BusinessDay 03 Oct 2019

CBN debits 12 banks N499.1bn for missing minimum loan target SEGUN ADAMS

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he Central Bank of Nigeria (CBN) has sterilised about half a trillion naira belonging to a dozen lenders that failed to meet its minimum lending ratio directive

by end of September after it set December 31, 2019 as deadline for a new target of 65 percent.

The N499.1 billion reflects 50 percent of the shortfall by the 12 lenders of a previous minimum Loan to Deposit Ratio (LDR) the CBN had set.

“This means those lenders penalised would have to pay interest on the sterilised fund but would not be receiving any,” a banking analyst told BusinessDay. “This might stress the lenders especially if they still cannot meet the new requirement.”

The banking sector index declined 4.51 percent on Wednesday at the Nigerian Stock Exchange (NSE) while the broad market closed 1.14 percent lower.

The banking regulator had in August issued guidelines for Nigerian banks to lend at least 60

percent of all customer deposits or risk a sanction by October 1.

Lenders in the country raced to meet the deadline evidenced by an expansion of banks’w loan book by 5.33 percent or N829.4

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Biggest Loser

Biggest Gainer FO N16.40 3.80pc

MOBIL N139.00 -9.45pc 27,314.87

Foreign Reserve - $41.85bn Cross Rates - GBP-$:1.23 YUANY-N 50.57 Commodities Cocoa

US$2,482.00

Gold

$1,505.50

news you can trust I **THURSDAY 03 OCTOBER 2019 I vol. 19, no 407

₦2,973,363.01 +2.52pc

$57.57

N300

Foreign Exchange

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$-N 357.00 360.00 £-N 448.00 455.00 €-N 389.00 398.00

Crude Oil

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Spot ($/N)

I&E FX Window CBN Official Rate Currency Futures

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fgn bonds

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362.55 307.00

3M -0.22 12.37

NGUS DEC 24 2019 362.68

6M

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20 Y -0.08

14.17

14.34

14.60

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0.17 12.81

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Nestle, Olam, Dangote, Unilever scramble for N100bn seasonings market as demography, urbanisation raise stakes

Odinaka Anudu & Gbemi Faminu

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he taste buds of 37 million Nigerian households are fuelling the growth of the packaged seasonings market estimated at N100 billion, with local and multinational firms scrambling for market share.

Seasonings refer to salt, herbs

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Bag of rice to sell above FG’s minimum wage in December …as price rises by 86%

Inside

Josephine Okojie

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FG mulls return of tollgates to drive infrastructure P. 2 development

R-L: Dapo Abiodun, governor, Ogun State; Sijibomi Ogundele, managing director, Sujimoto Construction Limited, and Olusegun Osoba, former governor, Ogun State, at Sujimoto’s 5th anniversary tagged ‘Celebration of resilience’ at Banana Island, Lagos.

espite many states struggling to pay the N30,000 minimum wage, Nigerians may buy a 50kg bag of imported parboiled rice for as high as N50,000 in December if the land borders remain shut.

For the past five weeks since

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news L-R: Femi Gbajabiamila, speaker, House of Representatives; Ahmed Lawan, Senate president, and Vice President Yemi Osinbajo, during the 2019 Independence Day Dinner and Gala Night in Abuja. NAN

FG mulls return of toll gates to drive infrastructure development ...as emergency FEC holds Saturday …budget may go to NASS next Wednesday …PDP rejects planned return of toll gates TONY AILEMEN, Abuja

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ifteen years after 31 toll plazas constructed at an average cost of N1 million naira each were demolished on the orders of the Federal Government, the government says plans are on to return the tollgates in order to encourage private sector participation in the development of basic infrastructure in the country.

Babatunde Fashola, minister of works and housing, disclosed this on Wednesday while briefing State House correspondents after the weekly Federal Executive Council (FEC) meeting presided over

by President Muhammadu Buhari at the Presidential Villa, Abuja.

But the People’s Democratic Party (PDP), through Kola Ologbondiyan, its national publicity secretary, in a statement described the plan as an insensitive idea. The

party described the plan as completely ill-conceived and anti-people because the country is faced with excruciating economic hardship and high costs of living.

The Olusegun Obasanjo administration had in 2004 ordered the demolition of 31 toll plazas across the country.

The Presidency also announced that it would hold an emergency FEC meeting on Saturday to tidy up final copy of the 2020 budget.

Villa sources told BusinessDay that the meeting is in anticipation of possible submission of the 2020 Appropriations Bill to the National Assembly next week Wednesday by President Buhari.

“There is no law that abolishes tolling in Nigeria today.

We expect to return toll plazas. We have concluded their designs, what they will look like, what materials they will be built with, and what new considerations must go into them,” Fashola told Sate House

correspondents.

“What we are looking at now and trying to conclude is how the back end runs and that is important because we want to limit significantly, if not totally eliminate cash at the plazas while ensuring that electronic devices that are being introduced do not impede rapid movement,” he said.

Fashola had earlier stated that FEC at its Wednesday meeting approved road projects worth N46 billion.

He said the new toll gates would be 10 lanes to enhance free flow of traffic.

Although the cost of the new tollgates is yet to be made public, government had spent about N360 million to demolish the 31 toll gates.

“We are being very deliberate and methodical in our new approach. Government can also toll, not just the private sector only,” Fashola said.

Government, he said, is now faced with the need to acquire more land to establish

the width of the toll plazas.

He debunked the notion of expectation that the collection of tolls would automatically produce the replacement cost of the roads, a notion he described as “inaccurate, because the traffic toll counts that we have done on major highways do not suggest that there is enough vehicular traffic across all roads”.

“The two or three heavy routes are Lagos/Ibadan, Abuja/Kano, Abuja/Lokoja. Now, Lagos/Ibadan, the heaviest traffic we can find is between Lagos and Shagamu and is about 40,000 vehicles. After Shagamu, heading to Ibadan, it drops to about 20,000. So, most of it has gone eastward going towards Ondo/Ore. And by the time you get to Benin, the number significantly drops. It ratchets up again at the confluence where they are heading towards the Niger,” Fashola said.

•Continues online at www.businessday.ng

Senate moves to amend PSC Act, probe N7trn FG’s oil revenue loss 20 years after SOLOMON AYADO, Abuja

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he Senate on Wednesday resolved to quickly amend the Production Sharing Contract (PSC) Act in order to end the years of oil revenue loss to the Federal Government. The bill to amend the Act will be presented in plenary today (Thursday).

The resolution follows several failed efforts by the 8th Senate to review the Act through private members and government-sponsored bills.

PSC is a contractual arrangement for petroleum exploration and production whereby the Federal Government as owner of petroleum resources engages a contractor to provide technical and financial services for an agreed share in profit oil after payments of royalty, coat and tax oil.

The FG had offered the PSC in 1991 through a legislation which was codified as “Deep Offshore and Inland Basin Production Sharing Contract Act 2004” and it

…proposes tax on communication services became effective on January 1, 1993.

Since then, the PSC Act has not been reviewed and the situation has resulted in loss of oil revenue by the Federal Government. The Senate resolved to investigate the sum of N7 trillion oil revenue lost by the Federal Government over a period of 20 years due to non-review of the PSC Act. Specifically, the Senate noted that Section 16 of the PSC Act provides that where the price of crude oil exceeds US$20 per barrel, the Act should be reviewed to ensure that the share of the Federal Government on additional revenue is adjusted to the extent that the contractual agreement shall be economically beneficial to the government.

If the amendment of the Act finally succeeds, Nigeria stands to gain additional N360 billion annually and also, it will boost oil revenue generation significantly.

Consequently, the Senate www.businessday.ng

has mandated its committee on petroleum resources upstream to uncover the reasons for the failure to review the PSC Act. Also, it further charged the committee to recover all arrears of oil revenues to the Federal Government and the states entitled to derivation covering the years the PSC Act was not reviewed.

The Senate’s decision followed a motion by Ifeanyi Uba (Anambra South) on the urgent need to recover additional revenue accruable to government of Nigeria from the PSCs pursuant to Section 16 of the Deep Offshore And Inland Basin Production Sharing Contract Act CAP D3 LFN 2004.

Leading the debate, Uba argued that the principal role of the National Assembly is to amend subsisting laws.

“The need to probe the loss of oil revenue and non-review of the PSC Act is imperative to ensure that beyond the crude oil price of US$20, the share

of the Federal Government in the additional revenue is adjusted,” he said.

Senators in their individual contributions unanimously condemned why the Federal Government was allowed to be cheated in contractual agreements and lose heavy oil revenue. They assured that lawmakers would not bend till the Act is amended.

In his remarks, Senate President Ahmad Lawan commended the timeliness of the motion and said the bill would be enacted and given expeditious treatment.

“Once the bill is reviewed, apart from boosting oil revenue, it will provide the N120 billion the Federal Government is looking for to fund the 2020 budget,” Lawan said.

Meanwhile, a bill to enact legislative action to impose tax on communication services was on Wednesday presented in Senate for first Continued from page 2

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Nigeria’s external debt stock skyrockets by 252.2% in a decade – World Bank …principal repayment stood at $4.5bn in 2018 HOPE MOSES-ASHIKE & SEGUN ADAMS

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igeria’s total external debt stock grew sharply by 252.2 percent in a decade to $46.24 billion in 2018, from $13.1 billion in 2008, analysis of the World Bank International Debt Statistics 2020 shows.

According to the World Bank’s International Debt Statistics 2020, total external debt of low- and middleincome countries climbed 5.3 percent to $7.8 trillion last year, while net debt flows (gross disbursements minus principal payments) from external creditors tumbled 28 percent to $529 billion.

Although on average the external debt burden of low- and middle-income countries was moderate, several countries have been on a deteriorating debt trajectory since 2009, the report indicates.

The share of low- and middle-income countries with debt-to- Gross National Income (GNI) ratios below 30 percent has shrunk to 25 percent, down from 42 percent 10 years ago. Similarly, the share of countries with high debt-to-export ratios has climbed.

“To grow faster, many developing countries need more investment that meets their development goals,” World Bank Group President David Malpass said. “Debt transparency should extend to all forms of government commitments, both explicit and implicit. Transparency is a critical part of attracting more investment and building an efficient allocation of capital, and these are essential in our work to improve development outcomes.”

Debt stocks were driven up by a 15 percent jump in China, fuelled by investor appetite for renminbi-denominated assets. Excluding the 10 largest borrowers (Argentina, Brazil, China, India, Indonesia, Mexico, the Russian Federation, South Africa, Thailand, and Turkey), external debt stocks rose 4 percent. Sub-Saharan countries excluding South Africa saw debts stocks swell by 8 percent on average in 2018, and over half the countries in the region have seen external debt stocks double since 2009.

