Business Journal Newspaper 10th Edition by BusinessJournalNG

U.S. Banks Plan $16.6bn Digital Transformation in 2015

And this spending on digital transformation will grow at an average CAGR of 10.4% into 2019, according to recent IDC Financial Insights spending models. This compares to an overall IT spend growth of 3.9% for U.S. banks. A new report from IDC Fi-

nancial Insights, “The Cost of Digital Transformation in US Banking: The Critical Technology Investments in 2015 and Beyond,” outlines how much money is being invested by U.S. banks in digital transformation, where those investments are going, and where

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dedicating more and more of their scarce resources to initiatives that promise to transform the business. Because of the pressures coming from onerous regulatory burden, increased

IDC Financial Insights believes the growth will be the strongest in digital transformation investment. As banks in the U.S. endeavor to stay relevant in the financial lives of their consumer, business, and corporate customers, the institutions are

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etail banks (including thrifts and credit unions) in the U.S. will spend nearly $16.6 billion on hardware, software, services, and internal IT staff in order to develop and implement digital transformation initiatives in 2015.

Monday July 06 - 12, 2015

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Nigeria Must Rethink Forex Policy to Spur Investment

here is need for Nigeria to seriously rethink her forex policy to spur investment and quicker economic recovery. At the same time, the country recorded growth of only 3.96% y/y in Q1, 2015, down from 5.9% in Q4-2014, according to Razia Khan, Economist at Standard Chartered Bank, London.

She said Nigeria’s oil sector contracted by 8% y/y in Q1, following growth of 1% in the previous quarter. “Decelerating growth was seen across most sectors in Q1, with the exception of crop production. Q2 growth may be slower still, reflecting a slowdown in activity around the elections, and the transition to a new government.” She said the severity of fuel

shortages in May, culminating in a shortfall in imported diesel for generators, had a more pronounced impact on the services sector than is typically the case, just as growing queue for foreign exchange, as Nigeria’s ‘order matching’ FX system fails to meet all demand, may result in a further delay to corporate investment plans, potentially postponing recovery.

Khan also projects slow growth in the first half of 2015, with some recovery in the second half of the year. “However, downside risks to our full-year forecast of 4.5% GDP growth still predominate. We are constructive on the outlook for oil in H2-2015. We expect oil prices to rebound to c.USD 80-90/bbl. Higher oil earnings should provide some boost to activity. “

She advised that Nigeria’s changing economic fundamentals call for a rethink of foreign excahnge policy, in order to better absorb external shocks. “We see Nigeria’s current account surplus moving to a deficit, both in 2015 and in the years ahead. The pace of accumulation of new FX reserves will not easily support a fixed exchange rate system. With a fixed exchange rate, FX

reserves rather than the NGN bear the brunt of any external shock, hurting Nigeria’s creditworthiness, and potentially raising the cost of any external borrowing. Near-term, constrained FX availability also exerts a cost on the real economy, adding to uncertainty and delaying investment activity. The risk is that the longer it takes to re-open the FX market, the greater.”

Insurance:

Underestimated Tool for Sustainable Economic Growth in Africa

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Emirates: Building Global Network on Service & Innovation

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L-R: Executive Commissioner, Stakeholder Management, Nigerian Communications Commission (NCC), Dr. Okechukwu Itanyi; Administrator, National Judiciary Institute (NJI), Hon. Justice Rosaline Bozimo; Chief Justice of Nigeria and Chairman, Board of Governors, NJI, Hon. Justice Mahmud Mohammed; President, Court of Appeal, Hon. Zainab Bulkachuwa and Head, Legal and Regulatory Services, NCC, Mrs. Yetunde Akinloye, at a workshop for Judges organised by NCC in collaboration with NJI in Abuja.

Exciting Launch of Yezz Mobile into the Nigerian Market

Win it Like Buhari: 5 Start-up Lessons to Take Away from Nigerian Elections

13

Business Journal July 06 - 12, 2015

News

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U.S. Banks Plan $16.6bn... Continued fom PAGE 1 need to manage risk, and the constant attack on the bank's security systems, discretionary spending for important line of business projects that can accomplish digital transformation is at a premium. This new report offers IT executives, line of business leaders, and financial chiefs at banks in the US critical insight into the industry trends and investments that are driving digital transformation, to help keep pace with the leaders in the industry. Key highlights of the new report include: • The highest growth in digital transformation spending comes from software and internal IT. While internal IT is typically a large part of digital transformation for only the largest banks that can afford to have substantial IT groups, software spend is shared by all institutions, whether a bank in the top 10 in assets that develops its own bespoke software, or a small mutual that relies on an integrated bank software provider for its technology needs. • Spending on IT services for digital transformation is a smaller, but not inconsequential, source of spend growth as well, growing at 8.5% 2015 to 2016. Only hardware is keeping pace with total IT spending growth. • The growth of spending on digital transformation is outpacing aggregate IT spending by over 2.5 to 1. In 5 years, IDC Financial Insights estimates that fully one third of the IT budget at U.S. banks will be dedicated to achieving digital transformation. • Spending on consumer initiatives (including small business) and infrastructure improvements will continue to lead the way. Payments is experience a healthy proportion of spend

in transformation as well, however, given the range of payment types in that category – ACH vs stored value, for example – a more detailed analysis is needed to reveal the strong areas of growth in payments transformation. After using 80% of the IT budget to pay for mandatory improvements in compliance, risk, security, and just keeping the lights on, it doesn't leave a lot to invest in the bank's future. In this report, IDC Financial Insights quantifies reports heard from CIOs and line of business leaders and validates that about 24% of the total IT budget in U.S. based banks and credit unions is being used to enable digital transformation. And this investment is happening from two opposite end of the institution, with line of business executives buying consumer-facing solutions to improve customer engagement, while the CIO and IT groups try to transform the bank's infrastructure from the inside out. "It's like two teams of diggers making their way through a mountain to build a tunnel. They're hoping they'll be aligned when they meet in the middle. It's a $16.6B bet," said Jerry Silva, Global Banking Research Director for IDC Financial Insights. The budget season is about to begin for banking institutions in the U.S. And the challenge of funding digital transformation is a difficult one. This report provides market insight into what kinds of investments that market is making to enable digital transformation, where those investments are being made, and how those investments will grow over time. Banks can use this report to guide their own investment strategy in line with their commitment to transform their business.

From left - Korede Demola-Adeniyi, Head, Premier Banking, Ecobank Nigeria; Kingsley Umadia, Executive Director, Ecobank Nigeria; Alexander Hoofmann, Executive Vice President, Business Development and Global Product, MoneyGram and Kemi Ogunsanya, Regional Manager, Anglophone, West Africa, at the commencement of "MoneyGram Send" services in Ecobank branches last week in Lagos

Nigeria – June BSI Indicates Near-term Challenges, Future Growth • • •

Business sentiment in Nigeria fell 1.1% m/m to 60.7 in June The bigger picture reveals that activity likely accelerated in Q2-2015 as elections lifted sentiment Future expectations remain strong, consistent with our view of a ‘year of two halves’ for Nigeria

he Standard Chartered-MNI Business Sentiment Indicator (BSI) for Nigeria fell modestly in June by 1.1% m/m to 60.7. Following the relative euphoria of the elections, confidence corrected – albeit modestly – to its lowest level since February. Nonetheless, the BSI may see some recovery in the months ahead. While 10 of 15 current conditions indicators improved in June, nine of 15 future expectations indicators also picked up, with four of these future expectations indicators (new orders, inventories, financial position and overall business confidence) reaching new series-highs. We believe the softer BSI for June indicates ongoing economic challenges. Inflation is likely to remain a problem.

Despite weak demand, with firms reporting some difficulty in passing price increases on, input prices reached a new series high in June. Rising costs continue to pressure margins. Moreover, businesses still point to weak FX availability as a constraint on activity. The current conditions assessment for the ‘effect of the naira exchange rate’ remains in deeply contractionary territory – despite picking up to 21.7 in June from 16.8 in May. This implies that FX availability is hurting businesses. Even at 21.7, this indicator remains well under the more neutral 50 breakeven level. Given the introduction of further FX controls by the Central Bank of Nigeria (CBN) in late June – a period not yet covered by the

survey – we expect to see further deterioration in businesses’ assessment of FX availability when the July BSI data is published. In all, our BSI indicates that confidence reached its lowest level since February, suggesting that some of Nigeria’s post-election euphoria is starting to fade. This is a new development. The bigger picture still indicates that elections and a recovery in oil prices likely played a role in lifting sentiment in Q2. The three-month average BSI reading of 61 for Q2 is consistent with some economic recovery, up from the slightly weaker 59.2 in Q1. Both prints are lower than the average of 63.3 in 2014, when oil prices were higher.

We believe a recovery in H2-2015 is plausible. This is consistent with our thinking that 2015 will be a ‘year of two halves’ for the Nigerian economy, with a weak H1 giving way to more robust activity in H2 The strength of the future expectations indicators in Nigeria suggests that businesses remain optimistic on the likelihood of an economic turnaround. Most future expectations indicators are holding up well above the 50 break even level, suggesting businesses continue to anticipate the resumption of stronger growth even now, despite the economy’s many challenges. Razia Khan

Nigeria Plans Big for ITU Telecom World 2015

mall and Medium Enterprises (SMEs) will form a major part of the delegation from Nigeria that will attend the International Telecommunications Union (ITU), ITU Telecom World 2015 in Budapest, Hungary (October 12-15, 2015). A Committee has been constituted made up of officials of Ministry of Communications, Nigerian Communications Commission (NCC), Galaxy Backbone, Nigerian Communications Satellite Limited (NigComSat), Nigerian Postal Service (NIPOST), and Universal Service Provision Fund (USPF) among others to put together plans for Nigeria’s

participation. Mr. Tony Ojobo, Chairman, Media and Publicity Sub-Committee and Director, Public Affairs, NCC, said in a statement that Nigeria wants to make a big statement in this year’s participation when a large number of SMEs will be on ground to dwell around the theme of this year’s event: Innovation To make Lives Better and Faster. Nigeria’s participation will build on the reality that regulatory robustness has led to a spiral growth in voice telephony and look beyond that by coming out with innovative products to improve the lives of the citizens. ITU on its part has listed five key reasons why

countries, Individuals, Corporate organisations should participate in the Hungary event. Besides exceptional knowledge sharing, opportunities, ITU Telecom World 2015 will focus on accelerating innovation and growth of SMEs and innovative networking opportunities. Of particular interest is the role SMEs play in driving national economies. One of the key concerns of the Hungarian government is to provide a balanced and predictable business environment where SMEs can easily find support or exploit business opportunities. This is what the country wants to share with participants in Budapest.

And Nigeria will share in this, Ojobo explained in the statement, adding that the Nigerian SME ecosystem will be guided by the experience they share through ITU Telecom World 2015 from October 12-15, 2015. The event will focus on the crucial role of innovation and entrepreneurship in the fast growing ICT ecosystem, covering a broad-based international audience with specific outreach to SMEs and start-ups from across the world, as well as leading global ICT players, policy makers, regulators, industry experts and investors. The Chief Host would be Houlin Zhao, Secretary-General, ITU.

Business Journal July 06 - 12, 2015

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

L-r: Chairman of Council, Nigeria Netherlands Chamber of Commerce, Reginald Ihejiahi, Managing Director/Chief Executive Officer, Teco Company Limited, Engr., Charles Aladewolu, Chief Executive Officer, Financial Derivative Company Ltd, Bismarck Rewane and Managing Director/ Chief Executive Officer, Fidelity Bank Plc., Nnamdi Okonkwo at the Annual General Meeting of the Nigeria Netherlands Chamber of Commerce sponsored by Fidelity Bank Plc. in Lagos

L-r: CEO, E.L. Rothschild, Co-Founder of the Inclusive Capitalism Coalition & Member, Board of Tony Elumelu Foundation, Lady Lynn Forester de Rothschild; Former U.S. President Bill Clinton; Chairman of Heirs Holdings, Tony O. Elumelu; Chairman & CEO of PepsiCo, Indra Nooyi; and EVP, General Counsel & Corporate Secretary, PepsiCo, Tony West, shortly before Mr. Elumelu's panel discussion at the Inclusive Capitalism Conference in London

L-r: Managing Director, Heritage Banking Company Limited, Mr. Ifie Sekibo; Director, Banking and Payments System Department, CBN, Mr. Dipo Fatokun; Managing Director, SecureID Limited, Mrs Kofo Akinkugbe and Managing Director, Intermac Consulting, Mr. Adeyinka Adeyemi, during the cutting of the tape to commence the CBN Cashless Card Expo at Eko Hotel & Suites, Lagos

L-r: Head, Business Development, Stanbic IBTC Pension Managers Limited [SIPML], Mrs. Nike Bajomo; Executive Director, SIPML, Mr. Steve Elusope; Zonal Head, South-South, National Pension Commission [PENCOM], Mr. Kehinde Awotunde; Head, Compliance, SIPML, Mrs. Idu Okwuosa and Head, Private Sector, South-South, SIPML, Mr. Tayo Akinsanmi, at an employersâ&#x20AC;&#x2122; forum organized by Stanbic IBTC Pension Managers Limited in Port Harcourt

L-r: Head of Marketing; Jumoke Akande; Chief Financial Officer, Babatunde Dada; Chief Executive Officer, Funke Opeke and General Manager, Corporate Services and Development, Lynda Madu, all of MainOne, at the companyâ&#x20AC;&#x2122;s #MainOneAt5 anniversary press conference in Lagos.

L-r: CEO, Kevicomms Nigeria Limited, Port Harcourt/winner of a brand new Hyundai Elantra in the Etisalat 2014 SME Acquisition Promo, Emmanuel Joshua Okoronkwo; Head, Enterprise Sales, Etisalat Nigeria, Eric Uwaoma and Regional Retail Manager, South South, Etisalat Nigeria, Nkechi Amadi, at the Etisalat Strategic Partner (ESP) car presentation held in Port Harcourt.

L-r: President, SAP Europe, Middle East and Africa (EMEA), Mr. Franck Cohen; Principal, Ojodu Junior Grammar School, Ikeja, Lagos, Mrs. Victoria Kolawole and Managing Director, SAP Africa: West Africa, Mr. Kudzai Dhana during the second Africa Code Week pilot project for children between 8 - 17 years old in Africa, held on Thursday, 25th June, 2015 at Ojodu Grammar School.

Satirical comedians, Naija's Craziest and Communications and Public Affairs Manager, Google Nigeria, Taiwo Kola-Ogunlade (3rd l), at the YouTube at 10 event that held at the Intercontinental Hotel in celebration of Nigerian content creators.

Business Journal July 06 - 12, 2015

Special Nigeria Report www.businessjournalng.com

Nigeria – Reform Priorities

Significant Challenges Confront Nigeria’s New Government

ollowing the euphoria of the elections, economic reality sets in. Nigeria’s new All Progressives Congress (APC) government is likely to come under significant pressure to deliver – on security, ca paign promises of more inclusive growth, improved governance and greater transparency, and a revival of Nigeria’s oil and gas sector. Policy priorities will need to be carefully sequenced. Security, perhaps the most ‘doable’ reform in the very near term, is likely to emerge as a priority. A weaker oil-price environment in 2015 may complicate economic achievements. First, the authorities will need to establish just how large a gap in public finances they have inherited. The weeks in the run-up to the 29 May inauguration were marred by reports of more severe fuel shortages (triggered by delayed payments to independent oil marketers), a fall in official power generation to only 1,327MW and widespread state government public-sector wage arrears. Nigeria’s economy registered growth of only 3.96% y/y in Q1-2015, down from 5.9% in Q4-2014. Nigeria’s oil sector contracted by 8% y/y in Q1, following growth of 1% in the previous quarter. Decele ating growth was seen across most sectors in Q1, with the exception of crop production. Q2 growth may be

slower still, reflecting a slowdown in activity around the elections, and the transition to a new government. The severity of fuel shortages in May, culminating in a shortfall in imported diesel for generators, had a more pronounced impact on the services sector than is typically the case. A growing queue for foreign exchange, as Nigeria’s ‘order matching’ FX system fails to meet all demand, may result in a further delay to corporate investment plans, potentially postponing recovery. We still see 2015 as a year of two halves for the Nigerian economy – slow growth in H1, with some recovery in H2. However, downside risks to our full-year forecast of 4.5% GDP growth still predominate. We are constructive on the outlook for oil in H2-2015. We expect oil prices to rebound to c.USD 80-90/ bbl. Higher oil earnings should provide some boost to activity. At c.USD 62/bbl, the price of Bonny Light is already above the USD 53/bbl benchmark assumed in Nigeria’s 2015 budget. However, the scale of public-sector liabilities is not yet known. Public-sector payment arrears may take some time to resolve, capping any perceived windfall from a higher oil price. With the authorities already borrowing to meet recurrent expenditure commitments, capital expenditure is likely to remain constrained.

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.

Budget vulnerabilities persist. Oil output levels may also be at risk. Longstanding uncertainty over future fiscal terms in the oil sector, triggered by delays to the passage of the Petroleum Industry Bill, discouraged investment in Nigerian oil, relative to peers. Output may not keep up with the 2.3mn barrels per day assumed in the 2015 budget. However, the Nigerian naira (NGN) exchange rate may help boost fiscal revenue, assuming a more flexible FX system is adopted. While the budget assumes an official USD-NGN rate of 190, the parallel market (which admittedly reflects mostly retail, informal sector demand) has traded closer to 220 recently. We expect the debate over FX policy to take centre-stage in Q3-2015, culminating in a reopening of the interbank FX market, and a likely move higher in the USD-NGN exchange rate. The authorities, mindful of other reform priorities and the need to limit inflation, are unlikely to favour NGN depreciation for its own sake. These reform priorities include a probable doubling of the rate of VAT to 10% in order to boost state government revenue, as well as some form of fuel subsidy adjustment. Nigeria’s poor record on tax compliance limits other near-term options for raising non-oil revenue. Ex-oil, revenue collection currently stands at only c.5%

Razia Khan

Economic Research Standard Chartered Bank

of GDP. An improvement is long overdue. A hike in the VAT rate might be the easiest to administer. Fuel subsidies are also problematic. The current system is regressive (with those who consume more fuel benefiting disproportionately from the subsidy), relatively opaque (previous years’ subsidy claims are still being investigated), and even now, its affordability remains in question. The NGN 100bn allocated in the 2015 budget for the petrol subsidy (in addition to NGN 43bn for supposedly discontinued kerosene subsidies) is unlikely to be sufficient to compensate for a higher international oil price, a weaker FX rate, and the paydown of arrears to oil marketers. Subsidy reform, a rise in VAT, and pass-through from earlier NGN weakness should all drive inflation higher, even given weak demand. We see CPI inflation in low double digits in H2-2015. Inflation is likely to remain in double digits until mid-2016. Despite inflationary pressures, it is unlikely that the NGN can serve as a nominal inflation anchor. Nigeria is under pressure to re-open two-way interbank FX trading. Given the current perceived market shortage of FX, a re-opening of the market is likely to see USD-NGN trade higher. The ‘negative watch’ period for the continued inclusion of Nigerian bonds in the widely tracked GBI-EM index was extended

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

PH Bureau Darlington Igbokwe

Lagos Bureau Abraham Adewole

Head of Marketing/Advert Elvis Ebigwu

Snr. Correspondent Blessing Ikeme

Digital Consultant Bamidele Owotoke.

Abuja Bureau Chris Onwuka

Design Consultant Kelechi Okoro

Kaduna Bureau Haruna Mohammed

Logistics Consultant Godspower Cookey

Aba Bureau Larry Akunne

in June, to allow the new government the time to formulate policy. Unless interbank determination of the FX rate is reintroduced, with a resulting improvement in FX liquidity, Nigeria risks being excluded from the GBI-EM index. Failure to re-open the FX market may deter direct investment as well. Few foreign investors are ready to commit new investment to Nigeria ahead of an FX adjustment that they believe to be imminent. Nigeria’s changing economic fundamentals call for a rethink of FX policy, in order to better absorb external shocks. We see Nigeria’s current account surplus moving to a deficit, both in 2015 and in the years ahead. The pace of accumulation of new FX reserves will not easily support a fixed exchange rate system. With a fixed exchange rate, FX reserves rather than the NGN bear the brunt of any external shock, hurting Nigeria’s creditworthiness, and potentially raising the cost of any external borrowing. Near-term, constrained FX availability also exerts a cost on the real economy, adding to uncertainty and delaying investment activity. The risk is that the longer it takes to re-open the FX market, the greater the likelihood of FX overshooting when conditions do eventually normalise.

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

Business Journal July 06 - 12, 2015

Banking www.businessjournalng.com

Remittances from Europe Hit $109.4bn in 2014

report by the United Nations International Fund for Agricultural Development (IFAD), says migrant workers living in Europe sent home over $109.4 billion in 2014 to provide a lifeline to more than 150 million people around the world. A key finding of the report ‘Sending Money Home: European Flows and Markets’, say that benefits for families back home could be significantly higher if they had access to more competitive money transfer markets and targeted financial services to help save and/or invest their funds. IFAD President, Kanayo F. Nwanze said: “We need to make sure that this hard-earned money is sent home cheaply, but more importantly that it helps families build a better future for themselves – particularly in the poorest rural communities where it counts the most.” On the sending end, Western Europe and Russia accounted for 75 per cent of the flows. In 2014, the six top-ranked sending countries were the Russia ($20.6 billion); the United Kingdom ($17.1 billion); Germany ($14 billion); France ($10.5 billion); Italy ($10.4 billion); and Spain ($9.6 billion). Despite these numbers, the report notes that remittances amounted to less than 0.7 per cent of individual country (gross domestic product) GDP – representing an insignificant outflow of wealth from the host

countries. On the receiving side, in 2014, about one third, or $36.5 billion, of European remittances went to 19 countries in the Balkans, the Baltics and Eastern Europe, including 10 European Union member States. The remaining two thirds, or $72.9 billion, went to some 50 developing countries outside of the continent. Of the 19 European remit-

tance-receiving countries, the report showed that nine agriculture-based economy States relied heavily on Europe flows – highlighting a GDP representation of 22 per cent in Moldova and 17 per cent in Kosovo. Beyond Europe, Northern Africa and Central Asia were the regions most reliant on European flows, largely from France and Russia, respectively.

