MAKING NIGERIA by PENRESA

PENRESA FOCUS ON NIGERIA APRIL 2018 EDITION

Produced in association with

Broadening its Economic Future Inside this issue, exclusive interviews with

H.M. Babatunde Fashola H.M.Rotimi Amaechi Prof. Umar Danbatta Roland Ewubare

PENRESA

INDEX

OPENING ARTICLE

Page 6 Interview Babatunde Fashola Minister of Power, Works and Housing Page 7 Interview Rotimi Amaechi Minister of Transport Page 8 Interview Umar Danbatta Exec. Vice Chairman and CEO NCC Page 9 Interview Roland Ewubare Group General Manager NAPIMS

The Rebirth and Remaking of a Nation

Page 14 Interview Charles Kie Managing Director, Ecobank Nigeria Page 16 The year of Nigerian infrastructure

A New Vision for Africa www.penresa.com I info@penresa.com This report is sponsored and produced by PenResa and did not involve the reporting and editing staff of any third party. This Report was possible thanks to:

Only two years after President Buhari’s administration came into office, Nigeria has finally exited from its worst recession in 20 years. As Nigeria ambitiously rebuilds its economy, an atmosphere of positivity and determination is sparking off financial mobilisation around the country.

he recent revelation that Nigeria had finally exited its worst recession incited much celebration and optimism within the government, as well as great caution and a revived determined focus. According to the National Bureau of Statistics (NBS), Nigeria exited the recession with a 0.55% GDP growth in the second quarter of 2017. The NBS report claims that improved oil performances were not the sole cause for economic recovery, but that the optimisation of sectors such as agriculture, manufacturing and trade have also played a major role. “The decisiveness that attended the launch of the Economic Recovery and Growth Plan (ERGP) in April 2017 set the country on the path to sustainable recovery,” reveals Obeahon Ohiwerei, Managing Director at Keystone Bank.

Nigeria’s Economic Recovery and Growth Plan 2017–2020

President Muhammadu Buhari formally launched his ERGP programme for MediumTerm economic recovery in April 2017 in a bid to strengthen the economy, encourage growth and avoid recession. Consistent with their other plans and strategies, the government will focus on making structural reforms to assist the diversification of the nation’s economy, create an environment where businesses thrive and shift the nation from being import dependent. Minister Udo Udoma explains, “The broad objectives of the ERGP are to restore growth, invest in our people and build a globally competitive economy.” The ERGP has an umbrella framework incorporating 60 national development schemes prioritising APRIL 2018

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PENRESA

The Rebirth and Remaking of a Nation

the development of infrastructure, agriculture, industrial and power sectors. It aims to have a GDP growth of 7% by 2020. Agriculture, Infrastructure, Transport and Social Investment

President Buhari was unwavering when he stated, “Until coming out of recession translates into meaningful improvement in peoples’ lives, our work cannot be said to be done.” The government’s determination in reflating the economy, and consequently empowering the people, is found in its dedication to funding sectors such as infrastructure, agriculture, transport and its people. “The investment in infrastructure is driving the value chain of the economic diversification,” explains Babatunde Raji Fashola, Minister of Power, Works and Housing. “We’re building roads and bridges. We’re building houses. We’re also building power assets, particularly transmission assets, which government retains in the aftermath of privatisation. Those are the areas that we are working on. We are operating from first principles – what can you do for yourself with your own resources. So, we’re focusing on budget resources,” states Hon. Fashola. The Minister of Transportation, Rotimi Amaechi, extrapolates, “The government is focusing more on railways, even carrying out reforms in the area of maritime. There is also the habitation of Abuja airport.” Agriculture has also consistently and positively contributed to GDP growth 4 | FORBES AFRICA APRIL 2018

in Nigeria in recent years. Investments in the sector guarantee food security, contribute to job creation while saving the costs of importation. It is also key to promoting economic diversification. Babatunde Fowler, Chairman of Federal Inland Revenue Service (FIRS) explains, “The country is going back to its roots; it’s beginning to focus on agriculture and I foresee that within the next year or two we should be self-sufficient.” The government also continues to campaign vigorously for the patronisation of Made in Nigeria goods to encourage the development of local industries, Vice President Osinbajo says, “If you had to sum up our vision for the Nigerian economy in a few words, these would suffice. Grow what we eat, produce what we consume.” The administration’s viewpoint that the Nigerian people are its invaluable assets has enhanced its concern with investment in education. Wolfgang Goetsch, General Managing Director at Julius Berger explicates, “The world always says that Nigeria is such a rich country. I think it is a rich country, but the real wealth is not the oil, the real wealth are the people – the skills, brains, energy of the people.” Charles Inyangete, General Managing Director at Nigeria Mortgage Refinance Company concords, “Nigeria has a youthful, vibrant population, who feel that nothing is impossible for them.” Nigeria’s aspirations for a rapidly growing economy with diversified sources of growth are reliant

upon increased opportunities for its people and the creation of jobs. Proforce MD, Ade Ogundeyin, affirms, “We’ve added value to the economy, we’re impacting society by what we do. We are creating job employment. If everybody does that, you will be surprised at how the whole country changes completely.” With this in mind, as well as the need to promote innovation, critical thinking and future jobs, the Vice President Osinbajo has declared a need to invest in Science, Technology, Engineering, and Mathematics (STEM) education. This, he has declared, is fundamental to the successful industrialisation and development of Nigeria. “If it has a clear target, Nigeria has the capacity to be a highly industrialised country,” he says. World Bank Ranking

In October 2017, The World Bank issued its Ease of Doing Business report confirming that Nigeria has moved up by 24 points. The report sets Nigeria as one of the 10 countries that has most improved its business environment due to the impact of its reforms. It further outlined the five reforms which had ensured business ease in the two cities of Kano and Lagos as being: Starting a Business, Dealing with Construction Permits, Registering Property, Getting Credit and Paying Taxes. “Improving the business environment is at the heart of the Buhari Administration’s reform agenda,” clarifies Vice President Yemi Osinbajo, “Our focus remains firmly on ensuring that SMEs operating in Nigeria find it easier to do business. Our ultimate success will be the testimonials received from businesses all across the country. However, this validation from the World Bank endorses the direction that we have been taking to improve the ease of doing business in Nigeria over the last 12-18 months.” It appears to be obvious that Nigeria didn’t exit the recession by accident. This has been the result of months of hard work and strong governance by the administration, as well as a robust adherence to economic policies. In Nigeria, economic confidence has returned steadily and triumphantly, restoring an increasingly promising outlook for long-term growth.

MinistER of Power, Works and Housing

BABATUNDE fashola

Building a new Nigeria

interview

pillar to the administration, the Ministry of Power, Works and Housing is key to constructing the opportunities needed for economic diversification. Hon. Babatunde

“The investment in infrastructure is driving the value chain of the economic diversification. We welcome transparent partnerships, that feel sufficiently comforted by the bold steps that we are taking to do things for ourselves.” BABATUNDE fashola, MinistER of Power, Works and Housing

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Fashola successfully heads the most complex and demanding ministries in present day Nigeria; one upon which the development of other sectors, such as agriculture and industrialisation, are also dependent. Hon. Fashola’s role and policies are crucial to the diversification of the economy, mobilising the people and flinging open the gate to safe and secure trade. Here, he speaks to Penresa about the Ministry’s major projects and the need for infrastructural and technological progress.