•Continues online at www.businessday.ng

US Justice Department closes investigations on Eni’s Nigerian, Algerian cases SEGUN ADAMS

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he United States Department of Justice (DOJ) would be taking no action against Eni as it shelved investigations into corruption allegations against the Italian oil major in the purchase of a Nigerian oil field in 2011, the company said Tuesday.

The DOJ also closed a graft case in Algeria against the oil company in a similar fashion.

An Italian court had in 2018 acquitted the energy major and ex-CEO Paolo Scaroni of bribery in the same case.

Eni said the decision by the DOJ “confirms the findings of independent advisors, who conducted investigations into the claims following the decision taken by Eni’s controlling bodies, which also found no illegal activity”.

The Italian company expressed confidence that allegations currently put forward before the Court of Milan, where it is facing trial for a Nigerian oil deal, would be found to be groundless.

The Nigerian corruption trial, also known as the Malabu case, is almost a decade old and began in 2011 when Eni and Royal Dutch Shell reportedly paid $1.3 billion into the coffers of the Nigerian government for

@Businessdayng

an offshore oilfield licence.

The offshore oilfield called oil prospecting licence (OPL) 245 was said to have been worth $3 billion but most of the payments made by Shell and Eni ended up in Malabu Oil and Gas, controlled by Dan Etete, then oil minister of Nigeria.

Both companies have repeatedly denied any wrongdoing.

A source told Sahara Reporters in the United Kingdom that the decision of the DOJ would have no bearing on what steps regulators in the United States of America would take once the trial in Italy is concluded. In a trial hearing in July, Italian prosecutor in the Nigerian corruption case involving Eni said the oil company attempted to tamper with the court case.

Prosecutor Fabio De Pasquale said that officials of Eni approached Vincenzo Armanna, a defendant and witness in the case, to withdraw some statements made during investigations.

Armanna, a former manager who led Eni to acquire OPL-245 field in 2011, had informed investigators that his former colleagues were aware of the shoddy transactions involved in purchasing rights

•Continues online at www.businessday.ng

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Viathan & Gasco: Offering Solutions to Nigeria’s Electricity and Gas Challenges

By Razaq Ayinla and Tunde Bisuga

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igeria is very much a special place to live in. It is home to more than 250 ethnic groups, each with its unique culinary, etiquette, language and culture.

Nigerians are known globally to be vivacious, resilient and optimistic people come what may, be it unemployment, poverty, traffic jams or other social challenges.

In April 2014, following the rebasing of the nation’s GDP by the National Bureau of Statistics (NBS), Nigeria also became known as the largest economy in Africa. While undoubtedly, this statistic made many Nigerians proud, it did not translate into improved living conditions.

The phenomenon of regular power black out remains a constant fixture in the Nigerian experience. In 2016 alone, an estimated 74 million Nigerians had no access to power.

In comparison, Egypt with a GDP of US$249 billion in 2018, produced peak power of 28,000MW. However, Nigeria, Africa’s most populous nation and acclaimed giant of Africa, with GDP of $397 billion in 2018 had peak generation of 4,800MW. Nigerian households continue to spend billions of naira on private power generation.

Statistics by the Manufacturers Association of Nigeria (“MAN”) showed that member manufacturers spent a whooping N339 billion in the last three years on alternative electricity sources in various manufacturing plants across the country. This is money and maintenance man hours that would otherwise have been spent on core production activities for the benefit of the nation.

This situation is simply inefficient and unsustainable. Nigeria is in dire need of a solution to its power challenges. Given this background, cleaner, cost effective and more environmentally friendly options such as compressed natural gas, and renewable energy options are a welcome development in Nigeria’s electricity industry.

These solutions are not impossible to deploy in Nigeria, as there are already strategic and innovative players in the power space who have started developing and deploying these solutions.

The Viathan Group is one of such. Headquartered in Lekki Phase 1, Lagos, Viathan is what you can call an Integrated Energy Solutions company. It comprises of two key business units, Viathan Engineering Limited and Gasco Marine Limited.

Viathan is the Independent Power Producing (“IPP”) unit, while Gasco Marine is the compressed natural gas (“CNG”) unit.

These two business units within the Viathan Group work in tandem to deliver energy solutions in Nigeria.

The Viathan Group has a clear plan and focus for providing uninterrupted power to Nigeria and offering cost effective power solutions to the country’s budding energy consumers.

To achieve this feat, the Viathan Group, through its subsidiary Gasco Marine Limited has developed and commissioned a Compressed Natural Gas (CNG) facility in Abeokuta, Ogun State with initial installed capacity of 144,000 standard cubic meters (“SCM”) per day together with the a virtual pipeline of trucks and gas skids to supply consumers in all the six SouthWestern states of Nigeria. The facility processes enough gas to power a 16MW power plant roundthe-clock.

Speaking at the commissioning of the gas compression facility in Abeokuta, the Gasco Marine management team noted “that the establishment of the gas compression facility in Abeokuta is strategic as it is meant to offer CNG to independent power plants as well as manufacturing organisations in the South Western parts of the country who are in dire need of CNG but have to travel distances or pay exorbitant sums to get the product”.

Gasco Marine already supplies CNG to a host of companies in Lagos, as well as to Viathan’s Lekki power www.businessday.ng

plant, and various factories in Ogun state.

The team declared that the choice of the South-West for natural gas distribution was borne out of the fact that this region of the country is a fast growing industrial hub, hence, there is a strong need for compressed natural gas in powering the manufacturing plants among other companies for effective production of goods and services, adding that the gas firm has come to redefine compression and distribution of natural gas in Nigeria’s midstream and downstream gas value chain.

“Over the last five years, we have quickly evolved our operations and servicing capacity and we have grown our market share to almost 13%. Our processing and distribution infrastructure can deliver gas to power stations and other industries in Ogun, Oyo, Lagos and other Southwest states”.

According to Gasco Marine’s management, the company “ aims to become the industry benchmark for quality, affordable service delivery, reliability, sales and distribution of CNG and other gases in Nigeria, thus becoming a partner, uniquely positioned to be able to guarantee supply assurance”.

Gasco Marine’s sister company, Viathan Engineering Limited describes itself as a leading energy solutions provider on the African Continent. However, much is left to be done in Nigeria in terms of power supply to industrial, commercial and other service markets around the country.

Viathan has mapped out short-term and long-term strategies to reach 200MW generation in the next five years. The company’s commitment to tackle Nigeria’s energy challenge is clear from its move to create a war chest to finance its ambitions, by initiating a N50 billion infrastructure programme, a first in Nigeria’s capital market.

The first tranche of N10 billion, guaranteed by InfraCredit and listed on the FMDQ Exchange, has been drawn and the Viathan Group is positioning to move to reduce the coun-

Viathan’s IPPs and Gasco Marine’s Gas Plant

try’s energy deficits.

Currently, the Viathan Group generates and distributes 50MW of electricity from six power plants, namely; Akute Power Plant, Ilupeju Power Plant, Island Power Plant I, Island Power Plant II and PIPP LVI Genco in all Lagos.

It also operates its Lisabi Power Plant located in Abeokuta in Ogun State. Currently the company has partnerships with the Lagos State and Ogun State governments to provide uninterrupted power for critical infrastruc-

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ture such as hospitals, courts, malls, schools, government parastatals, street lighting (e.g. Lekki-Ikoyi suspension bridge) to name a few.

These services have helped improve the quality of life for millions of Lagosians and thousands of people in Ogun State, by guaranteeing uninterrupted power supply.

Viathan plans to continue expanding its footprint into many other states outside of Lagos and Ogun States. with Abuja, Oyo, Edo, Ondo, Kwara, Osun and Ekiti states in view. @Businessdayng

Speaking recently in Abeokuta after an interactive parley between investors and industry CEOs and the Ogun State Government, led by His Excellency, Dapo Abiodun, Governor of Ogun State, where the Governor outlined his administration’s plan to work with all stakeholders to make Ogun State attractive and profitable for all, Habeeb Alebiosu, Chief Executive Officer of Viathan Group, said, “For us, we have made our intention very clear from the outset”.

“To date, we have established

a 7MW power plant, already operational. We have developed a gas plant here in Abeokuta with installed 144,000 standard cubic meters capacity a day. And the beauty of what we have established here is that the power plants and CNG facility are all scalable and modular.

“The intention for the Lisabi Power Plant is to go as far as 20MW. And quite frankly we say the demand is the limit.

We can generate up to the extent of demand of 100MW and 200MW, name it and we have the capacity”.

“And the way we see it, we are not here to replace the DisCos, we are here to complement them. We will partner with them and work together to fix the power sector. We need to build an ecosystem of different players. The gas players, the distribution, metering and other last-mile infrastructure, the technical know-how, to build up the entire value chain and that’s how we see the sector emerging from a place where it is currently to one that would render flawless service to the end users.

“So, we are ready to make www.businessday.ng

those investments. We are backed by various partners both locally and internationally, and beyond all of that, we have a knowledge repository of the pitfalls from doing business in Nigeria.

“Most importantly, each one of us including you is a stakeholder. We got credit enhancement mechanisms put it in place by InfraCredit.

As such, that allowed us gain access to the capital market where we were able to float a N50 billion Naira Bond Programme and we’ve only drawn N10 billion of the N50

billion. Effectively It means that we have N40 billion naira that we can potentially access and utilise in infrastructure support for state governments, commercial and industrial consumers and the country alike.

“You know, you have heard some things that have been discussed here today like Ogun State has a huge number of industrial estates in the country and an equally high count of Free Trade Zones.

“The meaning in essence is that although Lagos State without a doubt is the most industrialised state in the South-West, Ogun State surely has huge potential to also be a stand out state in terms of industrialisation, manufacturing and growth.

As a result, our objective at Viathan is to key into new markets and States which will help grow Nigeria’s future as Ogun is doing”.

“Ogun State is very strategic for us. It is no accident that we established the gas business here. Ogun is really as it is fondly called the Gateway State.

“The reliability of the gas here, is superior to other States and that’s what gives our gas business that superior competitive advantage.

For us the demand is here in terms of commercial and industrial which is our predominant target, but beyond that you’ve also heard the Chief Economic Adviser (Dapo Okubadejo) on the statement of the farming and the agricultural activities in the state.