As unprecedented numbers of refugees fleeing conflict enter Europe, the report also notes that the continent was a source of considerable remittances to fragile States – including Iraq, Mali, Somalia, Sudan, Syria and Yemen – with the potential to help stabilize and rebuild, if better leveraged. While the majority of remittances are used for basic goods, such

as food, clothing, shelter, medicine and education, studies indicate that up to 20 per cent could be available for savings, investments or to repay loans for small businesses. With 40 per cent going to rural areas – estimated to equal at least three times official development assistance to developing countries – the report suggests that remittances play a critical role in transforming vulnerable communities. Nwanze emphasised that the immense potential of remittances for development is still largely under-utilised but it is within our capacity to make every hard-earned Euro, Ruble, Pound, Krona, or Swiss Franc sent home count even more. If migrant workers and receiving families in rural areas had more options to utilize their funds, such as improved access to basic financial services – like savings and credit – and non-financial – including technical assistance for business development or financial education programmes – IFAD estimated that of the $80 billion globally that could be available for investment, about $34 billion could be for rural areas. “Remittances offer a unique opportunity to bring millions into the formal financial sector,” said Pedro De Vasconcelos, Co-author of the report and Co-ordinator of the Financing Facility for Remittances at IFAD. “Given the frequent interaction between remittance senders, receivers and the financial system, remittances could spark a long-term and life-changing relationship.”

FDI to Developing Countries Decline by 28% to $499bn

lobal foreign direct investment (FDI) declined in 2014 but flows to developing countries actually reached their highest level ever, says a new United Nations report released recently that also calls for systematic reform of the current international investment agreement regime. According to the 2015 edition of the World Investment Report, FDI fell by 16 per cent to $1.23 trillion in 2014, while flows to developed countries declined by 28 per cent to $499 billion. The report, produced by the UN Conference on Trade and Development (UNCTAD), says this is mostly because of “the fragility of the global economy, policy uncertainty for investors and elevated geopolitical risks,” adding that new investments were offset by some large divestments, the most important being in the United States. In the meantime, inward FDI flows to developing economies reached

their highest level ever, at $681 billion with a 2 per cent rise. Among the top 10 FDI recipients in the world, five are developing economies, with China taking the lead. For 2015, UNCTAD projects global FDI inflows to grow by 11 per cent to $1.4 trillion. Expectations are for further rises to $1.5 trillion in 2016 and to $1.7 trillion in 2017. The Geneva-based UN agency is also calling for a systematic reform of the international investment agreement regime in order to bring coherence to the almost 3,300 agreements currently in existence. “The case for reform is clear,” UNCTAD Secretary-General, Mukhisa Kituyi said. “We are now faced with a global patchwork of agreements, with unintended and sometimes far-reaching consequences for the right, of developed and developing countries alike, to regulate.” “‘Old style’ international investment agreements have increasingly

come to a dead end. Reform should make the global network of interna-

tional investment agreements better fit the needs and realities of today

and tomorrow,” explained Kituyi, stressing the importance of achieving such harmonization as the international community is in the process of formulating a new development agenda. “Reform should be guided by the goal of more effectively harnessing international investment agreements for sustainable and inclusive development, focusing on key reform areas, and following a multi-level, systematic and inclusive approach,” Mr. Kituyi stated. “Only a common approach will deliver an international investment agreement regime in which stability, clarity and predictability help achieve the objectives of all stakeholders.” Among the areas where governments should undertake efforts, UNCTAD mentions the need to safeguard the right to regulate in the public interest, to reform investment dispute settlement and to expand investment promotion and facilitation in international investment agreements.

Business Journal July 06 - 12, 2015

Banking

Fidelity Bank Bids Farewell to Retiring Executive Directors

idelity Bank Plc has announced the retirement of three of its Executive Directors – IK Mbagwu, Executive Director, Lagos & West Directorate, Onome Olaolu, Executive Director, Risk Management and John Obi, Executive Director, Corporate Banking. The retirement of Mrs. Olaolu and Mr. Obi takes effect from June 30, 2015, while Mr. Mbagwu proceeds on July 31, 2015. The retirements are in accordance with the Bank’s Human Capital Policy and predicated on attainment of retirement age. • Mr. IK Mbagwu rejoined Fidelity Bank as the Executive Director, Operations, Technology & Shared Services in 2006. IK started his career as a tax senior in Arthur Andersen. He moved on to Nigerian American Bank Limited (Bank of Boston) before joining the then Fidelity Union Merchant Bank Limited in 1993, rising to the

John Obi

Onome Olaolu

Ik Mbagwu

position of General Manager. In 2001 he moved on to Citizens International Bank as an Executive Director. • Mrs. Onome Olaolu was appointed to the Board as the Executive Director, Risk Management in July 2009. She had worked at Texaco Nigeria Plc. from where she moved to the then Nigerian Intercontinental Merchant Bank Limited (1990). In 1994,

she moved to Metropolitan Merchant Bank Limited before joining Fidelity Bank in 1997 as a Senior Manager, rising to the position of General Manager, Risk Management Sector in 2006. • Mr. John Obi was appointed to the Board as the Executive Director, Corporate Banking in April 2012. He joined the Bank in 2000 and has over 28 years industry experience

having served in various capacities in Corporate Banking, Investment Banking and the Public Sector. He was the General Manager, Corporate Banking and the pioneer Managing Director of Fidelity Pension Managers Limited (FPML), a former subsidiary of Fidelity Bank. While paying tribute to the retiring Directors, the Managing Director/

Chief Executive Officer of Fidelity Bank Plc, Nnamdi Okonkwo, noted the passion, commitment and experience they brought to the executive management and thanked them for their immense contributions to the overall growth of the Bank. He described them as distinguished members of the Fidelity family and praised them for working assiduously hard to develop the Bank from its merchant banking origin to a respected commercial banking brand. Commenting on their successors, Mr. Okonkwo confirmed the recruitment of a new Chief Risk Officer who has been understudying the out-going Executive Director, Risk Management in the last 3 months. The Bank will be announcing the successors of the other two Executive Directors after receiving final regulatory approvals. The Board and Management of Fidelity Bank wish the retiring Directors success in their future endeavours.

World Bank Warns China over State Financial Control

he World Bank has urged China to accelerate reform of its state-dominated financial sector, warning that failure to address the issue could end "three decades of stellar performance" for the world's second-largest economy. The ruling Communist Party has pledged a wide range of economic reforms and the Washington-based institution said reducing the "unique and distorted role of the state" in banking and the wider financial sector was crucial. "Wasteful investment, over-indebtedness, and a weakly regulated shadow-banking system," had to be addressed for the broader agenda to succeed, it said. The comments in the China Economic Update were unusually forthright for the World Bank. "Unlike other countries, in China, the state still maintains pervasive ownership and control of banks and other financial institutions," it said, including with powerful internal Communist Party committees and authorities appointing and dismissing top executives. "The state has formal ownership of 65 percent of commercial bank assets and de facto control of 95 percent of these assets, making it an outlier by international standards." In some cases, it added, authorities were simultaneously owners, regu-

lators and customers of banks. China's financial system was still "unbalanced, repressed, costly to maintain, and potentially unstable", the bank said, repeating its description from a 2012 report. "Urgency for fundamental reform has further intensified as excess capacity and indebtedness in many economic segments accumulate,

amid growing evidence of financial distress," it said. "Failure to address these outcomes could deflect the economic trajectory after three decades of stellar performance." In the document, the World Bank left its economic growth estimate for China this year at 7.1 percent. "Progress in rebalancing the sourc-

es of growth in domestic demand will remain incremental," it said. China's leaders are trying to engineer a transformation of the country's growth model whereby consumer demand becomes the main driver rather than investment. "China’s financial system was developed to serve the old investment-driven growth model, which

is not effective currently but was effective in the past," World Bank Senior Economist, Karlis Smits said at a briefing on the report. "Comprehensive reforms in the financial sector should enable the financial system to reallocate credit to those sectors that can maintain reasonable growth over the medium-term," he added. China has set itself a target of about 7.0 percent growth in gross domestic product (GDP) for this year, though weak data during the first half of the year has led many private economists to predict the final figure could be lower. The World Bank kept its GDP growth forecast for next year in China at 7.0 percent and at 6.9 percent in 2017. Smits stressed, however, that the organisation was well aware of potential hazards facing China's economy. "We are very cognisant of significant downside risks to our baseline scenario", he said, citing indebtedness in China's corporate sector among other dangers. Efforts to transform China's economy over the long-term could produce negative short-term effects, he added. "Reforms to address excess capacity in select industries would have impact on employment levels," he said.

Business Journal July 06 - 12, 2015

TheCEO www.businessjournalng.com

Why Businesses Need to Hire Biologists

Thinking of businesses as mechanical machines cranking out products is outdated, says IDEO's Tim Br

Katie Hope

usiness and biologists don't seem obvious bedfellows unless perhaps in a pharmaceutical or healthcare setting. Yet Tim Brown, chief executive of design agency IDEO, is convinced the combination is the future and says he has already hired "several". "They're really changing the way we think," he says enthusiastically. And that fresh perspective is exactly what he believes not just his firm, but businesses in general will need to enable them to adapt and find new profitable niches in an increasingly competitive market. "We think of a business as a machine. I don't think that's appropriate in the future. "The way we will think about business and society will be much more based on biological metaphors, on the way ecosystems work, because they're much more complex and much more adaptive," he says. 'Mind bogglingly complex' At IDEO, staff are sent on secondments to different international offices to ensure they experience different ways of working and living, giving them a wider perspective. Mr Brown says the firm also aims to create an atmosphere where employees feel free to try new ideas out, regardless of whether or not they are successful. For a firm like IDEO , which employs just 550 staff and whose work is based on individuals' knowledge and skill, changing how it does business can be relatively painless and fast. But for bigger companies the process can be much harder as inevitably the larger a firm gets the more people have to agree and approve any changes before they are put into action. Leadership expert Steve Tappin says larger firms often become "mind bogglingly complex", making change very difficult. "Most big businesses create bu-

IDEO boss Tim Brown says it encourages staff to experiment

Boots owner Stefano Pessina has done sev

Whole Foods' John Mackey says those at the top need to understand the different interrelationships which exist in business reaucratic processes to deal with their expansion. The key for chief executives is not to control complexity but to build organisations which can respond intelligently and adaptively," he says.

Looking Forward When George Barrett joined US healthcare services firm Cardinal Health in 2008 as chief executive, the entire industry was changing due to a significant demographic shift, with the older population expanding

rapidly, and a sharp growth in some health issues such as obesity. Because the firm operated on very small profit margins, the performance of staff and different units was constantly measured to ensure it was on target, but he says the "dark side" of

being so focused on the detail was that the firm was missing these bigger external shifts in the market. "Part of my job was about bringing a different perspective," he says. As a result, he says the firm started to look forward more, making some bets on which services would be in demand in the future and ensuring it hired people qualified in those areas. This included deliberately hiring people, he says, which were not like him or other people in the organisation, avoiding the "recipe for disaster" which he says surrounding himself with similar people would have been. "You sometimes have to give the voice to that heretic who drives everybody crazy but at least is stirring up enough new thought." Tiny Office Stefano Pessina, Executive Vice-Chairman of newly-merged firm,

Business Journal July 06 - 12, 2015

9 Meet the Boss: Candace Nkoth Bisseck, Country Manager, Kaymu Cameroon Kate Douglas “One of my managers once told me that it’s better to be the boss of your village than an anonymous guy in a city,” says Candace Nkoth Bisseck, country manager for Kaymu Cameroon. Candace Nkoth Bisseck, Country Manager, Kaymu (Cameroon)

1. What was your first job?

I’ve done so many things, but guess my very first job was volunteer work at the library in my home town – Edéa in Cameroon – when I was 17.

2. What parts of your job keep you awake at night?

Taking the business to the next level and making sure my team enjoy working for Kaymu. If those two things are happening, I am excited and sleeping well.

rown

3. Who has had the biggest impact on your career and why?

It’s not a person, but it’s definitely the fact that I moved from Ivory Coast to join a top business school in France. That literally changed everything, in terms of both career opportunities and expectations.

4. The best professional advice you’ve ever received?

One of my managers once told me that it’s better to be the boss of your village than an anonymous guy in a city. The meaning behind this advice was that sometimes you need to find your niche to shine. And honestly that’s what happened when I accepted the job to come back and work in Cameroon for this burgeoning e-business. That was definitely the most positively impactful advice I have ever received.

5. The top reasons why you have been successful in business?

veral mergers Walgreens Alliance Boots, is equally careful to make sure the views of those at the top don't become too dominant. An entrepreneur all his life, Pessina has grown the family firm he inherited from his father into a giant through constant mergers. But he's careful to ensure the larger firm retains its entrepreneurial edge. In fact, it regularly cuts people at the top of the firm to keep the organisation "very lean" and to make sure that it doesn't become too bureaucratic. "What is important is to have a lot of people where the customers are. It's not important to have people just in the corporate offices, because many people in the corporate offices have never seen a customer," he says. He, himself, he says only has a tiny

office, to emphasise the point that its customers and the staff serving them are the most important part of the organisation. Ultimately, says John Mackey, Chief Executive at supermarket chain, Whole Foods, those at the top have to ensure that they have a solid understanding of all the different relationships which exist in the business: those between suppliers, staff, investors and customers, for example. "We need leaders who have a higher degree of systems intelligence that can see how it all fits together and that understand the importance of creating value for all of these stakeholders. It's a different kind of leader to who we typically have," he says. Maybe a biologist is the person for the job, after all.

I think the first thing is the team. You need to have a dream team to be successful. You need to trust and like the people you work with – that makes all the difference. Secondly, you must be prepared for growth. While success might be achieved with few business processes and without being too strict on some details, at the end of the day if you want to grow you need to have very strong foundations in the company. And these foundations will need to rely on good processes to be prepared for growth. Thirdly I believe in what I do. As a country manager, as a boss or as entrepreneur, you must believe and love what you are working for. Those are my three main points.

6. Where’s the best place to prepare for leadership? Business school or on the job?

Neither business school nor di-

rectly on the job. I think you should first be attracted to a leadership position which might have happened at a young age. Maybe you held a leadership position in some association when you were younger, or maybe you were the first-born in your family, and you know how to manage people – something you learnt from your responsibilities. I definitely don’t think that you can simply learn those skills in business school, and it’s a bit risky to come into a leadership position on the job and not know where to start. For those wanting to become leaders, I would suggest volunteering and investing yourself in maybe an association where you can practise leadership before getting into the real thing.

7. How do you relax?

Sport. I go to the gym at least three times a week when I can – that’s my main form of relaxation. I’m also trying to get more into meditation to be more collected because Cameroon is a pretty intense country and being the country manager is a pretty intense job as well.

8. What time in the morning do you like to be at your desk?

Ideally, I like to be there at 7:45am, but to be honest I’m usually at my desk by 8:15 or 8:30. However, I do believe the best work day starts earlier because you are calm, collected, and can plan your day and figure everything out before switching into problem-solving mode, which starts from 9am – when work can just become crazy.

9. Your favourite job interview question?

I like to ask potential employees to tell me about their career journey and what they have done before. I love storytelling. I love lis-

tening to people’s stories because it says so much about who they are, their dynamics, and the way they think. When I was doing job interviews as a potential candidate, I believe this was one of my main advantages because I have a very uncommon story. And we are all kids at the end of the day; people like stories and I do too. So I like to know where potential candidates are coming from, what were their main challenges, and why did they made the decisions that led them to this point.

10. What is your message to Africa’s aspiring business leaders and entrepreneurs?

Try to define what you really, really want. It takes time and work to try to get to know what you want because Africans are often raised to do what others think they should do. So learn what it is you really love so that when the right opportunity arises you can tap into your real talent or passion and do what you really want to do. Go find what you love and try to make your passion your profession. And when you have discovered what your passion is, work hard at it. Try finding some mentors, attending conferences and reading online about the industry or the profession that drives you. To sum up: be dedicated to your dream, and you will do well. Candace Nkoth Bisseck is Cameroon’s country manager of the online marketplace Kaymu. The e-commerce platform is an initiative of the Africa Internet Group and allows buyers and sellers to trade a wide range of products online including home appliances, electronics and fashion. Nkoth Bisseck is an MBA graduate who grew up in Cameroon. She also has experience working in Ivory Coast, France, Singapore and China.

Business Journal July 06 - 12, 2015

Insurance Pension www.businessjournalng.com

MUTUAL PLC: Delivering Insurance Benefits Through Innovation

strong and competitive insurance Industry will always promote progress and sustainable advancement within the macro-economy. This is because insurance is a critical driver of value-addition and productivity. Considerably, in playing its social protection role, it relieves the State in the all-important area of Public Sector Finance. Insurance also enhances financial intermediation, engenders entrepreneurial attitudes and encourages investment and market dynamism. Mutual Benefits Assurance Plc., a Nigerian company with full-fledged but affiliate companies in Liberia and Niger Republic, is one of the big players in the African Insurance Market. An enhanced private-sector initiative, MUTUAL thrives on impacting positively on all facets of the economy and the various income brackets through value-addition with tailor-made insurance products as the unique offerings. Akin Ogunbiyi, MUTUAL’s Group Chief Executive explained that “the unique and dynamic posture of Mutual Benefits Group is to directly impact on GDP by progressively evolving business activities and strategic partnerships around unique insurance services.” “We touch all facets of the economies of our catchment countries, in our genuine desire to alleviate poverty”, he added. Ogunbiyi said MUTUAL has successfully carved a niche for itself in its ability to secure patronage of tailor-made insurance products by making customers feel genuinely impacted on and looked-after in what they are offered as value-additions: “We make them feel good about our value-offerings, about the process, and the Mutual Benefits Brand”, he added. Mutual Benefits’ innovative activities are driven across seven (7) key platforms namely: • Widening or deepening access to relevant insurance products • Awareness of the value-delivering benefits of these products through knowledge and patronage • Evolving Innovative and new distribution channels • Working with the Mutual Benefits Microfinance Bank to identify appropriate bancassurance businesses • Micro-Insurance • Takaful Insurance (Islamic compliant insurance) • Promoting insurance generating investments and Strategic Partnerships. The two cardinal objectives of Mutual Benefits are therefore: To bring tailor-made value-adding insurance services to the door-step of citizens and at the same time, promote a new era of using retail outlets to deliver insurance services to every nook and cranny. The New Era in Nigeria This was ushered-in few years ago through NAICOM’s (Nigeria’s very dynamic regulatory body) MDRI project. The project focused essentially on

Left: Mr. Akin Ogunbiyi, GMD, Mutual Benefits Insurance Plc receiving Insurance Innovation of the Year Award at the prestigious African Insurance Awards 2015 which held, May 25th at Ramadan Hotel, Tunis. Presenting the award is Mr. Adama Ndiaye, Chairman of Federation of Insurance Companies (FANAF). the Compulsory Insurance Products, Sanitisation and Modernisation of Insurance Agency System, Wiping out of Fake Insurance Institutions and Introduction of Risk-based Supervision. The Mutual Experience The kernel of Mutual Benefits’ impressive growth is strict adherence to the company’s core values. It prides itself as unrepentant sticklers for Leadership, Professionalism, Knowledge, Continuous Training and Ethical Practice. As a result of the recapitalisation exercise of 2006/2007, Mutual Benefits came up with the “Wind of Change”, its terms of engagement with stakeholders in fostering insurance as a vital financial instrument for national development through: • Repositioning and deliberate change in strategy • Clear and compelling brand promise • Superior and memorable services • Clear, competitive differentiation Sign-posts of some of our successes include: • Products availability – 102 products: 36 approved by NAICOM in a scoop in 2104 • Accessibility – 70 new offices opened in rural/remote locations • Products affordability • Employment Generation – over 7,000 agents • Empowerment – strategic alliances, cooperative cells • Poverty alleviation • Income at the bottom of the pyramid – extensive involvement with the informal sector • Consumer awareness: Communication Rapport building Networking

Positive attitude through professionalism Our Results • Gross Premium Income: Average N 1.2bn premium monthly from retail outlets • Unit Sales Volume: In 5 years, Mutual issued over 1,000,000 (One million) individual policies ALL ON ALTERNATIVE MARKET EXPANSION AND PENETRATION INITIATIVES What Nigerians are saying Two of the latest giant strides by MUTUAL are the schemes for the Abattoir Worker’s Union and the Franchise offices for retired military personnel as well as experienced bankers, businessmen and other professionals. Aminu Tanko Sadiq, the General Secretary of the Butchers Stakeholders, Lagos State Abattoir Complex, Oko-Oba, Agege, lifts his head with a broad smile. He points in the direction of the slaughters’ slab inside the complex for emphasis and says it’s a good time for the butchers. Every time Sadiq speaks, he looks around for his colleagues and their livestock to accentuate his speech. “Look at that cow there, it is ready for insurance. The man over there on the slaughters’ slab is already hooked unto the plan. We are many already”, he says. Sadiq talks with the confidence of someone who has seen the end from the beginning, but it’s just a little over six months since he came in contact with Mutual Benefits Assurance Plc, one of Nigeria’s prominent insurance companies. “We’ve not had it like this since this abattoir was opened. In our line of business, at all times we need cash to go to the North to bring these animals. We wish we’ve had Mutual Ben-

efits Assurance Plc with us from the beginning, because we’ve never had it so good. The benefits have been so wonderful.” he says. A new livestock insurance programme is providing Sadiq and members of his butchers association a safety net for lost cattle. Six months ago, he signed up for insurance cover for his business, which is being offered by Mutual Benefits Assurance Plc. The herders and butchers play significant role in Nigeria’s economy, where a growing population has increased the demand for healthier meat from regulated slaughterhouses. By its population and capacity for animal production, with more than 25 percent of livestock herds in the sub-region according to statistics, Nigeria is by far the leading livestock producer in Central and West Africa. After years of meritorious service as an officer of the Nigerian Air Force, Group Captain Richard Adebeso Okanlawon retired pondering over his future outside the military. For a man who spent 25 years of his service years taking care of finance for the Nigerian Air Force, Okanlawon knew where to apply his skills in retirement, but a platform would be required. Now, Mutual Benefits Assurance Plc has provided the former Assistant Director of Finance for the Nigerian Air Force with that much pedestal. Okanlawon has become a franchisee under its new product to create a better life for military personnel and other high network individuals in retirement. For Okanlawon, what appeared somewhat like a simple past time activity in the beginning has become a pot of soup from which he now generates good income. He said: ” I retired in December 2004 and I signed up to this in 2014

after I saw the advert for the franchise. I decided to try it out since I am a trained accountant. Insurance is marketing, so I sell and make my commission. Again, insurance is the bedrock of any nation. “If you must know, what propels the economy is insurance, so I call on people to join the race. For us here at Mutual Benefits, with just a small premium, you can secure your business instead of calling on government to bail you out anytime you run into problems like fire incidents and floods.” He added: “Since I signed on to this, the journey has been a wonderful experience. As a retired person, if you don’t go out to interact, you will age quickly. “As a retiree, I am fulfilled. During my service years, I served the nation as a military officer. By February next year, I will tell you that I am fit. “So I call on other retirees to join the crusade and help themselves to be active. I wouldn’t have been this fit if I had been idle after my retirement.” The franchisees are made up of a group of retired but not tired military, bank managing directors and other corporate individuals, who by their wealth of experience are invaluable treasures. Conclusion On Tuesday, 26th May, 2015, in Tunis, Tunisia, MUTUAL’s efforts in making insurance services relevant to everyday living was given a fillip when the company was adjudged Africa’s “Innovation Company of the Year.” At the award ceremony, Mutual Benefits was commended for “the use of technology, breakthrough in products/service delivery and innovative distribution channels/methods, introduced in the sale of insurance products to the grassroots.”

