion through m-payments, empowering people through online education, and creating transparency in government, for example. Broadband can no longer be viewed as just another infrastructure, but is today a powerful force for change. Recent discussions have focused on a ‘two-speed’ Internet.

Quotes High-Speed Mobile By the end of 2019, there may be 5.6 billion smartphone subscriptions. Source: Ericsson Mobility Report June 2014

Today, the Internet may be an Internet of 2.9 billion different ‘speeds’, in terms of how each individual Internet user relates to online networks and society as an online citizen. Taken cumulatively, these incremental changes add up to sweeping social transformation. Worldwide, mobile phone subscriptions will exceed 6.9 billion by the end of 2014, with three quarters of these subscriptions in the developing world and over half in Asia-Pacific (ITU, 2014 2). The total number of unique mobile phone users may be around 3.4 billion people by 2014 Today, the marriage of Internet with mobile promises greater Inter-

Growth in Mobile Services Mobile-enabled services, by vertical, 2005-2013. Source: GSMA, “Financing Innovation”, July 2014.

Broadband can no longer be viewed as just another infrastructure, but is today a powerful force for change. Recent discussions have focused on a ‘two-speed’ Internet.

Smartphone Shipments to Middle East, Africa Witness 83% Growth

martphone shipments to the Middle East and Africa saw unprecedented year-onyear growth of 83% in 2014, according to - Q4 2014 Handsets Tracker released by International Data Corporation (IDC). Spurred by the increased availability of cheaper models and dual-SIM devices, the global advisory and consulting services firm announced that smartphones accounted for 41.9% of all mobile handset shipments to the region in 2014, up from 27% in 2013, with the overall handset market expanding 19.6% in volume year on year. Feature phones have been hit hard by the increased availability of more affordable smartphones, with shipments down 4.5% year on year in 2014. Indeed, smartphones priced under $100 captured 20% share of the MEA smartphone market in 2014, up from just 5% in 2013. Additionally, market share of smartphones in the $100–200 price bracket increased eight percentage points in just one quarter, from 25% in Q3 2014 to 33% in Q4 2014. Meanwhile, smartphones priced in

the higher-end $250–500 bracket have seen their share of the overall market fall from 23% in Q3 2013 to 18% in Q4 2014. “Many new vendors have been eager to get into the region’s burgeoning smartphone space, with a number of them launching phones in this growing price band,” says Nabila Popal, IDC’s Research Manager for handsets and display solutions in the Middle East and Africa. “This strategy of targeting the mid and low end of the market has contributed significantly to the success of vendors like Huawei and Lenovo.” The growing popularity of dual-SIM smartphones is also helping shape the market, with shipments of such devices increasing 34% year on year in Q4 2014. “Vendors such as Samsung and HTC launched variants of their flagship S5 and HTC One M8 models with dual-SIM capabilities,” says Isaac T. Ngatia, a Senior Research Analyst at IDC Middle East, Africa, and Turkey. “Demand for such devices stems from the fact that a growing band of consumers want to enjoy cheap cross-net-

work calls and offers from multiple telcos and therefore retain more than one SIM card for their personal use.” The majority of the growth in the smartphone category was witnessed in countries that have larger populations but previously had low penetration rates. For example, smartphone shipments to Nigeria and Kenya increased 135% and 112%, respectively, year on year in 2014, while Pakistan saw growth of 105% over the same period. “The increased appetite for smartphones in Pakistan is being driven by a combination of the deployment of 3G networks across the country and the wider availability of more affordable devices,” says Popal. Meanwhile, the more mature GCC smartphone market expanded 31.8% year on year in 2014, contributing to the region’s penetration rate reaching an impressive 72.6%. The overall handset market’s vendor dynamics also changed by the end of 2014. Although Samsung maintained its number-one position in MEA, its smartphone share fell from 51.5% in 2013 to 43.8% for 2014. Huawei and

Apple followed in second and third place with shares of 8.9% and 7.8%, respectively. The same trend can be seen quarter on quarter, with Samsung’s share dropping 7.8 points from Q3 to Q4 2014, while Huawei and Apple saw their shares increase 5.1 points and 2.7 points, respectively, over the same period. “Apple’s growth is primarily due to the incredible success of its iPhone 6 and iPhone 6 Plus models, which finally placed the vendor in the large screen size segment that had previously been dominated by Samsung,” says Popal. “Many users that had made the switch from Apple to Samsung specifically for the larger screen sizes have now started to switch back.

Meanwhile, Huawei has experienced a wave of growth in the mid to lowend segment, with its Honor 3 and Ascend Y series enjoying great success. The vendor has struck the right balance between quality and price, particularly in some of the region’s more emerging markets where it is even killing the local competition.” Like in other global markets, the MEA market witnessed a massive 58% increase in the shipment of iOS devices in Q4 2014 compared to Q3 2014. Android shipments increased by only 3.8% over the same period, while Blackberry OS continued its declining trend after a temporary increase in Q3 2014.

Business Journal May 04 - 10, 2015

ICT

25 MTN Mobile Money, Vodafone M-Pesa to Interconnect Mobile Money Services

ustomers of MTN Mobile Money and M-Pesa in East Africa will be able to transfer money to each other following an agreement between MTN Group and Vodafone Group to interconnect their mobile money services. This interconnect collaboration between the region’s two biggest mobile money operators will enable convenient and affordable international remittances between M-Pesa customers in Kenya, Tanzania, Democratic Republic of Congo and Mozambique, and MTN Mobile Money customers in Uganda, Rwanda and Zambia. Under the terms of their Memorandum of Understanding, MTN Group and Vodafone Group will also share best practice and work together to define the rules and standards of mobile-based remittances in Africa.

tions in 17 markets. As of 31 December 2014, Vodafone had 444 million mobile customers and 11.8 million fixed Broadband customers.

Vodafone Director of Mobile Money Michael, Joseph said: “Our agreement with MTN to connect our mobile money wallets in East Africa is a fantastic example of co-operation and interoperability between competing mobile operators. By working together, we will deliver cheaper, faster money transfers, improving the lives of many people living in the seven countries

involved.” MTN Group Head of Mobile Financial Services, Serigne Dioum said: “After successful launches in Ivory Coast and Benin in West Africa, we are looking enthusiastically at the collaboration with Vodafone in East Africa. Together, we aim to build a scalable model that will accelerate remittance roll-out across the continent.”

About Vodafone Vodafone is one of the world’s largest telecommunications companies and provides a range of services, including voice, messaging, data and fixed communications. Vodafone has mobile operations in 26 countries, partners with mobile networks in 55 more, and fixed broadband opera-

About MTN Group Launched in 1994, the MTN Group is a leading emerging market operator, connecting subscribers in 22 countries in Africa and the Middle East. The MTN Group is listed on the JSE Securities Exchange in South Africa under the share code: “MTN.” As of 31 December 2014, MTN recorded 223,4 million subscribers across its operations in Afghanistan, Benin, Botswana, Cameroon, Cote d’Ivoire, Cyprus, Ghana, Guinea Bissau, Guinea Republic, Iran, Liberia, Nigeria, Republic of Congo (Congo-Brazzaville), Rwanda, South Africa, Sudan, South Sudan, Swaziland, Syria, Uganda, Yemen and Zambia.

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15 Insights from The Smarter Sustainability Reporting Conference

he fourth annual Smarter Sustainability Reporting Conference organised recently in London was by all accounts a great success. We heard from a range of experts, raised several challenges and discussed the finer points of what makes reporting smarter. Here is a selection from my opening comments to the conference as everyone braced themselves for an action-packed day: “G4 has emerged as the leading reporting framework with close to 1,000 reporters now having started their reporting journey with G4 or transitioned to G4. Has G4 made a difference? We do see a new relationship emerging with materiality but many reports are still written with a shopping list mindset – a list of ‘everything good that we did’. The G4 transition is still working itself out, but it’s a positive development. GRI has even introduced the G4 EXAM – to prove that people who write reports really can. The European Directive for non-financial reporting came into force in December 2014 with around 6,000 organizations expected to get on the train by 2018. Will they just show up or will they use the reporting process to add value? In other countries, such as Taiwan and Singapore, reporting has become mandatory. Sustainability reporting is apparently not going to disappear. But what will make it smarter? In 2014, more companies than ever reported to the Carbon Disclosure Project. CDP now reports impacts across a range of topics – climate change, water, sustainable cities, forests, and supply chains on the basis of data submitted by 4,500 of companies representing over a third of the world’s invested capital. This is a database too large to ignore. The IIRC continued its journey and its search for identity as more companies start to pilot the framework to explain how they create value for investors. The UN Global Compact launched a program for Boards of Directors so that Directors can actually learn what’s going on. SASB has published more and more standards, but

really about using sustainability reporting to create actions that will be of value to our clients. Increasingly our clients want to understand how we are helping them in their own sustainability journey”. It is great when reports are useful as part of regular business processes. And when clients know what to do with them! Shaun Davis, Group Director – Safety, Health, Wellbeing & Sustainability, Royal Mail: “Reporting is all about engagement and taking people with you. We shouldn’t forget how powerful it is as an engagement tool to talk to people about sustainability environment, safety well being etc.”

when you get beyond the hype, you realize that in some cases, you need to be a rocket scientist to understand the actual performance measures. The jury is still out on whether companies will adopt these standards and if they do, and how they will influence materiality processes. And talking of materiality, there is still no agreement across the board on what it actually means for sustainability and despite even more declarations of harmonization and collaboration talks, all we are seeing is more and more declarations of harmonization and collaboration talks.”