“We are happy to start with Ogun state. There’s a particular farm settlement of about 96 farmers. We’re targeting them and looking at what structures we can adopt, to cross-subsidise them under a partnership framework with all stakeholders – Ogun State Government and the DisCos. “So, to us the demand is clearly there and it’s just a function of being innovative and progressive in creating a market structure that works for all proponents.

It’s important that this message goes through.

“We are integrating technology into all of our processes,

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that’s one of the things that stands us out compared to our competitors. We want our consumers/clients to understand and know exactly when they should expect the gas that they requested or that they’ve contracted for from our gas company.

“On the power supply side of our business, we are one of the pioneers and advocates of distributed generation. So, the mere fact that our paradigm is to locate and operate our plants close enough to points of demand is on its own a competitive advantage.

“But, like I said, I think the way to solve Nigeria’s power challenge is by creating and galvanizing the ecosystem of industry players, from the gas suppliers to the power producers – gas-fired and renewables as it were – to the distribution companies, policy makers and regulators, to educators who educate the consumers on what needs to be done.

“All proponents of energy efficiency, all proponents of reliable power supply, all proponents of friendly consumer behaviour. That for us is our investing philosophy and what we are advocating for in the industry at large.

“So, we do have our competitive advantages but again we think that beyond technology, our understanding of that ecosystem and pushing the message around it, will separate us from our peers.”

Talking generally on the country’s effort to generate energy from different sourc-

Habeeb Alebiosu, CEO, Viathan Group @Businessdayng

es, Mr. Alebiosu declared that it is time to explore and exploit various sources of energy to cater for the nation’s energy deficit.

Thus, Viathan and Gasco Marine have not limited themselves to gas-fired energy only, but are also working renewable power solutions as they are ready to develop the first floating solar power solution in the country soon.

He added, “Let me be very clear, I am not a purist. Renewables have a role to play in a landscape like Nigeria and Africa widely. However, we have abundance of natural gas. It makes sense to start from there and it is still the lowest levelised cost of energy here.

“So, it’s logical and intuitive for Nigeria to industrialise by taking advantage of this natural resource and to that extent we have the knowhow, we have the capability and we remain environmentally responsible.

“At Viathan, we will push towards that direction, however, we are not neglecting our commitment to the environment and we still very much believe in CO2 reduction, we are very well committed, we are at the conceptual stage of the solar farm and it’s going to be an on water floating PV solution at our Lekki plan.

We have commenced conversations with potential stakeholders as of today.

“So, I assure you within that the next 12 to 24 months, you will hear of the first floating solar solution on the continent, to be built right here in Nigeria.”

Thursday 03 October 2019

BUSINESS DAY

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news African CEOs sceptical of revenue growth in 2019 MIKE OCHONMA

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here are negative indications that the ongoing economic, social and political uncertainty in the world is a perennial worry for CEOs globally, including those in Africa.

At least 25 percent of them believe that the global economy will decline over the next 12 months, according to an annual survey results from a survey of 83 CEOs across 19 African countries, including Nigeria.

African business leaders are less optimistic about the strength of the global economy and their organisations’ ability to grow revenues in both short and medium term than they were a year ago.

These are some of the key findings from the seventh edition of PwC’s Africa Business Agenda 2019 report launched recently in Kenya.

Furthermore, the unease about global economic growth is also dampening CEOs’ confidence about their own companies’ outlook in the short term, with only 27 percent ‘very confident’ in their own companies’ prospects for revenue growth over the next 12 months.

Only 39 percent are ‘very confident’ about their organisations’

growth prospects over the next three years. The agenda compile results from a survey of 83 CEOs across 19 African countries including Kenya.

The results are benchmarked against the findings of the Annual Global CEO survey of more than 1300 CEOs, conducted during the last quarter of 2018.

Commenting on the survey findings, Dion Shango, CEO for PwC Africa, said economic and policy uncertainty in the continent, among other issues, had cast some doubt upon business leaders’ hopes for immediate and future growth. ‘’Although there is a drop in optimism, African business leaders do see some opportunities on the continent, but overall, they are playing it safe,’’ Shango said.

The annual survey provides an in-depth analysis and insights into how businesses are adapting to meet the challenges of operating in Africa.

Notwithstanding the current economic climate and other challenges, there is notable optimism among business leaders about the potential to unlock more growth on the continent.

On-going economic, social and political uncertainty is a perennial worry for CEOs globally, not least for those in Africa.

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Boeing engineer, in official complaint, cited focus on profit over safety on 737 Max IFEOMA OKEKE

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senior Boeing engineer filed an internal ethics complaint this year saying that during the development of the 737 Max jet the company had rejected a safety system to minimise costs, equipment that he felt could have reduced risks that contributed to two fatal crashes.

Boeing has provided the complaint, which was reviewed

by The New York Times, to the Department of Justice as part of a criminal investigation into the design of the Max, according to a person with knowledge of the inquiry who requested anonymity given the ongoing legal matter.

Federal investigators have questioned at least one former Boeing employee about the allegations, said another person with knowledge of the discussions who similarly requested anonymity.

It is unclear what, if any, assessment investigators have made of the complaint.

The complaint, filed after the two crashes, builds on concerns about Boeing’s corporate culture, as the company tries to repair its reputation and get the planes flying again.

Many current and former Boeing employees have privately discussed problems with the

design and decision-making process on the 737 Max, outlining episodes when managers dismissed engineers’ recommendations or prioritised profits. The engineer who filed the ethics concerns this year, Curtis Ewbank, went a step further, lodging a formal complaint and calling out the chief executive for publicly misrepresenting the safety of the plane.

During the development of the 737 Max, Ewbank worked on the cockpit systems that pilots use to monitor and control the airplane. In his complaint to Boeing, he said that managers were urged to study a backup system for calculating the plane’s airspeed. The system, known as synthetic airspeed, draws on several data sources to measure how fast a plane is flying.

Such equipment, Ewbank said, could detect when the angle-of-attack sensors, which measure the plane’s position in the sky, was malfunctioning and prevent other systems from relying on that faulty information. A version of the system is used on Boeing’s 787 Dreamliner, a new model of plane.

Ewbank did not respond to requests for comment. Peter Carr, a spokesman for the Department of Justice, declined to comment on the complaint.

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Rendeavour launches women empowerment initiative to narrow gender gap SEGUN ADAMS

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n a bid to empower women and narrow gender gap in Africa, Rendeavour, Africa’s largest new city builder, has launched RenWoman, an initiative to be carried out by a team of women professionals in partnership with organisations and individuals committed to gender equality on the continent and globally.

The initiative would create an enabling and progressive environment for the advancement of women in the workplace through knowledge sharing, networking and leadership development to ensure the personal and professional success of women, Rendeavour said.

“Achieving gender balance and ensuring diversity is a priority of Rendeavour’s senior management and Board of Directors,” said Odema Ogbeh, Head of Human Resources and Corporate Services at Rendeavour. “Put simply, women mean business.

Research shows that companies with greater gender diversity tend to perform better financially.”

Speaking at the launch, Meghan Hagberg, senior vice president, Business Council for International Understanding (BCIU), recognised RenWoman’s mission to empower women and youth. “BCIU and its leadership look forward to providing plat-

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forms and resources to mobilise support for RenWoman,” she said.

Women at Rendeavour have already spearheaded mentoring initiatives to promote skills training, career opportunities, personal wellbeing and financial literacy in local communities at Rendeavour developments.

According to The United Nations Entity for Gender Equality and the Empowerment of Women, also known as UN Women, the majority of women in Africa work in unsecure, poorly paid jobs, with few opportunities for advancement.

A 2018 study by the International Monetary Fund indicates that policies are needed to provide women with skills and close gender gaps in leadership positions.

The launch took place in New York City in conjunction with the Organisation of African First Ladies for Development (OAFLAD) and the Business Council for International Understanding (BCIU).

The event was attended by Rebecca Akufo-Addo, First Lady of Ghana; Jeannette Nyiramongi Kagame, First Lady of Rwanda; Monica Geingos, First Lady of Namibia; Antoinette Sassou Nguesso, First Lady of Republic of Congo; and Keïta Aminata Maiga, first lady of Mali.

Thursday 03 October 2019

BUSINESS DAY

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Thursday 03 October 2019

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Cashless banking: So far, how far?

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ast week, I shared in this column, my preview of the cashless policy and my simple strategy for its achievement. That was eight years ago. Today, we take some excerpts from that preview (in 2011) as well as share with you my review of the programme in its first year of operation, which was seven years ago (Ik Muo, Cashless Banking: So Far, how far? BusinessDay. 16/10/12). Kindly read on, noting that the developments mentioned here are now 7/8 years “old”. …Furthermore, as an OB practitioner and a student of change management, I make bold to state unequivocally that attitudinal change is never successfully legislated. Change involves negotiation, persuasion, explanation, education, awareness and consensus building. Most important, the WIIIFM question (What Is in It for Me) must be satisfactorily addressed. There is nothing wrong in legislating change; but such a legislation will not lead to the expected change. Of course, there is a gulf of difference between change and transition because the ultimate destination is a transition to the desired mindset, attitude and behaviours.

People are also rewarded to change.

Ordinarily, behaviour can be shaped through positive reinforcement, negative reinforcement, punishment and elimination. Probably because of our years of militarised governance, we readily rely on punishment or at best, negative reinforcement.

Part of the reasons for this new cash

policy and other related initiatives is to reduce cost-to-serve (which should actually be the concern of the banks).

It is obvious that the cost of physical cash withdrawals is higher than the cost of the various automated and electronic alternatives. What efforts have the banks made to share the gains (savings) of non-cash operations with their customers? If it costs N10 to serve a walk-in customer and N2 to serve an ATM customer, why should banks not pay customers N3 per transaction to migrate to the ATMs? Why abolish Commission on Turnover (COT) to ATM customers (or charge lower COT) as an inducement for patronising that channel?

Of course, that is in our character!

The government will not provide parking spaces or urinal for the public, and boldly place sing-boards that read “Don’t Park” and “Don’t urinate” everywhere and punish people for parking and urinating – because they must urinate and they must park!

The central bank has invested a humongous quantum of resources (quantifiable and mostly unquantifiable) to prosecute in the last two years. A lot of hard cash, intellectual capital, truth and propaganda have been invested in the project and people in advertisement, POS/ATM business have been smiling to the bank. And Tunde Lemo, DGM Ops, CBN has lost some weight as he preaches and prances from one TV programme to another conference to the next newspaper house and yet another radio interview to explain why and how there is no alternative to cashlessness.