Business Journal July 06 - 12, 2015

Insurance

Pension

Insurance: Underestimated Tool for Sustainable Economic Growth in Africa

nder the theme, "Then and Now: Reimagining Africa’s Future," the World Economic Forum on Africa brought together regional and global leaders from business, government and civil society to take stock of progress made over the last 25 years, share insights on the present landscape and identify innovative approaches to accelerate inclusive growth to bring about sustainable development in the future. Swiss Re contributed by organising a breakfast roundtable called "From Risk to Resilience: Pathways to Catalysing Economic Growth and Development." The breakfast roundtable, which was well attended, with the Vice President of Ghana, Kwesi Amissah-Arthur, and several other government representatives and development bankers present, was hosted by former Finance Minister of South Africa and current board member of Swiss Re, Trevor Manuel; and Lord Mark Malloch-Brown, former UK Minister, Deputy Chairman United Nations and Chair of the Royal Africa Society. A primer on the role of insurance Martyn Parker, Chairman Global Partnerships highlighted the need for public sector resilience against unexpected shocks, providing examples of several sovereign risk financing solutions carried out the course of the last few years. He also explained the dual role of insurance as a catalyst for economic development. Firstly, institutional investors (pension funds and insurance companies)

have funds available to finance infrastructure projects. But regulation and transparency around infrastructure investments is lacking, and needs to be improved. To support this, Swiss Re is actively advocating that infrastructure investment be established as a separate tradable asset class. But regulation also needs to be improved, in order to give investors the comfort they need to invest in the continent. Secondly, Swiss Re and others provide insurance protection for the construction and operational phase of infrastructure projects. In addition, Swiss Re also provides innovative de-risking of cash flows from renewable energy projects, for example through covering the shortfall in power production in case of lack of wind or water, can make projects

bankable. Last but not least, there is the matter of climate-related natural disaster protection and food security –where a major drought or flood not only causes short term havoc, but can destroy years of development gains. To help counter that, Swiss Re is playing a pioneering role in the establishment of innovative insurance solutions granting swift payouts to keep farmers farming. This includes solutions across the spectrum, from sovereign and commercial, to small-holder level.. Altogether, this provides a platform for sustainable growth of what is considered by many as the backbone of Sub-Saharan Africa's industry. Martyn Parker urged: "It's time to start thinking beyond the obvious on insurance. Governments need to

include insurance in their financial tool box to foster growth, and put plans in place." In order to co-ordinate those plans, he also advocated the establishment of a Country Chief Resilience Officer – similar to the role that most successful corporations have institutionalised – who can liaise between the public and private sectors to assess the nation's risk landscape and organize the most relevant and effective tools and responses. Mark Malloch Brown said that monetising risk management is a powerful concept, breaking through to replace aid –on which many African countries have been reliant on so far. Trevor Manuel argued: "Although insurance is just one part of the bigger picture –and needs to be

looked at in the context of savings and other credit instruments - it's an essential element of de-risking infrastructure investment, in order to unlock capital for Africa. As a former finance minister, I know that we rarely put insurance on our list of priorities –but suggest it's time to we do so, in order to allow Africa to achieve sustainable economic growth, faster." Frank O'Neill, Head of Africa, Swiss Re concluded that never before has close engagement between government and the private sector been more important, or more opportune. "We hope Africa's political leaders and development agencies will move insurance to a prominent place on their agendas, as a means to achieving the progress they want to see on the continent."

Reinsurance Industry Faces an Uncertain Future as Time Moves on

t’s around two months until the annual Reinsurance Rendezvous in Monte Carlo, where the reinsurers, brokers, carriers, lawyers, accountants and cat modelers discuss the state of their industry. That industry, until recently a rock solid bastion of the “we do it that way, because we’ve always done it that way” school of management, is in a state of flux, roiled by events both from within and without. It is searching for ways to continue to provide the risk coverage that underpins economic life in a world that has been changed drastically in a very short period of time. Mike Van Slooten’s task, as head of Aon Benfield’s International Market Analysis team, is to make some sense of what’s going on in order to advise the firm’s clients what to expect and to guard against. But even he admits “it’s not an easy job.” The exponential growth and sophistication of technology, and rising global temperatures; i.e. climate change, have affected everyone, not just the reinsurance industry. The technology now being used has altered the way analytics are done, as vast amounts of data are available to construct models. It has also changed completely the way people communicate, instantaneously, and, unless a solar storm or similar catastrophe sends us back to the 19th century

it’s here to stay. There may still be arguments about the causes of climate change, but anyone who has looked at the data realizes that the ocean temperatures are rising, it’s getting hotter in the summer, and there are more blizzards in the winter, and the natural catastrophes, which form the bulk of the reinsurers’ activities, are being affected, even though as yet it’s unclear just how. Van Slooten and the rest of the reinsurance community can only affect certain variables. He pointed out the ripple effects of some of the more recent developments, starting with the prolonged period of low interest rates, which shows no signs of abating. As neither reinsurers (nor anyone else) now expects to make a significant return on debt investments (bonds, notes, savings accounts, etc.); sound underwriting has become a paramount factor in avoiding losses and making a profit. “Choosing an underwriter depends on the circumstances,” Van Slooten said. He explained that while the increasingly sophisticated cat models are one factor, they’re not the only one, as an underwriter’s expertise in understanding a certain risk is also important. Increased regulatory supervision, notably Solvency II in the European Union, and the heightened surveillance by the rating agencies has accompanied the

lower interest rates, and has thereby put pressure on capital. It must be deployed carefully and wisely. The reinsurance market used to be governed by cycles alternating between a hard and a soft market. Big catastrophe losses usually hardened the market, as premiums were expected to rise, and this attracted more capital into the market. The “cycle,” however has become a thing of the past. As an example: According to Aon Benfield’s Catastrophe report for the year 2011, there were 253 separate events, which generated a record total economic loss of $435 billion, and total insured losses of $107 billion. Only 2005 topped it with insured losses of $120 billion – $90 billion of which resulted from the major hurricanes Katrina, Rita and Wilma. But no significant hard market developed. Rates rose only in those areas that had actually experienced extensive damage and losses. If that didn’t move the market nothing will. The reinsurance market had the capacity to absorb those losses and move on. The industry was better prepared through the use of risk management and accurate enterprise risk management, made possible by more sophisticated and accurate software programs. Most importantly the growth of alternative risk transfers (ART’s), now re-

ferred to as insurance linked securities (ILS), helped to replenish the capital the industry needed – at a price. According to a recent study, summarized in two earlier articles, they are a factor in moving the reinsurance market towards “the commoditization of risks.” The other factor is the aforementioned sophistication of catastrophe models in the developed markets – U.S. hurricanes and tornadoes, European windstorms, Japanese earthquakes/tsunamis, Australian bush fires and cyclonic storms, etc. In those countries where they are used extensively the market is moving from coverage of “acts of God” to one that covers commoditized risks. If you substitute the “law of large numbers,” which has been the basic premise on the insurance industry since it began, for “acts of God,” you can see that this is potentially an existential concern. Van Slooten explained, however, that from a reinsurance industry point of view it isn’t really becoming a commodity, except perhaps in some personal lines coverage, notably household and auto insurance. Slightly more complex risks are still required to be analyzed on a case by case basis. “What this has done, he said, “is to narrow the [pricing] band for reinsurance.” If the price is too high, there are

alternatives in other reinsurers, retaining the risk, or the ILS market. If the carrier is asking for a price that’s too low, it won’t be available outside the band, unless other factors are brought into play. As an example Van Slooten explained that a reinsurer might accept a lower price on some business, seen as having more risk, if the carrier also offers to reinsure another line of business, which has less risk. The consequences of the changes detailed above have coincided with what has been described as the increasing irrelevancy of the reinsurance industry. Several factors are involved: Growth in the developed markets is at a standstill; prices are stagnant; major carriers are retaining more risk, and buying less reinsurance; a number of large multi-national companies have more capital than the entire reinsurance industry, so they’re quite capable of insuring themselves through captives or otherwise, and don’t need reinsurance. The ILS market has enough capital, and its managers are knowledgeable enough, to structure alternative reinsurance vehicles – mainly cat bonds and collateralized reinsurance. According to a report from Guy Carpenter, as of June first there was “$21.83 billion of P&C 144A catastrophe bond risk capital outstanding.”

Business Journal July 06 - 12, 2015

Technology www.businessjournalng.com

GOtv Extends Digital Coverage to More Towns in Edo State

n continuous support of the digital migration in Nigeria, GOtv’s coverage in Edo state has been bolstered with its signals now reaching Auchi, Aviele, Ewu, Igarra, Jattu and Okpella. GOtv Public Relations Manager, Efe Obiomah said: ‘GOtv first made an entry into Edo state when it launched in Benin, the state capital. We are excited to be taking GOtv beyond big cities to the hinterlands. This move further demonstrates our commitment to enable Nigeria achieve a speedy migration from analogue to digital broadcasting’. ‘Africa Independent Television (AIT) is of great significance to the people of Auchi and environs. Afemai / Etsako people can now access AIT on GOtv and enjoy news and cultural programmes in digital pictures and sound. This is in addition to the wide variety of family entertainment on GOtv’, she added. ‘In the month of July, GOtv cele-

brates African music talent with the live broadcast of the MTV Africa Music Awards 2015 on GOtv. Subscribers can also look forward to the premiere of a new series on Telemundo, Husband for Hire, and the Season 2 premiere of I Survived on Sony Entertainment Television”, she concluded. GOtv offers two bouquets: GOtv Plus for a monthly subscription of N1,800 and GOtv Value for N1,200 monthly. Both bouquets give families a good selection of international and local channels with 42 channels on the GOtv Plus bouquet, and 28 channels on GOtv Value. The GOtv channel lineup includes a wide selection which caters to different tastes within the family. Some of the channels on GOtv are; AfricaMagic Family, AIT, M-Net Movies Zone, Telemundo, Zee World, Discovery World, SuperSport Select, Al Jazeera, CNN, MTV Base, Soundcity, Disney Junior, Nickelodeon, JimJam, Islam Channel and Faith. Television lovers in these towns can

get the latest approved GOtv DBV-T2 decoders including one month subscription to the GOtv Plus bouquet at the highly subsidised price of N2,900. To receive optimal signals, GOtv subscribers are advised to make use of the outdoor antenna (GOtenna) which is

sold for a standalone price of N1,600. GOtv was recently also rolled-out in Epe and Ijebu-Ode. Across the country, GOtv has covered several other cities and towns including Ibadan, Port Harcourt, Lagos, Enugu, Benin, Aba, Owerri, Kano, Kaduna,

Onitsha, Asaba, Osogbo, Ife, Ogbomoso, Akure, Oyo, Jos, Abeokuta, Ilesa, Ede, Iseyin, Makurdi, Ado-ekiti, Mararaba, Suleja, Ondo, Owo, Abraka, Agbarho, Effurun, Ekpan, Jeddo, Kokori, Oghara, Okpe, Sapele, Udu, Ughelli, Warri, and Awka.

China's 4G Subscriber Base Exceeds 200m

hina's 4G subscriber base continued to grow in May, with 20 million added during the period, the Ministry of Industry and Information Technology (MIIT) has announced. There are now more than 200 million 4G subscribers in China. In total, there were 657 million mobile Broadband users, including 3G and 4G users, at the end of May. Since the "Broadband China" strategy was floated in August 2013 by the State Council to boost information consumption and expand Broadband coverage, the development of the broadband network has seen significant improvements, according to the MIIT. By the end of May, over 51 percent of Broadband users had access to cable speed above 80Mbps, the MIIT said. By the end of 2017, the average cable Broadband speed in major cities will be increased to 30Mbps, more than triple the current speed, while smaller cities will be upgraded to 20 Mbps. The State Council also vowed to expand the 4G network to cover the whole of the country by the end of 2017.

Tightens Control of Cyber Security Meanwhile, China's legislature has passed a wide-ranging and controversial national security law which

tightens government control over many areas of life. The law broadly defines national security as covering everything from finance and cyber security to religion. State media said it would "protect people's fundamental interests." It is part of a raft of policies by President Xi Jinping that have drawn criticism from foreign governments, businesses and rights groups. 'Severe' threats The vaguely worded legislation authorises the government to take "all necessary" steps to protect China's sovereignty. Included in the law, passed by the standing committee of the rubberstamp National People's Congress, is a move to make key network infrastructure and information systems "secure and controllable." The BBC's Martin Patience in Beijing says critics argue the law is excessive. Many foreign technology firms operating in China are concerned, he adds. They fear that under the new law they will be forced to hand over sensitive information to the authorities. The law is more an ideological declaration, says Zhang Xuezhong, a lawyer and former professor at East China University of Political Science and Law, which will allow more cultural censorship and a crackdown on dissidents. "A good security law should state who on what conditions gets what punishment, but this law doesn't," Zhang says.

"Technically speaking, the law is awful, as it is difficult to enforce it on individuals and companies." 'Legitimate rights' Speaking at a news briefing in Beijing, a senior party official, Zheng Shuna, said the law was necessary because China's national security situation had "become increasingly severe", the Xinhua news agency reports.

She said China had to defend its sovereignty and interests while also maintaining its political and social stability. "We will continue to follow the path of peaceful development but we absolutely will not give up our legitimate rights and absolutely will not sacrifice the country's core interests," she said. The tightening of security laws

comes amid tensions with its neighbours over competing territorial claims in the South China and East China Seas. President Xi, who is head of the recently formed National Security Commission, has previously said China's security covers a wide range of areas including culture, politics, military, the economy, technology and the environment.

Business Journal July 06 - 12, 2015

Technology

Exciting Launch of Yezz Mobile into the Nigerian Market

ezz Mobile was designed and birthed in Miami USA five years ago and has experienced tremendous success in the Latin American markets over the last few years. This success has led the US based company Yezz to expand its distribution footprint into Europe and also Africa, a keyy growth focus region for the company. "The Afrifrican market ket offers connsiderable sgrowth prosys pects”, says iRobert Schiano, Yezzz Managing n Director in dEMEA, studw ies show that thee number of es smartphones 7 sold by 2017 le will double ilto 350 milts. lion units. zz With Yezz brand, we mbihave the ambiolio tion, portfolio lities ess and capabilities to be a major player in Africa in the mobile phone sector. With Nigeria being one of the most significant markets in Africa as well as globally, we are highly motivated to showcase the Yezz brand offering to the discerning Nigerian consumer. Yezz is proud to announce that TD Mobile has been selected as the preferred and exclusive distributor of Yezz in the Nigerian market. TD Mobile, a subsidiary of Technology Distributions, has an exem-

plary track record in terms of software, hardware, accessories and peripherals and enjoys prime status

as one of the biggest distributors of mobile devices across the West African region.

We believe that the partnership between TD Mobile and Yezz is well placed for success. TD Mobile will make the product range available for sale exclusively online via Konga. com for the launch period, as well as through key partnership with Yudala and Key Opcos into selected open channel retail outlets throughout Nigeria. Choice - Whilst Yezz has a broad product range, much research has gone into selecting the key devices which will appeal to the needs and aspirations of the Nigerian target consumer. This research has been validated by key operators, distributors and consumers. Based on this, Yezz will spearhead this charge with key smartphone products which provide the right balance of features, value for money, performance and design to win their hearts. To do this we will be giving consumers a choice of Yezz devices to suit whichever operating system the consumers prefer, starting off with Android and Windowsphone devices, and to be followed shortly thereafter by a Firefox range of devices. In addition, most of the Yezz devices coming into market will come standard with between 3 to 4 additional colour covers. This will give consumers confidence that their device looks fresher and newer for longer. Yezz Billy 4.7 – This device offering is the thinnest Windows phone on the market, packed with solid performance features and quality Qualcomm chipsets that establish this windows phone as a quality device to the discerning consumer. This combined with a superlight weight of 120 grams and a 4.7 inch screen will be a winner for the consumer looking for an alternative Windowsphone to the current offerings in the market.

In addition to this there will be a Yezz Billy 4 device for consumers looking for great value for money. This is a great entry level windows smartphone device packed with class leading features including a 4 inch screen and quality at a highly competitive price to the end consumer. As weight and thinness are key design differentiators for the Yezz brand, we will be leading the Android Kit Kat charge with two very key super thin and superlight devices positioned to consumers who want a product they can confidently showcase to their friends, family and associates. Yezz Andy 5T – Our ultrathin Android 5T at 6.9mm and 123 grams really provides a unique coolness factor in terms of its design. Packed with a powerful 13mp main camera and 5mp selfie camera, combined with a highly useable 5 inch touchscreen, we see this as a highly desirable alternative to the existing offerings in the market, particularly in terms of design. The Andy 6M is the perfect answer to consumers who want a device that is the perfect balance of value for money and gaming capabilities. With its 6 inch screen, 13mp main camera and 5mp selfie camera, as well as 2400 mAh battery, it ticks all of the right boxes for the target consumer. In addition to the above devices, we will be offering the broader Yezz range into the key channels to cater for differing consumer demand and affordability requirements; this includes devices such as our entry-level C21 feature phone which is part of our mainstream smartphone device offering. Finally, Yezz stands for Quality. We are confident in our brand as well as our products’ durability, and are offering our consumers a class leading 24 month warranty on all of our product range. Peace of mind should be part of the deal.

Mark Zuckerberg: The Future of Facebook is Telepathy

ark Zuckerberg just dropped a big clue about Facebook's future. The social network's founder and CEO believes that one day, we'll be able to share our thoughts directly -- brain to brain -using technology. "You'll just be able to think of something and your friends will immediately be able to experience it too if you'd like," Zuckerberg said. "This would be the ultimate communication technology." He made his comments during a public Q&A session on hisFacebook (FB, Tech30) page on Tuesday afternoon. The response was addressed to a user who asked about Facebook's long-term plans. In the past decade, the company has expanded the way users communicate on the platform. First there

were plain profile pages. Next came comments, and then the Wall, Likes, Groups and News Feed. Over the last year Facebook has moved away from mass sharing and focused on personal messaging. It broke Messenger out as its own separate app for the web and mobile. It even bought an entire messaging platform, WhatsApp, for $22 billion. With its Oculus aquisition, Facebook gave us a hint of what it wants to do with virtual reality -- to make users feel like they're right next to their friends, seeing and experiencing everything in real time. Telepathy is just another step toward more personal connections (with the removal of some of the hardware). And it's not just a farfetched idea. Scientists have already discovered ways to create "computer brain interfaces," or the ability for com-

puters to translate brain waves into software commands, and vise versa.

The University of Washington, for example, has been building a system

that allows researchers to send brain signals from one person to another through the Internet. In the past, one participant has been able to successfully move a second participant's finger on a keyboard, just through thought. Both were wearing special hats equipped with carefully placed electrodes. Although studies have been confined mainly to motion commands, technology entrepreneurs like Zuckerberg have grander goals. What the Harvard drop-out is talking about is the stuff of dreams -- communicating with a computer or through the Internet with other people without a keyboard or voice. "There are a few important trends in human communication that we hope to improve," Zuckerberg said. "Our lives improve as our communication tools get better in many ways."