Here are some of the things that others said throughout the conference (and a short reaction from me). Mardi McBrien, Managing Director, Climate Disclosure Standards Board (CDSB) : “In 2007, at the World Economic Forum, companies were saying there are too many ways to report climate change. Investors were saying, “well, we don’t use it anyway”.” Err. What’s changed? Nelmara Arbex, Chief Advisor on Innovation in Reporting, Global Reporting Initiative (GRI): “Personally, I believe that reporting promotes change and innovation. Reports used

to talk about the past. Now they should be talking about the future.” I agree. But when exactly does the future start? Sarah Grey Markets Director, International Integrated Reporting Council (IIRC): “Smarter Sustainability Reporting is a pretty big issue for business. Sustainability is about having a strategic impact in the market. Hopefully some of the integrated reporting thinking will help sustainability reporting having that strategic impact.” Hopefully. Verity Lawson, Sustainability Reporting Manager, British American Tobacco: “I think especially for an organization like us that is operating in a very controversial sector, it is particularly important that stakeholders can place trust in what we report. So the robust frameworks and processes such as independent assurance and GRI are particularly helpful. But while it is encouraging to see all the developments – G4 s focus on materiality, the IR framework, the harmonization talks – frankly it is very overwhelming for reporting companies.” Harmonization is great in theory. The problem is, it’s always theory. Neil Barrett, Vice-President, Sustainable Development, Sodexo: “It’s

Louise Tyson, Head of Reporting, BP: “A lot of work goes into preparing information for reports and this is wasteful if it’s mot material. Less is more. In the last three years we have cut our reporting by 30%. We are hoping that more concise reporting targeted to what our stakeholders want to know will help us answer their questions better.” Irene Jakobi, Sustainability Manager, Telekom Austria: “Now we have taken a more creative approach. Our first reports were more classic with hands and people and green trees. In 2008, we started to make a shift to more communicative content.” If you want creative, look at Telekom Austria’s reports! Megan Mitrevski-Dale, Associate Director, Corporate Responsibility and Sustainability Communications, Coca-Cola Enterprises: “Starting in 2005 we set ourselves a target to reduce our operational carbon footprint by 15% by 2020. OK, we said, operations means our manufacturing facilities and field sales offices. But as we started to go through it, we realized that that’s only part of the story. If our product gets to a store and its not in a cooler, no-one will buy it. Then we realized that our main carbon footprint isn’t in our operations. It is actually in our vending and cooling facilities.

ThePovertyGap

Business Journal May 04 - 10, 2015

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Poultry Farming: Panacea for Poverty Alleviation, Empowering Women Tosin Ayinde

n March 8 2015, the world celebrated the International Women’s Day. This year’s theme was tagged ‘Equality for Women is Progress for All.’ This historic celebration dates back to 1908 in far away New York, United States where some women garment makers died in controversial circumstances after calls to ameliorate poor working conditions and other undue gender discrimination meted to them by their employer were rebuffed. Two years after their demise, an international women conference was convened and what is known today as International Women’s Day was unanimously adopted as a symbolic day to press for women’s rights. Thereafter, women’s empowerment has become very popular world-wide owing to the fact that empowering women who constitute a large percentage of the disadvantaged class leads to economic growth and development. This celebration has helped to highlight globally, the essence of gender inclusiveness and its importance in driving social and economic development. In truth, women bring a large amount of passion and dedication to bear on most of life issues and situations. In Nigeria, both the public and private sectors have demonstrated commitment through collaborative efforts targeted at alleviating poverty and creating employment through women empowerment initiatives, leveraging education and agriculture that are considered as vital to optimising women’s potential. For instance, the government’s YOUWIN Programme is especially targeted at female entrepreneurs while the British American Tobacco Nigeria Foundation (BATNF), and other organisations in the private sector have continued to be at the vanguard of public/private partnerships to empower women. Sustainable development is only possible when women and men enjoy equal opportunities to optimise their potential through equal participation in the development process, which is what many of the initiatives seek to achieve. In a bid to encourage women farmers and also boost agricultural productivity, the Central Bank of Nigeria provided about N1 billion special funds to Quintessential Business Women Association (QBWA), a group that seeks to empower women across the country. Mrs. Shimite Katung, President of QBWA said the funds are meant for members of the group, and some of the members have already benefited from this initiative. “We have disbursed funds to two states as pilot study and it worked perfectly. We are thinking of expanding to 10 additional states. Most of our beneficiaries are smallholder farmers who cultivate farming products such as cassava, rice, yam, etc. Having identified inadequate funding as a major setback in their line of busi-

ness, we divided them into groups to enable them access the funds as a team. We also ensure safe delivery of their farm products to their final destination so as to enable them to re-pay the loans.” Similarly, the Ogun State government, through the Ministry of Women Affairs and Social Development, in collaboration with Ecobank recently granted credit facilities to the tune of N100 million to 3,850 women across 20 local government areas in a bid to alleviate poverty in the state. The Commissioner for Women Affairs and Social Development, Mrs. Elizabeth Sonubi, disclosed that the initiative was an integral component of the mission to rebuild the state. “The empowerment initiative of the present leadership in the state is targeted at women across the state, particularly those in the rural areas to help improve their lives and ultimately reduce poverty to its barest minimum.” It is noteworthy that BATN Foundation has been in the frontline of private sector initiatives in social development and women empowerment. It has consistently demonstrated this strategic thrust by investing in women through agricultural interventions that are aimed at alleviating poverty and creating sustainable employment. Guided by this mindset, BATN Foundation, in collaboration with the Ogun State Ministry of Agriculture, & Chi Farms Limited organised a two-day poultry production training for women in the state capital, Abeokuta. The event was put together to honour women at a time the whole world was celebrating them; this was also in recognition of the fact that agriculture is a critical area of empowerment for women that has positive ripple effects within the family and across the community. The training programme was aimed at equipping both existing smallholder farmers and start-ups with requisite knowledge and skills on contemporary methods and techniques of operating successful poultry farming, to enable them migrate from subsistence to commercialised farming.

Mrs. Omolara Adeyemi, a beneficiary of the training programme, said: “What I have learnt in this training is enough for me to move my poultry farming business to a higher level. I want to thank the organisers for putting together this special programme.” The participants were exposed to non-operational aspects of poultry farming such as packaging, branding, customer service and after-sales service techniques that could facilitate the successful management of poultry business. A unique highlight of the programme is that some men also partook in the training that was originally designed to empower and celebrate women. Olalekan Bakare, male, and a graduate who was based in South Africa but relocated to Nigeria earlier this year, explained the motivation behind his participation in the programme. “I want to appreciate BATN Foundation for initiating this kind of programme. I graduated about five years ago, and travelled to South Africa in search of greener pasture. I relocated to Nigeria a few months ago to start my own poultry business. I have built my pen already, but I have not commenced operations. For me, this programme is just in time, because I have learnt a whole lot on how to

manage my farm.” Responding to the involvement of men in the programme, Mrs. Oluwaseyi Ashade, Sustainability Manager, BATN, said: “We are committed to supporting the government’s effort in creating employment and supporting rural development, thereby reducing poverty through sustainable agricultural initiatives designed to meet the needs of smallholder farmers in rural communities across Nigeria. Our strong mission is to drive sustainable agriculture using best practices, which we believe is the way forward for every country that desires economic growth. We are glad some men participated in the programme. For us, their involvement is an endorsement of the BATN Foundation’s initiative by the people of Ogun State. BATN Foundation believes in an inclusive culture as everyone’s success in agriculture and the poultry value chain is very important to the success of agriculture in Ogun State.” A total of 99 trainees registered for the programme on the first day, while the second day saw about 114 people participating in the programme. About 70 percent of the trainees were women, while 30 percent were men on the

first day. The second day witnessed 75 percent were women while 25 percent were men. Describing the strategy being used in fostering economic growth and development, Ms. Abimbola Okoya, General Manager, BATNF, told the participants and other stakeholders that investing in agricultural initiatives make sound economic sense to the Foundation. “Our main focus at BATNF is to drive sustainable agriculture to alleviate poverty by migrating smallholder farmers from subsistence farming to commercialised farming through various interventions schemes such as potable water supply, vocational skills development, agricultural development and environmental protection,” said Okoya. “That is why BATNF has partnered with Ogun State Ministry of Agriculture and CHI Farms Limited in supporting the government’s initiatives to create wealth and alleviate poverty in the state.” Speaking on the Foundation’s plan, Okoya said that the training programme will be extended to other communities in order to spread its benefits to a greater number of people. “The Foundation has invested in cassava and maize production in which we plan to empower some smallholder farmer groups especially co-operatives in those areas (Egba and Ijebu communities in Ogun State) before the end of the year. We have a lot of initiatives this year, and we will be partnering CHI Farms, Agricultural Development Programme and the Ogun State Ministry of Agriculture.” Alhaji Bashiru Bakare, Director, Planning, Monitoring and Evaluation, Ministry of Agriculture who represented the Ogun State government, lauded BATN Foundation for developing the empowerment initiative at a time the government is rebuilding the state through agricultural production. “The Ogun State Government has significantly developed the agricultural sector, and will continue to support any laudable initiative that is consistent with the vision of the state with respect to creation of wealth through agricultural initiatives. Already, we have provided the enabling environment for economic development to thrive in the state and this is reinforced by this BATN Foundation intervention.” The poultry production training for women is part of BATN Foundation’s contribution to alleviating poverty through capacity building initiatives designed for smallholder farmers across rural communities in Nigeria. With a little over 50 percent of Nigerians living in rural communities and a sizeable portion being women, initiatives such as the BATNF’s Poultry Training Programme will help beneficiaries increase their income, which will consequently lead to a better standard of living for the beneficiaries and their families. Ultimately, the community and the entire country will benefit as the increased productivity will make an impact on the nation’s Gross Domestic Product GDP).