Can you give us an overview of the key projects that the Ministry is incentivising to enable the country’s connectivity and boost economic activities across the country? We’re building roads, bridges, houses and power assets, particularly transmission assets, which government retains in the aftermath of privatisation. The investment in infrastructure is driving the value chain of the economic diversification. We welcome transparent partnerships, that feel sufficiently comforted by the bold steps that we are taking to do things for ourselves, to come along with us.

One of the biggest challenges for foreign investors is always infrastructure. They want to come to a place where there is a stable regulatory system that will assist their needs. How do you encourage these foreign direct investors to come to the country? We have a large market that is underserved, that’s a huge market for any smart investor. We have a population that demonstrably shows that it values quality. We protect existing contracts and we renegotiate those we think require negotiation. We are concerned about business, so you will see us leading the reform for ease of

doing business. You will see us promoting the role of private capital and doing everything by government policy to enable it. Each investor will prosper and survive by the quality of the service it renders to the market and that’s competition.

You recently advocated for a National Digital Map. What do you hope this will accomplish for Nigeria and how long would it take to implement? What are the pros and cons of having the NDM? Maps are critical to infrastructure development, they’re critical to design, feasibility, planning and execution. Our administration delivered a digital map for Lagos and that has saved a lot of time and money. We could design roads in our offices without needing to go out onto the field. We had information, including barometric underwater data. It also helps in movement of goods and services. So, it’s an investment in infrastructure delivery. We’re committed to IT. We’re installing more broadband and connectivity across the country. All of this becomes more useful and effective in digital form. This also gives us a lot of readings, statistics and data that we don’t have.

After 35 years of talk about the Mambilla Hydro-Power project, the Nigerian government has approved the contract for its construction. What are the main benefits of its implementation?

It demonstrates President Buhari’s decisive and deliberate leadership. When he visited China last year, he met with his opposite number and said we need to close on this project, it is important to my people. The parties that had been quarrelling for decades were given a very clear mandate – go and reconcile, go and resolve, go and form a joint venture otherwise we will change you. We’ve reached a major decisive hurdle that focuses on the project. It’s a 72-month project through construction.

MINISTER OF TRANSPORT

ROTIMI AMAECHI

Linking a faster and more efficient Nigeria

he government’s focus on transportation makes the economy soar. Transport infrastructure in Nigeria has been given a successful and powerful makeover during the short time President Buhari’s administration has been in office. Minister of Transport, Hon. Rotimi Amaechi has emphasised the need for teamwork in order to ensure efficiency while reiterating his Ministry’s ample capacity for creating much needed job opportunities. The establishment and expansion of dry ports, aviation, rail works and maritime is successfully and expeditiously opening up opportunities and allowing for the facilitation of trade within Nigeria, and the world.

What projects and policies are being implemented in the transport sector?

Quite a lot of activities are happening in the area of transportation. In the past, people used to see the Nigerian Maritime Administration and Safety Agency (NIMASA) as an avenue to making money and a private concern. We’ve returned to NIMASA with the necessary responsibilities, which are to regulate the shipping administration and ensure security in the waterways. Before awarding contracts, we’ve been carrying out reforms in this industry. We must provide kudos and attribute the success to the new director general of NIMASA. These reforms are ongoing in the Nigerian Port Authority (NPA). The government is also focusing more on railways and we’re almost there. We’ve commenced construction of the Lagos-Ibadan Railway line (180km) and we’ve completed the Kaduna-Abuja Track (180/160 km). We are negotiating with Chinese investors to complete the construction from Ibadan to Kano, which would give us 1,500km of railway up to Kano from Lagos. We’re also liaising with the China EXIM Bank to do the Lagos-Calabar Rail. The airport at Kaduna has been completed and we’re happy to commence activities. We’re mediating with General Electric (GE)

interview for the concession of the narrow gauge rail network across the country. That narrow gauge will run through the Kaduna Airport. We have completed a dry port in Jos and the Port Harcourt-Maiduguri Narrow Gauge Line will also pass through it. We’re also currently constructing four new tenders – one at Abuja Airport, one in Kano airport, one in Port Harcourt Airport and one at the International Wing at Lagos Airport.

Transportation plays a very important role to develop a country. You can’t really boost development without having connectivity. It’s a challenging job. Transportation is logistics. If you get it wrong, you get the economy into big problems. The government recognises that and that’s why they are funding transportation.

The aviation sector really is a boost to the economy, how are you encouraging profitability?

If you look at our aviation sector, it’s in the hands of the private sector; the government just regulates it. Now, the government is focusing on concessioning the airports, just like it is concessioning the narrow gauge. Apart from that the government wants to fix the airport, just as we fixed the Abuja airport. We are just two years into our term. We need time and we need patience.

“Transportation is logistics. If you get it wrong, you get the economy into big problems. The government recognises that and that’s why they are funding transportation.” ROTIMI AMAECHI, MINISTER OF TRANSPORT

Could you please tell us a little bit about your leadership style and how to achieve success?

This is difficult to answer, although I do know that I need to be efficient. I have a responsibility to help with the economy. I have a duty to ensure that I create jobs; I create jobs through the agencies and departments that I run. I don’t work alone, I work with a team. Our achievements have been getting everybody on board with their own tasks and a date to deliver. APRIL 2018

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EXECUTIVE VICE CHAIRMAN / CEO OF THE NIGERIAN COMMUNICATIONS COMMISSION

UMAR DANBATTA

Increasing Connections

interview

he telecommunications industry in Nigeria is like a haven for foreign investors as so much has been achieved in the last yearand-a-half in terms of the development in the industry and return on investment. Penresa had a chance to sit down with the Executive Vice Chairman and CEO of the Nigerian Communications Commission, Professor Umar Danbatta to discuss their plans to connect Nigerians closer together.

What is your vision for the next five years?

“The telecoms contribution to GDP is close to 10% and has been contributing 1.4 trillion naira to the economy.” UMAR DANBATTA, Executive Vice Chairman and CEO of the Nigerian Communications Commission

When I assumed duty in 2015, we came up with an articulated eight-point agenda that will drive our activities for the next five years. Under this five-year plan we have: facilitating broadband penetration, improving quality of service, optimising usage and benefits of spectrum, and promoting ICT innovation and investment opportunities. Others are: facilitating strategic collaboration and partnership, protection and empowerment of consumers, promoting fair competition and inclusive growth, and lastly ensuring regulatory excellence and operational efficiency, within the commission itself. For the next five years, these activities will make the industry more stable and resilient and therefore, contribute meaningfully to the social-economic development of the country.

What about broadband penetration? What is the NCC doing to connect more people?

When we introduced our agenda, penetration was hovering under 10%, meaning about 15 million Nigerians had access to broadband services. That has more than doubled now. So, we are up to 21%, which translates to over 30 million Nigerians now having access to broadband services. Consistent with the National Broadband plan (2013-2018) for this country we are supposed to achieve 30% penetration by 2018.

In terms of investment, what does the ICT and telecoms sector in Nigeria offer to investors coming in unlike any other sector? 8 | FORBES AFRICA APRIL 2018

Well, the ease of doing business has improved remarkably as this government is a government of change. The other one is employment creation. Any investor would love to hear this; that they can come into this country, gain access to the National Investment Promotion Council, discuss terms and conditions for investment and of course, come to the NCC if they intend to invest in the telecoms sector. All investors are welcome to invest in this country. The telecoms contribution to GDP is now close to 10% and has been contributing 1.4 trillion naira to the economy. So, it is a sector that has shown remarkable resilience, even in the face of economic recession.