I wish to state upfront that I support the cashless agenda and it may even be an appropriate priority project.

But what I am not comfortable about is the shock and awe approach to its implementation, the punitive dimension, failure to differentiate between change and transition and assuming that a habit that had been in our character for ages will be changed by a few newspaper adverts, TV appearances, draconian charges and orders from the CBN. It is important to note that we are

not the first to attempt to migrate from one payment system or platform to another. Thus, there is no need raising unnecessary dust as if it has not been done before or as if our own migration is unique. Let us examine a recent report in the technology section of Financial Times by Richard Waters and published

by BusinessDay of 8/10/12(p60).

It is all about efforts to apply the near-field technology to upgrade the payment system so as to create a commercial environment without cash and cards. It involves recognising people with their pictures as they approach, billing, selling to them and sending the debit receipt to their smart-phones.

One thing about this techy wonder is that it is being driven by customers who are tired of carrying cards and wallets and the technopreneurs who are developing the system and hoping to make a kill with their inventions.

The banks are not involved and definitely, the FED is not a party to these developments which as at now are being spearheaded by about 150 developers around the globe. The ultimate goal is to develop digital wallets where smartphone users will store virtualised methods of payment together with loyalty cards, gift cards, receipts and methods of identification.

While the technology is being perfected and customers are impatient, the developers keep on working on various options to improve their offerings, reduce costs, increase reliability and keep the customers happy. The retailers are also on the standby, keying into the system and strategizing on how to migrate to the new technology. Nobody is breathing down anybody’s neck; nobody is paying outrageous charges; nobody is licensing the vendors [which some lawyers have declared as illegal and against free-market operations] and nobody is punished for withdrawing or depositing his/her money. The head of the payment arm of eBay also has a word of advice for us here when he said that “changing habits takes time and changing habits in money takes more time.”

The lessons from the above experience are very clear and compares

‘

We are being raped by “EXECUTHIEVES” who do not know what to execute and how to execute the “nothing”, who impose harsh economic medicaments on the masses while their bank accounts are ballooning, whose only expertise is on horsetrading and blame-trading and who see nothing wrong in our lopsided governance structure

unfavourably with our own attempt to force cashlessness on the people. The CBN has literarily abandoned its other daunting responsibilities while the banks, the machine vendors and other relevant service providers are just hanging out there with their clippers, shaving off our accounts with reckless abandon.

Incidentally, the major indicator of success being harped upon by the CBN and the banks is the number of POS deployed and scheduled to be deployed.

Whether those POSs are being utilised, whether they are working, peoples’ dissatisfaction with the double charges, and the issue of electricity and failure of technology are cleverly played down.

As a student of change management, I am not surprised at this emphasis on the POS deployment statistics. In the politics of change management, one of the key areas of intense politicking is in the choice of indicators of success.

People want indicators that portray their performance very positively. Thus, while the number of POS is a very positive indicator, the number of active POS may not be that flattering. For a start, the POS figures are conflicting.

In a chart published in THISDAY (27/6/12) and sourced from CBN, the POS deployment was stated as rising from 18,874 in March, 2012 to 100,000 in June, 2012. However, Olu Adaramewa, a deputy director with CBN recently stated that as at December, 2011, there were 40,000 POS in “circulation” (conference on Nigerian transition to cashlessness, 8/10/12).

But the key issue is that a recent report from NIBSS, reports that there are only 14,000 active POS as at July, 2012. NIBBS is the POS aggregator in Nigeria. So, only about 10 percent of the POS are operational and this woeful picture is due to poor knowledge and skill, attitude, technical issues, delayed receipts etc. That is bad enough.

Note: The rest of this article continues in the online edition of Business Day @ https://businessday.ng Dr Muo is of the Department of Business Administration, OOU, Ago-Iwoye

Fixing Nigeria learning crisis: Rethinking the approach

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he positive benefits associated with creating an educated population cannot be over-emphasised. There are tons of studies with evidence to support education as a fundamental path to achieve growth and development in any nation. It is therefore vital to design educational infrastructure in such a way as to maximise the accessibility and effectiveness of the education being delivered.

For any student, a school is a home away from home. Most of their waking hours are spent in schools, especially in current-day Nigeria, where parents spend long hours trying to make a living. The school plays a significant role in shaping a student’s personality and the holistic learning process – helping them to anything and everything in multiple forms from books, teachers, peers and even school environs.

Intuitively, policymakers react to the problem of out-of-school children by calling for more investments in building new schools, more classrooms, and adding more furniture to existing ones. Besides, to improve school enrolment, there has been considerable investment in other programmes, such as feeding programs and provision of free uniforms and textbooks. However, instead of investing in education infrastructure using a strategic approach, policy initiatives are fragmented and in piecemeal. There are several

uncoordinated and decentralised efforts both at the national and sub-national levels with policy initiatives driven mainly by ad-hoc needs and limited funding availability.

As of today, no data source or agency can authoritatively quantify government spending on education in Nigeria. Many people confuse the federal government’s (FG) budget as the total expenditure on education by the country. Whereas the FG is only responsible for federal schools, the subnational governments are responsible for the most substantial chunk of teaching and learning, mostly at primary and secondary school levels.

A different approach: What we should be doing Policymakers need to rethink investment in education infrastructure in Nigeria by using a holistic and evidence-based model to inform their investment decisions.

First and foremost, policymakers, at all levels, need to collect and analyse a vast amount of data on Nigeria’s education system in a manner that has never been done in the country before. There is a need to establish an Education Information Management System to curate all the data gathered and must regularly be updated with new information. Data collection can be under several categories, but the following details are essential; Demographic trends - student age popu-

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lation growth, territorial distribution of population such as urban and rural, the gender distribution of the school-age population etc.

The needs of educational institutions - school capacity, utilities and amenities needed, sanitation requirement, teacher-student ratio, infrastructure conditions in existing schools, etc. Also, labour market skill needs - employees perception of skills supply and shortages, the literacy level of the student, capacity development needs etc.

Secondly, identification of educational challenges is key. Based on the data gathered, policymakers must run an in-depth analysis to reveal broad-based and acute challenges that are affecting learning in Nigeria based on educational level and geographical areas.

To accurately identify the problems, the data gathering process must take into account all stakeholders such as the communities, religious organisations, teachers, parents, students etc.

Furthermore, development of criteria to prioritise investments because there is limited funding available to address the challenges in education, policymakers must make good use of the little funds available. Therefore, based on the in-depth review of the data collected, a set of criteria must be put in place to assess and prioritise infrastructure funding proposals coming from different schools. By applying a transparent, data-driven, and ho-

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BISI OGUNWALE listic set of criteria, the responsible authorities will ensure that selected projects strike an optimal balance between efficiency, equity, and sector-specific needs.

The last step is to monitor the application of the criteria in practice continuously in addition to evaluating the effect of the allocation of funding for investment in education and supporting infrastructure.

Finally, as important as access to education is, policymakers in Nigeria need to focus more on the quality of education using datadriven, evidence-based and multi-faceted model to promote effective and efficient learning for all students across the country.

Ogunwale is a public policy analyst

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Why Awolowo feared northern domination in a post - British Nigeria

REMI ADEKOYA

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ast series, we discussed the controversial 1953 selfgovernment motion which almost led to northern secession from Nigeria. Today, we’ll look at what drove the politics of the late 1950s.

For most of 1955 and 1956, Nigeria’s leaders focused on preparing for the upcoming 1957 constitutional conference scheduled to discuss the hows and whens of independence.

However, ethnic animosities were never far below the surface. In a 1955 memo to Alan Lennox-Boyd, secretary of state for the colonies, Bryan Sharwood-Smith, the British governorgeneral of Northern Nigeria, stated: “It is appropriate to record the increasing tendency of many ministers, and particularly Premier Ahmadu Bello to indulge in anti-Southern diatribes on the one hand and to evidence a narrowing and more militant Islamic outlook on the other.

This despite repeated reminders that a Southern exodus would result in total collapse and that one sure way of ensuring this is rabid racialism, particularly when this is combined with acute religious intolerance.”

The “anti-Southern diatribes” were particularly vicious towards Igbos.

Reporting on sentiments in Bello’s Northern People’s Congress (NPC) party towards southerners later that year, Sharwood-Smith stated that,

“while there is deep dislike and suspicion for the Action Group and all its works, the Yorubas, as a race, are not unpopular. On the other hand, the northerner’s feeling for the Ibo borders on detestation….it is a situation which must always contain the seeds of violence.”

In a 1955 memo sent to London, James Robertson, the governor-general of Nigeria, also noted northern anti-Igbo sentiments: “My brief tour of the Northern Region left me in little doubt that Northerners are bitterly opposed to the Ibo in general and [Azikiwe’s] NCNC in particular. Every Northern minister with whom I discussed the North versus South issue has emphasized his fear of Ibo infiltration. They have much less fear of the West and seem to think that they can easily come to terms with the Action Group and the Yoruba. Possibly this feeling is based partly upon the fact that many Yorubas are Moslems.”

However, while Yorubas per se were not disliked by NPC members the way Igbos were, their attitudes towards Awolowo’s Action Group would soon become increasingly hostile. This was due to Awo’s aggressive agitation for the half-a-million Yorubas living in areas like Ilorin to be incorporated into the western region, in a bid to reduce the north’s numerical and territorial advantage.

A 1956 Times editorial noted Awo touring Ilorin “advocating its secession from the North so Yorubas could join their ‘kith and kin’ in the West.” The editorial noted Awo “was enthusiastically applauded. He has gained considerable personal ascendancy through addressing the Ilorin masses, who understand only Yoruba, whereas the normal language of NPC leaders is Hausa.”

Awo’s party devoted significant

resources persuading not just Ilorin Yorubas but other minorities in the lower north as well to agitate for secession from the region, vexing Bello and subsequently rendering Action Group his main political enemy.

While Bello and many of his party colleagues personally despised Igbos, they considered Awo and his Yorubadominated party to be the bigger political threat to their interests. By 1956, Nigeria’s regional governments were “hopelessly at odds” and treated each other “with a mutual aloofness reminiscent of Russia and the United States at the height of the Cold War,” wrote an Observer. “Bello makes no bones about the contempt he feels for both his adversaries – Awolowo and Azikiwe – in the South,” it added.

The 1957 constitutional conference granted both the east and west full regional self-government, while the north opted to wait till 1959.

Again, population numbers played the deciding role in structuring the political centre. It was agreed, seats to the House of Representatives would be allocated per capita: approximately 1 representative per 100,000 people.