Business Journal May 04 - 10, 2015

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NIGERIA: The $500m World Bank Support for Maternal, Child Health

he Board of Executive Directors of the World Bank Group, last month, approved a $500 million International Development Association (IDA) credit for

Nigeria. The IDA is the window of the World Bank which offers grants and low- to zero-interest rate loans for projects and programmes that boost economic growth, reduce poverty, and improve standard of living. The facility granted Nigeria was designed to bring about significant improvements in maternal, child, and nutrition health services for women and children in the country. Domestic reforms aimed at improving cogent primary healthcare indicators in the country and engagements with multilateral funding agencies and donors fructified the credit. In 2012, Prime Minister Jens Stoltenberg of Norway and Chelsea Clinton, in her capacity as Board Member of Clinton Health Access Initiative (CHAI), arrived in Nigeria to join President Goodluck Jonathan and (then) Honourable Minister of State for Health, Dr. Muhammad Ali Pate, to launch the Saving One Million Lives (SOML) initiative with support from CHAI. The rationale for the initiative was that in Nigeria, an estimated one million mothers and children die each year from preventable causes. As a result, the Federal Ministry of Health decided to set new goals to improve quality healthcare from 2013 and save the lives of Nigerian mothers and children. Health sector experts and stakeholders credit Dr. Pate as the initiator of the SOML initiative. He had come into Nigeria’s healthcare limelight following his trailblasing work at the National Primary Health Care Development Agency (NPHCDA), where he served as the Executive Director from 2008 to 2011. Prior to his appointment, Nigeria was one of the four polio endemic PAIN countries; the others being Pakistan, Afghanistan and India. Dr.Pate tackled the polio epidemic headlong. By June 2009, he had instigated a grassroots-oriented campaign of engaging respected traditional rulers in the North, under the leadership of the Sultan of Sokoto, to assist with delivery of the immunisation programme messages in combination with the development of an effective primary healthcare system. A decade earlier, the national immunisation programme had suffered severe setbacks, especially in the North. The effectiveness of the strategic approach adopted by Dr. Pate caught the attention of the international and local stakeholders in less than two years of his appointment. In 2010, incidences of the Wild Polio Virus (WPV) fell to only 11 cases from a staggering figure of 803 in 2008. His work also entailed the consolidation of the National Programme on Immunisation (NPI) into the broader framework of NPHCDA, in line with international best practices. The merger sought to address old issues of structural constraint, fiscal decentralisation, mismatched burden of disease and low quality spending.

This effort resulted in the strengthening of core diagnostics, systems development and human resources capacity development within the new NPHCDA. With the critical arms of the agency thus strengthened, the national Midwives’ Service Scheme (MSS) was launched, to mobilise midwives to selected primary healthcare facilities in rural communities to increase the pool of skilled birth attendants and boost delivery of services. The overarching objective of this programme was to significantly reduce high maternal and child mortality and morbidity. The level of work done to achieve the targets of the MSS paved the way for the Saving One Million Lives initiative. Subsequently, at the time of his appointment as Minister of State for Health by President Goodluck Jonathan in July 2011,Dr. Pate already had a clear focus on what his priorities were, namely continued fight for polio eradication and mobilization of public-private coalition for SOML. Nigeria is now at the verge of being declared polio-free by the World Health Organisation. However, Dr. Pate resigned his appointment in 2013 to take up a profes-

sorial chair at the United States’ Duke University’s Global Health Institute. The position would see him serve as Senior Adviser to the Seattle-based Bill and Melinda Gates Foundation (a major player in Nigeria and other developing countries in the fight against major diseases like Polio), among other high-level engagements. Nevertheless, this high profile exit from Nigeria’s health policy sector, raised concerns on continuity of some of the programmes that had begun to gain traction under the purview of Dr. Pate. To address the concerns, he offered to continue to provide his services on part-time basis as chairman of the Presidential Task Force on Polio Eradication and the public-private coalition for Saving One Million Lives initiative, in fulfilment of his previous commitments to“ see to conclusion of these important national priorities.” It becomes obvious that Dr. Pate, a consummate Nigerian health professional, has a strong passion and exceptional commitment to improvements in healthcare delivery in Nigeria, especially to the most vulnerable groups.It always instils confidence when donors

are able to associate someone of this quality with a development programme they are giving funding consideration. The $500 million credit will serve as a necessary fillip to the policy drive towards a Nigeria where maternal, child, and nutrition health services for women and children would be significantly improved. Not least because of the existing constraint in the fiscal space as a result of the sharp drop in oil prices. The healthcare challenges the $500million credit is supposed to help address are enormous. Nigeria accounts for 14% of all annual maternal deaths worldwide, second only to India at 17%. Similarly, the country accounts for 13% of all global deaths of children under the age of five years, again second only to India at 21%. To address the challenge of estimated annual 900,000 maternal and child deaths, SOML focuses on increasing the use of high-impact reproductive and child health and nutrition interventions, and improving the quality of these services; strengthening monitoring and evaluation systems and measurement data; encouraging private sector innovation; and increasing transparency in management and budgeting for Primary Health Care (PHC) in the country. The World Bank Group says it is expected that the new health operation will start implementation on August 1, 2015 and run till December 2019. The Bank’s support for SOML will utilise the Programme-for-Results (PforR) instrument to encourage a greater focus on results, increase accountability, improve measurements, strengthen management, and foster innovation. Importantly, the PforR funds will only be disbursed to the Federal and State governments for independently verified improvements in key services such as vaccination coverage among young children, rates of contraceptive use, Vitamin A supplementation, skilled birth attendance, HIV counselling and testing among women attending ante-

natal care, and preventing new malaria infections among children by using insecticide-treated bed nets. Also, the Federal and State governments will receive incentive payments for effective tackling of governance and management issues in the health sector and for improving the quality of basic health services. The incoming administration of General Muhammadu Buhari now has the responsibility of successful utilisation of the IDA credit. Based on the passion of the President-elect to serve, there is high hope that the $500 million funding will deliver its objectives, and that further general improvement in healthcare delivery in Nigeria will be realised over the next four years. Appointment of a competent Nigerian with experience in result-based budgeting as Minister of Health will boost the chances of success in the implementation of health policies and foster judicious use of available resources. The need for such a professional to have exposure to the international health policy community and global funding agencies cannot be over-emphasied, considering the significant international resources to be mobilised for healthcare under the Sustainable Development Goals which will replace the Millennium Development Goals in 2015. The WHO asserts that “the enjoyment of the highest attainable standard of health is one of the fundamental rights of every human being.” This means children should have access to healthcare when they need it. It also implies that pregnant women should be able to receive antenatal care and deliver safely with the assistance of skilled birth attendants. Chinedu Moghalu is Head, Corporate Communication Department, Nigerian Export-Import Bank

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The Advocacy for Precision Agriculture, Food Security

y 2050, it’s expected that the world’s population will reach 9.2 billion people and majority of this growth has been predicted to occur in developing countries like Nigeria, which has a lot of untapped land space and water for agriculture. Thus in order to keep up with the rising populations and income growth, global food production must increase by an estimated 70 percent to be able to feed the world. The answer to that daunting challenge lies in real time data gathering and analysis. Precision agriculture involves the collection of real-time data on weather, soil, air quality and crop maturity as well as equipment, labor costs and its availability, to provide analytics which can be used to make smarter decisions. The wealth and security of a country comes from its land and hence what is needed is sustainable, high-tech and high productivity agriculture which will be remunerative and help provide both food and energy security. Precision agriculture, which can provide precise inputs like water, fertilizer, insecticides at the right time to crops, can help bring in the next green revolution. It can be said that the practice of precision agriculture was enabled by the advent of GPS and GNSS. The farmer’s and/or researcher’s ability to locate their precise position in a field allows for the creation of maps of the spatial variability of as many variables as can be measured (e.g. crop yield, terrain features/topography, organic matter content, moisture levels, nitrogen levels, pH, EC, Mg, K, etc.) According to Wikipedia.com, Precision Agriculture (PA) or satellite farming or site specific crop management (SSCM) is a farming management concept based on observing, measuring and responding to inter and intra-field variability in crops. Crop variability typically has both a spatial and temporal component which makes statistical/computational treatments quite involved. The holy grail of precision agriculture research will be the ability to define a Decision Support System (DSS) for whole farm management with the goal of optimizing returns on inputs while preserving resources. With precision agriculture, control centers collect and process data in real time to help farmers make the best decisions with regard to planting, fertilizing and harvesting crops. Sensors placed throughout the fields are used to measure temperature and humidity of the soil and surrounding air. Global Adoption and Features of Precision Agriculture Currently, precision agriculture technologies are being used by larger companies as it requires robust IT infrastructure and resources to handle the monitoring. Originating from the United States of America and European countries where farms are generally big (over 100 hectares), it sees extensive use of Global Positioning Satellite (GPS) for precise mapping of farms and with appropriate software, informs the

farmer about the status of his crop and which part of the farm requires inputs like water, fertilizer and pesticide etc. Precision agriculture in western countries is also characterized by increased mechanization with the use of heavy farm machinery (average power 100-200 kW) for all the farm and field operations such as sowing, harvesting, weeding, baling etc. The machinery runs on fossil fuels and uses about 63 percent of the total energy used in farming, which is a significant amount. PA for small farms, on the other hand, can use small farm machinery and robots which may also be amenable to run on renewable fuels like bio oil, compressed biogas and electricity produced on farms by agricultural residues. The energy efficiency of the machinery and operations could also be improved. For small farms, precision agriculture may include sub-surface drip irrigation for precise water and fertilizer application to the crops and robots for no-till sowing, weed removal, harvesting and other farming operations. Some of these robots are already being used on small farms in the US and Europe, with