Do you think the situation is changing only because of the government’s strong administrative position? How did you get to this point with everything in place? We just emphasized adherence to the rules of engagement and due process. We are not in a hurry to penalise the operators, but we take deliberate steps to ensure regulatory excellence consistent with the laws that established the NCC. The enforcement action that results in a sanction is an action of last resort. We normally do it, even though we don’t like it, to send a clear message that it cannot be business as usual.

How does the system work and how does the NCC try to ensure harmony among all stakeholders?

The ecosystem is important because no element of the ecosystem can survive without the other. There are the telecom operators, internet service providers, Value Added Services (VAS) providers and other licensees. Then, of course, you have other stakeholders. All of us need to work in harmony, for the interest of the industry. The NCC deliberately introduces flexibility in all regulations to ensure the rules of engagement are respected and complied with. This pattern will continue because we are here to ensure all the necessary measures are put in place to ensure sustainability of performance.

GROUP GENERAL MANAGER of NAPIMS

ROLAND EWUBARE

Investing safely in Nigeria’s energy future

igeria has just exited from the worst recession in the past 20 years and we are witnessing the first results from the reforms of the administration of President Buhari. What are the implications for the oil and gas in Nigeria?

We really must commend President Buhari and his team for the dedication and single-minded focus brought to bear on tackling what was easily the worst recession in recent memory. There are two factors that led to the quick abatement of the recession: first, the government put imaginative initiatives around mitigating the effects of the recession and secondly, the inherent resilience of the Nigerian people. Now we are beginning to see some traction around major projects which we hope will attain final investment decision status in the next 12 to 18 months. Any stimulation of the business environment directly leads to improvement of the fortunes of the players in the oil and gas space, especially the multinational companies who maintain a large footprint in our market. That said, on every level, it is a positive thing that Nigeria is emerging as a progressive place for global capital to reside.

How is NAPIMS utilising the idea that “sharing is more profitable”?

Cost optimisation via shared facilities is one of the major initiatives that we believe will have us drive down the unit technical cost of our barrels. We have robust logistics services to support production and we are trying to instill a superior mechanism for pulling and tugging at shared resources. The outcome will be twofold: economies of scale and efficient management. If the partners embrace this initiative, we will see many positive things moving forward.

Minister Kachikwu spoke of his desire for Nigeria to become a gas-based economy and end fuel importation. What are some of the current initiatives to help this Gas Revolution?

interview The intelligent money will tell you that Nigeria is really and truly a gas basin with some oil. Historically, oil was way easier to exploit and infinitely easier to market and sell. Oil was the main dish and gas was like a morsel of dessert. Now, we realise that gas is the future. Gas checks all the right boxes from the perspectives of clean energy and sustainability. I can tell you now that we have some major offshore gas development projects coming up that would help speed up the industrialisation of our domestic economy on the anchor of gas.

Transparency and accountability are crucial in the oil and gas sector. What framework is NAPIMS currently using to ensure transparency and fairness?

Transparency is essential to manage Nigeria’s investment in the oil and gas industry, and investment management also requires the highest standards of accountability. The nation has an opportunity cost requirement for every dollar, so we have to ensure that there is a mechanism internally to prevent the waste of any dollar invested. We have frequent reviews and different levels of management oversight over investment decisions plus a whole process of budget and work programme management. Bottom line, we have a pretty structured and organised framework designed to meet the expectations of Nigerians and we are working hard to improve the process and up our game everyday.

What is the key thing to say to investors about why they should come now to Nigeria, not before, not after, but now?

“Cost optimisation and sharing our facilities is one of the major initiatives that we believe will drive down the unit technical cost of a barrel of oil.” ROLAND EWUBARE, GROUP GENERAL MANAGER, National Petroleum Investment Management Services (NAPIMS)

You have to jump on the train whilst it is still at the station. If you come two or three years from now, the train would have left. I say regularly that Nigeria is a massive market for anything and everything. Think about it, if it is shoes we have a market of 180 million pairs of feet. If it is housing, we currently have a housing deficit in the affordable homes segment. The opportunities are simply infinite if investors approach the market with the right mindset. APRIL 2018

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PENRESA

DEVELOPMENT BANK OF NIGERIA

MSMEs take centerstage with inclusive banking model The Development Bank of Nigeria will serve as a wholesale bank to commercial banks and microfinance banks to ensure micro, small and medium enterprises receive proper funding.

he Development Bank of a subsidiary, which is aimed at derisking Nigeria (DBN) is a wholesale that segment of the market to encourage financial institution aiming lending to MSMEs.” to increase access to finance With access to US$1.3 billlion (N396.5 for micro, small and medium enterprises billion), provided by the World Bank, (MSMEs) through eligible financial German Development Bank (KfW), intermediaries. Conceived in 2014 but African Development Bank (AfDB) and coming into fruition in 2017, the French Development the project was inherited Agency (AFD), the DBN is by President Buhari’s primed to make a positive administration with a contribution to the large determination to resolve all MSME market. To ensure the outstanding issues. “One of the sustainability of the DBN and greatest challenges MSMEs the achievement of its mandate, have is lack of access to finance international best practice in terms of long-term funding, was used in establishing the as well as minimal capacity bank. This meant they must building within this segment,” adhere to strong corporate states Tony Okpanachi, CEO governance standards while Tony Okpanachi of DBN. “So, the setting up its management and board ceo of dbn of DBN is in alignment with are professionals who are the Federal Government’s objective of independent and highly qualified. All of diversifying the economy and boosting these actions were done with a direct economic growth.” focus of “providing an enabling and stable The operations of the DBN are distinct environment while improving the ease of from other development banks as it is doing business.” focused on supporting small businesses The influx of additional capital from defined by size and not by sectors. By the DBN will lower borrowing rates, providing loans to all sectors of the while the longer tenure of the loans will economy, the DBN fills an important provide the requisite flexibility of cash financing gap not currently served by flows, ultimately giving businesses the existing development banks. “Our first opportunity to make capital improvements mandate is to engage with participating and acquire more assets. “On a personal financial institutions, pre-qualify level, my sense of accomplishment lies in them using our set criteria and begin how many MSMEs can access funds from providing funding through them,” details DBN within the first year of operation, Okpanachi. “Our second mandate is to how easy the process is for them, and provide guarantees of up to 50% through what share of the MSME market we have

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in the next 5 years,” affirms Okpanachi. “The other developmental impact I expect are creation of more jobs by the MSMEs, empowerment of women, financial inclusion and ultimately, growth in government revenue from the activities of the MSMEs. “ Since MSMEs contribute 48.47% to the gross domestic product (GDP) of Nigeria but have access to only about 5% of lending from banks, DBN’s work will assist in diversifying the economy with the growth of the MSME sector having a positive impact. Delivering enhanced access to funding is what drives DBN towards the vision of helping MSMEs grow and improving the economy. Capacity building is another area of focus in the MSME sector that needs addressing due to the lack of knowledge in that area. According to Okpanachi, “we will provide training to build capacity and take the lead in anything pertaining to funding and capacity building for micro, medium and small enterprises because it is a challenge that needs to be solved.” By providing leadership to a frequently overlooked sector and acting as a catalyst to ensure MSMEs receive proper funding, the DBN is a progressive model of inclusion and diversity within the Nigerian financial sector. Development Bank of Nigeria Abuja, FCT, Nigeria Telephone: 0811 384 1699 www.devbankng.com