This meant the north would be entitled to 174 of 312 seats in the House of Representatives.

However, as independence approached, minority groups in all three regions intensified separatist agitations. In their eyes, the major parties were all controlled by the dominant ethnic groups in their region; they feared independence from colonial rule would amount to the replacement of British overlords with Yoruba, Igbo and Hausa-Fulani overlords. The growing ethnic nationalism within these major groups, visible in organisations like the Egbe Omo Odùduwà and Igbo State Union, hardly served to reassure them.

Bello was categorical on the issue

‘

The fundamental cause of minority fears which the commission had missed was the dictatorial and totalitarian tendencies inherent in the characteristics of certain majority ethnic groups in the country

of separatism in his region, saying he would not part with “an inch” of northern territory. Southern politicians were more ambiguous. In principle, they supported the reorganisation of Nigeria into a larger number of states based on ethnic criteria. However, once their parties captured control of their regions, NCNC and AG leaders were reluctant for new states to emerge from territory under their control.

Instead, they actively supported separatism in their rivals’ regions.

In response to agitations, a Minorities Commission was established in 1957 to address minority fears and demands for state creation. The commission eventually recommended against creating new states, arguing this would trigger the fragmentation of Nigeria along ethnic lines. Bello’s NPC welcomed the decision. It left the north intact, larger and more populated than both southern regions combined.

Awo was predictably critical, stating “the fundamental cause of minority fears which the commission had missed was the dictatorial and totalitarian tendencies inherent in the characteristics of certain majority ethnic groups in the country.”

To be clear, by “certain groups”, Awo was referring to Hausa-Fulanis.

Meanwhile, Zik and his NCNC party argued independence was the overriding goal and everything else could wait. “Let us get our independence first, we’ll sort out our differences later,” was their general stance.

Note: the rest of this article continues in the online edition of Business Day @https://businessdayonline.com/ Dr Adekoya is a journalist and political scientist. He has written for the UK Guardian, Foreign Policy, Foreign Affairs, Washington Post and Politico among others. He tweets @ RemiAdekoya1

The dangers of repudiating history I had decided to write on the trampling of the rule of law by the Buhari government. But just as I started, I chanced upon this article I wrote last year. It captured exactly everything I wanted to say. I reproduce it again with minor modifications. This article was first published August 30th 2018.

F

ollowing early signals that the Buhari administration was not totally committed to upholding the rule of law and due process, I started writing, since 2016, to warn about the administration’s gradual descent into autocracy. Of course, not many people took me seriously. I was dismissed as a “wailer” and an unrepentant critic of President Buhari who was just doing his utmost to deal with the miasma left by 16 years of the People’s Democratic Party’s (PDP) rule.

The silence from the bar, academics and thought leaders was noticeably loud. I guess, haven invested so much energy and reputation into the Buhari project, they could not turn their backs on him.

But much more dangerous was a belief, prevalent in Nigeria at the time, that corruption could not be effectively fought within the ambits of the rule of law. We were therefore willing to overlook the occasional disregard of the law and the judiciary and the employment of unconventional and unlawful methods in dealing with the hoard of corrupt officials in Nigeria.

However, with the recent happenings in the polity – the wilful disregard of the rule of law, wanton human rights abuses, the not-so-subtle attempts to silence all opposition and divergent voices, and to illegally remove and replace the leadership of the national assembly – Nigerians are beginning to see a pattern. And when a democratically elected president looks all citizens in the eyes and tell them national security and public interests would come before individuals’ rights, then they know no one is really safe from the clutches of such a state.

But Buhari didn’t just take us by surprise.

He has a history which we all failed to take into account. In the run up to the 2015 general elections, I’d watched with shock and horror how we all repudiated our history – of events that happened between 1984 and 1985 – and proclaimed Buhari to be the answer to all our national woes and the best person to fix our ailing economy.

Being a keen student of Nigerian government and politics, I’d read virtually every available historical account of the Buhari military regime – and there was almost a universal consensus that the regime was a major economic disaster. Unable to convince multilateral agencies to advance lines of credit to Nigeria following the regime’s stubborn refusal to countenance even a partial devaluation of the country’s currency and due to the drying up of the country’s foreign reserves in the face of declining oil prices, the regime chose rather to engage in counter-trading (or more appropriately trade by barter) where the country bartered its oil cheaply for spare parts and other raw materials to escape from its economic immobilism.

Expectedly, the measure only worsened the country’s dire economic situations. Wages still went unpaid and there were general shortages of basic commodities like rice, milk, sugar, etc and the helpless masses had to queue endlessly to get to these items. Industries had to close shop and those that managed to remain open operated at very low capacity.

Confronted by the apparent failure of its policies to revamp the economy, the regime became even more oppressive and intolerant of criticism. As Adebayo Olukoshi and Tajudeen Abdulraheem rightly noted, “The Nigerian Se-

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curity Organisation’s powers were significantly expanded. Then the state began to play the old card of blaming so-called illegal ECOWAS immigrants, especially from Ghana, for the continued shortage of commodities and jobs. But the diversion created by the second mass expulsion of aliens early in 1985 was only short-lived and was soon exhausted.”

As rational explanations ran dry, repression became the norm. The famous decree 4 that prohibited journalists from reporting anything that could embarrass the regime, even if it were true, was promulgated. It did not take long before two journalists fell fowl of the law and were consequently locked up. Soldiers were sent out with whips to enforce order and discipline on the streets and ensure cleanliness in people’s homes.

Special secret military tribunals were set up to try politicians accused of corruption despite protests and boycotts of the tribunals by the Nigerian Bar Association (NBA). The accused were all presumed guilty until they could prove their innocence, and few managed that task.

Most were given ridiculously long sentences, some running into hundreds of years. Certain crimes like drug trafficking, smuggling, and oil bunkering were made to carry the death sentence and three Nigerians were retroactively executed under this law.

The most sensational example of the regime’s recklessness was the botched attempted kidnap and forced repatriation of Nigeria’s former transport minister under the Shagari regime, Umaru Dikko, who was found drugged in a crate in a London airport that had been tagged as diplomatic baggage. This led to a break-up

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CHRISTOPHER AKOR

of diplomatic relations between Nigeria and the Britain.

The history we all rejected and repudiated has come back to haunt us. Just like 1984/85, we have had to endure the worst economic recession in Nigeria in almost 30 years, watched as hyper-inflation and rapid depreciation of the naira erode the spending power of Nigerians and threw millions of Nigerians into extreme poverty. Even, various attempts have been made to bring back the infamous “Decree 4” in form of the “Anti-Social Media Bill”. With the president’s stand on the rule of law, Nigerians should be ready for a full-blown dictatorship in his second term – and perhaps after.

There are feelers that some persons are working on a life presidency project for the president. Recently, the APC candidate for the Senatorial bye-election in Bauchi south, Lawal Yahaya-Gusau stated explicitly that he had only one agenda for seeking to go to the senate – to work towards a constitutional amendment to pave the way for Buhari to become presidentfor-life. Yahaya-Gusau did win the election and there has been no word of caution or denunciation from either the party or the presidency.

Considering how Obasanjo’s third-term project started, we will be foolish to dismiss YahayaGusau’s campaign promise as wishful thinking.

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Thursday 03 October 2019

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Frank Aigbogun EDITOR Patrick Atuanya DEPUTY EDITOR John Osadolor, Abuja NEWS EDITOR Chuks Oluigbo EXECUTIVE DIRECTOR, OPERATIONS Fabian Akagha EXECUTIVE DIRECTOR, STRATEGY, INNOVATION & PARTNERSHIPS Oghenevwoke Ighure ADVERT MANAGER Ijeoma Ude FINANCE MANAGER Emeka Ifeanyi MANAGER, CONFERENCES & EVENTS Obiora Onyeaso BUSINESS DEVELOPMENT MANAGER (South East, South South) Patrick Ijegbai COPY SALES MANAGER Florence Kadiri DIGITAL SALES MANAGER Linda Ochugbua GM, BUSINESS DEVELOPMENT (North)

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PMB threatens free speech once again

P

resident Muhammadu Buhari returned to a pet peeve i n h i s In d e pendence address to the nation. He denounced the manifestations and direction of discourse in cyberspace in Nigeria. He then threatened a possible clampdown.

Mr President stated, among others, that “Our attention is increasingly being focused on cybercrimes and the abuse of technology through hate speech and other divisive material being propagated on social media. Whilst we uphold the constitutional rights of our people to freedom of expression and association, where the purported exercise of these rights infringes on the rights of other citizens or threatens to undermine our national security, we will take firm and decisive action.”

Buhari spoke of the need for all “to exercise restraint, tolerance and mutual respect in airing their grievances and frustrations.” He asserted that “whilst the

ongoing national discourse on various political and religious issues is healthy and welcome, we must not forget the lessons of our past -lessons that are most relevant on a day such as this.”

He then declaimed: “The path of hatred and distrust only leads to hostility and destruction. I believe that the vast majority of Nigerians would rather tread the path of peace and prosperity, as we continue to uphold and cherish our unity.”

The irony is that the presidential declaration is a return to a past that continues to colour and affect perceptions of his temperament and ability negatively.

During his first journey in the headship of Nigeria, the then General Buhari acquired notoriety for his inflexibility and intolerance of open national discourse.

Two ill-intentioned pieces of legislation gave that regime the ring of infamy.

Decree No 4 of 1984, the Public Officers Protection Against False Accusations Decree, gagged the press with obnoxious fines, led to the jailing of two journalists of The Guardian and cre-

ated a siege mentality. Similarly, Decree No 2, The State Security (Detention of Persons Decree) prepared the ground for repression by cancelling all fundamental rights of citizens granted by the 1979 Constitution. It allowed the military to detain, indefinitely and without trial, any person suspected to be involved in “acts prejudicial to state security” or contributed to economic adversity of the nation.

More than twice under PMB, government through the legislature and other means has attempted to clamp down on the rights of citizens to free and open discussion of issues that affect them. These issues are political, economic, social and otherwise. They are contrastingly pleasant and unpleasant. Both are par for the course.

Free speech comes with the package called democracy. It is also guaranteed by our constitution as a right of citizens. It is a right that we urge the government of Nigeria to protect rather than demonise and deny citizens its use.

We must appeal to Mr

President to “exercise restraint, tolerance and mutual respect” in airing his “grievances and frustrations” with free speech in Nigeria. There are enough legal and constitutional safeguards against abuse.

Our laws protect individuals and governments from abuses of the freedoms.