vigorous research and development taking place, it is expected that they may be deployed on a large scale in the near future. Similarly drones are being used quite regularly in Japan and US for insecticide application to the crops. Use of drones for agriculture is proverbial “turning swords into ploughs!” Most of these robotic machines and drones are small in size and hence are very suitable and excellent match for small farm applications. Thus small farms size in Nigeria is a blessing in disguise and ripe for large scale application of precision agriculture. Benefits of Precision Agriculture Farmers and farms are the backbone of any country since they can produce food, fuel (agricultural residues) and wealth from the land. Precision agriculture techniques and technologies have been adjudged to maximize food production, minimize environmental impact and reduce cost. PA management practices can significantly reduce the amount of nutrient and other crop inputs used while boosting yields. Farmers thus obtain a return on their investment by

saving on phytosanitary and fertilizer costs. The second, large-scale benefit of targeting inputs in spatial, temporal and quantitative terms concerns environmental impacts. Applying the right amount of inputs in the right place and at the right time benefits crops, soils and groundwater, thus the entire crop cycle. High tech PA can help tackle the non-availability of inputs and labour on time which is the biggest stumbling block to increase productivity of farms and remuneration for farmers, as well as manage water input as majority of farms are rainfed and with the change of weather patterns, availability of rain water has become very unpredictable. PA in the US and other countries has shown tremendous increase in productivity, lowering of inputs and hence increased remuneration to the farmers. Besides it has helped improve the quality of land with no-till farming and less water usage. Adoption of PA can help to produce tremendous rural wealth in a sustainable and environmentally sound way. The most important beneficial component of its adoption, will be in creating a huge resource of engineers, scientists and agriculturists to develop various components of the technology. Precision Agriculture Activities in Nigeria With the aim to enhance farm output in Nigeria, a week-long training workshop on PA was recently conducted by Coordinators and Assistant Coordinating Officers of West Africa Agricultural Productivity Programme (WAAPP) drawn from several universities, research institutes and Agricultural Development Projects across the country ) in collaboration with Clemence and Geoconsult. The workshop which held in Kaduna, was aimed at acquainting participants with Precision farming techniques in terms of using technologies such as Global Positioning System (GPS),

Geographic Information System (GIS), Remote Sensing, and Yield Monitors Guidance Systems for various rate application. According to the National Project Coordinator of WAAPP, Prof. Damian Chikwendu, the training would expose participants to unending possibilities and applications in everyday field operations, thus participants were urged to seize the opportunity of the platform to improve their knowledge to enable them join hands in the current drive to take the country to a level of sustainable agricultural development and food security. The Way Forward For Precision Agriculture With the increased penetration of mobile devices into rural areas, it is been envisioned that a time will come when smaller farms and co-ops could use mobile devices and crowd sourcing to optimize their own agriculture. As technology grows, a scenario whereby a farmer can take a picture of a crop with his phone and upload it to a database where an expert can assess the maturity of the crop based on its coloring and other properties; people could provide their own reading on temperature and humidity and be a substitute for sensor data if none is available, is a possible reality. There is a need for excellent engineers from science and technology focused institutions to design machinery like robots and drones for PA. This can be facilitated by establishing a new branch of engineering called Agricultural Mechanotrics or robotics where faculty and students from almost all branches of engineering will interact and collaborate to develop smart systems for PA. Another way forward is when scientists from agriculture research institutes, engineers from the academic world, industry and farmers work together in developing PA. PA can provide a platform for industrial Corporate Social Responsibility (CSR) activity. After all helping the rural poor improve their livelihood through high tech farming should qualify as a CSR activity. The government can provide support via policies and infrastructure, as well as funds to the technology industry so that they get more engaged in agriculture and PA activities. Precision Management Practice and Sustainable Agriculture Consequently, precision agriculture has become a cornerstone of sustainable agriculture, since it respects crops, soils and farmers. Sustainable agriculture seeks to assure a continued supply of food within the ecological, economic and social limits required to sustain production in the long term. Precision agriculture therefore seeks to use hightech systems in pursuit of this goal. Without excellent manpower and consequently good research and development, PA will not succeed. As demands on the world’s food supply chain increases, it has become a matter of necessity to maximize agriculture resources in a sustainable manner. Source: Agronigeria

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31 Muideen Adebayo

muideenibrahim2004@yahoo.com or 08037221517 (SMS only)

Management of Crisis or Crisis Management? Haniel Ukpaukure

he casual reader of the title of this article who knows nothing about public relations will ask the natural question – what is the difference between the two? In what way is management of crisis different from crisis management? Surprisingly, there are many supposed public relations practitioners who use the two terms inter-changingly to mean the same thing. The truth is that while both terms refer to crisis and its management, they are not exactly the same thing. One involves employment of appropriate and relevant techniques to nip a crisis in the bud, while the other is about using the same or other techniques to put out a fire that has broken out. For a good practitioner, therefore, it is ideal to notice in time what might look like early signs of fire in the form of smoke, for the purpose of ensuring that even the first flame does not become visible, let alone develop into a real fire. A general disquiet among employees about unusual delays in payment of salaries could be early signs of smoke, which could develop into a fire in the form of a labour crisis. An organisation that understands that public relations objectives are better achieved when actions are taken proactively would employ the technique of communication to address the issue before it gets out of hand.

The economy is bad; everybody knows that. The company is passing through difficult times, as sales have slumped, no thanks to the bad economy. The staff may be aware of that. But do not assume that it is enough to make them understand why salaries have been late in coming, recently, especially if they have been performing their tasks diligently, without fail. In dealing with issues that are potential crises, there should be no room for assumptions, which could proof to be costly. It would not take more than a meeting with officials of the workers’ union to ensure the disquiet does not develop into a crisis. The workers may know what the company is passing through. But a formal communication to them, through a meeting, would achieve the twin objectives of showing them the company cares about their existence and also making them feel a sense of belonging, when they are brought into the picture. Perhaps, they have been feeding on information from the grapevine about the reasons for late payment of salaries. A formal meeting with workers’ representatives would afford the company the opportunity to explain not just the cause of recent developments, but efforts it is making to mitigate the effects. This would achieve for the organisation the understanding, sympathy and support of a very critical public in its trying period. Besides, it could also result in a situation in which workers resolve, without prompting, to put in more effort,

in the hope that going the extra mile in their allotted tasks could improve the fortunes of the company, which would result in regular payment of salaries. In a situation such as this, the company would have succeeded in the management of a crisis by snuffing out the unseen fire that is responsible for the smoke. This would ensure the fire never breaks out. Compare this scenario with a situation in which the company decides to ignore the disquiet that has virtually engulfed the company, expecting workers to know why salaries have not been regular, after all, the situation has not always been the case. Can’t they understand that sales have not been impressive since the rate of the Naira made a huge fall against the Dollar, which increased the cost of imported raw materials, against the background of generally low purchasing power? They should even be grateful to the company for preferring the option of delayed payment of salaries to job cuts! Well, the organisation will have more than a plateful when the fire breaks out in form of a labour crisis, with the attendant consequence of loss in man-hour, negative publicity, fall in share price if it is quoted on the stock exchange and public perception of it as an organisation that cannot meet its basic obligation to its workers. Whatever it does at this stage to quell the crisis is known as crisis management, which is different from man-

agement of crisis, which we saw in the first case. An organisation that understands the importance of public relations must be prepared to deal with management of crisis and crisis management at one time or the other. It is not every time crises give signs before they break out. What this means is that while it is preferable to have to engage in management of crisis, unforeseen circumstances could throw up crises that were not anticipated, forcing the organisation to engage in crisis management The sudden death of the chief executive officer in an organisation without a clear succession plan could ignite a power struggle among top executives, for instance, those at the level of executive directors, who would all naturally feel eminently qualified to fill the vacuum. Think of a development that could cause division in the board, management, right down to the staff, with sympathy and support split in favour of two or more potential chief executive officers. It would take skillful crisis management to steer the organisation out of a major crisis that could negatively affect its operations and, by extension, its image, over a long period. A sudden crisis could also erupt through the death of a factory worker, especially in a company that does not consider employee safety and safe work environment a priority. Here, the company finds itself fighting the fire in more than one direction. While

it contends with having a corpse on its hands if there is no insurance policy for factory workers, it also worries about how to provide answers that would inevitably come from the government through the police and the courts. There is also the worrisome question of how to restore confidence in the entire factory workforce who may rightly see the same fate befalling them in due course. Central to the crisis, of course, is the negative publicity the incidence would attract to the organisation, which could portray it as one that cares nothing about the safety and welfare of its staff. In the two cases – whether management of crisis or crisis management – the organisation must employ appropriate and relevant public relations tools in the most effective manner to ensure its integrity, image and reputation remain intact. As we have seen in this article, while management of crisis is always preferable because it is easier and more convenient to handle, since it involves preventing the fire from breaking out, crisis management is unavoidable, in so far as it is not possible to predict what would happen the next moment or the next day. No matter how proactive an organisation may be, the occasion will always come when the public relations manager must face the unpleasant task of putting out a fire that has broken out. In a way, this is when his skills and expertise are best measured.

ENTREPRENEURSHIP WITH MUIDEEN ADEBAYO IBRAHIM

decided to write on this topic this week because of the rate at which businesses die prematurely in Nigeria. Infact, it is alarming and frightening, which really call for serious concern and all hands must be on deck. I was in a meeting sometime last year when a woman lamented that the rate at which businesses die or fail in Nigeria is quite alarming and I was able to share my thoughts with her and others at that meeting. It is on that note that I decided to also share with my ardent readers how to build a sustainable business. Oxford Advanced Learner’s Dictionary defined Sustainable as something “that can continue or be continued for a long time”. In other climes such as India, China, America and Germany just to mention but a few, there are some companies that have existed for over 150 years.