PENRESA

BANK OF INDUSTRY

Industrialising the nation The oldest, largest and most successful development financing institution in Nigeria continues to renew and reinvent itself as it propels the industrial sector of the country’s economy forward.

he Bank of Industry is the oldest financial institution in Nigeria. Formerly known as the Nigerian Industrial Development Bank (NIDB), it began operations in 1964 with an authorised share capital of GBP2 million. In 2001, the NIDB underwent a successful institutional, operational and financial restructuring programme transforming it into the present-day Bank of Industry (BOI). The recapitalisation of N250 billion allowed BOI to effectively carry out its primary mandate of providing long term financing to the industrial sector of the Nigerian economy. BOI has offices in each geo-political zone of the country and the Federal Capital Territory. In May 2017, President Buhari appointed Olukayode A. Pitan Managing Director and CEO of BOI. Pitan has 25 years corporate and banking experience. He states, “There was a working strategy 2017-2019 already in place when I took on my role in BOI. All over the world, the small and medium enterprises are engines of growth. Our idea is that

in Nigeria we should also put some emphasis in that area so we can actually help the micro and the small and medium enterprises. We need to have a holistic plan for the whole industrial sector.” He goes on to state that the company’s mission is “to reduce, in critical areas, the costs of finance for companies.” The Bank offers financial support and loans for the development of industries in Nigeria, emphasising management and project selections that are targeted at job creation and poverty alleviation in the country. It provides financial assistance and advisory services for the establishment of large, medium, and small projects, as well as the expansion, diversification, modernisation and rehabilitation of existing enterprises. BOI is intent on transforming Nigeria’s industrial sector by providing financial and business support services to enterprises. Pitan elaborates, “My job is to say, we need to subsidise some critical infrastructure and some industries and we have

to raise the money.” It aims to be Africa’s leading development finance institution operating under global best practices. Launched in October 2015, the Graduate Entrepreneurship Fund (GEF) scheme, in partnership with the National Youth Service Corps (NYSC) Directorate, is the Bank’s first youth programme. This initiative is targeted at youths undergoing the mandatory one year national service programme. The aim is to change the job-seeking mindset of Nigerian youths to entrepreneurship and self-reliance by encouraging them to develop skills for self-employment and to contribute to the accelerated growth of the national economy. Pitan explains, “We’re looking at building capacity for the middle and micro enterprises. We are holding workshops, telling them these are the kinds of things you need to do, this is how you can access funds, that way you can collateralise what you have. So, financial inclusion actually helps in ensuring that capital gets through to them and the idea is to increase capacity and actually enhance the ability to employ more Nigerians, because we have a lot of graduates who are there.” The future of BOI is bright, recently the approval of N750 billion will be used to further recapitalise the bank in an attempt to lead Nigeria’s reindustrialisation goals. Pitan claims, “I would say, in the next one or two years, people are going to see a different Bank of Industry. We’re going to be more active in the international capital market because I feel that we should also help to industrialise Nigeria.”

23 Marina Street, Lagos. Nigeria Customer Care 0700-CALL-BOI (07002255264) customercare@boi.ng • www.boi.ng APRIL 2018

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financE

You can take it to the bank Combining the private and public sector, these leaders discuss guiding their organisations under the new economic climate.

enresa talks to leading figures within Nigeria’s banking and housing institutions about how to encourage economic diversification in alignment with the government’s economic initiatives, as well as their own personal philosophies and visions. Olukayode Pitan is Managing Director at the Bank of Industry (BOI), Nigeria’s oldest, largest development financing institution. Charles Inyangete is Managing Director at Nigerian Mortgage Refinance Company (NMRC). NMRC is a private sector driven company with the purpose of developing primary and secondary mortgage markets.

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Tony Okpanachi is pioneer Managing Director at The Development Bank of Nigeria (DBN) was conceived in a bid to address financing challenges for Micro, small and medium-scale eEnterprises in Nigeria.

What are your objectives in ensuring a successful economic performance in compliance with the current administration’s initiatives? Okpanachi (DBN): Over 60% of Nigerians, almost 80 million Nigerians, are involved in one way or the other in micro, small and medium enterprises. The Development Bank of Nigeria has been set

up essentially as a catalyst for economic growth by providing MSMEs with funding. There is also minimal capacity building within this segment. So, the setting up of DBN is in alignment with the Federal Government’s objective of diversifying the economy and boosting economic growth. Inyangete (NMRC): As NMRC we are a public-private partnership (PPP) with the federal government of Nigeria, represented by the Ministry of Finance cooperative, the investment arm of the government. We’ve ensured that our reliance on technology is not just innovation for the sake of it, but innovation – MMS, the mortgage market system – technology in terms of operations.

As we are electronic, our systems and structures are very clear and transparent and our rating takes a short time.

can provide liquidity to the market and make it easy for people to be able to afford, as well as to have access, to home ownership. We’re looking at very significant Pitan (BOI): In the next few Olukayode Pitan, Charles Inyangete, Tony Okpanachi, years, people are going to see Managing director Managing Director Managing Director activity in the next three years that would allow us to deploy a different Bank of Industry. bank of industry of NMRC of dbn at least 140 billion into the We’re going to be more active refinancing activity of NMRC. in the international capital market, thereby making it easier for them to because we need to help industrialise grow and impact the economy positively. Nigeria. There are good industries to Another value we will add to the MSME Pitan (BOI): I’ve worked in various be supported in Nigeria, so we want to segment is capacity building. On a personal roles but I’ve been in management for attract the capital, as our government is level, my sense of accomplishment lies in quite some time. I’m also a pastor; I run trying to attract capital. We’re going to how many MSMEs can access funds from a church of about 4,000 people. For me, help foreign companies that are coming DBN within the first year of operation, when working with people, leadership in, to see how we can make life easier for how easy the process is for them, what is about setting examples. It’s not only them, so that they can thrive. share of the SME market we have in the what you say, it’s what you do. I believe next five years. that one should encourage authentic views on things and I try to be inclusive What are your vision and objectives as as much as possible. When I came to the Inyangete (NMRC): At NMRC, we leaders? Bank I had created a working strategy set ourselves with a vision to be the based on the idea that all over the world dominant housing partner in Nigeria Okpanachi (DBN): First and foremost the small and medium enterprises are and with a mission to tear down all the our vision here in DBN is to ensure we actually engines of growth. barriers to home ownership, so that we provide access to funding for MSMEs,

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MANAGING DIRECTOR of ecobank NIGERIA

charles kie

Riding the digital wave

interview

cobank Nigeria is a leading commercial bank licensed by the Central Bank of Nigeria. Charles Kie, Managing Director since 2016, discusses here the bank’s dedication to environmental projects, such as tree-planting, as well as its commitment to innovation and technology.

Could you tell us a little bit more about Ecobank Nigeria’s cashless banking systems?

“We believe that the future of our banking model has to fundamentally ride on the back of the digital in order to ensure our customers ease of transaction.” CHARLES KIE, MANAGING DIRECTOR OF ECOBANK nigeria

I think it’s important to take a strong view on where the banking industry is going, particularly for a country like Nigeria, where, as we know, the population is fairly young. At Ecobank Nigeria, we believe that the future of our banking model has to fundamentally ride on the back of digital in order to ensure our customers ease of transaction while they employ the applications and innovations we’re bringing to the market.