Business Journal July 06 - 12, 2015

Manufacturing www.businessjournalng.com

Top 10 Lean Manufacturing Companies in the World •

Nike

he super-cool clothing company worked with NGOs and fellow manufacturers on sustainability projects. They worked with the Fair Labour Association to create performance indicators and sustainable sourcing and launched the Sustainable Apparel Coalition with the US Environmental Protection Agency and other manufacturers, and in the process, saved money on energy and waste materials. • Kimberley-Clark Corporation The Makers of Kleenex recently outsourced logistics at its Barton Mill UK plant to leading Lean thinkers, Unipart. Before this, staff at the plant resented the long shifts and overtime and absenteeism was at 10 percent. Unipart got Kimberley-Clark to spend on enhanced staff engagement and development, meaning they saved on staff absenteeism and through an improvement in efficiency brought about by better staff morale. • Caterpillar Inc. The US machinery manufacturers, Caterpillar Production System is modelled after elements of the Toyota Production System. A key thing the company recognised is that pace is a critical aspect of Lean integration. If projects take too long to complete, they will fail. Projects must be quickly implemented, and far reaching, to be successful.

oductice programmes in producput, tivity, quality, throughput, ost customer service and cost nd reduction. Bosses found es that E-business strategies udramatically reduced huhile man intervention while hain speeding up the supply chain process. • John Deere The world’s largest manufacturer of

• Textron The American industrial conglomerate that includes Bell Helicopter, Cessna Aircraft and Textron Systems have their own ‘Textron's Lean Six Sigma Standards’, a comprehensive, common set of tools and techniques applied to all functional areas to eliminate waste, reduce variation, and fuel growth and innovation. • Parker Hannifin One of the largest companies in the world in motion control technologies, Ohio-based Parker Hannifin employs 58,000 people globally. Since 2000, the company has implemented best prac-

T h e philosophy also relies on the process being as flexible as possible to reduce stress, which counts as over-burden and generates waste.

agricultural machinery in 2003 spent $100 million on transforming its Iowa, US, operation from mass production to lean manufacturing. Project Manager Kallin Kurtz said: “This project transformed our manufacturing engineering mindset. We have put a great deal of effort into identifying non-value-added activities and eliminating them where possible.” • Ford Founder Henry Ford challenged ideas on waste in the 1910s. In his book, My Life and Work, he wrote of a farmer carrying water up a ladder rather than fitting water pipes as “waste motion”, and showed that spending on improvements was not waste expense,

• Intel Intel is the world’s largest computer chip maker. Joe Foley, Factory Manager at Intel Fab Operations in Leixlip, Ireland, said: “Five years ago, it took us 14 weeks to introduce a new chip to our factory; now it takes 10 days. We were the first Intel factory to achieve these times using Lean Principles.” • Illinois Tool Works Engineering manufacturer, Illinois Works employs 65,000 people in its hundreds of businesses, but smaller is better when it some to implementing Lean principle. The company’s policy of extreme decentralisation, splitting into 365 units in 34 countries – leaving just 100 employees at headquarters, means its local units react far faster and more efficiently to customer needs.

ment.

but an increase in efficiency and a reduction in waste. • Toyota The Toyota philosophy – and it truly is a philosophy – has helped make Toyota the world top three car company it is today, and has resulted in the ‘Lean’ concept, replicated worldwide. Lean manufacturing is a management philosophy derived mostly from the Toyota Production System (TPS), an integrated socio-technical system which comprises its management philosophy and practices. A socio-technical system is an approach to complex organisational design that recognises the interaction between people and technology in workplaces. Sometimes referred to as the Toyota Way, the TPS’ main objectives are to design out over-burden and inconsistency and to eliminate waste. Waste not only refers to materials, but time, such as consumer time waiting for product or assistance and even waste of move-

World Investment Conference Supports Inclusive, Sustainable Industrial-

isation Participants at the 20th Annual World Investment Conference, a flagship event of the World Association of Investment Promotion Agencies (WAIPA), which ended in Milan, Italy recently, voiced support for inclusive and sustainable industrialisation. The three-day event brought together over a hundred leading Investment Promotion Agencies (IPAs), heads of financial institutions, some leading political figures, private sector leaders, prominent economists and researchers. The agenda also focused on such issues as the role of FDI in stimulating aggregate demand and countering the slump in global economic growth; the effects of multilateral investment

agreements in global FDI inflows; best practices in FDI promotion to enhance the quality of human capital and physical infrastructure and how FDI could be channeled into agriculture to feed the planet—also the theme of the Milan Expo. The conference also focused on supporting inclusive and sustainable industrialisation, all of which would generate employment worldwide and contribute to global peace and stability. The Director General of UNIDO, LI Yong, delivered a speech at the conference, which was also attended by Nobel Laureate, Michael Spence, and world-renowned Economist, Jean-Paul Fitoussi.

Business Journal July 06 - 12, 2015

Manufacturing

Union says New Textile Policy will Lead to Industry Collapse T

he Textile, Garment and Tailoring Senior Staff Association of Nigeria, an affiliate of the Trade Union Congress, has called on the federal government to rescind its recent directive on textile importation as that is capable of leading to total collapse of the textile industry in the

country. The federal government had recently directed the Nigerian Customs to remove textile materials from the import prohibition list. The spokesperson of Nigeria Customs Service, Wale Adeniyi, confirmed the receipt of a circular to that effect from the

Ministry of Finance. The National President of the textile association, Mr. Ambi Karu, said what the government has done is to give licence for the final collapse of the textile sector. "We have been involved in a lot of running battle with the Chinese

over smuggling of textile into the country despite the prohibition, and does the government now think outright removal is the best decision?" The spokesperson claimed the Nigeria Customs Service, as a member of the Tariff Technical

Aramex to Establish Footprint in Nigeria, Others

ramex, the Dubai-based logistics company, has identified Nigeria and a few other African countries as avenue of growth for its business. To this end, the company is finalising plans to establish a footprint in Nigeria, Mozambique, Namibia and Zambia by the end of 2015. Hussein Hachem, the Chief Executive of Aramex, said the company will continue to scout for acquisitions and joint ventures as it expands its operations. The company recently acquired the master franchise of PostNet in South Africa. “It’s high time for someone to activate and unlock the potential of sub-Saharan ecommerce. So far, activity has been minimal and mostly on a domestic level. What we are trying to do is connect Africa to the global e-commerce market,” Hachem said. Last year, Aramex made a number of acquisitions, which included Australia’s Mail Call Couriers, and hopes to make two to three more buys this year in Asia, sub-Saharan Africa or the US. The company’s expansion drive could gulp as much as $120 million in 2015 for investments in technology, warehouses and acquisitions. “We are not going to buy companies with heavy assets. We will buy client lists, local knowledge, net-

Suspend Forex Window Exclusion, LCCI tells CBN

works,” Hachem said. “We want the consumers in Nigeria, Kenya, Angola, Ghana, Namibia and South Africa to enjoy the same level of service like anybody living in Dubai or Europe,” he added.

Cross River Builds Garment Factory to Industrialise State he Cross River State Governor, Ben Ayade, has assured widows in the state that his government will give priority attention to their plight and ensure they are gainfully employed. The governor gave this assurance while inspecting the level of work done at the site of a new garment factory in the state capital, Calabar. The governor said the new factory is expected to generate more than 1000 new jobs in the state. "It [the garment factory] is expected to generate about 1000 jobs and most of them would be for women, particularly widows. The factory will also provide employment for youths who are currently roaming the streets," the governor said. He decried the huge money spent

Committee, was not part of the policy review process. Nevertheless, in line with the usual practice of offering input to fiscal policies, the Comptroller General of Customs promised to engage with relevant authorities to enrich the new policy.

by governments and their agencies in the importation of textiles. "During the just concluded political campaigns, we discovered that T-shirts and caps worn by party members all across the country were imported from China. Cross River, being a border state, with support of the federal government, will supply those items to the neighbouring states and countries," he said. Apart from creating new jobs, the factory is also expected to boost the state’s internally generated revenue drive in form of taxes and levies when it commences production According to the governor, "the factory will provide fabric for the production of school uniforms, army, police and other paramilitary uniforms."

The company is present in 60 countries and offers services across freight, express, logistics and warehousing, e-commerce and record management. “We have less luggage and with the

transformation to become a technology enterprise, we are able to move, shift and introduce new products to the market faster than others.”

he Lagos Chamber of Commerce and Industry (LCCI) has called on the Central Bank of Nigeria (CBN) to suspend its latest monetary policy directive, which excluded 41 consumer goods’ importers from sourcing foreign exchange through the official markets. Alhaji Remi Bello, President of the Chamber, said the CBN directive could potentially result in major disruptions, dislocations and panic among many investors in the economy. According to Bello, the list is prone to multiple definitions and discretionary interpretations by agencies and institutions responsible for implementation, stressing that the HS codes of the items were not indicated in the CBN circular, and as such a discretionary interpretations would create room for corruption. “The foreign exchange market has no doubt been under pressure in the last couple of months, a situation which poses significant challenges to the CBN with regard to the stability of exchange rate and the protection of foreign reserves, which is in line with its mandate. We submit that the policy should be put on hold pending a proper study of the demand and supply gaps in the various sectors affected by this policy as many of the products on the list of the 41 products are intermediate goods which are critical inputs for many manufacturing firms as well as other critical sectors of the economy,” the LCCI boss said. He said the CBN should focus more on the market fundamentals and as much as possible allow market mechanism to drive the allocation of foreign exchange. Bello argued that the closer the rate is to equilibrium, the better for the economy and less disruptive for investors as this development will put several investments at risk with implications for job losses, quality of loan assets in the banking system and the welfare of citizens. “The CBN should engage with the stakeholders to better appreciate the dimensions of the shocks and disruptions of its recent policy pronouncement as the alternative forex markets, parallel market and the BDCs are not deep enough to meet the demand of the essential intermediate products on the exclusion list,” Bello noted.

Business Journal July 06 - 12, 2015

Energy

www.businessjournalng.com

China Wary of Closer Russia Energy Ties, says ex-Cnooc Economist

hina is wary of expanding energy investments in Russia because closer ties with the Kremlin could harm its relations with the U.S., according to a former researcher at China’s biggest offshore explorer. The government in Beijing isn’t prepared to jeopardise economic links with the U.S., said Chen Wei Dong, who resigned as Chief Researcher for China National Offshore Oil Corp.’s Energy Economics Institute in May. The U.S. is viewed as a “global” partner while Russian ties are regional, he said. Russia is turning to Asian markets after President Vladimir Putin’s annexation of Crimea led the U.S. and Europe to impose sanctions, including oil and banking restrictions. Russia’s biggest energy exporters are targeting China, the world’s largest consumer, yet progress on supply deals has stalled after crude and gas prices declined. “If Russia has bad relations with the U.S., this may make it more difficult for China to build

better relationships with Russia,” Chen said in an interview in Moscow last week. “China is looking for a balance.” The East Asian nation needs to safeguard its relationship with the U.S. because, while the two don’t trade oil or gas, they are key economic partners. U.S. trade with China reached $590.4 billion last year, according to the U.S. Census Bureau, while Russia-China trade was $95.3 billion, Chinese customs data show. Cautious Stance Russian exporter OAO Gazprom already supplies LNG to China from its Sakhalin LNG plant in the North Pacific Ocean. Putin, keen to expand trade further, struck a deal last year to pipe gas to China for 30 years through a new East Siberia link, and is pushing for a second supply contract. Yet China may take a cautious stance, having seen gas deliveries in Europe disrupted during pricing disputes between Gazprom and transit country, Ukraine. “Many people say: we can import gas from Russia but

we have to keep it at a certain level, 15%, maximum 20%,” said Chen, who has about 30 years’ experience in the offshore energy industry. “Otherwise, we will become too insecure, too dependent.” Russia halted deliveries to Ukraine in 2006 and 2009 after its former Soviet ally amassed debts for gas imports. The conflict interrupted gas transit to Europe and caused shortages in several countries. Putin’s $400 billion piped-gas deal with China took almost a decade to pull off. Negotiations on a second 30-year supply agreement, outlined in a framework accord last November, are yet to produce a firm contract. Russia expects to supply China with as much as 68 Bcm a year by 2030, meeting about 11% of the country’s piped-gas demand and making it Gazprom’s largest customer, according to a company presentation. The exporter targets a later increase to as much as 100 Bcm a year, a plan that Deputy Chairman Alexander Medvedev said was “realistic” in June.

IEA: Sharing Energy Efficiency Expertise with Trainees from 40 Countries

he IEA Energy Training Week has brought approximately 100 participants to Paris from countries as far afield as China and Cameroon, Morocco and Mexico, and Turkey and Thailand – all to learn the various steps to designing, implementing, measuring and modifying energy efficiency programmes for emerging economies. IEA Chief Economist, Fatih Birol opened the week of intense classes, site visits and exercises, welcoming the energy specialists from both government agencies and the private sector in 40 countries. He noted energy efficiency’s key role not just in energy security but also for reducing carbon emissions to slow global warming. The trainees were studying energy efficiency policies across multiple sectors all week, focusing during the middle three days on one of four sectors: buildings, industry, transport, or lighting, appliances and equipment. The courses, led by analysts from the IEA Sustainable Energy Policy

and Technology Directorate, feature sessions on prioritisation, toolkits for successful programmes, and best resources for implementation, monitoring and modification. A World Bank representative was joining Energy Training Week on the final day for an all-participants presentation, “Smart Communications Strategies to Support Energy Efficiency Goals”, before leading a group exercise on designing energy efficiency information campaigns. Another highlight of the training is each in-depth course’s site visit, which range from the logistics centre for the Paris regional transportation system to the headquarters of the French energy management and automation company Schneider. Over the past five years, more than 2 000 people from around the world have taken part in training weeks and other IEA Energy Training and Capacity Building Programme events, all targeted at central government officials and key national stakeholders, such as governmental executive agencies and the private sector.

Weeklong programme draws 100 participants for courses on statistics, standards, systems and so much more

Business Journal July 06 - 12, 2015

Energy

SPDC JV’s Afam VI Delivers 20m MWh Electricity into National Grid

hell Nigeria’s Afam VI Power Plant in Rivers State has delivered over 20 million Megawatt-hour (MWh) of electricity into the Nigerian grid between its inauguration in 2008 and June 2015, thereby consolidating its position as a leading contributor to the country’s grid generation. The operations at Afam VI plant have also led to sub-contract opportunities and employment for over 150 Nigerians from the 16 host communities. The milestone 20 million MWh of electricity is equivalent to 24-hour power supply to over one million residential consumers or nearly 180,000 medium-sized commercial enterprises for six years. It is also worth six years of 24-hour power supply to Port Harcourt city alone! The power plant was built by the Shell Petroleum Development Company of Nigeria (SPDC) Ltd Joint Venture and achieved first power in August 2008 about three years after the contract was awarded. “The SPDC JV is pleased to be a reliable partner in the quest for stable power supply in Nigeria,” said SPDC Managing Director and Country Chair, Shell Companies in Nigeria, Mr.

Osagie Okunbor. “What is most exciting is that the plant has achieved this milestone while also touching the lives of community people and helping youths to

acquire key engineering skills.” Located at Okoloma village in Oyigbo Local Government, the plant has an installed capacity of 650MW and consists of three gas turbines

Total Nigeria Promotes Fitness in 4th MD’s Cup Football Tournament

he MD’s Cup Football Tournament of TOTAL Nigeria Plc is a biennial football competition amongst staff targeted at boosting employee fitness, team spirit/bonding and promoting work-life balance. Started in 2009, the fourth edition of this event held from May 12 to 16, 2015. There were four participating teams representing the Head office, Northern, Eastern, and Western territorial offices. Prior to the final match, using the league format, these teams competed in preliminary matches with the Western territory and Head office emerging as finalists.

The Head Office team beat the Western territory during the final match of the tournament by 3 three goals to 1 one. The preliminary matches were held at the Legacy Stadium, Surulere on May 13 to 15 while the final match was held at Campos Mini Stadium, Lagos on May 16. Other activities were: • “Healthy Living walk” by Management and Staff with their families and friends, from Total House in Victoria Island to Campos Mini Stadium, Lagos Island. A 5.1 kilometer walk. • Novelty matches between

Management and Dealers, which drew 1 goal to 1. • “Fastest Man and Woman in Total Nigeria Plc” competitions in which Mr. Albert Mabuyaku, Corporate Affairs Manager and Mrs. Kate Ogu, Category Manager (Automobiles) retained their titles won in the 3rd edition of this contest by emerging winners. Apart from being a lot of fun and entertainment, the MD’s Cup Tournament offers several health benefits to the physical and mental well-being of participants. Total Nigeria Plc believes that a healthy workforce is a prerequisite for productivity and sustainable growth.

each rated at 150MW, and one steam turbine rated at 200MW. The gas turbines were inaugurated in July 2009, while the steam turbine came on stream in December 2010. The plant

receives gas from SPDC’s gas plant, also at Okoloma. Built on the best technology in the industry and utilising waste heat energy in the gas turbine exhaust gas, the additional 200MW from the steam turbine considerably reduces the plant’s carbon footprint. As a Clean Development Mechanism (CDM) project under the United Nations Executive Board for Climate Change, the Afam VI Power Plant eliminated over 500,000 tons of CO2 emissions per year, while also maintaining excellent safety standards. The plant could not, however, deliver nearly 5 million MWh due to gas supply disruptions from crude theft and pipeline vandalism. Aside from the over 150 jobs created by the SPDC JV through the Afam VI operations, the integrated energy giant has also provided hands-on and offshore training for 15 youths in Electrical, Mechanical and Instrumentation engineering on Combined Cycle Power Plant operations and maintenance. All the trainees are already employed in the Nigerian power industry. Arrangements have been concluded for the training of another 15 community youths.

Oil Steady after Biggest Drop since April as U.S. Supplies Rise

il was steady after the biggest decline since April as an unexpected gain in U.S. crude stockpiles signaled a supply glut may persist. Futures were little changed in New York after falling 4.2% last Wednesday. Crude inventories expanded by 2.39 MMbbl last week, a government report showed, compared with a 2.5 MMbbl drop forecast in a Bloomberg survey. U.S. Secretary of State John Kerry said envoys in Vienna were working “very, very hard” to reach an agreement on Iran’s nuclear programme, which could allow the nation to boost crude exports. Oil’s recovery from a six-year low in March has faltered amid speculation the price rally is spurring production and prolonging a surplus. U.S. crude production held near a record of 9.6 MMbopd last week and OPEC output surged in June to the highest level since August 2012. “The data show a strong picture of U.S. demand for driving fuels, but the crude oil picture is better supplied than expected,” Olivier Jakob, Managing Director at consultant Petromatrix GmbH in Zug, Switzerland, said by email. “The U.S. has shown a resilient increase in crude oil production.” WTI for August delivery was at $57.05/bbl in electronic trading on the New York Mercantile Exchange, up 9 cents, at 11:24 a.m. London time. The contract decreased $2.51 to $56.96 on Wednesday, the lowest price since April 22. Total volume was about 25% below the 100-day average. Prices have advanced 7.1% this year. U.S. Supplies Brent for August settlement was 32 cents higher at $62.33/bbl on the London-based ICE Futures Europe exchange. It later slid $1.58 to $62.01. The European benchmark crude

traded at a premium of $5.25 to WTI. Momentum is building around an agreement that would eventually lift sanctions on Iran in return for nuclear curbs as envoys continue discussions in Vienna. Diplomats from three of the six world powers negotiating with Iran said they’ve agreed among themselves on a so-called “snapback mechanism” to restore United Nations sanctions should an accord be violated. Crude stockpiles in the U.S., the world’s biggest oil consumer, rose to 465.4 MMbbl in the week ended June 26, the Energy Information Administration reported. That’s about 90 MMbbl above the five-year average level for this time of the year. ETF Exodus Supplies at Cushing, Oklahoma, the delivery point for WTI contracts and the nation’s largest oil-storage hub, climbed by 123,000 bbl to 56.4 MMbbl, according to the Energy Department’s statistical arm. Investors pulled the most money in six years from the largest U.S. exchange-traded fund that tracks West Texas Intermediate crude. Holders of the U.S. Oil Fund withdrew $1.02 billion last quarter, the most since the three months ended June 2009, data compiled by Bloomberg showed. WTI traded within a range of about $5/bbl in June, the narrowest in 19 months. The Chicago Board Options Exchange Crude Oil Volatility Index closed at 34.11, signaling the most volatile trading since June 4. The Organisation of Petroleum Exporting Countries, whose 12 members supply about 40% of the world’s oil, pumped 32.1 MMbopd in June, according to a Bloomberg survey of producers and analysts last week. That’s an increase of 744,000 bopd from May. Iraqi output accelerated to a record 4.39 MMbopd.

Business Journal July 06 - 12, 2015

Travel Tourism

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London: Tops in 2015 MasterCard Global Destinations Cities Index •

Projected to Welcome 18.82m International Visitors in 2015

ondon has retained its position as the top-ranked international travel destination for the fifth time in seven years, according to the annual MasterCard Global Destinations Cities Index released recently. Driven by insights into travel patterns, the Global Destinations Cities Index provides a ranking of the 132 most visited cities around the world. More than just a travel tracker, the Index delivers deeper understanding of how people move around the world and speaks to the importance and prominence of the world’s cities as homes, destinations and engines of growth. According to the study, London is projected to receive 18.82 million international visitors in 2015, just slightly ahead of second-ranked Bangkok. The two cities have topped the Index throughout its five-year history. Forecasted overnight visitors to the rest of the top 10 cities include: • Bangkok – 18.24 million • Paris – 16.06 million visitors • Dubai – 14.26 million visitors • Istanbul – 12.56 million visitors • New York – 12.27 million visitors • Singapore – 11.88 million visitors • Kuala Lumpur – 11.12 million visitors • Seoul – 10.35 million visitors • Hong Kong – 8.66 million visitors “MasterCard understands the importance of cities around the world both for travelers and those who live there,” said Ann Cairns, President of International Markets, MasterCard.