Building a Sustainable Business Statisticsbrain.com asserted in one on their publications that 55% of businesses fail before attaining five years whilst 71% fail before 10 years. I think to a large extent, a lot of businesses fail in Nigeria as a result of so many factors prominent amongst which are; in-competence, complacency, attitudinal challenge, un-balanced experience or lack of managerial experience, neglect, fraud, disaster, lack of corporate governance, lack of infrastructural facilities, lack of (5Ps) passion, perseverance, persistency, patience and prayer. According to a report published by the Bank of Korea on May 14, 2008 whilst investigating 41 countries, there were 5,586 companies older than 200 years. Of these, 3146 are located in Japan, 837 in Germany, 222 in the Netherlands and 196 in France. It is quite unfortunate that no Nigerian company made

that list. I think this is something we must all ponder about. In 2011, some companies in India were celebrated because they survived over a century (100 years) some of which are: Bennett, Coleman & Co., Dabur, Indian Hotels, Tata Steel, Kirloskar Brothers TVS (Maker of Keke Maruwa or Keke Napep as called in Nigeria), The Economic Times just to mention but a few. Come to think of it, where is Adeola Odutola Tyre, Tate & Lye, Okin Biscuits and others too numerous to mention? Infact, l am yet to come across an indigenous Nigerian company that is over a 100 years old. It is sad and disheartening that in this part of the world, it is ‘one man show syndrome.’ The mentality of some founders is that after all, it is my business and I can run it the way and manner I like. As a result, a lot of businesses have gone to the great beyond-whereas, in other

parts of the world, we have businesses that have lived from generation to another generation. In the Book entitled: Built To Last: Successful Habits of Visionary Companies written by Jim Collins & Jerry I. Porras, the authors took a critical look at truly exceptional companies that have stood the test of time. Jim and Jerry looked at 18 companies founded before 1950,that is (from 1812 to 1945). The companies are as listed infra: 1812; Citicorp, 1837; Procter & Gamble, 1847; Philip Morris, 1850; American Express, 1886; Johnson & Johnson, 1891; Merck, 1892; General Electric, 1901; Nordstrom, 1902; 3M, 1903; Ford, 1911; IBM, 1915; Boeing, 1923; Walt Disney, 1927; Marriott, 1928; Motorola, 1938; Hewlett – Packard, 1945; Sony and 1945; Walt Mart. The aforementioned companies were founded by people

like you and my humble self. But one thing those companies all have in common when founded by their various founders is to build sustainable businesses. Infact, the characteristics of the companies are ‘visionary’, ‘enduring’, and they were all more than successful because of their strong brands and presence all over the world. Other characteristics of those 18 companies are: resiliency, strategic planning, goals setting, charismatic CEOs, perseverance, change management, core ideologies, core values and patience amongst others. Not only that, many of them are now role models and icons for the practice of management around the world. You too can build a sustainable company/business. What you need is just a shift in paradigm and to have a positive mindset. It is not too late! The time to start is now!

At this juncture, it is pertinent to share with you survival tips so as to stand above board at all times and build a sustainable business: First: Develop a good marketing and business plan that takes into account customer needs, competition, pricing and promotional strategies. Second: Have a good knowledge of business law or better still hire a lawyer whilst transacting a serious business with third party. Third: Keep a good inventory of your products and/or services, train, motivate your employees. Fourth: Make sure you have experience, expertise and talent to run your business. Plan every business from start to finish and embrace corporate governance. Lastly: Know your market and define how much of it you will be able to capture. Conclusively, sustainability is a journey, not a destination.

Business Journal May 04 - 10, 2015

Books Arts Culture www.businessjournalng.com

Book Review

Art Delight (The Classic Collection) Author: Julie Agnes Omeike Move Forward Nigeria! The book is an interesting genre of literature that attempts to engulf enterprising youths and young minds- a grasp for the steady growth of Nigeria’s indigenous economic development. Fun loving articles also emerged from the author’s motivational stories culled from her literary works. The book has impact on talent, creativity and reformation of family, lifestyle norms and values existing in the Nigerian society. The fantastic content of poems illustrate Nigerian values for adolescents and the growing child, the typical ‘Omode’ as the writer emphasises, creates a calling for the learning culture of the youths at home and within the society. Facets of modern cooking, Mama’s cooking Pot and African tattoo are inculcated in her poems to describe the era of modern civilization. She warns aggressively on African Tattoo and the dangers surrounding addiction to western culture. Motivational articles on being the best you can be can be highly beneficial to young minds and entrepreneurs. Her popular Tamia’s Story has received resourceful influence, with a brighter concept for relevance to the role of the media in Nigeria. Her literary piece on common business gestures captivates the regular role of every business-person, it provides the true secret tips of gaining successful business sales. ‘Buyers can be very impatient, especially when they have a thousand and one things to do at the same time. The tone of a selling voice should be receptive, benevolent and informative.’ Catch the glimpse on handling relationships in your adolescent age and inspiring modes on curbing family lifestyle and enterprise in a harmonious manner from her fiction works which she terms as ‘fiction –realism.’ I leave a note on one of her inspiring poems ‘Life’s Little Lessons’ an excellent food for thought. Art Delight is now available at Terra Kuture, V/Island and Glendora Shoprite, Ikeja.

Olashore School Imbibes History, Culture on Europe Tours

igeria’s “Pride of Africa” in secondary education, Olashore International School has restated its commitment to retain Nigeria’s strong culture and value system in its core structure, even as it strives to ensure Olashore Scholars are adequately prepared for the competitive global market. Olashore International will also keep Nigeria’s history on the radar, given the fact that most young Nigerians are not conversant with the country’s history. This assurance was given by the

Chairman, Board of Governors, Prince Bimbo Olashore at the conclusion of an international excursion programme to France and a number of countries, by students of Olashore International School. “The world has indeed become a global village and we must be active players in the world stage, not just spectators. But even as we also help our students become global citizens, we must also help them understand our history so they can better appreciate where they are coming from and where they should be going.” To help amplify personal develop-

ment and experience, the Olashore School Europe Biennial trip was structured to connect the students to global culture, history and lingua-franca in the unique Olashore style. The trip was well rounded, engaging to 68 students and 5 members of staff, following a programme that revolved around history, Geography, Culture, Art, Music and language. The 7-day tour in France shed more light on the essence and benefit of OIS learning outside the classroom. The Principal of Olashore international School, Mr. Derek Smith, also pointed out that “Olashore educa-

tion is much more than academic excellence. We apply the educational philosophy based on Kolb’s learning cycle where experience followed by reflection leads to learning. Olashore’s trips and excursions are based on this experiential approach to learning. The common thread is the focus on positive outcomes and social development. “The trips involve a range of activities including climbing, canoeing, cognitive challenges and direct teaching alongside cultural activities, museum visits, local school visits and community interactions. This is all part of learning beyond

the classroom and shaping Olashore school students for the future as well as preparing them to take the next steps as the Nigerian grown global leaders for the 21st Century.” The Olashore ‘Beyond the Classroom’ programme includes special guided trips to local and international destinations including Obudu Cattle Ranch, Republic of Benin, South Africa, UK, Dubai and France. The school also holds a special community service every year, so students learn from an early age the principle of greatness through service.

Business Journal May 04 - 10, 2015

Maritime www.businessjournalng.com

Business Journal May 04 - 10, 2015

Automobile www.businessjournalng.com

Detroit 3, Nissan, Hyundai Tally April Sales Gains

MC’s U.S. sales jumped 20 percent last month and have advanced 16 percent to 167,005 this year in a hot truck market.

The Detroit 3, Nissan and Hyundai all posted U.S. sales increases for April as the industry appeared poised to stretch its streak of gains to 14 months. FCA US’s 5.8 percent advance from a year-earlier marked the automaker’s 61st consecutive monthly gain. Nissan Group and General Motors were back in the winning column after March sales declines. Ford Motor Co. ended a two-month skid, while Hyundai defied analysts’ forecasts of a drop. All of the companies were among the biggest spenders on incentives last month, according to TrueCar. The automakers were the first to report results for a month that was projected to climb 5.9 percent to 1.47 million light vehicles, according to the average estimate from 12 analysts surveyed by Bloomberg. The seasonally adjusted sales rate for light vehicles is forecast by analysts to come in at 16.7 million. That would be down from March’s 17.1 million but up from 16.1 million in April 2014. GM projected an April SAAR of

16.7 million. Chrysler’s forecast was 16.6 million after stripping out 400,000 medium- and heavy-duty trucks included in its estimate. The last time U.S. sales fell vs. the year-ago month was February of last year. Company Results Ford’s April sales rose 5.4 percent from a year earlier. The Ford brand was up 4.9 percent, while Lincoln advanced 20 percent. Ford said retail sales gained 7 percent and fleet deliveries were up 1 percent. General Motors posted a 5.9 percent increase. Chevrolet gained 3.4 percent and GMC rose 20 percent. Cadillac’s 14 percent advance marked just its second gain in the last seven months. Buick fell 5.2 percent. Jeep’s U.S. deliveries jumped 20 percent to 71,759 last month, an April record. Sales of the new Renegade totaled 4,214 in its first full month on the market, FCA said. Volume advanced 4.3 percent at the Ram brand and 26 percent at the Chrysler brand, while slipping 16 percent at Dodge and 13 percent at Fiat. Dodge sales have been hurt by the discontinuation of the Avenger midsize sedan, and suspension of Caravan minivan output to retool a plant in Windsor, Ontario.