What are your strategies to ensure growth? One of the good things the financial crisis did was make people within these financial services realise and be aware of the importance of capital. Nobody wants to get back into a situation where the states will have to bail out banks. The banks are now required to have enough capital by themselves and thus have the absorption capacity when confronted with a shock. Take the oil and gas industry, for instance. A lot of banks, for a long time, have been putting a lot of capital in that industry. Today, industries have been redefined so that they will be resilient. A crisis situation allows one to adjust. This is where strategic cost management comes into play; while we grow the revenues, we also reduce our cost in order to improve our returns. We then share these with our stakeholders; customers, shareholders and our employees.

How do you work with entrepreneurs in industry?

We believe that technology and ICT will drive some of the things that we should expect in the future. In 2017, we initiated 14 | FORBES AFRICA APRIL 2018

a fintech challenge in order to identify start-ups that have the potential to shape the future of this industry on the continent. We have to make sure that we create partnerships that will effectively allow us to achieve that development. So, it’s not just about being a bank, it’s about trying to identify those companies that have the potential to drive the future growth of this continent, including Nigerian companies.

What are your Corporate Social Responsibility projects?

As a group, we support malaria and HIV and tuberculosis health ventures in partnership with the Global Fund. We also support financial literacy in this country by providing grounds and teaching to a certain number of schools. We are also invested in environmental issues, including tree-planting campaigns. We regard part of our role as going beyond being a bank, we need to give back to the community and support all the initiatives that allow the life conditions of the population to improve.

Which steps do you think are needed to support local manufacturers?

If the country wants to grow macroeconomic policies it must support demand. At some point, you have to make sure that what the country collectively does will actually support the ability for people to consume the products that are manufactured in this country. Therefore, due to the size of the population, it’s important that some level of import substitution comes into play; the access to raw materials, machinery, plants and equipment has to be made easy in order for these companies to produce. This is where ethics and ease of trade comes into play. Investment in the power infrastructure space needs to take place in order to facilitate local manufacturing. This, in turn, will bring the cost of goods down and recreate the appeal for demand which we then fuel into the growth of the economy.

managing director at CORONATION MERCHANT BANK

Abubakar Jimoh

Crowning achievements in investment banking

nitially founded as Associated Discount House Limited, in 1993, and later metamorphosed into a full service merchant bank, Coronation Merchant Bank Limited has become a premier Nigeria-based investment bank providing innovative, long-term financial solutions to corporations, government institutions and other financial services organisations. Penresa had a chance to sit down with the Managing Director, Abubakar Jimoh, to discuss the state of the economy, financial sector and Coronation Merchant Bank’s services.

Nigeria just exited its worst recession in 20 years. Both the International Monetary Fund (IMF) and World Bank forecasts estimate Nigeria will grow by about 1.8% in 2018, while inflation is expected to moderate to 12.42%. What does the country require to surpass this prediction in 2018? With the restructuring of FX and the important import/export window created in April which significantly helped the system, the country is out of recession. If the tight monetary policy continues, and Central Bank continues to manage the liquidity that makes FX, I think we may even do more than the 1.8% that was projected. Since the end of September, we’ve seen an increase of 1.4% for that quarter. I think 2018 may see a case of upward of 2.0%, which is going to be higher than the 1.8% that was predicted.

The World Bank presented the report on 2018 Ease of Doing Business to Vice President Yemi Osinbajo where Nigeria moved up 24 points. Nigeria has already seen an increase on foreign investments entering in the market. What is Coronation Merchant Bank doing to attract investors and what differentiates you from the rest of the sector? We have built our business as an investment bank-led institution. We work in partnership with our clients, constantly interacting with them to

interview understand their needs and develop solutions that will match their requirements. Our solutions are custom-made for every one of our clients, carefully designed to meet their business objectives. Coronation Merchant Bank is doing its part to ensure that we support the government in achieving the goal of making the environment conducive for investors. We try to ensure that investors have a quick turn-around time, as well as access to quality and reliable information from our research Unit that will help them make informed decisions, giving them assurances that their investments are well directed and protected. We’re not like the commercial banks, meaning our decision time is very short. This means that you can get a yes or no decision from us within 24 hours, whereas this might take weeks with regular commercial banks.

Coronation Merchant Bank is heavily focused on social responsibility and capacity building in the country. What programmes are Coronation Merchant Bank currently running and who’s involved?

We started our training school with about 17 fresh graduates. This platform provides young graduates the opportunity to pursue a career in investment banking and become an integrated part of the organisation irrespective of their financial background. We do this on an annual basis.

Why is now the best time to invest in Nigeria? The best time to invest is when everybody is running away, at such times you are almost certain of guaranteed returns. A few years ago, FX was about N200 to the dollar, and that was before the devaluation started. People then were able to invest in the Eurobond in Nigeria at 15-16%. I am not sure there are many countries where you can get that in the world. Crude oil prices are stable now and there is relative peace in the Niger Delta. So, things are looking very positive. I think the best time to invest is now because the yield is good and the risks are trending down.

“The way we have built our business is that we have developed our merchant bank as an investment bank-led institution. We work with our clients, based on partnership.” Abubakar Jimoh, managing director CORONATION MERCHANT BANK

APRIL 2018

FORBES AFRICA | 15

PENRESA

infrastructure

The year of Nigerian infrastructure President Buhari’s administration has decided to reinvest a large portion of its fuel subsidy revenue in the maintenance and construction of power and transport infrastructure as a means to encourage economic competitiveness.

n a bid to drive the economy and create jobs for the Nigerian people, President Muhammadu Buhari revealed his intention to prioritise and commit to the development of infrastructure in his new year broadcast. “There are huge opportunities in Nigeria. We are taking people off the streets, creating value and job employment,” states Managing Director at Proforce, Ade Ogundeyin. “We’re building roads

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and bridges. We’re building houses. We’re also building power assets, particularly transmission assets, which government retains in the aftermath of privatisation,” asserts Hon. Babtunde Raji Fashola, Minister of Power, Works and Housing. The Federal Government has informed Nigerians to expect an additional 1,129MW in the country by 2018. At present, Nigeria generates 7,000MW of electricity with a transmission capacity of 6,900MW.

The Power Sector Recovery Programme (PSRP) was set up in 2017 in order to put into action a series of policy actions and financial solutions for the power sector. It also works toward solving distribution problems by strengthening the governance of DisCos by reconstituting board representation in its eleven DisCos. In addition to this, the Rural Electrification Agency (REA) are working on unlocking Nigeria’s mini-grid energy activity.

This year the current administration is looking to complete power plants, including the 240MW Afam Plant through a private investment partnership. In November 2017, the Federal Government and Chinese contractors signed a contract to complete the Mambilla Hydroelectric Power Project which according to Hon. Fashola is “a 72-month project through construction,” which will supply 3,050MW. Alongside the development of a stable power supply, the Minister of Transport, Hon. Rotimi Amaechi declares that, “once there’s efficiency in your transportation then you are sure that goods and services and logistics will grow.” The President has announced the revival and reconstitution of the Management of the Federal Road Maintenance Agency (FERMA) which has been given the task of urgent road repairs over all the geo-political zones. FERMA’s General Managing Director Engr. Nuruddeen Rafindadi explicates, “There are about 35,000km of federal