The protection extends to cyberspace with Nigeria having one of the most comprehensive legislation to guard against abuses in the Cybercrimes Act, 2015. That legislation came into effect fortuitously a few weeks to the ascension of office of Mr President and his party.

We believe that a clear reading of history and its lessons will advise the federal government under President Buhari against possible clampdown and limitations on free speech.

As a born-again democrat that he claimed on the hustings, Mr President should work with all parties to expand the space for free expression of ideas necessary to move the nation forward in the information and knowledge age rather than in closing the space.

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The good that the odour of Aba will yield THE PUBLIC SPHERE

CHIDO NWAKANMA

R

efuse and associated rubbish dominate the news in Abia State currently. There is fire on the mountain of refuse that defined the state over the last five years. What does it entail and to where will it take Ndi Abia?

Here is a sample news item from the AbiaFacts platform on WhatsApp. “The T.C Chairman, Isuikwuato Local Government, Hon. Chima Agbaeze constituted an emergency refuse evacuation team. The team leader, who is the Transition Chairman and Secretary, Chief Eric Ikwuagwu, also has Enyioma Ekebuike, the HOD Works and Environment as members.

The team will locate a suitable dump site, find ways of disposing the refuse heaps and device ways to prevent indiscriminate dumping of refuse. The team will within one week clear all the refuse heaps around Isuikwuato LGA. “LET’S GET ISUIKWUATO LOCAL

GOVERNMENT WORKING AGAIN. #IkpeazuSabiTheWork”.

Many denizens of Abia State readily use choice words such as “putrefaction” to describe governance in the state. They refer of course to the stench of Aba, which has now extended to the state capital, Umuahia.

It became so disgusting that various citizen groups began moves for an open agitation against the governor.

Governor Okezie Ikpeazu suddenly woke up to declare an emergency on refuse management in the state. It is fitting that the Governor’s first active role after almost five years is to fire the boss of the State Environmental Agency-ASEPA and then revert to his role as GM ASEPA, after Aba and Umuahia were swimming in filth. Craters are now visible on Government House Road, Umuahia.

Umuahia had one of the best drainage systems as bequeathed by the late visionary Sam Mbakwe. Umuahia now weeps with the flooded roads when it rains.

The source and focus of outrage in Abia State is the state of Aba. Aba is significant to the entire Igboland.

Aba is a critical mirror yet a compass to Igboland. It matters to all Ndi Igbo what happens in Aba. The concerns with scatology should be familiar terrain to the governor. His people, Ndi Ngwa, are adept at deploying scatology. They say that “the flavour of fart foretells

the taste of excreta” and similar aphorisms.

At his election in 2015, my prognosis was that Aba would define and determine the legacy of Okezie Ikpeazu. Nwa Aba had taken charge of Aba with all the expectations. After initial bluster and much social media drumming, the results speak ill of the so-called actions.

The key arterial roads in Aba demand action. Is it Port Harcourt Road upon which the governor and his team beat the drums about some action 18 months ago? Come today and Port Harcourt Road is an eyesore. Is it the entrances into the city, east, west and south? The flyover at Osisioma and its surrounding swimming pools provoke the anger of everyone who drives into Aba from the Umuahia end of the Enugu-Port Harcourt expressway. Many years later, the song and dance about the “first over head bridge in Abia State” has turned into a dirge while neighbouring Ebonyi has built three and counting.

Each obvious failing obscures the many successes that Okezie Ikpeazu has recorded. For each successful infrastructure project, you could point to one Big Elephant in the room signposting failure. Citizens then remember the inexplicable failure in human resource management in breaching the contract with the state’s workers. Abia ranks with the worst when citizens count governments

‘

Many denizens of Abia state readily use choice words such as “putrefaction” to describe governance in the state. They refer of course to the stench of Aba, which has now extended to the state capital, Umuahia.

It became so disgusting that various citizen groups began moves for an open agitation against the governor

that fail to pay their workers. Is it the much-lamented debts to Teachers, Civil Servants and Pensioners?

Prescient analysts foresaw this day.

In “The historic and heavy cross of Okezie Ikpeazu” in The Cable of April 26, 2015 (https://www.thecable.ng/ historic-heavy-cross-okezie-ikpeazu) I declared that the incoming governor had to win the battle of performance and perception. He came with a hunchback of negative perceptions concerning his godfather. He bore the cross of representing a demographic that had never governed with the notion of incapability.

The cross of perception is heavier today than ever before. It would be a shame if the odour of Aba becomes the undoing of the Aba boy who got the first chance to govern Abia State.

The awakening of the elite and middle class of Abia State demanding performance should serve as critical impetus to bring Okezie Ikpeazu back to the path of performance and positive perception. Ikpeazu must change the atmosphere of Aba and Abia State to a sweet-smelling fragrance of good performance. Or… Nwakanma is a Visiting Member of the BusinessDay Editorial Board and serves on the Adjunct Faculty at the School of Media and Communication, Pan Atlantic University, Lagos. Email chidonwakanma@ gmail.com.

Leaders are readers of BusinessDay news

M

y vacation to Europe for practical work experience in four companies in different sectors improved my perspectives on team and staff engagement, organisational psychology and leadership, and creating the best place to work.

Two of the key takeaways I will implement for my company’s clients and the leaders under my executive coaching programme are the need to allow employees to be themselves and how leaders, irrespective of their roles must be aware of the economic impacts of their decisions. Let’s call the first lesson, the psychology of getting the best from people and tag the second takeaway as effective leadership for bottom-line performance.

In this write-up, I want to behave like an employee (the readers are my employers) that is free to be himself in the workplace. I do hope you will not take this article as a form of praise-sing for BusinessDay newspapers. The brand of paper you are reading is beyond my little endorsement. Equally, if you are reading this, many thanks to Temitayo Fagbule, the chairman of the editorial board for not perceiving this as self-appraisal and to Frank Aigbogun for creating the platform for people to be literate economically.

All the company I studied as part of my practical work experience have one thing in common. The heads of departments, team leads, and business leaders have access and read business news and relate the information to their decisions. I was surprised that the team leaders I understudied in human resources, training and development, process management and all other functions could relate to the happenings in the business environments and the impacts not only on their roles but on the companies they lead.

This is contrary to my experience where a functional head without any bottom-line responsibility is an economic illiterate, yet he or she is the human resources manager for the organisation. Every leader I engaged is aware of the impacts of “deal or no-deal Brexit”, the

influence of inflation of the consumer purchasing power, and most importantly is the effects of training, developing and engaging employees to be productive.

The cost of disengaged employees is known to them, and these leaders are people-oriented in a collaborative manner for the best interest of the organisations they represent.

I was an economic illiterate in the past despite being a chartered accountant until necessity pushed me out of my comfort zone.

I was a business manager in of the reliable banks managing a big conglomerate with over N150 billion annual turnover when the event happened. As someone new to the role, I was with my boss John and one of my colleagues to visit the Chief Finance Officer (CFO), Ally of the big customer, my number one in terms of size.

Ally is from Pakistan with deep-rooted experience in finance and general economic situation of Nigeria. John was so eloquent discussing the Nigerian economy from the effects of government policy on international oil prices and others with Ally. I was nodding as if I knew what was being discussed. In real terms, I was a number, not a person in the meeting.

Ally is fond of asking for John, demanding meetings with him and meeting with John was a learning avenue for him. I did nothing to improve on my knowledge of the business economy for one year, depending on my boss to take the lead in the discussion. Not until John was transferred that I realised my conscious incompetence to engage Ally in a meaningful economic conversation before my new supervisor settles into the job. I became jittery knowing that the failure to exude knowledge will not help my drive to improve my bank’s share of the customer’s business.

Anything short of 50 percent of John’s knowledge of the economy will close the doors to Ally’s office for me.

What I did as the immediate smart move is

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what I want you as leaders irrespective of your functions to do. I subscribed to BusinessDay newspapers for one year and was looking for the past editions to read. Within two weeks, my first test of economic competence came.

Ally requested to see me when he heard that John had been transferred to another region.

He demanded I book an appointment for John to visit him before travelling to his new location. John did visit Ally and took the lead in the discussion.

The final handshake between John and Ally was like a handover to me. The next day Ally started throwing questions to me as if I was John. Thanks to my preparation and BusinessDay newspapers. I gradually became an expert Ally could trust and rely on his advice to engage other banks. I transited to a new John, and this helped in gaining more of the wallet share of the customer’s sales proceeds for my bank. I did have a regrettable failure with this experience. I didn’t try enough to inculcate my newfound habit in my subordinates before I exited the job.

In the companies I visited in Europe, the understanding of the economy is a piece of essential knowledge for managers and leaders. Every decision is checkmated against its impact on the people, the brand and the value for the stakeholders of the company and the environment.

Leaders must understand the economy of the environment they operate, including the logistics of the business industry. These attributes are critical success factors for building sustainable business entities that stand the test of time and outlive the owners.

To all the people occupying leadership positions, especially our politicians in the presidency, senate and the house of assembly, the governors, commissioners to the special advisers and local government presiding officers, the knowledge of how things work and the economic implications of your actions are important if any impact will be made. If a public officer embezzles N5

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POSITIVE GROWTH WITH BABS

BABS OLUGBEMI billion for example, transferred it to Scotland to sit idle and help the Scottish economy, the people from whose commonwealth was stolen will not have the employment and quality of life the N5 billion could have generated if not stolen or mismanaged.

It is our leaders’ lack and shallow understanding of the economic, contracts and business dynamics with poor relationship management that have landed us a judgement debt of $9.6 billion to the UK firm, Process and Industrial Development Limited (P&ID). The failure to supply wet gas as agreed, ignoring business dispute process and making untenable excuses was as a result of our lack of capacity which might cost us about 20 percent of the nation’s external reserve and 2.5 percent of the GDP if $9.6 billion is paid to P &ID. To my primary constituents, the business owners, organisations and leaders, the knowledge of the economics of people’s engagement, workplace effectiveness, transitioning your organisations to institutions, stakeholders’ management and the understanding of your business value chain, income and cost drivers vis-à-vis policy and other environmental factors will help you in becoming better decision-makers.

Olugbemi FCCA, the Chief Responsibility Officer at Mentoras Leadership Limited and Founder, the Positive Growth Africa. He can be reached on babs@babsolugbemi.org or 08025489396.