FCA’s overall light-truck sales slipped 1 percent while car volume rose 29 percent last month. Nissan Group, meanwhile, said its sales rose 5.7 percent from a year earlier. The Nissan Division was up 5.4 percent, while Infiniti advanced 8.8 percent. Hyundai’s U.S. sales rose 2.9 percent to 68,009 last month, setting an April record, the company said in a Twitter posting. Some analysts had projected a decline for Hyundai.

Honda, Takata Sued over Airbag Shrapnel Death in Malaysia

he father of a pregnant woman killed by shrapnel from an airbag that deployed during an auto accident in Malaysia sued Takata Corp. and Honda Motor Co. in the U.S. Law Suk Leh, 42, died when a metal fragment sliced into her neck in the July 2014 low-speed crash, according to the lawsuit filed in Miami federal court. Her daughter, delivered after the mother’s death, died three days later. Ten automakers, including Honda and Toyota Motor Corp., have recalled since 2008 about 24 million vehicles globally with Takata airbags, according to Reuters estimates. The National Highway Traffic Safety Administration has said the airbags’ inflators may malfunction if exposed to consistently high humidity, deploying with too much force and

shooting metal pieces into drivers and passengers. Leh’s death is one of six, including five in the U.S., blamed on shrapnel expelled through Takata airbags. At least 105 injuries are connected to the flaw, U.S. Sen. Bill Nelson, D-Fla., said. Chris Martin, a Honda spokesman, and Jared Levy, a Takata spokesman, declined to comment on the lawsuit. Law Ngee Chiong, Leh’s father, sued in the U.S. because “the defective inflator at issue” was made in LaGrange, Ga., attorney Kevin Dean said in an interview. He sued on behalf of her estate and the estate of his granddaughter. Borneo Island Leh, who was driving a 2003 Honda City on Borneo Island in Malaysia on July 27, was traveling at about 20 miles (30 kilometers) an hour when

she was hit by another vehicle at an intersection, according to the lawsuit. She died in an ambulance on the way to a hospital, according to the suit. Leh was survived by a 10-yearold son, Dean said. Chiong’s lawsuit has been combined with about two dozen airbag personal-injury and death claims before U.S. District Judge Federico Moreno in Miami for pretrial rulings and evidence-gathering. Attorneys in these cases filed a combined complaint claiming Takata, Honda and others hid airbag defects for years. Class actions against Takata, Honda and multiple automakers claiming loss of vehicle value tied to the recalls are also combined before Moreno in Miami. The car owners’ lawyers also filed a combined complaint on contending the companies concealed quality problems and inflated the cost of cars and trucks.

Business Journal May 04 - 10, 2015

StockReport

Celebration of Corporate Death

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Nigeria’s 2015 Appropriation Bill: Legislators Adopt the Ostrich Strategy

week after the House of Representatives passed the 2015 Budget, the Upper Chamber fulfilled its part of the Appropriation process by passing a N4.5tn budget. This is N134.4bn in excess of the N4.4tn submitted by the Executive arm late 2014. Meanwhile, recurrent expenditure was reduced slightly by N0.5bn to N2.6tn while capital expenditure was scaled down by additional N85.9bn to N557.0bn from N642.8bn proposed by the Executive arm. Effectively, this implies that recurrent expenditure is approximately five times the capital expenditure. Drafted on the assumption of US$53.0 oil benchmark, exchange rate of N190.00/US$1.00, 2.3m barrel per day crude oil production, 5.5% GDP growth rate and 1.1% Deficit to GDP ratio, we think the 2015 appropriation bill as passed by the National assembly seemed disconnected with present realities in the economy in a number ways. The most telling amongst the shortcomings of the budget includes the outright exclusion of fuel subsidy payment by both the Upper and Lower Chambers. Fuel scarcity appears to have remained a recurring subject across major cities of the Federation in recent time. The oil marketers have blamed events in the currency market and most recently non-inclusion of subsidy payment in the 2015 budget as passed by the House of Representatives as reasons for cutting supply. Nevertheless, we noted that the Minister of Finance has already made it clear that approximately N156.0bn will be paid to oil marketers today (April 30, 2015) to avert the crisis in the sector. On that note, we wonder how government intends to reconcile the exclusion of subsidy payment in the budget with the N156.0bn subsidy payment to be made to oil marketers. That said, Recurrent Expenditure (N2.6tn) is also expected to be about five times the capital expenditure (N557.0bn) in the 2015 appropriation bill. Juxtaposing this with programmes and plans of the Buhari led in-coming administration which appears broadly expansionary, we wonder how appropriate the 2015 Appropriation Bill would be for the next government. Ultimately, we think the realities on ground portray the 2015 budget as a “paper-tiger” that would be promptly reviewed by the next administration to become effectual. Global Equities Market Review and Outlook Global equities market performance under our coverage this week was broadly bearish as Q1:2015 economic data released in the US during the week shows slower GDP growth (+0.2%) relative to expectation (+1.0%). Against this backdrop, the NASDAQ and S&P 500 Indices slumped 2.1%% and 0.8% W-o-W respectively. Similarly, the UK FTSE Index slipped 1.5% W-o-W as investors’ confidence on developed markets performance wanes. In the Eurasian region, France CAC

the contrary, the Banking, the Insurance and the Oil & Gas sectors all trended southwards, depreciating 1.7%, 2.3% and 6.9% in that order as sell pressure was sustained on key counters in the sectors during the week Market breadth was negative, settling at 0.8x as 36 stocks advanced while 41 stocks declined. 105 stocks however closed flat. PRESCO (+14.6%), NPF MICRO FINANCE (+13.8%) and AG LEVENTIS (+11.8%) were the best performing stocks for the week, while UNITY BANK(-22.2%), DANGOTE SUGAR (-13.8%), MAY & BAKER (-12.8%) and ACCESS (-11.1%) were the market laggards. We expect the market sentiments to improve in the week ahead as investors react to some impressive Q1:2015 results posted at the close of the week.

was down 2.8% W-o-W, Japanese NIKKEI slumped 2.5% W-o-W even as the German DAX fell 2.1% W-o-W. We believe this performance may not be unconnected with the US GDP data which moderated as harsh weather condition, mixed effect of cheaper oil and faltering global recovery weigh down on the world’s largest economy. However, the Hong Kong HANGSENG sustained its positive outing, adding 0.3% W-o-W. Performances across the BRICS market were also largely bearish. The Brazilian IBOVESPA declined 1.8% W-o-W reversing last week’s gains, as the Indian SENSEX (-1.6 %) and the South African FTSE (-1.5%) both trended southwards. On the other hand, the Chinese Shanghai Composite Index stayed bullish appreciating 1.1% W-o-W. Nonetheless, the Russian RTS closed flat as against prior week’s appreciation. Contrary to the rest of the world, major markets across Africa within our coverage advanced W-o-W as the Nigerian All Share Index improved 0.6% W-o-W on gains in bellwether stocks. The Kenya NSE 20 and the Ghana GSE advanced 0.6% W-o-W apiece. However, Egypt EGX 30 dipped 0.7% to emerge the lone decliner. Daily Equities Market Review and Outlook The Nigerian Equities Market reversed a 4-day losing streak as the All Share Index (ASI) gained 1.9% to close the week at 34,708.11pts. Likewise, market capitalization improved N214.6bn to settle at N11.8bn. Today’s upsurge was largely driven by gains in DANGOTE CEMENT (+4.8%), NIGERIAN BREWERIES (+3.9%) and GUARANTY (+1.6%). Activity level measured by total volume and value traded improved as volume traded appreciated 30.1% (374.6m units) while value traded increased 18.1% to close at N3.8bn. The NSE sector performance was mixed as the Consumer Goods Index

led sector advancers with 2.0% as NIGERIAN BREWERIES (+3.7%) and GUINNESS (+3.7%) rallied. Closely trailing was the Industrial Index, which appreciated 1.9% as sentiment on DANGOTE CEMENT(+4.8%) strengthened on impressive Q1:2015 earnings numbers, even as the Banking Index rose 1.1%. Nevertheless, the Oil & Gas Index depreciated 1.6% due to price decline in FORTE OIL(-5.0%). Similarly the Insurance Index dropped 1.1%. Market breadth as measured by the ratio of advancers to decliners improved (1.2x) today as 29 counters advanced in contrast to 24 decliners. Top on the gainers table today were PRESCO(+10.2%), FIDSON (+9.2%) and VITA FOAM (+7.6%) while the highest losing stocks werePAINT COM (-5.0%), FORTE OIL (-5.0%) and DANGOTE SUGAR (-5.0%). The equity market was awash with more Q1:2015 results today as listed companies rushed to meet the 1-month submission deadline for unaudited results. Hence, we expect further investors’ reaction to these results in the coming week. Weekly Equities Market Review and Outlook The Nigerian Stock Market traded predominately in the red save for the last trading day this week erasing previous losses. The streams of positive quarterly results that were released gradually boosted investors’ sentiment most especially on Thursday (+1.9%). As a result, the NSEASI advanced 0.6% WTD settling at 34,708.11 points at the close of trade this week. Likewise MTD and YTD swung positive at 9.3% and 0.1% respectively. On the other hand, market activity was down W-o-W as the aggregate volume traded declined 43.4% W-o-W to 1.2bn units while aggregate value traded for the week shed 30.4% W-o-W to N12.0bn. The Consumer Goods (+0.7%) and the Industrial Goods (+2.8%) sectors trended northwards respectively. On