Across the globe, a few key trends stand out, including:

“This year’s study helps us understand just how interconnected the world’s cities are the significant role they play in connecting and empowering greater numbers of people than ever before.” Intellectual Insights: Understanding What Drives Global Cities In 2015, it is expected that nearly 383 million overnight trips will be made by international visitors between the Index’s 132 cities, representing a massive demand for goods, services and experiences as they spend at total of US$360 billion during their visits. According to the UN report on World Urbanisation Prospects, twothirds of the world’s population will

IATA Report: Africa Records 3% Air Cargo Demand

live in cities by 2050. By forecasting the number of international overnight travelers, the Global Destination Cities Index shows the infrastructure needed to meet the expectations of both locals and visitors. Businesses and governments can use the insights from the study to identify those areas – from transit to cultural experiences to infrastructure – in which investment is needed for continued growth, innovation and sustainability. “This index is just the beginning. Through a powerful combination of insights, innovation and experiences, MasterCard is partnering to help build the smart cities of the future,” said Cairns. Infrastructure Innovation

he International Air Transport Association (IATA) released data for global air freight markets showing that growth continued to slow in May. Compared to May 2014, growth in freight tonne kilometers (FTK) was 2.1%, the slowest rate this year and outpaced by a capacity expansion of 4.3%. On a year-to-date basis, freight volumes are up 4% on the previous year, but much of that growth was realised in the latter part of 2014. Carriers in most regions, with the exception of those based in the Middle East, saw weak growth or even contractions.

and Consumer Experiences Major cities like London and Chicago are building an open, interoperable transit system facilitated by MasterCard contactless and mobile payments. The streamlined operations help support investments in other infrastructure. MasterCard has also developed consumer marketing programs to support the significant role cities play as centers of human interaction. In fact, six of the top 10 Global Destination Cities are also Priceless Cities, a one-of-a-kind global platform that curates unique experiences, privileged event and attraction access, and special merchant offers. Destination Cities: Spotting the Trends

In aggregate, airlines in North and Latin America and Europe reported that their freight business was smaller in May 2015 than in the same month of 2014. Carriers in Asia-Pacific experienced slow growth as a result of poor import/export performance. “Cargo growth has undoubtedly come off the boil. The expansion in volumes we saw in 2014 has ground to a halt, and load factors are falling. Some economic fundamentals still point to a rebound in the second half of the year, but we have to recognize that business confidence is flat and export orders in decline. There is also the risk of a shock to the eco-

• Asia/Pacific – The region is home to three of the top four fastest-growing destination cities between 2009 and 2015 – Colombo, Chengdu and Osaka. • Europe – Istanbul is the most diversified destination, with 50 percent of its international overnight visitors coming from 33 feeder cities. • Latin America – Lima is both the top destination and the fastest growing city in the region, featuring almost 50 percent more international overnight visitors than second-ranked Mexico City. • Middle East and Africa – Dubai continues to be one of the fastest growing cities in the global top ten while Abu Dhabi is the third fastest growing destination city overall between 2009 and 2015. • North America – Houston is the fastest growing in North America since 2009 and is the only destination city in North America with double-digit growth. About the MasterCard Global Destination Cities Index The MasterCard Index of Global Destination Cities ranks cities in terms of the number of their total international overnight visitor arrivals and the cross-border spending by these same visitors in the destination cities, and gives visitor and passenger growth forecasts for 2015. Public data is used in deriving the international overnight visitor arrivals and their cross-border spending in each of the 132 destination cities, using custom-made algorithms; paying special attention to eliminate the hub effects for destination cities such as Singapore, Dubai, Amsterdam and Frankfurt.

nomic system of a ‘Grexit’ from the Eurozone,” said Tony Tyler, IATA’s Director General and CEO. Regional Analysis Asia-Pacific carriers reported demand growth of 2.8% in May compared to May 2014, below a capacity expansion of 6.7%. At the end of Q1, trade volumes for emerging Asia markets were down 10% compared to Q4 2014, although there have been signs of improvement at the start of Q2, which if sustained, would help ease downward pressure on air freight demand. European carriers saw demand decline by 1.3% in May, compared to a year ago while capacity grew by 2.7%. Consum-

er confidence remains subdued in the region, and the region is at risk of economic contagion if a disorderly ‘Grexit’ from the Euro were to occur. • North American airlines reported a fall in demand of 2.9% year-on-year while capacity was cut by 4.2%. The May result is a continuation of the disappointing economic performance in Q1. Stronger growth, however, is expected in coming months as the effects of poor weather and US seaport congestion fade. • Middle Eastern carriers saw demand grow by 18.1%, on the back of increased trade within the region, as well as shippers taking advantage of

Business Journal July 06 - 12, 2015

ICAO, ITF Enhance Cooperation on Air Transport Development

he International Civil Aviation Organisation (ICAO) and the International Transport Forum (ITF) have established a new agreement to engage in joint research and events as well as exchanges of information and staff. Building on their existing co-operative programmes to better forecast air passenger flows and related impacts, both organisations will work together on statistics methodology and data aggregation, data analysis and forecasting, and conduct economic studies on air transport development. The new ICAO/ITF Memorandum of Collaboration (MoC) was signed by both organizations on 23 June. It identifies

topics of joint interest including international air transport liberalisation, the security and passage of air travellers, and aviation infrastructure investment. The agreement covers an initial three-year period, with both organisations being accorded observer status at their meetings. “Working co-operatively is, and has always been, fundamental to the aviation sector,” stressed ICAO Council President, Dr. Olumuyiwa Benard Aliu. “This new framework for enhanced co-operation with ITF will allow us to more effectively meet our objectives and, at the same time, share our experiences and best practices to the benefit of ITF and its mem-

ber states.” Other potential areas highlighted for possible joint efforts by ICAO and the ITF include crisis management, sustainable development and climate change mitigation, and the promotion of compatible regulatory approaches among States. “This collaboration will provide added value for both organisations and for their member countries,” said ITF Secretary General José Viegas. “It will help strengthen ITF’s understanding of the aviation sector, and it will help us provide ICAO with additional policy perspectives that can also include lessons from other transport modes.”

South African Airways Celebrates 10 Years of Washington D.C.-Africa Service

outh African Airways (SAA), the national carrier of South Africa and the most awarded airline on the African continent, will celebrate 10 years of service to Washington D.C. Dulles International Airport on July 2nd. SAA introduced new service between Johannesburg, South Africa and Washington D.C. on July 2nd, 2005, with four flights per week and rapidly grew to offering daily service on the route. In 2006, SAA introduced service to Dakar, Senegal, continuing onward to Johannesburg, providing daily flight from the U.S. to Dakar and a convenient gateway to West Africa. South African Airways is also the only Skytrax 4-Star rated airline flying between the U.S. and Africa, providing award-winning, world-class service. Over the past 10 years, South African Airways carried nearly 1.5 million passengers between Washington, D.C. and Africa, and has recently announced expansion of its West Africa network. On August 3rd, SAA will launch a new nonstop ser-

vice between Washington, D.C.-Dulles International Airport and Accra's Kotoka International Airport, operating four days per week. "Our Washington route is one of the reasons why South African Airways is the predominant airline from the U.S. to Africa today," said Marc Cavaliere Executive Vice President for South African Airways for the Americas. "Passengers traveling between Dulles International Airport and Africa deserve award-winning service and convenient schedules, and we are proud to have been serving them for 10 years. We look forward to welcoming more and more customers on board and offering them our unique blend of African hospitality." Dulles International Airport also serves a major gateway and connecting point in the U.S. for South African Airways passengers, with code share service offered to over 30 cities in the U.S. and Canada through its Star Alliance partner, United Airlines. "For 10 years, the partnership between Washington Dulles International Airport and South African Airways

has provided world-class travel opportunities and experiences between South Africa and the Washington, D.C., region," said Mark Treadaway, Metropolitan Washington Airports Authority Vice President for Air Service Planning and Development. "Now, with the upcoming addition of nonstop service between Dulles International and Accra, Ghana, one of this region's most important African travel destinations will further strengthen the ties between the United States and Africa for decades to come." SAA's gateway at Washington, D.C.-Dulles International Airport has helped to foster new business, trade and tourism development between the Washington, D.C. metropolitan area and Africa. Direct connectivity between both regions has been essential for existing investment and will continue being pivotal for future economic growth. Over the last decade, the route has been popular with business and leisure travelers alike, creating a convenient way for more people to discover Africa as a land of opportunities and scenic wonders.

SAA introduced new service between Johannesburg, South Africa and Washington D.C. on July 2nd, 2005, with four flights per week and rapidly grew to offering daily service on the route.

the Gulf carriers’ hub strategy. Capacity expanded 19.4%. • Latin American airlines reported a fall in demand of 10.5%, while capacity grew by 4.7%. A general increase in regional trade activity has not yet manifested itself in stronger air freight demand, possibly due to continued weakness in Brazil and Argentina, two of the region’s largest economies. • African airlines experienced a 3.0% rise in demand and a 1.3% increase in capacity. Despite some volatility, the region is the third-fastest growing for the year-to-date. The under-performance of the Nigerian and South African economies may be outweighed by trade activity in the wider region.

Closing Thought Air freight plays a critical role in global trade, transporting some 35% of goods traded internationally. The slowdown in air freight reflects a general slowing in world trade at a time when it is needed most to reinvigorate faltering economies. "This week, governments are meeting in Geneva to discuss ‘aid for trade’ and the World Trade Facilitation agreement. If implemented, this could boost world GDP by up to $1 trillion. I urge governments worldwide to bring down the barriers to facilitate trade that will accelerate prosperity and innovation," said Tyler.

Business Journal July 06 - 12, 2015

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Emirates: Building Global Network on Service & Innovation The Inaugural Story On 25th October 1985, Emirates flew its first routes out of Dubai with just two aircraft—a leased Boeing 737 and an Airbus 300 B4. Then as now, our goal was quality, not quantity, and in the years since taking those first small steps onto the regional travel scene, Emirates has evolved into a globally influential travel and tourism conglomerate known the world over for our commitment to the highest standards of quality in every aspect of our business. Though wholly owned by the Government of Dubai, Emirates has grown in scale and stature not through protectionism but through competition—competition with the ever-growing number of international carriers that take advantage of Dubai’s open-skies policy. Not only do we support that policy, but we see it as vital to maintaining our identity and our competitiveness.

After making its initial start-up investment, the Government of Dubai saw fit to treat Emirates as a wholly independent business entity, and today we are thriving because of it. The airline has recorded an annual profit in every year since its third in operation. Secret of Success Continuing our explosive growth while continually striving to provide the best service in the industry is the secret of Emirates’ success. The airline's business includes: • An award-winning international cargo division • A full-fledged destination management and leisure division • An airline IT developer. Flying to More Destinations on More Aircraft Everyday With a fleet of more than 230 aircraft, we currently fly to over 140 destinations in more than 80

The Emirates Airline Foundation Under the patronage of His Highness Sheikh Ahmed bin Saeed Al-Maktoum, Chairman and Chief Executive, Emirates Airline & Group, The Emirates Airline Foundation provides humanitarian, philanthropic aid and services for children in need. The Foundation aims to improve the quality of life for children, regardless of geographical, political, or religious boundaries, and to help them maintain and improve their human dignity. When you donate to The Emirates Airline Foundation, you help give a child somewhere in the world education, food, health and housing. By providing these four basic needs, the Foundation aims to help eradicate poverty from the communities Emirates flies to. The Emirates Friendship Hospital Ship, Bangladesh – The Emirates Air-

through projects like this travelling hospital in rural Bangladesh.

line Foundation is committed to pro-

viding healthcare to children in need

Emirates Scoops 11th Consecutive SKYTRAX Award for In-flight Entertainment Emirates continues its record-breaking streak for its ice entertainment system which has been awarded the ‘World's Best Airline Inflight Entertainment’ at the 2015 SKYTRAX World Airline Awards for the 11th consecutive year. The Skytrax World Airline Awards polled over 18 million business and leisure air travellers from more than 160 countries. The award was accepted by Patrick Brannelly, Emirates’ Divisional Vice President – Customer Experience, at the awards ceremony in Paris. Emirates additionally won an award for ‘Best First Class Comfort Amenities’. Always pioneering, Emirates’ in-

flight entertainment system continuously sets industry standards from being the first airline to launch personal TV screens in all seats in 1992, to Live TV in 2013 and free WiFi on its compatible aircraft in 2014. Now with over 2,100 channels on ICE Digital Widescreen, Emirates continues to push boundaries in the depth and breadth of content it offers the global traveller. Emirates’ second award at the 2015 SKYTRAX World Airline Awards for Best First Class Comfort amenities highlights the popularity of its men’s and women’s kit with products from luxury Italian brand Bvlgari. “These awards are particularly gratifying as they reflect a vote of confidence from global travellers, who appreciate our ongoing efforts to deliver high-quality content. We don’t believe in resting on our laurels, and will keep pushing the limits of what

Business Journal July 06 - 12, 2015

countries around the world, and our network is expanding constantly. Over 1,500 Emirates flights depart Dubai each week on their way to destinations on six continents. In recent years, Emirates has made numerous significant announcements regarding the future of its already state-of-theart fleet. In 2001, Emirates demonstrated its confidence in the industry’s future growth by announcing the largest order in aviation history, valued at USD 15 billion. A staggering 58 new aircraft, a mix of Airbus and Boeing, were to join the rapidly expanding fleet. In 2005, Emirates announced the largest-ever order for the Boeing 777 family of aircraft - 42 in all – in a deal worth Dhs 35.7 billion (USD 9.7 billion). At the Dubai Airshow in November 2007, Emirates announced a historic civil aviation aircraft order when it signed contracts for 120 Airbus A350s, 11 A380s, and 12 Boeing 777-300ERs,

is possible. We aim to stay creative, stay relevant, and keep building content that appeals to the broad cultural

diaspora that travel on Emirates,” said Patrick Brannelly, Emirates’ Divisional Vice President – Customer Experience.

worth an estimated USD 34.9 billion in list prices. The agreement with Airbus comprises firm orders for 50 A350-900s and 20 A350-1000s, plus 50 options for the A350-900s. The first A350 will be delivered to Emirates in 2015. During 2010, in line with the airline’s strategic growth plan, Emirates significantly increased its order for new aircraft. In June at the Berlin Airshow, Emirates announced an order for an additional 32 Airbus A380s and in July at the Farnborough Airshow, 30 more Boeing 777-300ERs were ordered. The combined value of these orders is USD 13.4 billion. In 2011 at the Dubai Airshow, Emirates placed the single largest aircraft order in dollar value in Boeing’s history when it requested an additional 50 777-300ERs, worth approximately USD 18 billion. The order also included 20 777-300 ER options valued at USD 8 billion, for a total of 70 aircraft valued at USD 26 billion. Underscoring its incredible growth, the airline is currently the world’s largest operator of both the Airbus A380 and Boeing 777. Emirates order-book stands at more than 280 aircraft, with a total value of approximately USD 138 billion as of November 2014. In combination with what is already one of the youngest and one of the most modern fleets in worldwide commercial aviation, this commitment to the future reflects our goal to develop Dubai into a comprehensive, global, long-haul aviation hub. In the financial year 2013/2014, Emirates carried 44.5 million passengers and 2.25 million tonnes of cargo. We look forward to a bright future in which we carry many millions more across a growing network of international destinations. History The story of a firm whose success story is intertwined with the incredible development of Dubai could be nothing but fascinating. Against a backdrop of regional unrest and volatile global economies, progress has been maintained at a rapid pace in every year of Emirates' and dnata's existence. A combination of business acumen, ambition and savvy investment set in motion a series of events which have propelled Emirates and dnata to amongst the most respected and recognised brands in the world. Sustainability

“Receiving this honour for the 11th year is truly a testament to our unrelenting effort to offer a consistently

In 2020, Dubai expects to welcome 20 million tourists and generate AED300 billion in annual tourism revenue. Emirates airline will play a big role in supporting this goal, and so will dnata, our home-grown air services provider which has transformed from modest beginnings into a global player.

world’s “Most Valuable Airline Brand”. • Emirates expands its social media footprint with the launch of its official Twitter channel. • Football legends Pelé and Cristiano Ronaldo star in Emirates’ global campaign to connect sports fans around the world, as global ambassadors for the airline. • Emirates becomes the first airline to offer a scheduled A380 service at London Gatwick. 2013 • Double daily A380 services to Paris Charles de Gaulle and New York JKF are introduced. • Concourse A opens at Dubai International – the world’s first dedicated A380 facility and home of the Emirates A380. • London Heathrow becomes

Inaugural flight For us, growth is not only about the numbers. We are here for the long haul, and we are conscious that with the scale of what we do, we can make a difference to economies, communities, and the environment. We consciously strive to improve our economic, environmental and social impact in a meaningful way. 2014 • Emirates brings its A380 to India with a first-ever display at the Hyderabad Air Show. • Emirates launches flights to Boston, its 8th gateway in the USA. • Emirates is named the

great product that surprises and delights customers, and I believe that this is what sets us apart.” ICE Digital Widescreen highlights: • 2100+ channels on ice Digital Widescreen • Over 500 films including the latest blockbusters from Hollywood, Bollywood, and the rest of the world, with around 80 movies added every month • Connectivity: Wi-Fi on over 120 aircraft, mobile phone or personal in-seat phone for every customer • Up to the minute: Live TV news or live text news available on all aircraft 24/7 • Entertainment offered in more than 35 languages for a global audience • More TV programmes in the air, including 50 complete box sets of hits shows, including Better Call Saul and Wolf Hall this June • More than 1000 channels of music and radio • Family friendly offering: 50 Disney movies, over 25 channels of kids’ TV, special headsets and a bespoke activity magazine • Accessibility: growing list of movies offering Closed Captions

an all A380 route, following the launch of the fifth daily A380 service. Awards Emirates has been recognised many times over the years for the quality of our in-flight cuisine, the breadth of our in-flight entertainment, and the excellence of our overall service. But we refuse to rest on our laurels. Each award drives us to develop even better products and services, and while we are certainly proud of our reputation for overall excellence among global travellers, we are equally proud of achievements that many of our passengers might not be aware of, such as our international cargo service.

and Audio Descriptions; over 60 with Closed Captions and over 20 with Audio Description this month • Quality experience: 60 aircraft with HD movies with more to come, new and improved headsets and superior sound quality • Emirates recently delivered Airbus A380 and Boeing 777 aircraft offer larger personal TV screens with HD resolution: 27-inch in First Class, 20-inch in Business Class and 12.1 inch in Economy Class, with more product enhancements to come when Emirates launches its next generation IFE system this August "I congratulate Emirates on its long standing winning record in taking the award for the Best Airline In-flight Entertainment. It’s a huge accomplishment to win this fantastic customer recognition for in-flight entertainment year after year, and the team must be very proud. As an onboard product offering, in-flight entertainment continues to grow in importance for customer satisfaction rankings, and it’s a richly deserved recognition to remain a favourite airline for this amongst passengers" said Edward Plaisted, CEO of SKYTRAX.

Business Journal July 06 - 12, 2015

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Public-Private Investments Hit $107.5bn in Emerging Economies

otal infrastructure investments in 139 emerging economies – for projects with private participation in the energy, transport and water sectors – rose to US$107.5 billion in 2014, driven largely by increasing activity in Brazil, according to an update released today to the World Bank Group’s “Private Participation in Infrastructure” database. The data, covering the period from 1990 to 2014, reviews more than 6,000 projects across 139 low- and middle-income economies, providing a rich source of data on private infrastructure investment in emerging markets. “Our update reveals that the top five countries with the highest investment commitments in 2014 are Brazil, Turkey, Peru, Colombia and India,” said Clive Harris, Practice Manager, Public-Private Partnerships, World Bank Group. “These five countries together attracted US$78 billion, representing 73 percent of the investment commitments in the developing world in 2014.” The increase in the global investment commitments total is mainly due to increasing activity in the Latin America and the Caribbean (LAC) region, which captured US$69.1 billion — much of which is attributable to investment commitments in Brazil, Colombia and Peru, which together accounted for 55 percent of the global total. Brazil’s large stake is a continuation of a recent trend: Brazil

captured 24 percent of global investment in 2013 and 42 percent in 2012. In 2014, Peru saw the completion of 11 deals totaling US$8.1 billion. Eight of the 11 deals were in energy, while the largest project – the Lima Metro Line 2, at US$5.3 billion – was in the transport sector. The metro line will stretch 35 kilometers and eventually connect Lima with Callao, including the international airport.

The update finds that the total for 2014 is 91 percent of the five-year average for the period from 2009 to 2013. It is the fourth highest level of investment commitments ever recorded, exceeded only by levels seen from 2010 through 2012. In addition to noting the many increases in 2014, the data also revealed investment commitments declines in China and India.

Investment commitments in China in 2014 were US$2.5 billion, its lowest level since 2010. Investment commitments in India also waned in 2014, dropping to US$6.2 billion. Sub-Saharan Africa saw an especially steep fall from $9.3 billion in 2013 to $2.6 billion in 2014 because of a drop in activity in the energy sector. However, 2014’s figure was closer to levels seen before 2012, and the

emergence of activities in countries such as Ghana, Kenya, and Senegal is particularly encouraging. Regionally, LAC led the other regions, followed by Europe and Central Asia (ECA); East Asia and Pacific (EAP); South Asia (SAR); and the Middle East and North Africa (MNA). Sub-Saharan Africa (AFR) experienced the lowest amount of investment. The Middle East and North Africa (MNA) region, which had a much smaller total of commitments of $3.3 billion, also saw increases compared to the previous year. The energy sector had the largest number of new projects, but the sector with the greatest total of investment commitments was the transport sector, receiving US$55.3 billion, or 51 percent of total global investment commitments. Consistent with the trend in previous years, roads attracted the most investment commitments with US$28.5 billion in 33 projects, about the same number as in 2013. Four out of the top five road projects were in Brazil, with the fifth-largest project in Turkey. Airports captured the second-highest investment commitments total with US$13.2 billion devoted to five projects. The World Bank Group’s “Private Participation in Infrastructure (PPI)” database is the leading global source of data on PPI trends in the developing world, covering projects in the energy, transport, and water and sewerage sectors.

GEF Allocates N4.7bn to Nigeria for Environmental Projects

he Global Environment Facility (GEF), the largest sponsor of environmental initiatives, has allocated $23.35 million (about 4.7 billion) to Nigeria to implement climate change, biodiversity and land degradation projects. GEF’s Desk Officer in the Federal Ministry of Environment, Mr. Festus Eguaoje, made this known at a twoday National Steering Committee Meeting in Abuja. Eguaoje, who presented an overview of the GEF projects in Nigeria, said the allocation was under the 6th Replenishment Circle, covering July 1, 2014 to June 30, 2018. According to him, the allocation is under the System for Transparent Allocation of Resources (STAR), which allows GEF to allocate funds to countries to implement projects in specific focal areas. The meeting was to review the progress of GEF’s activities in Nigeria and to update stakeholders on the ongoing projects. The official said Nigeria had achieved tremendous success in implementing GEF projects, adding that a lot of projects were still ongoing under GEF 4th and 5th replenishment cycles. He listed the ongoing GEF projects to include Conservation and Sustainable Management of Niger Delta Bio-

diversity; Sustainable Urban Transportation; and Setting up Mini- Grids based on Photo Voltaic (PV), Hydro and Biomass Sources. Others are Promoting Energy Efficiency in Public and Residential Sectors; Less Burnt for a Clean Earth: Minimisation of Dioxin Emission from Open Burning Sources and Small Grant Programme for Civil Society Organisations. On Fadama III, he mentioned Scaling up of Sustainable Land Management; Polychlorinated Biphenyls

(PCBs) containing equipment management and disposal; and Nigeria Erosion and Watershed Management (NEWMAP): Component of Great Green Wall Initiative. Also listed were Lake Chad Regional and Natural Resources Conservation and Regional Project on Equatorial Africa Deposition Network. He said that GEF had approved Fostering Sustainability and Resilience for Food Security in sub-Saharan AfricanAn Integrated Approach (IAP-PROGRAM) under the 6th replenishment

cycle. He added that GEF had three funding windows, namely the full size, the medium size and the small grants. According to him, small grants component of GEF is a grant below $50,000, medium size is between $500,000 and $2 million, while the full size is from $2 million and above. Eguaoje said Nigeria could benefit more from GEF by building the capacity of its staff. In addition, he suggested that project proponents should forward well-articulated concept to the GEF Operational Focal Point for

Endorsement. “The project proponent, in collaboration with the operational focal point, should ensure that prompt comments on the proposals are made by relevant offices of the GEF focal areas. The comments should be reverted to the project proponent for incorporation and further development,” he added. The implementing agencies for GEF projects, he said, were UNDP, World Bank, FAO, UNIDO, ADB, UNEP and IFAD, among others.