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14

Thursday 03 Thursday 2019

BUSINESS DAY

Retail &

consumer business Luxury

Malls

Companies

Deals

Spending Trends

CONSUMER SPENDING

After 59 years, consumer goods firms continue to Wither away BALA AUGIE

W

henever l tell my grandchildren that Leventis Stores and Kingsway Stores were the pride of Nigeria, they laugh, making look me look like a circus clown, says Mr. Ademola Williams, a 71 year old retired civil servant.

Williams says he doesn’t blame for not catching his gist because their generation is familiar with Shoprite and Spar, but he hasn’t given up telling the story.

“Kingsway Ebute Metta was fun those days, and as kids we saved and went to the store to buy meat pie, burglar, and sausages, but how these brands withered away still remain a mystery.

Established in 1948, Kingsway stores was the first department store Nigeria, where kids and parents could get the refreshment they needed, and workers could grab snacks during lunch period.

It was established by United Africa Company (UAC), to mimic the American shopping culture. Following the success of the Lagos stores, the company established outlets in Ibadan, Port Harcourt, Warri, Ikeja, as well as Apapa.

Aside from snacks, the stores had the best toys and

clothes, which were the delight of mothers and children.

Like Kingsway, another brand that fizzled way is A.G Leventis, a company founded in 1937 by Cypriot Merchant, Anastasios G. Leventis.

Following the success it enjoyed in these periods, it opened other brands like Leventis Motors Limited and Leventis Techbical Limited.

Leventis Stores met the needs of Nigerians, and its products were in their homes.

It owned one the most successful football clubs in Africa, Leventis United.Leventis United paraded the best players across West Africa, one of them was the Ghanaian born goal keeper, Edward Ansa.

Also in the lists of department stores that reigned pre and post-independence were UTC Nigeria Plc, a subsidiary

of Union Trading Company, Basel, Switzerland, and Domino Stores respectively.

Both companies established in 1932 and 1964 respectively, made life interesting for citizens that cut across the middle and upper class of society.

The buildings that once housed some department stores are moribund, overgrown with weeds, while some of them have become a rendezvous where marijuana smokers fellowship.

How things fell apart The collapse of crude oil price of 1980 and a deteriorating economy combined with bad policies took a toll on consumer spending, as unemployment rate started to spiral.

Consequently, companies started folding up while

the ones that survived left the country because they couldn’t cope with harsh operating environment.

Epileptic power supply, bad roads, huge levies, administrative bottlenecks, and poor regulations make it difficult for business to thrive.

Nigeria has always ranked low in ease of doing business, while multinational firms bemoaned corruptions by public civil servant who demand bribe from them.

But the plight the consumer goods firms have not ameliorated, instead their conditions have been increasingly deteriorating since 2015, when the President Muhammadu Buhari led All Progressibe Congress ended the 16 year rule of the People’s Democratic Party (PDP).

The refusal of the central bank governor to let the Naira float, the restriction of foreign exchange restriction on 41 items, and President Muhammadu Buhari’s lack of policy direction compounded the woes of consumer goods firms as a severe dollar scarcity hindered them from importing raw materials and equipment to meet production.

In 2016, the country slipped into its recession in 25 years after two negative growths, as companies continue to leave for Ghana.

That same year, about 272 firms had been forced out

of business, 50 of which are manufacturing companies, according to the Manufacturing Association of Nigeria (MAN); South Africa retailer, Woodworths, pulled out Nigeria over high rental costs, duties and complex supply chain.

So far, economic numbers have been discouragingly disappointing, while investors have dumped Naira assets in pursuit of safe haven assets across the globe.

The economy grew at a slower pace of 1.94 percent in the second quarter of 2019 (Q2) 2019, according to a recent report by the NBS; that compares with a growth rate of 2.10 percent in the first quarter.

More worrying, manufacturing sector contracted by 0.13 percent from the 0.81 percent expansion in first quarter (Q1)2019. The contraction contradicts evidence from manufacturing PMI data published by the Central of Bank Nigeria (CBN) in the period which suggested that activities continued to expand, albeit at a weaker pace.

The cumulative bet revenue of the largest consumer goods firms that have released half year results showed combined revenue dip by 1.13 percent to N839 billion from N849.55 billion as at June 2019; Five out of the total number recorded a sharp drop in revenue, the first in 3 years.

These firms are also spending less to produce each unit of currency as combined net profit margins reduced to 4.17 percent in the period under review as against 6.33 percent the previous year. Combined net profit dipped by 26.55 percent to N47.18 billion as at June 2019.

Dangote Sugar, the largest producer of the sweetener, said in a conference call last month that recurring menace of smuggled sugar remains a severe concern for the growth prospects of the producer of the sweetener. In addition, the Apapa gridlock continues to impact distribution network thus increasing the lead time for product deliveries.

Dangote Flour Mills has continued to record recurring losses, while Olam International Limited, a leading food and agri-business company with operations in 70 different countries, intends to buy the Nigerian miller for N120 billion.

Experts say President Muhammadu Buhari has less than 3 years to formulate transformation policies that will help propel economic growth, as over 50 percent of a population of 200 million live on less than $1.29 a day.

Unemployment rate is at an all-time high of 23 percent, as the country dethroned India to become the poverty capital of the world.

CONSUMER SPENDING

Consumers shift to sachet bitter drinks as purchasing power weakens OLUFIKAYO OWOEYE

A

keem is a Danfo driver at the popular Obalende motor park, very early in the morning before he mounts his rusty and dirty yellow cab popularly called “Danfo” he buys 5 sachets of his favourite bitter drinks, gulps two sachets and drops the remaining three in his pocket. This has been a daily ritual in the last 2years.

“I love this “pelebe” sachet drink it makes high and “ginger” for my daily job, I can always keep them in my pocket and take it while driving,” he told BusinessDay. On the back expensive beer drinks, the market for bitters is gradually heating up in the Nigerian beverage market. In recent times there has been a surge in the volume of sales of Bitters in the country. It is like a ‘scourge’ suddenly unleashed on the land.

They are so popular that even at highbrow retail outlets the various brands have become more visible on shelves, with brewers trying to claim some market share in the lucrative bitters market. Currently, it is like a raging bitters war at every shop, bar and no social event is complete without the sight of bitters.

Bitters made its entry into the Nigerian market about 10 years ago and since then it has gained acceptance among all classes of consumers in the country. It is no longer strange to see commercial drivers, even the smartly dressed ones, hurriedly buying bottles of bitters early in the morning before heading off for the day’s work.

The drink which is mostly taken to enhance sexual performance and virility is also acclaimed to have plants and herbs that are good for blood circulation, with anti-malaria and anti-fever properties. www.businessday.ng

In the past, Swedish and German bitters were scarcely marketed in the country and because of the limited distribution line, there was not much awareness. Also, some consumers who would have possibly used the Swedish and German products believed that they were for the rich and perhaps, not affordable by the

common man.

A ‘disruption’ however came in 2011, when littleknown Kasapreko Company Limited of Ghana made entry into the Nigerian market with the introduction of Alomo Bitters brand, while Intercontinental Distillers Limited (IDL), another major player in the Nigerian beverages segment,

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joined much later with its Action Bitters brand.

The introduction of Alomo into the market was well received by consumers whose purchasing power have dropped due to economic contraction and seek alternatives from the costly beer brands.

Interestingly, the Bitters also came at pocket-friendly bottles and prices. Last year, the Alomo brand sold 580,000 cartons of the product in the country, translating to 13.9 million bottles.

The giant brewers (Guinness and Nigerian Breweries) have also launched their various bitters brands into the market. Guinness launched its Origin Bitter brand into the market, while Nigerian Breweries also introduced Ace Roots into the market.

Since the Kasapreko Alomo’s entrance into the market, other brands with very funny names emphasising on the aphrodisiacs nature @Businessdayng

of the drink have also made their way into the market.

This includes Erujeje, Black Wood, Bajinotu Poka, Kerewa, Koboko, Kogbebe, Dadubule, Baby Oku, Pasa, Goko Bitters, etc., have also emerged to command significant market presence, thus eroding the market share of both the traditional brands and those of the established big players and multinationals in the Nigerian beverages market.

Other brands have continued to play on the fringes include Yem Kem Nigeria’s Yoyo cleanser Bitters and Ruzu Bitters among others.

Another visit by BusinessDay to the popular Ojota motor park shows that the sale of Bitters is a booming market.

Fidelis, a commercial driver at the park after deciding to speak with me beckoned to a seller in the kiosk shop, she emerged with several sachets of bitters drink and handed them to him.

Thursday 03 October 2019

BUSINESS DAY

Retail &

15

consumer business

COMPANY

How consumer goods firms are surmounting the headwinds BALA AUGIE

T

he macroeconomic environment has been menacingly scotching for Fast Moving Consumer Goods Firms (FMCGs) as they are finding it practically difficult to break even.

Reports from sundry investment house shows analysts and economists concur that the industry is the most susceptible to a sluggish economy.

Double taxation, low consumer purchasing power, poor regulations, multiple levies, and decrepit infrastructure like the Apapa grid lock, are the monsters tormenting industry operators.

However, amid these myriad of challenges, some firms are thriving, thanks to the introduction of innovative products, deleveraging exercise, cost control mechanism, and investment in Research

and Development (R and D).

For instance, Nestle Nigeria Plc, the third largest firm by market capitalization, has been leveraging its R and D capacity as it continues to develop a relevant wide range of high quality nutritional offering to meet consumer need.

These products have continued to contribute to earnings and margin expansion, thanks to strong growth in the Beverage business, as the Milo Ready To Drink (RTD) pack and Maggi seasoning continues to gain widespread acceptance in the market place.

Last year, the company opened a N4.10 billion RTD factory in Agbara Ogun State, and it has invested N74.10 billion on its operations in 5 years.

Nestles’ net income 22.34 percent to N26.24 billion in the period under review as against N21.45 billion in June 2019, while gross margins moved to 46.57 percent in June 2019 from 41.10 percent the previous year.

Cabury Nigeria Plc, recorded its best performance in 5 years, a stellar performance it attributes cost-cutting measures, effective marketing strategy and superlative performance of its product brands. For instance, Cadbury re-launched its iconic cocoa beverage drink, Bournvita, with a new improved taste in line with consumers’ tastes and preferences.

The company’s Cadbury Hot Chocolate 3-in-1 brand, its treat portfolio, recorded substantial growth, driven by its unique offering, while the gum and candy brands also recorded success in their

respective categories.

Cadbury’s gross margins increased to 21.29 percent in June 2019 from 16.02 percent the previous year while it recorded a profit after tax of N669.93 million as against a loss of N423.67 million the previous year.