Money Market Review and Outlook Liquidity within the market surged during the week hence average money market rates for the week dropped to 8.3% for the Open Buy Back rate (OBB) and 9.0%for the overnight rate relative to previous week’s 15.1% and 16.2% respectively. This was driven by bonds maturity worth N535.0bn which hit the system. Liquidity level further increased on Tuesday with an opening balance of N812.2bn while Standing Lending Facility (SLF) accessed from the CBN by the Deposit Money Banks (DMBs) closed at N91.0bn. As such the OBB and Overnight rates declined marginally to 8.0% and 8.8% respectively. On Wednesday however, liquidity opening balance declined to N712.7bn, pushing money market rates higher to 8.6% (OBB) and 9.3% (Overnight). This decline in liquidity was as a result of OMO auctions during the week (Monday and Wednesday worth N268.0bn and N331.4bn apiece). Amid net inflow of N93.4bn today from the OMO auction worth N258.0bn and OMO maturity of N351.4bn, the OBB and Overnight rates closed the week lower at 8.3% and 8.8% respectively. In the coming week, liquidity level is expected to increase slightly as T-bills worth N150.6bn and FAAC allocation for March are anticipated to hit the system. Foreign Exchange Market Review and Outlook Despite dollar auction sales worth US$91.2bn by international oil companies on Monday, the naira closed flat at N199.10/US$1.00 at the interbank market. This rate was maintained throughout the week. Similarly, the CBN’s clearing rate steadied at N197.00/US$1.00 for the week. As a follow up to the CBN’s withdrawal limit on overseas card holders to US$50,000 (from US$150,000) per annum and daily cash withdrawals to US$300, the Apex bank has further clarified that customers’ cards linked to domiciliary accounts overseas are not affected. Although we suspect that demand for the dollar by travelers may increase locally as a result of this decision, we expect exchange rate to continue to trade within the

current level at the interbank segment of the forex market in the coming week. However, at the BDC segment of the forex market, the naira depreciated by N3.00 or 1.3% WTD to N220.10/US$1.00 from N223.10/ US$1.00 Bond Market Review and Outlook Against the backdrop of the bullish sentiment which drove a rally in the fixed income space last week, the market took a breather this week. Hence average yield rose 17bps to 14.7%, even as investor sentiment varied along the term structure. Trading activities in the fixed income market however did not commence until Tuesday due to IT related malfunctions that prevented trading activities from taking place on Friday and Monday. Activities however picked up strongly on Tuesday after the suspension on trading was lifted with volume and value of T-bills and bonds instruments traded reached a 6-day high. Investors played more at the short to medium end of the curve while the JUL-2034 and JUL-2030 instruments majorly drove volume in longer term instruments. The shorter term instruments which experienced significantly rally last week witnessed correction this week as dealers quoted higher yields. This was traceable to profit-taking and the aggressive OMO mop-ups (N847.2bn in total) conducted by the CBN this week to rein in the liquidity influx on OMO bills (N366.0bn) and FGN bonds (N535.0bn) maturities. OMO bills were allotted at relatively high yield of 14.0% for all tenors (vs 10.0%, 12.8% and 13.0% rates for the 91, 182 and 368 days tenor T-bills were allotted last week). This had a more telling impact on yields on shorter term debts, as all short term rates inched higher. In contrast to the bearish activities at the shorter end of the curve, dealers quoted lower yields for long tenured securities with the NOV-2028, MAY-2029 and NOV-2029 instruments witnessing a W-o-W decline in yields. Despite the mixed sentiment along term structure, the sovereign yield curve majorly maintained its normality. However, a slight inversion at the longer end of the curve remained noticeable where the 20Y benchmark instrument traded at a slight discount to the 15 year benchmark bonds. We expect bargain hunting to take precedence in the FGN bonds market next week, especially across the short to mid-termed tenors. Liquidity in the money market is expected to improve on the back of liquidity injection from FAAC allocation and settlement of maturing treasury bills (N153.6bn). Our short to mid-term outlook for the market remains moderately bullish as we expect investors to further re-price financial assets based on lower political risk and the recent stability in the forex market. Source: Afrinvest Research

Business Journal May 04 - 10, 2015

PoliticalEconomy www.businessjournalng.com

Nigeria’s Anti-Corruption Pledge Resonates in Far-Off Zambia Lisa Vives

igeria’s president-elect is already making waves with his pledge to attack corruption, starting with the missing 20 billion dollars allegedly swiped from the Nigerian National Petroleum Corporation during the previous administration. Muhammadu Buhari pledged to pursue the claim of former Central Bank governor, Lamido Sanusi, who was suspended last year by former president Goodluck Jonathan after he warned of massive mismanagement by the oil corporation. His claim was never investigated by the ex-president. “This issue is not over yet,” declared Buhari, who will be sworn in on May 29. “Once we assume office we will order a fresh probe into the matter… We will not allow people to steal money meant for Nigerians to buy shares and stash (them) away in foreign lands.”

Buhari’s warning to those who pocketed national funds thrilled Africans as far away as Zambia and prompted an editorial in The Post newspaper. “Nigerian President-elect General Muhammadu Buhari’s message on corruption brings some hope for that country and our continent,” wrote The Post’s editor in a piece viewed 1,294 times. The editorial continued: “We wish this was the message we were getting from our own President, Edgar Lungu. But it is not. If there is anything Edgar hardly talks about, it is corruption. “What we have in Zambia today is a corrupt government... This is a government where those in leadership are the ones getting government contracts. They are the suppliers of government. Leaders and cadres of the ruling party are the ones doing business with government. “If one scrutinises all government contracts, it will not be difficult to discover that almost all of them have been given to people connected to

the ruling party and its leadership.... When one criticises such practices,

he is seen to be hurtful, frustrated. “Look at how quickly those in the

leadership of government, from president to the lowest cadre, become rich! What is the magic? Where is the money coming from? It is from corruption, from bribes, from selling government policy. There is no other source of that money other than corruption.” Africans surveyed by the group Afrobarometer in 2013 expressed similar views and many believe the situation has deteriorated in the last decade. In the survey of 34 countries, 56 percent of the 51,000 people surveyed thought their governments were doing “fairly badly” or “very badly” in the fight against corruption. Only 35 percent said their governments were doing “fairly well” or “very well”. Among those most dissatisfied by official efforts to end corruption were Nigerians and Egyptians at the top, followed by Zimbabweans, Ugandans and Sudanese, Kenyans, Malians, Tunisians, Togolese, Tanzanians and South Africans.

Business Journal May 04 - 10, 2015

DiplomaticZone

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Xenophobia Row Exposes Rivalry Between Nigeria, South Africa

Joe Brock & Nqobile Dludla he recall of Nigeria’s top diplomat after a spate of xenophobic attacks in South Africa follows several similar spats that expose the two countries’ deep rivalry for economic and political dominance in Africa. Nigeria’s Acting High Commissioner to South Africa Martin Cobham said he had been “invited” to Abuja to discuss this month’s anti-immigrant attacks in South Africa, which have killed at least seven people. Televised images of armed gangs attacking immigrants and looting foreign-owned stores in Johannesburg have sparked a backlash in Nigeria, where hundreds protested in front of shops owned by South African brands like MTN and Shoprite. South Africa’s foreign ministry called Cobham’s recall an “unfortunate and regrettable step”, before taking a swipe at Abuja for its own record on protecting foreigners. Last September, a church hostel collapsed in Lagos, killing 115 people, most of them South African. Nigeria was criticised for its slow response to the disaster and what some saw as a haphazard rescue effort. “It would be curious for a sisterly country to want to exploit such a painful episode for whatever agenda,” a foreign ministry statement said in response to Cobham’s recall. “We did not blame the Nigerian

Such tit-for-tat slights are becoming increasingly common. Weeks after the hostel collapse, South Africa seized $9.3 million from a private jet carrying two Nigerians, funds Abuja said were for a legitimate arms deal. South Africa said the deal was being conducted without relevant permits. Abuja accused South Africa of xenophobia when Nigerians were deported after staff at Johannesburg airport believed their yellow fever certificates were fake. Arik Air, Nigeria’s biggest airline, briefly canceled flights to South Africa.

Jacob Zuma South African President

Muhammadu Buhari President-Elect, Nigeria

government for the deaths and more than nine months’ delay in the repa-

triation of the bodies of our fallen compatriots.”

Cannibals Nigeria banned 2009 film “District 9”, a hit movie directed by a South African that depicted Nigerians as cannibals, criminals and prostitutes who had sex with aliens. Rows over Hollywood movies and yellow fever certificates are reflective of a more serious battle for economic dominance and control over Africa’s representation on the global stage. “It’s no secret that Africa’s wouldbe superpowers don’t like each other very much,” Analyst Simon Allison wrote in a column in the Daily Maverick, a leading South African political online newspaper. “For all their lofty talk of unity and pan-Africanism, both Nigeria and South Africa are actually locked in a fierce struggle to be sub-Saharan Africa’s pre-eminent superpower.” Nigeria overtook South Africa as

the continent’s biggest economy last year after re-basing its GDP. Pretoria said the numbers reflected Nigeria’s larger population and not the sophistication of their respective economies. “Despite what was said publicly, Nigeria’s rebasing was resented by the South African government,” a Pretoria-based Western diplomat told Reuters. Diplomats say that when South African politician, Nkosazana Dlamini-Zuma, the ex-wife of President Jacob Zuma, won a close race to chair the African Union Commission in 2012, Nigeria strongly backed her opponent. Both countries are also lobbying for a permanent position to represent Africa on the United Nations Security Council. Given their political and economic heft -- together, the two economies are larger than the rest of sub-Saharan Africa’s combined -- relations between South Africa and Nigeria could be decisive for the future of a continent of 1 billion people. “Nigeria and South Africa are like two prisoners in the same cell of poverty, inequality and bad leadership,” Nigerian writer and political commentator, Elnathan John told Reuters. “Together, they could muster the strength to break their bonds and overpower the jailer but instead they spend time feuding with each other in a needlessly fractious relationship.”