Business Journal July 06 - 12, 2015

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Wealthy Foreigners Bought $100bn in US Real Estate

verseas buyers snapped up more than $100 billion in U.S. real estate over the past year, as the foreign wealthy sought safe shelter for their fortunes. According to the National Association of Realtors, sales of U.S. residential real estate to overseas buyers between April 2014 and March 2015 reached a record $104 billion, or about 8 percent of total existing home sales. While the number of properties sold slowed to 209,000 from 232,600 last year, buyers acquired more expensive properties, which brought up the sales total. Chinese were far and away the top foreign buyers of real estate last year, with buyers from China, Hong Kong and Taiwan accounting for $28.6 billion in sales, according to the report. Canada ranked second, with $11.2 billion, followed by India with $7.9 billion. They mainly favoured homes in Los Angeles, San Francisco, Seattle and New York. Overall, Florida was the top state for overseas real estate buyers, accounting for 21 percent of all U.S. sales to foreign buyers. California ranked second, with 16 percent, followed by Texas with 8 percent and Arizona with 5 percent. The top four states accounted for half of overseas buying. Overseas buyers accounted for only 3 percent of sales in New York state, though that share is far higher for New York City, where most of their buying is concentrated. The buyers were split almost evenly between resident and nonresident foreigners. Europeans and Canadians were attracted to Florida and Arizona, while California and Texas were favoured by buyers from Asia. Buyers from Latin America, including Mexico, favoured Texas and Florida.

Foreign buyers were focused on higher-end homes. The mean purchase price for overseas buyers was $499,600, nearly twice the national mean purchase price of $255,600. Foreigners are also paying more than they were last year: The mean price paid by overseas buyers

jumped 26 percent over the previous year. Most favoured the suburbs over the city and most favored single-family detached homes over apartments. The declining number of properties sold was primarily attributed to the stronger dollar, which makes U.S. real estate

more expensive for overseas buyers. The report said that U.S. real estate remains a relative bargain compared to other global cities favored by the wealthy. For instance, a condo costing $1.6 million in New York would cost more

than $4 million in Paris and $2 million in Moscow. Fully 46 percent of foreign buyers planned to use their properties as a primary residence, while 20 percent plan to use them for rentals and 15 percent plan to use it them as vacation homes.

Dutch Govt Ordered to Cut Carbon Emissions in Landmark Ruling

court in The Hague has ordered the Dutch government to cut its emissions by at least 25% within five years, in a landmark ruling expected to cause ripples around the world. To cheers and hoots from climate campaigners in court, three judges ruled that government plans to cut emissions by just 14-17% compared to 1990 levels by 2020 were unlawful, given the scale of the threat posed by climate change. Jubilant campaigners said that governments preparing for the Paris climate summit later this year would now need to look over their shoulders for civil rights era-style legal

challenges where emissions-cutting pledges are inadequate. “Before this judgement, the only legal obligations on states were those they agreed among themselves in international treaties,” said Dennis van Berkel, Legal Counsel for Urgenda, the group that brought the suit. “This is the first a time a court has determined that states have an independent legal obligation towards their citizens. That must inform the reduction commitments in Paris because if it doesn’t, they can expect pressure from courts in their own jurisdictions.” In what was the first climate liability suit brought under human rights

and tort law, Judge Hans Hofhuis told the court that the threat posed by global warming was severe and acknowledged by the Dutch government in international pacts. “The state should not hide behind the argument that the solution to the global climate problem does not depend solely on Dutch efforts,” the judges’ ruling said. “Any reduction of emissions contributes to the prevention of dangerous climate change and as a developed country the Netherlands should take the lead in this.” After a legal campaign that took two and a half years to get to its first hearing in April, normally dispassionate lawyers were visibly

moved by the judge’s words. “As the verdict was being read out, I actually had tears in my eyes,” Roger Cox, Urgenda’s lead advocate. “It was an emotional moment.” Young activists in court said that the ruling had gone some way to restoring Dutch national pride, which has been dented as Denmark, Germany and even the UK overtook the Netherlands, once seen as a European climate leader, in the green economy race. The Dutch Socialist party MP Eric Smaling cautioned though that “some people will feel proud but others are more unhappy about the influx of refugees. So far climate

action has too much been the last baby of a relatively leftist elite.” He called for a wide coalition to spread the climate action message before elections in early 2017. In a statement on behalf of Prime Minister Mark Rutte’s cabinet, the Dutch Environment Minister, Wilma Mansfeld said that the government’s strategy was to implement EU-wide and international agreements. “We and Urgenda share the same goal,” Mansfeld said. “We just hold different opinions regarding the manner in which to attain this goal. We will now examine what this ruling means for the Dutch State.”

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Business Journal July 06 - 12, 2015

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OLASHORE International Bags Award for Top 10 Schools in Nigeria Prince Bimbo Olashore Chairman, Board of Governors

lashore International School (OIS) has bagged an award for emerging one of the Top Ten schools in Nigeria, and one of the best international schools in Africa. This was stated at the 17th Valedictory ceremony of the school held recently at the school in Osun State. The Award which was granted by Africa Brands Review, an Integrated Marketing Service Company in Africa, got its ratings from the 2014 WASSCE results. They compared how secondary schools across Nigeria performed and rated the Top 1000 schools in Nigeria, and thus granted the award in June 2015. The events brochure of the Africa TOP 1000 SCHOOLS AWARD is to be distributed to Embassies of various African countries and libraries of institutions of higher learning and blues chip companies, including free copies to all participating schools in Africa. The Plague award which was granted based on standard criteria read ‘2015 Africa Top Schools Award Platinum Category’ Speaking at the valedictory ceremony, the Chairman, Board of Governors, Prince Bimbo Olashore, stated that being honoured with the Platinum category award based on standard criteria, and Top 10 award based on WASSCE results, gives credibility and validation to the efforts of the staff and students in taking the school to its career peak. “Awards are good. When we do things here, we don’t do them for the purpose of awards, but awards are validation of some of the things we stand for. We believe in academic excel-

Graduands in procession lence. It’s the bedrock of what the school stands for. About 99.8% of our students get Cs’, while about 92% get As’ and Bs’. To us, this is already excellence. By the time we add other activities such as music, drama, discipline, leadership and the likes, we will be proud of ourselves. We didn’t apply for any award, they just wrote us a letter, and initially we were being skeptical, until they showed us results and proofs, so we agreed with them at least it was from an official source. We emerged one of the best international schools in Africa, but before qualifying for this, we first qualified as one of the top ten schools in Nigeria with 7th position to be specific. Being one of the top ten schools amongst about 11,000 schools sitting for WAEC gives us value to our certificates.” The Principal also spoke on the award; he pointed out thus: “We’ve been recognised as one of the Top 10 schools in Nigeria, and this reminds us of our position and how academically successful we are. We need to let everyone know we do a lot in Olashore and it keeps us out. There’s no school to compare, so if you want sustained academics and all round education,

Olashore has it.” Being a unit of Spirit DeFirst Limited, Africa Brands Review specialises in Research, Training and Awards. With a combination of Award ceremonies, roundtable discussions on brand and product distribution issues, regular supplements and conferences added to its editorial strength, Africa Brands Review has established credibility as a specialised marketing vehicle for multinational institutions. The Chairman spoke further on the vision of the school, reiterating that the vision is to educate Nigeria’s young male and female, give them an education that is comparable to any other one in the world, prepare them for leadership positions, to position the school and the young ones, to equip them enough to compete with any other institution in the world, and that vision is actualized through the performance of those who have passed through the school. “This is our 17th valedictory service, meaning we’ve produced 17 sets of graduands, and we are so pleased that the ones that have left have stayed tuned to the motto of the school. They’ve left the school to lead-

Miss Mofuyinfoluwa Hannah Olasoko Best Graduating Student ing schools in the world. Our students have competed with other students abroad. It’s not just going to the best schools but it’s what they become afterwards in their work place. Being above their peers is the manifestation. We are bringing up disciplined students, people that are upright with moral compass set towards the right direction, people who can take decisions that will move them forward.” He however urged the graduating students to go into the world with confidence of changing the status quo, pointing out that the six years they spent in the school has opened their minds to understand the global world and global standard, thus preparing them for the future. The Principal of the School, Mr. Derek Smith, on his part, rated the out-going students well, based on how they were able to manage the challenges inherent in the last year of their stay in school, ranging from the late resumption of the session as a result of the Ebola disease breakout, and later, the heat of the election period, thus resulting in the addition of extra

hours of learning. He explained that Olashore International School believes in learning beyond classroom and that is why activities have been introduced such as leadership programmes, international excursions which gives them the opportunity to meet other students abroad, sports, public speaking, orchestral (music), amongst others. The Valedictory service was celebrated in grand style with dignitaries, parents and students. Speaking at the event, the Guest of Honour, Mr. Chidi Okoro, in his presentation titled ‘To be ready for the world you crave; reflect and learn’, x-rayed that life is sweet, and can be fun and fulfilling where challenges will come, and opportunities missed. He however advised that they should endeavor to blaze a trail, discover better and more efficient ways to live through life while living their dent on it, explore boundaries and testing limits, hold firmly that everything is possible and nothing can stop them, keep imaginations and creativity alive, keep being inquisitive, and to see failure as an opportunity to learn. He ended his speech by stating that between goals and achievement are Discipline and Perseverance. The Out-going Head Boy, Master Beko Wood, an indigene of Osun State, and a would-be lawyer /ambassador, confessed that he learnt lots of lessons from the school, amongst which are discipline and proper courtesy, which reflects a good upbringing. He however advised his fellow graduands to go into the world and showcase what the school has taught them, thus representing the school well,

and to his juniors, he advised that they should follow their own examples and uphold the name of the school. In the same vein, the out-going Head Girl, Miss Ojehomon Eunice Arinola, a would-be Aeronautic Engineer, reiterated that the school taught her to be self-confident amongst others. She also advised her fellow graduands to keep the right company, and to her juniors who combine relationships with studies, to take their studies more seriously than the relationship. Also, the best graduating student, Miss Olasoko, Mofiyinfoluwa Hannah, a would-be Doctor with best results in six (6) subjects (Maths, Biology, Chemistry, Physics, Economics, and Painting and Decorations), reiterated that ‘Not giving up’ and ‘God’s Grace’ kept her at the peak academically. To this end, she advised her juniors not to ever give up, and also show respect to their elders. To crown up the valedictory ceremony, a Social Project Presentation, which is termed a leadership programme and anchored by a United Statesbased consultant, Mr. JohnUbong Silas, was organised for Year 7 to Year 10 students, in which they had to devise a service project addressing a societal issue, make presentations, and a panel of esteemed judges would judge them based on their presentations, the quality of students’ research for each group, and the sustainability of the project. According to the Principal, “the Social Project Presentation is a combination of our leadership programme. Leadership shows a lot, and has an impact on the local community and improved environment. We need Social Change Modeling, shaped.”

Business Journal July 06 - 12, 2015

Capital Market

FMDQ Lists 15.54bn Stanbic IBTC Bank Bond

ollowing the listing of the pioneer corporate bond, the 30.5 billion UBA Bond on its platform, FMDQ, in June 2015, welcomed another corporate bond listing on the OTC Securities Exchange, the 13.25% Stanbic IBTC Bank Plc 15.54bn Series 1 (Tranches A & B) 10-Year Subordinated Notes under a 150.00 billion Structured Note Programme due in 2024 (the Stanbic IBTC Bond) listing. In commemoration of this listing, FMDQ hosted the issuer, represented by the Chief Executive Officer of Stanbic IBTC Bank PLC, Mr. Yinka Sanni, and key members of the team

to a Listing Ceremony for the issue. The issuing house/sponsor of the Stanbic IBTC Bond on FMDQ platform, Stanbic IBTC Capital Limited., was also present at the ceremony and represented by the Head of Debt Capital Markets, Mr. Kobby Bentsi-Enchill. The ceremony was marked by the signing of the FMDQ Bond Listing Register and the presentation of the Stanbic IBTC Bond Listing Certificate, and subsequently, the presentation of the Listing mementos. The FMDQ Bond Listing Register was signed by the issuer, issuing house/sponsor and FMDQ, represented by the FMDQ Board Vice-Chairman and Member,

Board Listings and Quotations Committee, Mr. Jibril Aku, and FMDQ MD/ CEO, Mr. Bola Onadele. Koko. The presentation of the Stanbic IBTC Bond Listing Certificate was made to the issuer by Mr. Aku. Ahead of the presentation of the Stanbic IBTC Bond Listing mementos, in the form of the unveiling of the FMDQ Bond Listing Scroll; the presentation of the FMDQ Bond Listing Plaque to the Issuer; and the autographing of the FMDQ Bond Listing Wall of Fame; Sanni noted that the Stanbic IBTC Bond was the second corporate bond to be listed on the OTC Securities Exchange and that the issuer, Stanbic IBTC Bank Plc, was pleased to

achieve this milestone and contribute to the deepening of the Nigerian debt capital markets. The 15.54 billion bond issue was the first series issued under Stanbic IBTC’s Structured Note Programme and comprised of two tranches of fixed and floating rate notes and has a tenor of 10 years, making it notable for being the longest tenored bond in its asset class to be issued in the Nigerian debt capital market. Sanni further highlighted that the Stanbic IBTC Bond was being listed on FMDQ because of the exchange’s provision of a dedicated OTC platform serving to enhance

the liquidity of bonds and other securities traded on FMDQ. He concluded by noting that growth in secondary market liquidity will contribute immensely to the growth in the overall domestic bond market, highlighting that FMDQ’s value proposition for the transformation of the Nigerian financial market, will help deepen secondary market liquidity and transparency, thus further aligning it with international best practices. Stanbic IBTC Bank Plc is currently the largest contributor to the overall turnover in the FMDQ secondary market.

FMDQ Turnover & Dealing Members' League Table

he FMDQ OTC Market Turnover Report shows the turnover on all products traded on the FMDQ secondary market – Foreign Exchange (FX), Treasury Bills (T.Bills), Money Market (Repurchase Agreements (Repos), Buy-Backs and Unsecured Placements/Takings) and Bonds (Federal Government of Nigeria (FGN) Bonds, Eurobonds

& Other Bonds). FX and Money Market Derivatives are embedded in the FX and Unsecured products categories. These figures exclude primary market auctions in T.Bills, Bonds and FX. The data, collated from the weekly trade data submissions by FMDQ Dealing Members, represents trades executed between Dealing Members, Dealing Members & Clients, and Dealing Mem-

bers & the Central Bank of Nigeria (CBN). FMDQ OTC Market Turnover (January – May 2015)

The FMDQ League Table shows the rankings of its Dealing Members across all products traded on the FMDQ platform – FX, FX Derivatives, T.Bills, Bonds (FGN Bonds, Eurobonds and Other Bonds),

Money Market (Repurchase Agreements, Buy-Backs and Unsecured Placements/Takings) and Money Market Derivatives. It depicts the overall ranking for the cumulative value traded across all products. Top 10 Dealing Members in FMDQ Market (January – May 2015)

All Dealing Members maintained their positions on the League

Table except Access Bank Plc and First Bank of Nigeria Limited who swapped positions at 2nd and 3rd due to increase in FX Derivatives, T.Bills and FGN Bonds transactions by Access Bank Plc; and Skye Bank Plc and United Bank for Africa Plc who swapped positions at 5th and 6th due to increase in T.Bills, Repos/Buy-Back and Unsecured Placement/Taking transactions by Skye Bank Plc.

Business Journal July 06 - 12, 2015

ThePovertyGap

www.businessjournalng.com

The Secret Weapon of Growth:

The Poor & Middle-Class Era Dabla-Norris, Kalpana Kochhar, and Evridiki Tsounta

he gap between the rich and the poor is at its widest in decades in advanced countries, and inequality is also rising in major emerging markets (Chart 1). It is becoming increasingly clear that these developments have profound economic implications. Earlier IMF work has shown that income inequality is bad for growth and its sustainability. Our new research shows that income distribution itself—not just the level of income inequality—matters for growth. Specifically, we find that making the rich richer by one percentage point lowers GDP growth in a country over the next five years by 0.08 percentage points—whereas making the poor and the middle-class one percentage point richer can raise GDP growth by as much as 0.38 percentage points (Chart 2). Put simply, boosting the incomes of the poor and the middle class can help raise growth prospects for all. One possible explanation is that the poor and the middle class tend to consume a higher fraction of their income than the rich. If more money flows to these segments of society, they will consume rather than save, raising demand and spurring aggregate growth in the short run. What this means is that the poor and the middle class are key engines of growth. But with inequality on the rise, those engines are stalling. Over the longer run, persistent inequality means that the poor and the middle class have fewer opportunities to get educated, enhance their skills, and pursue their entrepreneurial dreams. As a result, labor productivity and growth suffer. Factors at Play Inequality has been falling in some bright spots in Latin America, sub-Saharan Africa, Middle East and North Africa. But even in these regions, there is little room for comfort, given the pervasive inequalities of opportunity and access to education, health care, and finance. In sub-Saharan Africa and the Arab world, for example, around half of the poorest segments of the population have less than four years of education (Chart 3). In developing countries more generally, access to healthcare and finance is scarce for the poor. In addition to looking at the consequences of inequality, our study also examines some of the causes. Our results suggest that there are many common factors behind rising income inequality, irrespective of a country’s level of economic development. One such factor is technological

change, which can raise the demand for skilled labor over low-skilled labor by eliminating jobs through automation or upgrading the skill level required to keep those jobs. The decline of some labour market institutions (such as lower trade union power) is another.

These factors help overall growth and productivity, but they also tend to boost inequality, at least in the absence of compensating measures. Globalisation has also played a role in reinforcing inequality, albeit a smaller one. We find that the rising skill pre-

mium—that is, the wage difference between skilled and unskilled workers—is associated with widening income disparity in advanced countries. Financial deepening—or the expansion of bank credit and financial markets—is associated with rising inequality in emerging

market and developing economies. This is particularly true in the early stages of financial deepening, as access to financial services is limited to a small segment of population, although the benefits become more broadly shared as economies develop.

Business Journal July 06 - 12, 2015

Healthcare www.businessjournalng.com

How Mobile Tech is Shakingup Healthcare in Africa Lauren Said-Moorhouse

n sub-Saharan Africa, particularly in rural areas, accessing a health clinic isn't always as simple as it should be. Poor roads can mean a trip to the doctor could be a days-long journey. As a result, several start-ups have launched that bring medical advances directly into the home -- or smartphone. Despite the huge leaps being made in the medical field in Africa, there are still an estimated 3.2 million children living with HIV, with a majority in sub-Saharan Africa. And 90% of the world's malaria fatalities also come from the region. But it doesn't mean that Africa is a lost cause. Mobile technology is emerging as a powerful ally in medical innovation on the continent. As it continues to grow at an exponential rate, a vibrant mobile health -- or mHealth -- industry is blossoming. Start-ups are emerging with one purpose in mind: to create tech solutions for healthcare professionals. One such company is Access Mobile, founded in Uganda by Social Entrepreneur, Kaak Yelpaala. After years of working in the public health sector -- Yelpaala began his training at Yale University before becoming one of the early employees of the Clinton Health Access Initiative in

East Africa -- he was inspired to develop his own start-up providing mobile tech solutions for the industry he had become so passionate about. "Access Mobile is a company that builds software solutions for healthcare providers to better improve the health of their patients through mobile phones," he says. "Having lived in countries like Tan-

zania, Kenya, here in Uganda and other parts of the region, what really compelled me was believing that no matter where you live in the world you should be able to access a certin level of care. And technology plays a role in that." Cue his first software platform -- an app called Clinic Communicator designed to facilitate an easier interac-

tion between doctors and patients in the region. The web-based platform helps medical professionals communicate with the patients through emails and SMS. Doctors are able to send messages directly to their patients and in the process tackle issues like long waiting times, unnecessary queuing, missed appointments and prescription re-

minders. Yelpaala is not the only tech-savvy entrepreneur using mobile technology to reach patients and provide better healthcare. To crack down on counterfeit drugs and medicines in the marketplace, former astrophysicist Bright Simons went back to Ghana and created mPedigree, a simple idea where codes are printed on prescription packaging and customers can check its legitimacy by sending a text message. Meanwhile, Cameroonian IT Specialist, Arthur Zang designed "Africa's first handheld medical computer tablet" last year to provide medical professionals in more rural regions to get cardiac tests results to specialists in a speedier manner. It hasn't always been smooth sailing for Yelpaala. It's been four years since he began his business and he had to provide incentives to peak interest at first. "We have started to get our first customers, which has been a great milestone for us. Our first approach was to offer the product on trials and say "use this product"." He adds: "What we're finding now is that we're already starting to get traction in Kenya. We're partnering with healthcare facilities there. The thought is that we have to think very big, we have to think Pan-African, and we have to think about how we can innovate for the world."