highways in Nigeria. At any one time the Ministry of Works will be having existing contracts on 2,000. The rest of it will be under finance mandate to maintain.” He clarifies the importance of the road network as economic enabler “It’s a catalyst. The better the roads are, the better we are able to evaporate agrigoods and prevent damages in perishable items. A lot of our roads, especially the Federal Highways, are designed to criss-cross between the east and the west, which are basically trade routes. They are designed to convey vehicles right down to the northern borders.” There is also the importance of job creation. Julius Berger’s Managing Director, Wolfgang Goetsch, voices the importance of quality, “If we build a road with a lifespan of 25 years you can rest assured that the minimum lifespan is 40 years.” Other transport infrastructure projects include the expansion of existing rail lines as well as the development of new ones. Nigerian Railway Corporation’s Managing Director Okhiria states, “Rail is

the backbone of a nation industrialising.” Construction has already commenced on the rail lines from Lagos-Kaduna which is expected to reach Ibadan from Lagos by the end of 2019. Transport Minister Amaechi has signed an agreement on behalf of the Federal Government for a contract with the CCECC for the construction of the Lagos-Calabar coastal railway line in Nigeria. When completed, the proposed coastal railway line in Nigeria will link all sea ports. The project is also expected to create business hubs meant for commercial activities. Negotiations for the construction of other railway lines are also underway. The importance of infrastructure lies in its potential to develop the business milieu and economic growth. Minister of Power, Works and Housing Hon. Fashola elaborates, “the investment in infrastructure is driving the value chain of the economic diversification,” providing Nigeria with a unique opportunity to emerge.

APRIL 2018

FORBES AFRICA | 17

PENRESA

AIR PEACE

Taking Nigerian skies to new levels

Air Peace, Best Domestic Airline of 2016, delivers outstanding service and punctuality.

he concept of strength in diversity is that challenges and differences create more unity than disparity. According to Air Peace Founder and CEO Allen Onyema, “there is so much strength in diversity but instead in Nigeria, we are fighting against each other, which is not necessary.” Under this mandate to create peace and a united Nigeria, Air Peace Airlines was founded in 2014. The name Peace was chosen, as it is in all of his businesses, because Onyema is into peace building. With an ever-expanding fleet size and destinations, Air Peace promotes the unity of the country through its flight operations and policy of employing workers without ethnic or religious considerations. Onyema likes to refer to Air Peace as a mini Nigeria based on the different nationalities constituting its management and workforce because “I believe in broad nationalism to unite our country rather than focusing on ethnicities, which is narrow minded.”

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Air Peace isn’t his first foray into peace building in Nigeria. Originally trained as a lawyer, Onyema initatiated the Foundation for Ethnic Harmony in Nigeria, in 2004, to fight the incidents of violence among the Nigerian ethnic nationalities. Travelling from state to state with millions of his own money to bring peace, Onyema trained over 200 Nigerians in non-violent conflict to travel to Niger Delta and stabilise camps. Catching the eyes of the international community, Shell and Chevron joined the programme while the American government began giving visas to go for training in the US. “In the end,” notes Onyema. “We converted about 600 commanders and they were all given amnesty while we turned about 30,000 militants for the federal government. Today, some of them are lawyers, engineers, technicians, welders, belonging to all strata of life.” Besides peace building in the Niger Delta, Onyema also owns All Time Peace Media Communications to promote

radio and TV peace. “What keeps me going is the passion to create jobs,” declares Onyema “because it drives me to find things to put my hand in; not to make money.” The Air Peace staff are the highest motivated in the industry full of indigent people and orphans whose jobs have given them a meaning. Air Peace was founded to bring back the spirit of Nigeria in the airline business while providing life and opportunities to its people. While Onyema is not opposed to open skies, he feels that foreign airlines have been given cheap and easy access to the country, all to the detriment of local airlines. Due to its population and its role as an African economic hub, Nigerian skies have long been a target market for foreign airlines and according to Onyema, “they would never allow a Nigerian airline to survive because the success of a Nigerian airline might affect their businesses.” It is Air Peace’s goal to resolve this situation and continue to expand across Africa, like they’ve recently done with Ghana. With plans to expand to a fleet of 22 aircraft for greater connectivity, Air Peace is also looking to help bring the world to Nigeria by making it the “best tourism spot in Africa.” Under Onyema’s guidance and persistence, Air Peace is certified by the IATA Operational Safety Audit (IOSA) and was recently rewarded as Best Domestic Airline at the TELL Awards for Excellence in Nigeria. Punctuality, which practically doesn’t exist for Nigerian airlines, has been a trademark for the local airline. “When Air Peace started, if your flight was at noon, by 11h50 the aircraft door is shut and we take off. Passengers would come to the counter and complain because the flight had left on time which was an anomaly to them,” chuckles Onyema. “At the airport, if you see people rushing then they are flying Air Peace.”

25, Sobo Arobiodu Str., GRA, ikeja. Lagos, Nigeria Phone: 234 814 04 09 808 www.flyairpeace.com

PENRESA

Nigerian Rail Corporation

The fast track to boosting Nigeria’s economy The Nigerian Railway Corporation secures rail as becoming Nigeria’s transportation hub and is intent on moving the nation’s economy forward in all directions.

he Nigerian Railway Corporation As well as rehabilitating old rail lines NRC is (NRC) is Nigeria’s oldest also intent on constructing modern ones with corporation, retracing its past higher speed, as well as the standard gauge back to the construction of track system. There are plans to construct Nigeria’s first railroad from Lagos to Ibadan 10 new standard gauge rail lines across the in 1898. The company then went on to build country. Okhiria explains, “For the economy the Maiduguri rail line, the main core of to be truly competitive, Nigeria must move Nigeria’s railway network for away from the narrow gauge to many years. Today, the railway standard gauge lanes.” He believes system is made up of 3,505 that it is essential to upgrade the route km and 4,332 track km rail to a wider track, “It’s easier and is expanding fast. As part and faster and cheaper,” he says. of an endeavour to rewrite the “You can move more people, history of transportation which more goods, more speed, better is “critical to development”, poundage of the rail — instead of in October 2016 the Federal moving 40 tonnes per wagon you Government appointed Fidet can move 80 tonnes.” Edetanlen Okhiria as NRC’s The groundbreaking new Managing Director. Abuja-Kaduna rail line is one Fidet Okhiria, Okhiria is a qualified Electrical Managing Director of the first standard gauge Engineer with vast experience railway modernisation projects of Nigerian rail in the sector. His strategic undertaken in Nigeria and was corporation leadership is fundamental to inaugurated by President Buhari NRC’s master plan. He states, “to make in July 2017, only a year after its commission. Nigeria investment-friendly, and catch up The 186.5km standard gauge line, awarded with the rest of the world, our rolling stocks to China Railway Construction Corporation must be modernised.” According to him, the (CRCC), has double lines and connects the establishment of an efficient railway system federal capital city with its commercial capital will expand commercial activities, boost Kaduna, thereby enabling an efficient and the socio-economic development of Nigeria faster movement of goods and people between and play an essential role in building up the the two cities. It has a travelling distance of over nation. Okhiria declares that NRC ensures 3,421km and played a significant role during the safe, improved and efficient services to repair work at Abuja International Airport. freight owners and the increasing influx of Okhiria has stated that the construction commuters. and rehabilitation of the Itakpe-Ajaokuta-

Warri standard gauge line project was also nearing completion, with about seven coaches already in Nigeria from China. This railway line will be crucial for the transportation of iron ore from the Itakpe mine to the Ajaokuta and Delta Steel Plants and for coal haulage from Warri to the Ajaokuta steel plant. The Lagos to Ibadan standard gauge railway line construction awarded to the Chinese Civil Engineering Construction Company (CCECC), is also ongoing, as well as the standard gauge railway across Nigeria, from the Atlantic Ocean port of Lagos to Kano, near the Niger border. The Federal Government hope to complete all these projects before December 2018. In January 2018, President Buhari inaugurated 10 additional locomotives and two coaches to be deployed by NRC. The government’s ambition to link commercial cities and production centre’s through rail, so as to fast track the socio-economic development of the nation, is becoming a reality thanks to NRC. Okhiria states, “The dream of this management is to fully support the government by providing the necessary professional support and advice, providing the fastest way to achieving the dream that is being turned to reality.”