African, African Nations Challenge ‘Obsolete’ World Order View photo Leaders from Asia and Africa pose for a group photo before the start of the Asian-African Conference … Leaders of Asian and African nations called on Wednesday for a new global order that is open to emerging economic powers and leaves the “obsolete ideas” of Bretton Woods institutions in the past. Their calls came at the opening of a meeting of Asian and African nations in Jakarta to mark the 60th anniversary of a conference that made a developing-world stand against colonialism and led to the Cold War era’s non-aligned movement. Among the leaders listening were Japanese Prime Minister Shinzo Abe and Chinese President Xi Jinping, who were expected to meet on the sidelines of the conference, the latest sign of a thaw in relations between the Asian rivals. Sino-Japanese ties have chilled in recent years due to feuds over the two neighbours’ wartime past, as well as territorial rows and regional rivalry. Bilateral talks in Jakarta could promote a cautious rapprochement that began when Abe and Xi met at a summit in Beijing late last year. Abe, in an apparent reference to China’s growing military assertiveness,

told the conference that the use of force by the “mightier” should never go unchecked. The Japanese prime minister also said Japan had pledged, “with feelings of deep remorse over the past war”, to adhere to principles such as refraining from acts of aggression and settling international disputed by peaceful means. It was not immediately clear if the remarks would satisfy China’s desire for Japan to acknowledge its wartime past, but a Japanese official told Reu-

ters Abe and Xi would meet. Xi had earlier told the conference that “a new type of international relations” was needed to encourage cooperation between Asian and African nations, and said the developed world had an obligation to support the rest with no political strings attached, the Xinhua news agency said. New World Order Indonesian President Joko Widodo, the conference host, said those who still insisted that global econom-

ic problems could only be solved through the World Bank, International Monetary Fund and Asian Development Bank were clinging to “obsolete ideas.” “There needs to be change,” he said. “It’s imperative that we build a new international economic order that is open to new emerging economic powers.” The IMF and World Bank were at the center of the post-World War Two monetary order created by the United States and Europe at the Bretton Woods Conference in New Hampshire in 1944. Widodo made no mention of the China-backed Asian Infrastructure Investment Bank (AIIB) that is seen as a competitor to the Western-dominated World Bank and Asian Development Bank, but Indonesia is one of nearly 60 countries that have offered to be founding members of the AIIB. The United States and Japan have not thrown their support behind the bank, which is viewed as a threat to U.S. efforts to extend its influence in the Asia-Pacific region and balance China’s growing financial clout. Zimbabwean President Robert Mugabe told the conference that Asian and African countries “should no longer be consigned to the role of exporters

of primary goods and importers of finished goods”. He called it a “role that has historically been assigned to us by the colonial powers and starting from the days of colonialism”. Indonesia invited heads of state and government from 109 Asian and African countries, but according to a conference official, 21 leaders turned up, which commentators have said shows the group is no longer relevant. The world order has changed dramatically since nearly 30 heads of state gathered in 1955 in the Indonesian town of Bandung to discuss security and economic development away from global powers embroiled in the Cold War. Together they accounted for less than a quarter of global economic output at that time, but today they contribute to more than half of the world economy. Many of the Bandung countries, such as China and India, are now themselves at top tables like the Group of 20 and wield significant economic power. Widodo said the group may be meeting in a changed world but still needed to stand together against the domination of “a certain group of countries” to avoid unfairness and global imbalances.

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Business Journal May 04 - 10, 2015

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Mayweather Vs Pacquiao:

The $300m Fight of History • The Most Lucrative Fight Ever-The Greatest?

he fight on May 2 between Floyd Mayweather Jr. and Manny Pacquiao is one that boxing fans and writers have sought more than any other in recent years, even though both fighters have passed their respective peaks. But no matter the occasion remains massive, what with Mayweather’s status as the highest earning athlete in sport, the fact he is only two fights away from matching Rocky Marciano’s 49-fight unbeaten record, and the veneration accorded Pacquiao as a national hero in the Philippines. Then there is the bad blood that exists between Pacquiao’s trainer, the widely respected Freddie Roach, and Mayweather’s father, Floyd Mayweather Snr., who will be in his son’s corner. Some of the hype surrounding the fight has gone as far as laying claim to it being the biggest in the history of boxing. While, yes, the projected $300 million the fight will generate undoubtedly qualifies it as the most lucrative fight there’s ever been in boxing, in terms of its wider significance and impact, it pales in comparison to some of the classic fights of the past.

Mayweather and Pacquiao at a news conference before their historic $300m fight on May 2, 2015.

I Love This Game! NBA Unveils First Game in Africa Aug 2015

he NBA announced recently that it will play its first ever exhibition game in Africa on August 1 at Ellis Park Arena in Johannesburg, South Africa. Team Africa will tip-off against Team World and will feature two-time NBA All-Star, Luol Deng, born in South Sudan, as its Captain. The Miami Heat star will lead a roster made up of first and second generation African players. Team World will be led by eight-time NBA All-Star, Chris Paul of the Los Angeles Clippers. The game will be hosted in aid of Boys & Girls Clubs of South Africa, SOS Children’s Villages Association of South Africa and the Nelson Mandela Foundation.

Business Journal May 04 - 10, 2015

May 04 - 10, 2015

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

“The unemployment situation in Nigeria currently has reached a level of national crisis. This is because in economics, if an economy records 5 per cent unemployment, you can say there is full employment, but once it is 30 per cent and above, it is crisis.” Prof. Akpan Ekpo Director-General West African Institute for financial and Economic Management (WAIFEM)

The Indonesia Executions

ast week, Indonesia stood its ground on its declared war on hard drugs through the firing squad execution of eight convicted drug offenders despite global appeals for clemency. The eight-4 Nigerians, 2 Australians, 1 Brazilian and 1 Indonesian paid the ultimate price for daring to challenge the Death-For-Drug-Dealers-Law in Indonesia. For months, the international media followed the death penalty on the convicted drug dealers and the ensuing campaign to free them from violent death. First, the appeals came from their concerned home governments, and later, from global citizens and institutions opposed to the death penalty. Then, in the early hours of April 29, 2015, Indonesia carried out the executions, clearly defying all the appeals for mercy and once again, restating its commitment to punish drug peddlers via death penalty. Natural Emotion As human beings, many felt pity for the eight men. But for some, they deserved what they got. The natural emotion was bent on giving them a second chance to amend their fractured lives for good after a long spell in jail in the course of the judicial process leading to their conviction. The second emotion was the mystery and sanctity of death over nothing but possessing and peddling drugs. Unfortunately for the eight men, the Government of Indonesia applied the Law of Indonesia on Hard Drugs without Human Emotion. And they died! Why Hard Drugs? After the emotions came the question: why hard drugs? Over the years, and despite every effort by governments and institutions around the world, a number of men and women, driven by factors unknown to humanity, believe that transporting and peddling hard drugs is the only way to make a living. Their weird belief has propelled them to defy all warnings, all dangers and all laws across borders, to engage in their illicit drug deals to the detriment of certain citizens in many countries. Indeed, the debilitating effect of hard drugs has compelled many nations to initiate strict legislations to counter the drug trade to protect vulnerable segments of their population from self-destruction. Unfortunately, for such governments, the drug barons always have their way, either legally or illegally.

Main Global Cocaine Flows (2008)

The Sweet in Hard Drugs Without any doubt, there is sweetness in hard drugs as this report from the United Nations Office on Drugs and Crime (UNODC) clearly illustrates: ‘In 2007 and 2008, cocaine was used by some 16 to 17 million people worldwide, similar to the number of global opiate users. North America accounted for more than 40 per cent of global cocaine consumption (the total was estimated at around 470 tons), while the 27 European Union and four European Free Trade Association countries accounted for more than a quarter of total consumption. These two regions account for more than 80 per cent of the total value of the global cocaine market, which was estimated at $88 billion in 2008.’ Paying the Price It is on record that not only the peddlers pay the price. Those who try to stop them also pay the price. On a recent visit to the Nigerian Drug Law Enforcement Agency (NDLEA) in Lagos for visa documen-

The Nigerian government has tried over the years through the NDLEA to educate and stop Nigerians from peddling in hard drugs--the government failed. As they’d say, in Naija, the people are always ahead and faster than the government. As hard as the government tried and continues to try, the drugs barons always have their way, until one or two are caught and paraded before the cameras.

Global Heroin Flows from Asian Points of Origin tation, l was rudely confronted by faces pasted on a huge notice-board at the entrance of the main building. Those were innocent faces of NDLEA officers killed by drug dealers or missing-in-action in the course of their duty to stop the drug barons and save society from drug-induced mental breakdown. These men and women, of various ages, and from

various parts of the country, paid the price. The Nigeria in Indonesia Execution Of the eight drug offenders executed by Indonesia, four were Nigerians! Not an Olympic or Commonwealth Gold Medal. It is an embarrassment to Nigeria!

What Next? The men have died. So-what next for Nigeria? Despite the operational challenges, including killing and kidnapping of its operatives, the NDLEA deserves our collective support to appreciate their efforts and elevate their spirits beyond the challenges. The NDLEA deserves more funding, human capital capacity, strategic training and high-level equipment to operate more effectively and save the nation from the Indonesia scenario. Last time, it was in Singapore. Last week, the theatre of drug death moved to Indonesia. Where will it reappear next?

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.