Ebola to Blame for More Malaria Deaths in West Africa

bola has been blamed for a surge in untreated malaria cases in West Africa, according to a study that suggests the latest epidemic may have led to more deaths from malaria than the total caused by the Ebola virus. Published in The Lancet Infectious Diseases Journal, the research exposed the indirect effects of the Ebola epidemic in Guinea: a severely disrupted health-care system and a compromised National Malaria Control Program. The US researchers surveyed 60 facilities in Ebola-affected regions of Guinea and 60 in areas unaffected by the virus. Study teams reviewed malaria case management indicators from registers for January to November in 2013 and 2014 and interviewed health-care workers, comparing the data with previous years. They found around 74,000 fewer malaria cases than expected were seen at health facilities in the country in 2014 compared with pre-Ebola years. Lead author, Dr Mateusz Plucinski from the Malaria Branch of the US Centers for Disease Control and Prevention, said the consequences for those infected with malaria could be severe. “In a setting like Guinea, people with malaria are very likely to either

Vaccinations for children and other health services were suspended during the Ebola epidemic receive no care or inappropriate care if they do not go to health facilities. As a result, they are at much higher risk of dying from malaria,” he said. “Our study and a recent modelling analysis suggest that the number of excess malaria deaths in Guinea are likely substantially larger than number of deaths from Ebola virus disease.” Malaria is usually the main cause of

visits to health facilities in Guinea, accounting for more than 30% of visits to health facilities. However, during Ebola epidemic the number of people presenting with fever at outpatient clinics fell dramatically across the health facilities - dropping by nearly 42% in certain age groups and worst affected areas. This was in contrast to presentations

in areas not affected by Ebola, which showed no marked difference. Dr Ricardo Ataide from the Burnet Institute said the results weren’t surprising. “People are afraid to go to the hospital, not just because they don’t want to get in contact with Ebola but because they don’t want people thinking they have Ebola.” The researchers thought the overlapping symptoms of the two diseases, such as high fever and headaches, prevented those infected with malaria from seeking treatment for fear of being sent to an Ebola treatment centre. Dr Ataide, who was not involved in the study, also noted that the diagnosis of other diseases - such as tuberculosis - would likely have suffered during the Ebola focused wave of health care. “Ebola is something that comes in a very determined period of time. So what happens is that people think, ‘ok we need to put all our efforts into reducing this now and then we’ll go back to doing the malaria work’,” he said. “The problem is that the number of people affected by malaria is much higher than the number affected by Ebola. But Ebola attracts much more media attention so local governments are pressured to do much more and donors start throwing a lot of money

at them. You basically throw a curtain over everything else.” Professor of Pediatric Infectious Diseases at the University of Sydney Dr. David Isaacs has dubbed government led responses to epidemics like Ebola as “pandemic paranoia.” “One has to be a little bit careful to overreacting to public health problems, mostly infectious diseases,” Dr. Isaacs said. “If you spend huge amounts of money on one particular thing, it’s an opportunity cost. And then you may spend less on other things – and so you have to prioritise.” The researchers conclude the Ebola outbreak could have similarly threatened the health-care system in other affected countries. “The underlying factors – closed health facilities, an atmosphere of fear in the community and mistrust of the public health sector – have also been consistently reported in Sierra Leone and Liberia. It is thus likely that Sierra Leone and Liberia have been affected in a similar way,” Dr. Plucinski said. It’s important to note, however, that the study did not determine whether there was a larger number of malaria deaths during the study period. “This is not telling us that malaria went up. This is telling us that the capacity to detect malaria came down,” said Dr. Ataide.

Business Journal July 06 - 12, 2015

Entrepreneur www.businessjournalng.com

Win it Like Buhari:

5 Start-up Lessons to Take Away from Nigerian Elections Lauren Said-Moorhouse

image of the areas where people had worries about his personality. He was able to work through all of them," he continues. "We are not judging him as an individual but the collective capabilities of the team around him. The focus is not on one man but the team. Where the man himself has a weakness, the rest of the team can cover that and you need to have your A-players in charge."

arch 28 was a historic date in Nigeria's history as it marked the first time the opposition defeated the ruling party in democratic elections in Africa's most populous country and biggest economy. Muhammadu Buhari, a former military leader who had ruled Nigeria for a 20-month period in the early 1980s, campaigned as a born-again democrat and saw the tide of public opinion turn in his favor. Here, CNN's African Start-Up examines Buhari's campaign strategy and reveals the key business lessons entrepreneurs can adapt for startup success. • If at First You Don't Succeed... Keep Going This wasn't the first time Buhari had run for the highest political office in Nigeria -- in fact, it was his fourth attempt. He could have quit on several occasions, but didn't, and his persistence was rewarded at last march's polls. Buhari's endurance and perseverance in the face of setbacks is a key lesson young entrepreneurs can take heed of, says Femi Longe, Co-founder and Programmes Director at CcHub, a tech innovation space in Lagos. "The reality is that starting a business is everyday slog," explains Longe, who is an expert in social entrepreneurship. "A huge chunk of start-ups is just surviving to see the next day. You don't know when the big break will come." • Learn from Mistakes and Don't be Afraid to Re-brand Another area for entrepreneurs to take into consideration is Buhari's read-

Nigerian President, Muhammadu Buhari. iness to learn from the previous unsuccessful bids and make changes to the way he communicated his message. "He was willing to smile a bit more, was willing to dress in the outfits of the different tribes, he was willing this time to actually campaign extensively across the country to change the image that people had of him," says Longe. "There was a lot of work to make him more presentable." Similarly, startups need to be flexible and be able to adapt their campaigns to meet the needs of their target markets. Longe explains: "At the end of the day, it's about your customers, it's about your users. And you need to think about how does my business appeal to each of their individual needs and concerns while not los-

ing my core essence." • Focus on Setting the Right Agenda Buhari has also been praised for reading the ground reality accurately and delivering a focused and consistent message. Lazarus Apir, Programme Manager of Transition Monitoring Group, a not-for-profit organisation that helped monitor and corroborate official results, explains that even in Buhari's failed attempts in previous elections, he showed an unwavering focus on his outlook for the country. "Focus is very crucial," he says. "Buhari said security, he said corruption, he said infrastructure -- all of these problems have continued in Nigeria

and today, they are only at their worst. "He has kept the focus of things that he is seeing. If anyone wants to build a business empire for themselves, it is very important that they maintain focus. There is a temptation to be overly dynamic but then (entrepreneurs) lose focus." • Find the Right Team Many experts have hailed Buhari's choice of Yemi Osinbajo as running mate as part of the election success story -- a cue entrepreneurs can take in their business plans, says Longe. "The last time (Buhari) ran, he didn't have the appeal across the country. And this time he had an alliance that gives him appeal across the country. He has people that helped with improving the

• Embrace Social Media and Use it Properly Social media has globally become one of the most important tools for candidates during election campaigns -- and Nigeria's race was no exception. Cynthia Mbamalu, Programmes Manager at Nigerian youth charity YIAGA, said platforms like Twitter and Facebook helped the Buhari campaign to reach population pockets that they could have otherwise missed. "Social media provided the opportunity to connect with Nigerians, especially young people," she explains. "For the first time in a long while there were tweets targeted mainly at promoting the person of General Buhari and the party's vision for Nigeria." Mbamalu says the main selling point for start-ups to incorporate social media into their on-going strategies is that it allows businesses to enter a vibrant marketplace and engage with customers. "Customer satisfaction is vital in every business endeavor; people are more open to a system that guarantees that their opinions are important. Social media provides the right amount of buzz a viable business idea may need." But she adds: "Businesses need to understand intrigue, trends and interplay on social media to strategically carve its niche."

10 tips for Entrepreneurs to Attract Investors & Secure Funding

any excellent business ideas never get past the spreadsheet stage and into the real world simply because entrepreneurs fail to connect with individuals or investors with enough capital and risk appetite to help implement them. This is according to Gerrie van Biljon, Executive Director of Business Partners, who says that finding the correct investors and pitching an idea is a valued business skill that can be developed and improved. “Often entrepreneurs don’t possess the skills to pitch their business effectively and enthusiastically enough to potential investors, and thus don’t succeed in generating the necessary interest or funding.” He offers the following 10 tips to get entrepreneurs started: • Get Yourself Connected and Network. Investors are out there, and they are usually only one or two peo-

ple away from those with whom you do business with anyway. Your accountant or suppliers, for example, can put you in touch with potential investors, or at least someone who knows a potential investor. Emphasise the “work” in “network”, and investigate and ask for referrals. • Prepare and Sharpen a Concise Story Around Your Idea that contains no waffle, but only the essential elements that will interest an investor – marketability, sustainability and your own passion for the project. Your value proposition should come through succinctly – what are you offering to whom, and why will they be prepared to buy it. • Make Sure that You Know all the Aspects of Your Idea and Business Plan, as well as its market and industry. Investors want to know that you are experienced in the industry in which you want them to invest in. Therefore, the

more you have worked on your plan, even to the point of taking your idea to the market on a small scale, the better. • Have a Detailed Business Plan Ready. Not only will it help to give you the knowledge mentioned in the previous point, but the fact that you will immediately be able to send or present your plan if someone wants to have a closer look will help to convince potential investors of your readiness. Besides, knowing that you can back up your pitch with a plan will give you confidence. • Your Business Plan Should Have a Powerful Executive Summary which encapsulates your business plan precisely, without waffle or exaggeration. Chances are that the investors whom you will be targeting have seen many business plans in their lives, and they will not bother to read further if the executive summary does not whet their appetite.

• Often Investors will Request a Follow-up Meeting which Includes a Detailed Presentation of the Business Plan, profit projections and industry insight. Be prepared for this request and have a more detailed plan available in advance. • It is almost Guaranteed Nowadays that an Investor who Becomes Interested in Your idea will do a Background Search for you on the Internet. It helps to have a good website on your idea and a strong presence on social media in which your successes are highlighted, not only in your current business but in previous ventures and jobs. Most astute investors investigate the strength of both the business idea and the prowess of the entrepreneur. • Once you’ve Made Contact with a Potential Investor, Stay in Touch, even if it is just by asking for advice, for example on how an investment of the kind you are looking for can best be

structured. • Be Open to Feedback from Potential Investors, who would want to see that you are open-minded and adaptable. Besides, chances are that the investors you are pitching to are experienced business people themselves, and can enhance your ideas with their advice, whether they decide to invest in your idea or not. • Have a Realistic Exit Strategy for the Investor, who unlike you, does not necessarily want to remain in the business in the long term. The investor’s thinking is likely to be around whether he or she can make the best return possible on the investment, so this point should be included in the exit plan. The time frames that most investors work with are between three and seven years.

Business Journal July 06 - 12, 2015

Books Arts Culture www.businessjournalng.com

Man Booker International Judge Laments Lack of World Literature in English

aking his voice heard internationally ... Congolese Author, Alain Mabanckou The British can be “oddly provincial in outlook” when it comes to literature, the writer and academic Marina Warner is due to say, as she calls for more translations to be made of literature from India, China and across the Arab world. Warner, fresh from chairing the panel of judges that selected Hungarian Author, László Krasznahorkai as winner of the £60,000 Man Booker International Prize, is set to give a public lecture at Birkbeck University on exploring the nature of global fiction, and the dominance of English. Pointing to a recent report which found that just 3% of books published in the UK were in translation – an “embarrassingly low” figure according to Literature Across Frontiers Director, Alexandra Büchler – Warner is due to say that this is “far lower than other countries”, with all 10 writers on the Man Booker International shortlist translated into German, French and Italian “far more swiftly” than they were into English. “Possessing a world language can make us oddly provincial in outlook,” she will say, as she reflects on the two years she has spent reading fiction from around the world to judge the Man Booker

International. “I also felt, anecdotally, that women were faring worse. Some leading figures, such as Linda Lê and Francoise Chandernagor, whose books I would see reviewed in full-page articles in Le Monde, have not made the passage into English; nor have Melania G Mazzuccofrom Italy and Elena Poniatowska from Mexico had enough titles published in English, though their work was much recommended as we made our soundings. So against all expectation, the world in world literature still occupies a narrow berth.” She and her fellow judges, she will say in a lecture entitled Translumination or travesty?: The

Passage into English, “all wanted to move out across the map of the world and listen in to many voices on wavelengths our systems don’t pick up, in this country, very attentively”. “The big commercial metropoles can be extremely provincial in their outlook, and several of the writers we read are nomadic, willingly or unwillingly part of the contemporary world’s diasporas, while imaginatively, they inhabit places far and wide besides those which the body occupies or birth allotted,” she will say. “The novel is a free arena – or at least, the most open arena available in many places during an era of oppressive regimes.”

Man Booker International Prize 2015:

he will say that the writers on the Man Booker International shortlist, who ranged from the Guadeloupian Maryse Condé to the Congolese Alain Mabanckou, have “found translators and brave small publishing houses and enterprising digital platforms … where they can now make their voices heard, beyond their own language and its restrictions, political and other”. But she and her fellow judges wanted to include “many more”. “One of the main causes for past

failures of translated fiction to emerge as the winner in the MBI has been the absence of cultural transmission at this level. When Carmen Callil was a judge she found over and over again that the translators were not writing well in English. That was in 2011 when Philip Roth won it, the second North American, after Alice Munro, and he would be followed by Lydia Davis two years ago,” Warner will say. But while the mythographer and professor of English and creative writing at Birkbeck feels that, this

year, those authors writing in languages such as Spanish, Portuguese and French were not placed at such a disadvantage because the languages they are using “have a very strong tradition already … major world languages abundantly alive in other parts of the world – India, China, and the Arabic used all over the Arab world – have a more meagre legacy of translation”. “Consequently less flows from their literature … the wake of the literature in which new trans-

lators are bobbing is weaker.” “But it is the reason more translations are needed: the more works make the passage into English, the better will be the results, as one instrument picks up from another to create that region’s music, as it sounds when played in English,” she will say. Warner and her fellow judges, Nadeem Aslam, Elleke Boehmer, Edwin Frank and Wen-chin Ouyang have considered work from all over the world for the Man Booker International, which goes

to a living author for their body of work, either originally published in English, or “generally” available in translation. This year, Hungarian Krasznahorkai was chosen as winner from a 10-strong shortlist, which also featured Condé, Mabanckou, Mia Couto from Mozambique, Ibrahim al-Koni from Libya, Marlene van Niekerk from South Africa, India’s Amitav Ghosh, Lebanon’s Hoda Barakat, Argentina’s César Aira and America’s Fanny Howe.

Business Journal July 06 - 12, 2015

Stock Earnings Tracking

Business Journal July 06 - 12, 2015

Obituary Celebration of Corporate Death

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The Bankruptcy of WorldCom: Why Did It Happen? Another major factor driving this fraud was Bernie Ebbers' very apparent desire to build and protect his personal financial condition. For this reason, he had to show continually growing networth in order to avoid margin calls on his own WorldCom stock that he had pledged to secure loans. Theodore F. di Stefano Aug 19, 2005

hen WorldCom, the telecommunications giant, failed and was put into bankruptcy, the U.S. witnessed one of the largest accounting frauds in history. Former CEO, Bernie Ebbers, 63, was convicted of orchestrating this US$11 billion accounting fraud and was sentenced to 25 years in prison on July 13, 2005. How could a loss of this magnitude have occured? Where were the checks and balances? The watchdogs? Specifically, whatever happened to WorldCom's Board of Directors, the custodians of this once mighty corporation? Were they "asleep at the switch?" While examining this colossal failure in corporate governance and what could have been done to avoid it, I came across a fascinating document entitled "Report of Investigation" dated March 31, 2003. This Report was prepared for, among others, the Federal Bankruptcy Court overseeing WorldCom. A great deal of my research was obtained from the Report and all of the quotes below can be directly attributed to the Report. Accounting Misstatements WorldCom made major accounting misstatements that hid the increasingly perilous financial condition of the company. The Report described the accounting shenanigans as follows: "... As enormous as the fraud was, it was accomplished in a relatively mundane way: more than $9 billion in false or unsupported accounting entries were made in WorldCom's financial systems in order to achieve desired reported financial results ..." What Drove the Fraud? The driving factor behind this fraud was the business strategy of WorldCom's CEO, Bernie Ebbers. In the 1990s, Ebbers was clearly focused on achieving impressive growth through acquisitions. How was he going to pay for this acquisition binge? By using the stock of WorldCom. To accomplish this buying spree, the stock had to continually increase in value.

Here's a Bit of How the Report Describes this Scenario "... WorldCom pursued scores of increasingly large acquisitions. The strategy reached its apex with WorldCom's acquisition in 1998 of MCI Communications, a company with more than two-and-a-half times the revenue of WorldCom. Ebbers' acquisition strategy largely came to an end by early 2000 when WorldCom was forced to abandon a proposed merger with Sprint because of antitrust objections ..."

Ebbers felt the need to show ever-increasing revenue and income. His only recourse to achieve this end was financial gimmickry. The problem is that the more one resorts to this sort of deception, the more complicated it becomes to continue it. Deception is just not sustainable in the long run. Complicating Ebbers' situation was an industry-wide downturn in telecommunications. During this time, Wall Street had continuing expectations of double-digit growth for WorldCom. After all, they had achieved so much in such a relatively short period of time. However, WorldCom needed time for its management to catch up to its newly acquired companies and learn how to run and manage them. Unfortunately, Ebbers did not have the courage to tell Wall Street that WorldCom needed time for the consolidation and digestion of its acqui-

sitions. In order to satisfy Wall Street's expectations, Ebbers had to doctor his company's books. If he had had the courage to tell them what was really needed, WorldCom would be alive today and Ebbers wouldn't be facing the prospect of spending the rest of his life in prison. Another major fac-

Bernie Ebbers, WorldCom CEO

tor driving this fraud was Ebbers' very apparent desire to build and protect his personal financial condition. For this reason, he had to show continually growing net worth in order to avoid margin calls on his own WorldCom stock that he had pledged to secure loans. This Debacle Could Have Been Stopped It is obvious that the Board of Directors that was in place when WorldCom was planting the seeds of its destruction could have stepped in and stopped this financial death spiral. Although the Report clearly puts a great deal of the blame on Ebbers saying, "... The fraud was the consequence of the way WorldCom's Chief Executive Officer, Bernard J. Ebbers, ran the Company ... he was the source of the culture, as well as much of the pres-

sure, that gave birth to this fraud," the Board of Directors certainly shares this blame. As the Report states, "... The setting in which it occurred was marked by a serious corporate governance failure ..." The Court-Ordered Fix The Bankruptcy Court directed the newly constituted Board of Di-

rectors and the newly appointed Corporate Monitor to fix this horrible example of corporate malfeasance. The Report of Investigation includes recommendations meant to "... cure the principal failing that gave rise to the fraud: a lack of effective checks and balances on the power of senior management ..." Here are a few: • An active and independent Board of Directors and Committees; • A corporate culture of candor, in which ethical conduct is encouraged and expected, as exemplified by the ethics pledge that the Company and the Corporate Monitor have developed and that senior management has signed; • A corporate culture in which the advice of lawyers is sought and respected; and • Formalised and well-documented policies and procedures, including a clear and effective channel through which employees can raise concerns or report acts of misconduct. Make Your Company Transparent You can avoid the pitfalls that plagued WorldCom by choosing a corporate culture which would insure that a similar situation doesn't happen to your company. Two sources of information on how to do this include the articles entitled "Your Corporate Culture: A Boon or a Bane?" and "Choosing Your Board of Directors." You should never have to fear what regulators or other government officials would uncover if they were to take a good look at the workings of your company. Transparency can bring you safety. It's a great way to get a good night's sleep!

Business Bus siness JJournal ourn July 06 - 12, 2015

For the Record

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Official Communiqué of Nigeria Oil & Gas (NOG) Conference 2015 (2) Continued from last week • The Oil Producers Trade Section (OPTS) to seek avenues to secure a platform to relate with government and find out modalities on how to handle the current industry situation and the need for a deregulated environment. • The prevailing low oil price and uncertainty in the industry has prompted the need for government and industry to come together and agree on its impact on the industry in order to take a decision on how to optimise projects to avoid incurring costs and agree the best way to fund projects in view of persistent shrinking revenue profiles. • It is also important to ensure that we capitalise when oil prices rise. OPTS believes the lack of clear regulation, especially in this present condition of low income, makes it very difficult to achieve targets and hence the need to discuss with government. • Nigeria needs to attract investors and to ensure this, NNPC and the majors, as role models, should ensure the industry runs efficiently. The industry must consistently work to improve the business environment as a whole by increasing efficiency and cost reduction. Likewise, tender processes must be efficient as the current process takes years to conclude due to inefficiency brought about by high levels of bureaucracy. • There is a need to focus on major achievements of Nigerian Content and ensure it delivers higher capacity and value at a lower cost. • In terms of social development programs, it was agreed that low oil prices could compel companies to reduce their Corporate Social Responsibility (CSR) projects. Companies were urged to maintain critical parts of their CSR initiatives so as not to cripple current successes achieved. • The lack of progress in the implementation of the United Nations Environment Programme (UNEP) Report recommendations were cited as an example of the need for more collaboration between Government and other stakeholders. THE RISE OF THE NIGERIAN INDEPENDENT PRODUCERS: THE SECRET TO SUCCESS AND OUTLOOK FOR THE FUTURE The landscape of the industry is changing with the rise of the Nigerian independent oil and gas companies. Independents are believed to account for about 10%, but projected to account for about 500kbpd by the year 2020, which will be a quarter of Nigeria’s current oil production. Key Recommendations: • Integration of the upstream to other parts of the value chain may eventually be driven by the independents. • Challenges such as security, especially for independents operating in shallow waters. Local companies reiterated that security and community challenges have greatly altered their cost of production which cannot be fully ascertained. When coupled with Government take and interest from loans the cost per barrel increases. • Government is to ensure that an enabling environment is created - independents need to be able to

transfer, and then the individuals who issue the fake certificate of origin for the crude before the crude ends up in the refineries. Financial institutions are also involved because there must be an exchange of dollars. • It has been observed that skills have been eroded through poor standards in the education systems. There is a need to ensure that standards are restored by developing pragmatic policies that incorporate technology training back into the educational system.