P.M.B. 1037 Ebute-Metta. Lagos, Nigeria www.nrc.gov.ng

APRIL 2018

FORBES AFRICA | 19

PENRESA

remita

Nigeria’s Innovative Software Solution The indigenous electronic payment system aiding the Treasury Single Account reaps in numerous successes and accolades.

with footprints in a number of eveloped 100% in Nigeria by neighbouring countries, with plans at SystemSpecs, an indigenous advanced stages to roll out across the software firm, Remita is an African continent. electronic payment platform Remita is regarded as a remarkable that helps individuals, organisations software success story and a pride to and governments to receive and make Nigeria and Africa at large, payments easily. and has in fact been voted Adopted by Central many times as Nigeria’s Bank of Nigeria (CBN) Software of the Year. as the payment gateway Owing to Remita’s for the facilitation of the outstanding performance Federal Government’s much in the delivery of efficient celebrated Treasury Single electronic payments, its Account (TSA) project – the developers, SystemSpecs, largest and most impactful has received many of its kind in Africa, Remita recognitions, including the processes about N700 Most Innovative e-Payment billion worth of transactions John Obaro, on a monthly basis and Managing Director Company of the Year at the BusinessDay Top 25 Most has enabled the Federal of remita Innovative Companies & Government to mop up more Institutions Awards 2017, Leadership in than N3 trillion of government funds Technology award at the 2016 African that would otherwise have been lying Achievement Awards in Scotland, and idle in different commercial banks. the ICT Software Personality of the Year Thriving on collaborations with 2016 accorded John Obaro, the visionary key stakeholders across the payment and CEO of SystemSpecs, at the Beacon industry, including all commercial of ICT (BoICT) Awards. banks, more than 500 microfinance banks, card payment processors and industry regulators, Remita has evolved into a highly preferred platform for electronic payment in the country,

awards & recognitions The excellent service delivery of the past years has brought numerous awards and recognitions within and outside the country, including: • Product of the Year at the New Telegraph Award 2017 • e-Payment Platform of the Year at the Beacon of Information & Communication Technology (BoICT) Awards 2017 • Most Innovative e-Payment Company of the Year at the BusinessDay Top 25 Most Innovative Companies & Institutions Awards 2017 • Most Innovative Mobile Payment Solution of the Year at the DigitalPay Expo Awards 2017 • Most Efficient e-Revenue Service at the CBN Card Expo Award 2016 • Software Company of the Year at the National Information Technology Merit Award (NITMA) (2015) • Outstanding Achievement in Software Development (2014) and Most Outstanding Software Solution (2014) at the Nigerian ICT Centenary Awards • Software Company of the Year (2013) at the Beacon of ICT Awards (Nigeria Communications Week) • Outstanding Public Service Product of the Year (2012) by the Financial Technology Africa Magazine • Others: - Central Bank of Nigeria’s Sector Award of Excellence (2013) for FG MDA awarded to Petroleum Equalization Fund (through the use of Remita) - Public Sector Award of Excellence for Local Government (2013) awarded to Kano Local Government (through the use of Remita) - Private Sector Award of Excellence for Multinational (2013) awarded to Chevron (through the use Remita) 4th-8th Floor, 136 Lewis Street, Lagos, Nigeria. Phone: +234 (1)2805182, (0)8035555051-2 Email: info@systemspecs.com.ng

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PENRESA

Nigerian Independent Petroleum Company (NIPCO)

Fully entrenched in Nigeria’s energy future Indigenous company expands its operations to grab 15% market share and 440 retail outlets

ith the recent majority acquisition of Mobil Oil Nigeria, Nigerian Independent Petroleum Company (NIPCO Plc) has expanded its offerings and market share in a competitive marketplace. The indigenous company has been offering stability, prosperity and sustainability in the petroleum sector since 2004. The NIPCO is an indigenous integrated oil and gas company that began operations in 2004 at its stateof–the-art terminal in Apapa, Lagos and has since remained a consistent and significant player in the industry. In recognition of its tireless contribution in the oil and gas sector, NIPCO was deservedly granted the status of Major Marketer in 2013. Compared to the other major marketers, states Venkatapathy Venkataraman, Group Managing Director at NIPCO, “in 14 years, we’ve invested much more than anybody else. We have diversified into LPG, CNG, promoted investments in gas and oil and expanded the business. Our range is the furthest in the country, from north to east Lagos.”

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In 2009, when the government called for the promotion of gas, NIPCO was the first out of the gates and became the first company in Nigeria and West Africa to start dispensing CNG in Benin. “From 2004 to the present day, we have achieved 10% distribution across the country, all in a matter of 10 years,” says Venkataraman. “From nowhere to a force of the country in the downstream. So, it’s a phenomenal growth as well. We never stop the flow.” In 2017, NIPCO announced the acquisition of 60% stake in the Mobil Oil Nigeria Plc (MON), a leading downstream player of high repute. With the addition of Mobil, NIPCO has improved its operating efficiency, adding tankers, putting new pipelines into its facilities with a clear focus on the future. “Our investments look inward. So, it’s fully entrenched into Nigerian operations. It should be the pride of place for Nigeria to showcase and grow in their own interest.” Venkataranam points out that, “before MON, we had 10% market share but now combined with Mobil, we have 15% market share with a total of 440 retail outlets.”

Passion lies at the core of everything that NIPCO does, and that passion directly translates to safety. In its 14 years of existence, NIPCO’s terminal has never gone through any major incident, loss of life or loss of manpower. Safety is essential for them since they are currently in the midst of graduating to another terminal in Port Harcourt. With safety comes efficiency and “one of the biggest assets of NIPCO is the ability to exhibit projects. We exhibit projects in a very short time, even the largest projects,” exclaims Venkataraman. “So, this is about the strength of this company and these are the little things that helped us grow. The team understands the necessity to move things at a good speed.” The current liberalisation of the petroleum downstream sector can be achieved with the partnership of this forward looking indigenous oil and gas company whose vision is to be the first choice company in the industry. Venkataraman affirms that the “indigenous Nigerian downstream oil and gas company would ensure stability, prosperity, sustainability and growth of the company, shareholders and the country.” NIPCO has distinctly proven, through its trailblazing investment in the industry, its readiness and capability, to be a formidable ally with the government in shaping the future of the mainstay of the Nigerian economy. Lagos Office: 1 & 15 Dockyard Road Apapa. Lagos - Nigeria Phones: +234 811 559 0117 +234 811 553 2291 info@nipcoplc.com www.nipcoplc.com

PENRESA

Nigerian Mortgage Refinance Company (NMRC)

Breaking down barriers to home ownership in Nigeria Awarded as one of the “Most Innovative Companies in Nigeria”, NMRC promotes mortgage access and affordable home ownership.