deliver on capacity growth and funding. The major challenge now is that banks do not want to fund potential exploration and this is hampering growth plans of independents. • There is a great need to increase reserves if sustainability is to be ensured within the current low oil price regime. Another issue bleeding income from the independents is pipeline loss charged by operators. Independents called for government to look into the possible divestment of pipelines to help reduce cost. • Banks have called on independents to hedge production in order to ensure stability. • Independent companies were urged to collaborate and see how they can address existing security and community challenges as well as participate in intelligence gathering and aid security agencies. EXPLORING SOLUTIONS TO ASSET SECURITY CHALLENGES FACED BY THE NIGERIAN OIL AND GAS INDUSTRY • Risk assessment for Nigeria requires a holistic view to capture all facts. • There is need for communication to be in place to ensure rapid response. The ability and technology to gather intelligence is available but the big challenge remains in the willingness to respond and prosecute breaches of security. • Government has the responsibility of ensuring that a database is created as well as provide well equipped and non-compromised security operatives. The international community on the other hand must ensure they refuse to buy stolen crude from criminals. Key Recommendations: • All stakeholders must respect the law in order to ensure energy security, national security and continued progress. • Host companies must effectively engage communities by giving a sense of ownership and access to the business value chain which will help develop host communities and dissuade criminality. • There is a need for a coordinated effort at national level to protect oil and gas assets and address the issue of corruption. • Environmental damage and the

lack of social amenities like electricity need to be addressed. • The ultimate solution to security challenges resides with the Nigerian people who need to play a bigger role in safeguarding national assets with patriotism. THE JOURNEY TO TRANSFORMATION: NIGERIA’S POSITION IN THE SHIFTING GLOBAL OIL AND GAS MARKET • The burning question remains, how can Nigeria use its oil and gas resources more efficiently and equitably? The management of the revenue that comes from these resources requires discipline and prudence. • Low oil prices present an opportunity to look inward and change many things quickly. Nigeria, like other oil exporting nations, now targets Asian countries in search of new markets for its crude oil. The current over supply of crude oil resulting in low oil prices has negatively affected revenue. • The country needs to diversify its economy and gas domestication is one option. A strategy for export markets must also be put in place to make sure we optimise our share of the market. • To further unlock the industry’s potential, the Gas Master Plan must be fully implemented. The policy is designed to connect the entire gas value chain and consequently encourage the exploration for new gas resources to increase reserves. • There is a high domestic demand for gas in Nigeria, therefore domestication of gas should be pursued and policy development must be thorough. The indigenous companies dominating the service sector must act as the main engine of the industry in order to drive this transformation if the best impact outcomes are to be achieved. • There is a need for regulation which will encourage the service sector to localise technologies within Nigeria. This will ensure an increase in indigenous technology capacity so as to be able to drive down cost. Technology resident in service is not exclusive to oil and gas hence the need for backward integration. • Nigeria must move from policy formulation to implementation actions and all policies adopted must ensure that there is a fair amount of

profit for operating companies and rent for Government i.e. a balance between incentives and Government tax. • Energy switching and development of fuel efficient products is on the rise and this has reduced the cost of energy as well as lowered demand. Nigeria, as an energy supplier, needs to increase its flexibility by diversifying its market to be able to insulate itself from undesirable market forces. • Nigeria’s advantage over any other country is its population. The country needs to unlock its product market through deregulation of the downstream sector. Existing companies will automatically key into a deregulated market to maximise value and take advantage of low oil prices. However, to make our refineries work, domestic empowerment is really needed to insulate the industry. Irrespective of oil prices, we must solve the issue of oil theft through a combination of long-term CSR and other security activities. • Investment in refining is important to Nigeria and there is therefore a need to incentivise companies by encouraging backward integration. Nigeria’s market dwarfs all markets in West Africa and the removal of price controls will create an opportunity for huge investment in refining. Nigeria could draw experience from its cement industry model in this regard. • Privatisation brings in market discipline which will allow banks to assess the market and improve capital efficiency. • The development of more local expertise by training indigenous manpower throughout the value chain will also cut down the cost of doing business and ensuring quality certification can help to manage Nigeria’s currency volatility. Indigenous operators are becoming the “new expatriates” and this is changing the industry terrain as Nigerian companies now compete for both oil and gas exploration and service projects in other countries such as in Sudan. • Crude oil theft has a value chain which must be disrupted. It involves individuals who hack the line with sophisticated equipment, barge owners who evacuate the product through the creeks, ship to ship

Challenges • Restricted/pending investment decisions due to the non-passage of the PIB • Limited skill and capabilities of local companies • Excise duties on some raw materials seem to have eroded local companies’ competitiveness. • Out of about 100 approved industrial parks, only 5 are operational with limited utility services. Key Recommendations: Government • A pragmatic approach to the passage of the PIB is required to spur investment, particularly in exploration and production activities. • There is need for a well thought out plan on the modalities for operation of industrial parks, especially in terms of back and forward linkages with complimentary service providers to support and spur Small and Medium Scale Enterprise (SME) growth. • Government to consider building smaller industrial parks (SME based) to support healthy startups and wider entrepreneurial spread. • NCDMB needs to share opportunities (white spaces) on a regular basis to promote ingenuity and encourage entrepreneurial development. • NCDMB to assess local participation across the value chain with a view to aligning Content Development Initiative (CDI) interventions to cover all the critical skills sets currently lacking in our existing local players. • In view of the huge successes recorded by the NCDMB, Government should consider extending it to all sectors of the economy • Custom duties need to reflect considerations for local content initiatives. • CBN needs to revisit project financing obstacle for viable Nigerian Content. • In view of the national importance of local content, policy makers are encouraged to always attend National Content seminars. (a) Industry • Synergy, collaboration and communication amongst independents and other stakeholders is required to ensure steady industry growth and compliance to the Nigerian Content Act. • Local service companies to focus on cost efficiency, corporate governance and service delivery reliability to build the requisite profile, certifications, ratings etc. to secure right to play as the industry evolves towards gas monetisation. • Local banks to support local companies for organic growth in the industry

Business Journal July 06 - 12, 2015

Economy www.businessjournalng.com

China, France Tie-up in Africa, Emerging Economies Projects Fran Blandy

hina and France's plan to team up on projects in Africa and Asia is a winwin deal that will "serve the interests of all", Chinese Prime Minister Li Keqiang said Wednesday. In recent years, China has muscled out Western nations from emerging economies, especially in Africa, but appears to be changing tack with the deal which was signed Tuesday and branded as "historic" by French Prime Minister Manuel Valls. The agreement, which was signed on a high-level three-day visit by Li to France, will see the two nations work together on infrastructure and energy projects and introduce "new forms of co-contracting, co-production and co-financing." "Let us work together to help improve infrastructure, industrialisation, poverty reduction. Doing that will serve the interests of all of us," Li said in a speech at the headquarters of the Organisation for Economic Co-operation and Development (OECD) in Paris. "It will help developing countries gradually move towards prosperity, it will help China find a market for its production capacity and also force China into upgrading its own industries domestically. "China will also be able to learn from developed countries in this process and make itself more succesful in reducing energy consumption." China, which has too many factories and is struggling with a

French Prime Minister Manuel Valls (C) shakes hands with Chinese Prime Minister Li Keqiang (R) prior â&#x20AC;Ś

China's Prime Minister Li Keqiang (L) delivers a speech at the OECD in Paris on July 1, 2015

slowdown in domestic demand, is pushing its companies to seek new markets abroad. According to the deal, the countries will also jointly produce civilian aircraft for sale to countries in Africa and Asia and co-operate in the agriculture and transport industries. "Projects fitting into the global fight against climate change will also be encouraged," reads the accord. - Financial power vs know-how "It is win-win," said a French official. "The Chinese have financial power, we have the know-how." China has become Africa's largest trading partner in recent years where it has carried out massive infrastructure projects and its economic growth has been fuelled by natural resources from the continent.

a "huge market" which could not always afford the industrial equipment needed to spur growth. While China could provide affordable equipment, he said emerging economies would also need more advanced technologies and Beijing was therefore looking to "form joint ventures or co-operatives" with the developed world. Providing better quality products to poorer countries would "also help us meet targets of reducing energy consumption," he added. - Development advice The Chinese premier said his country was hoping for "policy advice and recommendations for China's modernisation drive" after joining the OECD's development centre which brings together rich and developing

But with Africa being home to seven of the world's fastest-growing economies, other Western nations are vying for a slice of the pie. "In Africa the idea is not to have our markets taken away from us, we remain vigilant," said the French official, adding that China is also counting on France to help improve its often negative reputation on the ground in Africa where "they are not liked". In Asia, the deal will allow for the opening of new markets for France, which is struggling to revive a moribund economy. Li said China could also work with other Western nations to create growth in developing countries. The premier said some six billion people lived in developing countries,

countries who share knowledge and advice on stimulating growth. He said while China was the world's second biggest economy, it still ranked only 80th in terms of GDP per person, at $7,589. Although China had managed to lift 600 million people out of poverty, by UN standards 200 million people were still living in poverty -- "the population of France, Germany and the UK combined," he said. "Our goal is that by the middle of this century China will enter the ranks of the mid-developed countries. "China's development cannot be achieved without the rest of the world. That is why we need to promote global cooperation on production capacity."

Business Journal July 06 - 12, 2015

CSRDigest

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Total: Committed to Africa-Active in Africa for 80 Years Total is engaged and focused on helping to drive the continentâ&#x20AC;&#x2122;s economic and social development, in a spirit of dialogue and partnership with all our stakeholders. In the third edition of Pathway(s), we bring you more personal stories featuring vivid, real-world examples of how we are involved on the front lines and how our actions relate to our business and our professional activities. We believe to operate effectively we must consider the various expectations of all our stakeholders. This is definitely true of education, a particular focus of ours in 2013, in line with a desire to plan and sponsor initiatives with an even greater chance of being self-sustaining. Working alongside our partners to create educational opportunities that lead to jobs is one way of helping to build the Africa of the future.

In Nigeria, for example, Total is helping start-ups to find their feet and contributing to the diversification of the local economy by supporting projects that can generate permanent jobs in two key sectors: producing sustainable construction materials and finding commercial outlets for local agricultural resources. In the Republic of the Congo, our commitments take the form of the many training opportunities we offer to our service providers and their employees, especially in road safety, a major concern at this juncture as the continentâ&#x20AC;&#x2122;s growth drives strong expansion of road infrastructure and also therefore the risks that go with it. From Nigeria to Kenya and to South Africa, follow the pathways of the women and men with whom we share a common goal: being responsible partners in a shared development.

Sports

Business Journal July 06 - 12, 2015

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Roger Milla: 90 Minutes that Changed the Face of African Football

t was arguably the most powerful emblem of the tournament that changed the way the world saw African football -- a Cameroon striker's joyous dance at a corner flag. Nobody had really expected all that much of Cameroon at the 1990 World Cup in Italy. Not many casual observers knew that much about 38-year-old Roger Milla -- the football veteran who, after each of his four tournament goals, shimmied his way into the spotlight. Exactly a quarter of a century ago, Milla was the man on the spot in his side's last-16 clash with Colombia, scoring twice as a second-half substitute to seal a 2-1 win and continue the Indomitable Lions' heroics. After each strike he headed straight for the corner flag, gyrating in front of it in a sort of Makossa dance before being engulfed by euphoric colleagues. He found that his celebration, almost more than his goals, had caught people's imaginations -- and that it also had a wider and more dramatic effect. "It remains in our collective memory -- it actually changed the perception the world had of African football," Paulo Teixeira, who was

working as a photographer at the tournament, told CNN. "Milla dancing in front of the corner flag became a hit. It was an image of joy, of positive energy, communication through body language. "Those goals put Cameroon, and ultimately, African football, on the world map." Now an agent, Teixeira was born in Zaire (now Democratic Republic of Congo) and has extensively traveled throughout Africa in his work, giving him an in-depth knowledge of the continent's football development. The 63-year-old believes the exploits of Milla and friends also began to alter the way in which people thought about footballers' diets and preparations. "His, and Cameroon's, performance made scouts and clubs look differently at African players," he says. "It was proof that they could physically go beyond all expectations, almost defying science in terms of resistance. "People started to look at the way African players ate -- no bread, no desserts, no booze, no coffee, no smoking. All was natural -- vegetables, rice, white meat." Milla hadn't even been supposed to be in Italy for the tournament, having earlier quit the international game

The Historic Dance and traveled to the Reunion Islands to play his football. But it turned out he had admirers in high places and was persuaded to reconsider by Cameroon President Paul Biya, who then insisted on his

inclusion in the World Cup squad. The Indomitable Lions faced tournament holders Argentina -- Diego Maradona and all -- in their opening match. Milla, the oldest outfield player at

the event (only England goalkeeper Peter Shilton was older), played a late cameo role in the occasionally brutal 1-0 win that got Italia 90 off to a sensational start. But there was plenty more to come from Milla. Coach Valeri Nepomniachi opted to bring him on earlier in the next group game against Romania, knowing a win would seal his team's place in the knockout stages. With 76 minutes of an often tense match gone, Milla won a bouncing ball on the edge of the area, ran on and opened the scoring some 15 minutes after entering the fray. An iconic celebration was born. Four years later, he would augment his achievements by becoming the oldest-ever World Cup player and goal scorer against Russia in the United States. But it is Italia 90 with which he -- like the host nation's Toto Schillaci and England's Paul Gascoigne -- will always be most strongly associated. "It might not have changed his career in financial terms," Teixeira says. "After all, he was already way past normal football age. "But he became an icon -- and that is something that money cannot buy."

Japan in Twist Over $2bn Bike Helmet Olympic Stadium

Tim Hume and Yoko Wakatsuki apan appears set to proceed with a controversial design -- likened by some critics to a giant bike helmet -- for its center-piece stadium for the 2020 Tokyo Olympics, despite heated objections to the project, an official said. Furthermore, the cost of the project is now predicted at 250 billion yen ($2.02 billion) -- a huge rise from the 162 billion yen ($1.31 billion) proposed earlier. Iraqi-British Architect, Zaha Hadid's ultra-modern design for the stadium, selected as the winner of an international competition, will be significantly larger and more expensive than its recent predecessors, and has faced scathing criticism since it was unveiled. In an open letter to the government body in charge of the games last year, leading Japanese architect Arata Isozaki said the sight left him "in despair" and warned the stadium would be a "disgrace to future generations." The project has seen budget cuts, design revisions, demolition delays and serious cost blowouts since it was unveiled, as material and construction costs have soared. Amid concerns over the design's cost, sustainability and its suitability to its surrounds -- in the outer gardens of Tokyo's Meiji Shrine, on the site of the stadium used for the 1964 Olympics -- rival groups have proposed alternatives to the Hadid design.

National Olympic Stadium, Tokyo â&#x20AC;&#x201C; Today's stadiums are architectural feats of design that can elevate the senses, capture the spirit of a community, and become an icon of the city long after a sports event ends. Celebrity Iraqi-born British architect, Zaha Hadid's design for the 2020 Olympic stadium in Tokyo won an international competition, but has received criticism. Japanese architect, Arata Isozaki described it as, "A turtle waiting for Japan to sink so that it can swim away." The 83-year-old warned: "Tokyo will surely be burdened with a gigantic white elephant." Not all new stadiums receive such objections. One group, led by Pritzker Prize-winning Architect, Fumihiko Maki, who designed the Tokyo gymnasium for the 1964 Olympics, favours altering Hadid's design by removing two of its trademark arches running the length

of the stadium. In this way, the group claimed it could reduce the cost of the stadium significantly. "The biggest problem overall is the cost and the length of construction," the group said in a statement.

Another group has advocated retrofitting the existing stadium for the 1964 Olympics -- a solution advocated by Jeff Kingston, an Asian Studies Professor at Tokyo's Temple University. Kingston has been an outspoken

critic of the stadium, which he described to CNN as a multi-billion dollar "white elephant waiting to happen." "There are very few events that will require such a massive stadium, one that blights one of Tokyo's greenbelts," he said. "For a fraction of the cost they could have retrofitted the old stadium that requires far less maintenance than the new facility. So taxpayers will be handed a gift that keeps on taking." Further more, he said, the "glitzy and garish" design "tramples on Japanese aesthetics." "Hadid's curse will be a burden for decades to come," he said. Education Minister, Hakubun Shimomura, whose ministry is overseeing the event, hinted that an alternative design could be considered if it could realistically be implemented ahead of the 2019 deadline. Japan plans to use the stadium when it hosts the Rugby World Cup that year. But Yukio Yamamoto, an official at the ministry's Sports and Youth Bureau, appeared to pour cold water on the idea. "The ministry is planning to stay with Zaha's plan as of now," he said, as it was unlikely changes could be made and still make the deadline. He said the original design had already undergone alterations to reduce costs -- but the controversial arches would be retained, otherwise the design would no longer be Hadid's. Yamamoto said a final decision on the stadium had yet to be made, but one was likely by the start of July.

Business Journal July 06 - 12, 2015

Automobile

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Kia Motors announced its 'Platinum Sponsor' role for the Copa América Chile 2015. This marks Kia's second consecutive sponsorship of Copa América, having served as a 'Gold Sponsor' for the 2011 tournament in Argentina.

U.S. Auto Sales Remain Robust in June 2015

.S. auto sales have shown no signs of weakening this month after a blowout performance in May, with forecasters projecting an industry wide gain of about 5 percent to close out the best spring in a decade. Forecasters at LMC Automotive and Kelley Blue Book each raised their full-year sales forecasts to 17.1 million, matching TrueCar. Sales are on pace to surpass 8.5 million units in the first half of the year -- marking the industry’s best first half and second quarter since 2005, when employee-discount-for-everyone deals caused a surge in demand. “This is arguably the strongest and healthiest the auto industry has been in a very long time,” Jeff Schuster, Senior Vice-President of Forecasting at LMC, said in a statement. “A green light outlook across a basket of metrics -- including economic support, gas prices, the stock market, higher and stable transaction prices and significant product activity -- is behind our forecast of a 17.1 million unit pace in the second half of 2015.” LMC estimates consumer spending on new vehicles in the first half of 2015 to reach a record $206.2 billion, $11.6 billion more than the same period last year. 17 Million in Sight

seen during the first half, full-year sales would surpass 17.3 million, approaching the record of 17.4 million set in 2000.

Sales are expected to total about 1.5 million in June, which would result in a first-half gain of 4.7 percent. To hit 17 million for the year, a threshold last crossed in 2001, sales in the second half would need to rise just 1.1 percent from year-earlier levels. TrueCar and KBB each project the industry’s seasonally adjusted, annualised selling rate to be 17.4 million in June. That would be less than

May’s rate of 17.8 million -- the best May on record -- but more than the June 2014 rate of 16.9 million. Edmunds said it expects a June SAAR of 17.3 million, while LMC projects 17.2 million. June has one more selling day this year than it did in 2014. “The auto industry has maintained most of the strength it flexed during its record-breaking May,” Jessica Caldwell, Edmunds’ Director of Indus-

try Analysis, said in a statement. “In many parts of the country, we saw May’s deal offers extend well into June, and Fourth of July promotions should start as early as next week. These sales messages are helping to sustain the industry’s momentum into the first few weeks of summer.” Sales could begin to flatten out later in the summer, said Alec Gutierrez, KBB’s Senior Analyst. At the pace

Winners, Losers Fiat Chrysler Automobiles, Nissan North America and Subaru could each post double-digit gains in June, forecasters said. KBB projects FCA’s market share to reach 12.6 percent, its highest level since 2007. Forecasts for General Motors are mixed; TrueCar and KBB show its market share roughly flat from a year ago, while Edmunds expects GM to post a slight sales decline and lose a full point of share. Ford Motor Co. and Hyundai-Kia Automotive may each lose as much as half a point of market share. Toyota Motor Sales U.S.A. is expected to post a sales increase that’s in line with or slightly below the industry average. “With the exception of comparatively low demand for conventional compact and midsize sedans, June sales look solid across the industry,” TrueCar President, John Krafcik said in a statement. “Our dealer partners should see a very strong close to the month.” TrueCar said incentive spending is averaging $2,846 per vehicle, 3.6 percent more than a year ago and 0.4 percent higher than May.

July 06 - 12, 2015

TheLantern

“We face enormous challenges. Insecurity, pervasive corruption, the hitherto unending and seemingly impossible fuel and power shortages are the immediate concerns. We must not succumb to hopelessness and defeatism. We can fix our problems.” President Muhammadu Buhari Inauguration Speech May 29, 2015 Abuja

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

NNPC: An Ugly, Dirty Story!

but also in respect of the weight of the office. Those were those days. Unfortunately, under the Jonathan administration, that position became a sort of Musical Chairs. The GMDs were hired and fired overnight. It became the most unstable job in the federal hierarchy. Indeed, the long list includes Shehu Ladan, Austen Oniwon, Yakubu Andrew, Joseph Dawha etc. It became known in the oil sector for a new occupant not to celebrate his ascension until Further Notice! In that light, the public image and reputation of NNPC became less valuable than a Banana Republic.

he Nigerian National Petroleum Corporation (NNPC) is a Bad Story. Today, right thinking members of the Nigerian society are asking just one question: What is wrong with NNPC? In the past few years and running, the NNPC has been in the news for all the wrong reasons-from frequent sacking of its group managing directors, which gives a picture of instability and incompetence, to endless allegations of insolvency and rampant fraud. The Insolvency Story Way back in 2010, Mr. Remi Babalola, then Minister of State for Finance was reprimanded and downgraded to the position of Minister of Special Duties for daring to state that the NNPC was insolvent. The Babalola admission on the financial health of NNPC was shocking to millions of Nigerians who naturally see the NNPC as the nation’s cash cow. That our cash cow was insolvent meant nothing but hardship in the offing for the people of Nigeria. As expected, questions were asked: what happened to the billions of dollars accruing to Nigeria from the export of crude oil through NNPC? What made the Babalola bombshell more convincing was the position of the messenger himself: Babalola was the Minister of State for Finance and as such, was in a premium position to know. Secondly, he came to the job from First Bank where he functioned as Executive Director-meaning he was not a novice in financial matters. As usual in the Naija fashion, he was shoved aside for allegedly stating what many saw as the obvious. House of Musical Chairs A time there was when the Office of Group Managing Director of NNPC was as stable as the rock. Indeed, many envied the occupant, not only in monetary terms

Dieziani Allison-Madueke

And the Missing Billions The NNPC was already crawling

on its knees in metaphorical terms when Mallam Sanusi Lamido Sanusi, then CBN Governor sounded the alarm on alleged missing $20 billion, later $10 billion, depending on the figure you decide to believe from the coffers of NNPC. NNPC again?-somebody muttered in anguish. First, there was utter disbelief, then surprise, and then, clamour for forensic audit to unravel whether the Sanusi allegation was real or witchhunt. And what did the forensic audit by PricewaterhouseCoopers reveal?-that indeed, the management of NNPC withheld the sum of $1.48 billion from the coffers of the Federation Account. That was a damning report! And then came the curious questions: • Who authorised the management of NNPC to withhold the money? • Was the Minister of Petroleum and The Presidency aware or not aware of the actions of NNPC? • Was it the first time such act was committed by NNPC? • If not the first, what became of such withheld funds later? • If not the first, when did the practice begin? The Buhari Broom And when we thought we’ve had enough of the NNPC Nollywood script, the iron broom of President Muhammadu Buhari descended like thunder on the troubled petroleum giant, sweeping away the Board of NNPC to the admiration of many stakeholders in the polity. In essence, we are waiting earnestly to see how far the Buhari Regime will go to cleanse the NNPC of its Light Fingers and safeguard our collective resources from the naked greed of unscrupulous few. The Last Word For NNPC, these are troubled times. When will the troubles end? For me, NNPC of today, is a Bad and Ugly Story not worth telling!

NNPC Towers, Abuja: Citadel of Graft?

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