he Nigeria Mortgage Refinance Company (NMRC) is a Central Bank of Nigeria (CBN) — licensed, private sector-driven mortgage refinance company with the public purpose of developing the primary and secondary mortgage markets through raising long-term funds from the domestic and foreign capital markets, to provide accessible and affordable home ownership in Nigeria. NMRC leverages long-term funding to promote enhanced mortgage access and affordable home ownership by refinancing the mortgage portfolios of member banks. NMRC is “responding to its vision to become the dominant housing partner in Nigeria, by providing liquidity and access to affordable housing finance in Nigeria,” states Charles Inyangete, Managing Director and CEO of NMRC. Since commencing full operations in February 2015, NMRC has standardised mortgage origination and administration processes by implementing a Uniform Underwriting Standard (UUS) for use by its member mortgage lending banks to promote uniformity, efficiency and to mitigate mortgage financing risks. More recently, NMRC partnered with the CBN, Mortgage Banking Association of Nigeria (MBAN), Federal Mortgage Bank of Nigeria (FMBN) and the Nigeria Deposit Insurance Company (NDIC), to develop uniform underwriting standards for the informal sector, which constitutes about 54% of the economy. Expectations are that the new mortgage standard will be a game-changer for the economy in the area of housing and homeownership, since it is going to increase access to

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housing by narrowing the affordability gap which has been blamed for the wide housing gap in the country. In July 2015, NMRC successfully issued a 15-year N8 billion Series 1 Bond — the first mortgage refinance facility in Africa to achieve this feat. “NMRC has since refinanced mortgage portfolio with value in excess of N8 billion, and is set to issue another conventional bond totaling N10 billion and the first ever mortgagebacked sukuk bond. In addition to its core business of mortgage refinancing, NMRC also engages in market development activities to ensure the creation of the enabling environment for growth in mortgages and home ownership. Through advocacy for the passage of a Mortgage & Foreclosure Law (MMFL) with state governments, NMRC encourages the streamlining and digitisation of all titling, mortgage origination and property registration processes to enhance efficiency and reduce costs, the benefits which can be passed on to the home owner. It also advocates for the institution of a nonjudicial foreclosure processes in cases of default, to enhance investor confidence in state investment climates. In 2017, Kaduna state became the first in the federation to adopt and pass the law and is already reaping the benefits of doing so through enhanced credit ratings and increased inflows of FDIs. Inyangete however, believes “part of what we’re doing over the next two or three years is to get many more states, because we say, look this is showing the world that you’re creating the right environment to do business.” To further streamline the fragmented housing market, NMRC has developed a

transformative Housing Market System (HMS) a technology platform also available as an App available on Google and Apple stores to de-risk all systems and processes along the housing value chain in Nigeria. “We’ve ensured that our reliance on technology is not just innovation for the sake of it, but innovation – MMS, the mortgage market system – technology in terms of operations. Everything from the origination of the transaction, right through to closing it, is all electronic in NMRC,” says Inyangete. “All of the payments to our customers is straight wire, nobody is paid in cash, nobody is given a cheque. So, everything is digital.” HMS also incorporates a Housing Market Information portal positioned as the go-to technical platform for easy access to realtime and live information on housing finance, property development and ownership. In only a two-and-a-half-year timeframe, NMRC has already been recognised as one of the ‘Top 25 Most Innovative Companies in Nigeria’ plus winners of the Abuja Housing Award for Mortgage and Housing Market Innovation and ‘The Most Compliant Bond Issuer on the FMDQ Platform’ Award. Inyangete states that “NMRC’s remains committed to its mission is to bring down all the barriers to home ownership, so that we can provide liquidity to the market and make it easy for people to be able to afford, as well as to have access to home ownership.” 18, Mississippi Street, Off Alvan Ikoku Way, Maitama, Abuja, Nigeria Email: info@nmrc.com.ng Phone: +234–09–460–3430 www.nmrc.com.ng

PENRESA

NIGERIAN LEGAL FRAMEWORK

Re-forming Nigeria

An overview of the reforms set up under the PEBEC.

t the onset of 2017, the Buhari administration began reforming the country’s processes for commercial entities by setting up the Presidential Enabling Business Environment Council (PEBEC). This aimed to improve Nigeria’s ranking in the World Bank’s Doing Business report by at least 20 positions, as well as positioning itself amongst the top 100 business friendly countries by 2019. The principal aim in establishing a National Action Plan was to make and implement reforms that would ease the regulatory processes of doing business in the country. “For the first time, a presidential Executive Order (A01) was used as a catalyst for change in Nigeria,” claims Afam Nwokedi, Principal Counsel and Group Head, Stillwaters Law Firm. “Under this executive order, we are witnessing positive strides in the ease of doing business platform.” Indeed, Nigeria has since climbed 24 spots in the ease of doing business ranking and is one of the 10 Most Improved World Economies in 2017. The Federal Government has compelled every ministry, department and agency to publish their fees on their websites with the objective to make business as cashless as possible. According to Nwokedi “If you visit some of the websites of these MDAs you know the fees, you know the procedure, you see the regulatory processes. Administratively, and from the legal perspective of ease of doing business in Nigeria, these are positive developments considering the bureaucracy, efforts and time it usually took in determining some of the mundane bureaucratic issues.” Several other sectors have benefitted from the 31 reforms implemented. For example, Nwokedi expands, “in the area of construction sector, there used to be so many different agencies where you obtain licences and permits. Now, all you 26 | FORBES AFRICA APRIL 2018

Company and National Petroleum Company – are to be established, and five new commercial and governance organisations will be set up to replace the existing Nigerian National Petroleum Corporation and the Department of Petroleum Resources. Attention has also been given to reforming trade across borders, all imports into Nigeria must now be placed in pallets for quicker physical examination. Only one point of contact now exists between officials and importers. The goal is to reduce export and import timeframes by up to 50%. The reforms in immigration are aimed at improving visa processing times with the introduction “One of the of a visa on-arrival procedure things about as well as the e-submission investment, about of applications. Nigerian embassies are required to attracting foreign issue business and tourist investment, is you visas within 48 hours. While these reforms under need to be very the current administration transparent when have been robust and wide-reaching, Nwokedi you’re bringing Afam Nwokedi, that “One major and Principal Counsel, in people.” Stillwaters Law Firm notes commercially essentially area that has escaped the reformer’s scrutiny since the 60s is rates. These include the creation of an online platform for the National Collateral the area of industrial property reform within the intellectual property space. Registry, which allows for searches of Hopefully the PEBEC will look into this secured interests on moveable assets. The all-important global indicator of a friendly National Assembly is currently working business environment.” to ease access to credit for many smaller Seeking to be a catalyst for change, the enterprises. “What the government is current administration’s reforms have doing under PEBEC is ensure everything is out in the open, before you come in, you sincerely helped ease the cost and time basically know what to expect, no surprise of doing business within the country. Investment and investors require peace of package.” states Nwokedi. With regards to oil and gas, the passage mind and security and as Nwokedi states, “If of the Petroleum Industry Governance Bill well implemented, these reforms will achieve the desired result of making Nigeria a highly by the Senate envisages a major overhaul functional and friendly environment for of the sector. Two new companies – existing and potential businesses.” Nigeria Petroleum Assets Management have to do now is apply and the agencies or departments will sort themselves out internally.” Reforms in the power sector seek to improve timelines for connecting businesses to the grid. The Nigerian Electricity Regulatory Commission (NERC) has already issued a draft order to reduce the time for new connections to the national grid from 198 to 61 days as well as the number of national grid connection procedures from nine to five. To accentuate the importance of micro, small and medium-sized enterprises, reforms have been introduced to ensure they have access to credit at cheaper