Flour Mills Nigeria Plc, the largest miller by market capitalization, had raised rights issue to reduce debt and bolster earnings. The strategy has yielded fruit as finance cost has fallen by 26.51 percent to N4.55 billion in the period under review while net income jumped by 16.08 percent to N4.23 billion as at June 2019; earnings

were also supported by the large food products portfolio.

In order to magnify its share of the market and deliver higher returns to shareholders, the management of Nacon Allied Industries plans to increased refined salt capacity by 250kMT in 2019.

Analysts at Cordros Securities Limited in a recent note to client said they see a strong opportunity for sector players in the refined salt space following the implementation of higher Import duty on refined salt, by the federal government to 70 percent.

NASCON expanded its seasonings production capac-

ity by 1.5kMT (lifting the overall capacity to 5.24kMT/yr) in the first quarter (Q1) of 19 to take advantage of the growth potentials in that segment.

While Unilever Nigeria Plc has no plan to launch new product, it intends to move into non saturated market. It launched its “Everyday Essentials” store on the JUMIA platform in order to drive sales.

The sluggish economy and weak consumer spending has forced a lot companies to roll out sachet product so as to penetrate the low income market.

“Nestlé introduced single serve packs as a strategy to ensure that consumers continue to have access to the nutritious food they need even in the current economic reality. This is in line with our purpose to enhance quality of life and contribute to a healthier future,” Victoria Uwadoka, Corporate Communications and Public Affairs Manager at Nestlé told BusinessDay.

da, motorbike hailing service which was launched in 2018 but it has partially shut down operations to re-strategise after the chief executive officer faced operational hurdles during a ride.

Typically, an ORide driver earns at least N5, 000 in a day and only pays N1, 000 to the company, unlike a Taxify driver that pays 15 percent of each ride to his company.

Bamidele Adams, another Taxify rider said, “Even when Taxify reduced the fare prices to enable them to get more customers, it has not been favourable to us.

We now work extra hours.

Healthwise, a driver is meant to spend 12 hours on the road even though Taxify is a 24 hours service. And now, these ORiders have made it worse by taking our customers. It is only weekends that I get enough rides, unlike the weekdays.”

A frequent ORide passenger said that most times when he is going to work he takes it and that it is only on special occasions that he takes cabs. “These bike riders

can beat through traffic, they have safety gears, raincoats to protect you while riding and you hardly hear of accidents from them,” Kemi Atutu, a rider said.

The Okada business is not new in Nigeria as it goes as far back as the 1990s.

Given their size, they can fit into small spaces that cars cannot and this makes them a faster means of transportation in both rural areas and even urban cities. With the poor state of roads in the country, they are able to ply very rough terrains and get passengers to their destinations on time.

Before ORide came into the picture, people preferred taxis or buses as against Okada riding due to the fact that most of the riders are not properly trained had safety gears and were prone to accidents and robberies.

In 2012, Babatunde Fashola, the former governor of Lagos state placed a total ban on commercial motorcycle (Okada) operation in Ikeja area of Lagos due to the increasing rate of criminality facilitated with bikes.

consumer spending

Bolt drivers mull moves to ORide BUNMI BAILEY

N

igerians are developing preference for for malised motorbike hailing services, (popularly known as Okada) and this is attracting drivers of cab-hailing companies, who are willing to become bike riders.

A reporter at BusinessDay’s found this out from a series of conversations with some drivers of Bolt, formerly known as Taxify that offers cab hailing services in Lagos and many other cities across the globe. These conversations showed that the drivers were contemplating a move to ORide, a new and innovative on-demand motorbike ride-hailing service due to the high demand for the service.

Most Taxify drivers are complaining that ORide bike riders are taking their customers away and thereby affecting their revenues.

“Most of the drivers I know have now moved to ORide and I am contemplating moving too; because I am

not making enough money as before. I have been doing this business for two years now.

Before I would make about N50, 000-N70, 000 a week but now, I make less than that. I am not getting enough rides as before,” Ibrahim Yusuf, a Taxify rider complained.

ORide service was launched in May 2019, with

initial operations flagging off in Lagos. The service has since expanded into other cities like Ibadan. Driven by technology, the ORide service is accessible via the OPay app - a super app that’s available on Android and iOS, with features that cater to a range of lifestyle demands including food order and

delivery, utility bills payment, cash access and more.

Its flagship motorbike models of 200cc engine specification aimed at servicing long-distance trip requests as well as ORide Street, its lighter offering to cater to shorter intra-city trips.

Before ORide came into the market, there was Goka-

Team Lead: Bala Augie, Olufikayo Owoeye; Analyst: Bunmi Bailey; Graphics: Fifen Eyemisanre Famous www.businessday.ng

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16

Thursday 03 October 2019

BUSINESS DAY

RESEARCH&INSIGHT

In association with

A WEEKLY PUBLICATION OF BUSINESSDAY RESEARCH & INTELLIGENCE UNIT(BRIU)

briu@businessday.ng

08098710024

Revisiting the Labour Force Statistics: what does the data say?

AMAMCHUKWU OKAFOR

T

he last four years witnessed significant economic downturn due to a combination of poor economic management, declining oil revenue, external shocks and the recession.

The response lag by the current administration was optimistic that the Economic Recovery and Growth Plan (ERGP) launched in 2016 among other efforts would be felt in 2018 (NBS report 2017). However, there is a breeze of uncertainty that follows election years. The election has come and gone, there is not much in the way of job creation as the economy still struggles to get back up. Unemployment is still higher at 23.1 percent in 2018(Q3) from 20.4 percent at year-end 2017.

This analysis highlights the important aspect of unemployment from 2014 through 2018.

2014 In 2014, the labour force in Nigeria was estimated to be 72,289,064 of which broad unemployment was 18,066,794. Broad unemployment here is the vertical addition summation of total unemployment and total underemployment. The number of fully employed above 40 hours are highest across categories whereas the number of unemployed (> 19 hours) represents the lowest. This is quite suggestive of the preference for or availability of full-time employment in the period. By settlements, rural unemployment exceeds urban unemployment by 106.5 percent of their category total. Unemployment (by 0 hours) seems to be about the same in both rural and urban areas. Interestingly however, the number of rural fully employed (> 40 hours) exceeds that of urban fully employed by 72percent. This could be explained by the ratio of employment to total labour force in rural area relative to urban centres where population is highest.

Subsistence living and livelihood strategies in rural areas as well as report issues and entry errors may influence the results.

The gender statistics followed expectation in that the population of male labour force exceeds that of female. It also revealed the gender bias in the labour market as employment above 40 hours is higher for male whereas unemployment is higher for female across all

Source: NBS, BusinessDay Research (This graph emphasises the distribution of unemployment by settlement pattern in 2014)

and also across all unemployment categories followed by those who have had no education.

This signified the preponderance of low-skilled labour in the country. Post-secondary school unemployment at 26.37percent rightly captured the high level of graduate unemployment in 2014. The age distribution supported the claim of a young and vibrant labour force: the age group 15-24 ranked the highest in broad unemployment and across categories, whereas

Source: NBS, BusinessDay Research

the age group 25-34 led in total labour force and full employment. This implied that unemployment was highest among the youngest.

2015 In 2015, Nigeria’s labour force increased by 3.87percent from 2014; the increase was significant in the groups 15-24 and 25-34. However, unemployment increased by 19.77percent.

Source: NBS. BusinessDay Research ( The above graph shows the distribution of unemployment by settlement pattern 2015)

This figure explains the uncertainties that trailed the transition of governments after the general elections in 2015. In the graphical

classes, it increased by 47.1percent for those who have had no education–suggestive of massive retrenchment due to downsizing in the period. But for those with below primary education, it increased by over 793vpercent.

This implies that the recession that eventually ravaged the economy in subsequent years began with the retrenchment of unskilled workers

Source: NBS, BusinessDay Research (This graph shows the trend in Labour force growth)

in manufacturing plants across the country.

The gender picture showed an equal level of decline in broad unemployment for both male and female–11.5percent.

cycles are severe for male labour. This may be due to the fact that male labour occupies more paid employment than females – and are therefore more prone to hire and fire.

12734BDN

unemployment categories.In the educational category; those who have had secondary education are the highest in the overall labour force

representation, the settlement patterns aptly showed that unemployment conditions were worsened in rural areas relative to urban centres. Again, unemployment below 20 hours in the educational group seemed to have experienced the most declines in employment especially for those who have below-primary education. For instance, whereas unemployment increased by 49.87percent for postsecondary school, secondary and primary

2016/2017 Following population growth, the addition to labour force in 2017 and 2016 was 11.7 percent and 6.61percent from the 2015 levels, with a year-on-year (YoY) increase of 4.78 percent.

And consequent to the negative growth rate due to the recession in the period, employment did not fare well—unemployment deepened.

Total unemployment in the same period increased drastically by 57.92 and 103.84 percent in 2016 and 2017 respectively from 2015 levels.

This is explainable by the effects of recession that peaked in 2017. Also,the increases in respective underemployment of 18.7 percent and 31.2 percent showed the level of job satisfaction. Expectations are that reversal in the spurt in unemployment would be felt in 2018 (NBS report, 2017).

2017/2018: trend Throughout the years observed, absolute unemployment which is unemployment by 0-hours was consistently higher in urban centres than in the rural communities from Q1 2014 to Q3 2017. However, there has been a subtle reversal since Q4 2017 to Q3 2018 based on the most recent data. As of Q3 2018, rural unemployed was twice as much as that of urban unemployment.

From the analysis, the age group 15-34 contributed significant share of the labour force growth in the period and also accounted for most of the broad unemployment in 2017 and 2018. The result is a rising rate of youth unemployment of 29.7 percent in Q3 2018—from 25.5 percent in 2017(Q3).The Gender distribution also showed labour market bias: whereas the labour force population increased consistently throughout the years, full-time employment bias as a proportion of labour force was 35 percent and 21 percent in 2018(Q3) from 33 percent and 29 percent for male and female respectively.

From 2015 – 2016, the change in broad unemployment increased by 32.3 percent and 31.6 percent for male and female; from 2016 to 2017, by 24.8 percent and 12.7 percent; and 43.4 percent and 17.8 percent for male and female respectively in 2018. This reveals that even though unemployment is higher among female labour force, the changes in unemployment through time as a result of economic

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Thursday 03 October 2019

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Thursday 03 October 2019

BUSINESS DAY

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Thursday 03 October 2019

BUSINESS DAY

COMPANIES & MARKETS

19

COMPANY NEWS ANALYSIS INSIGHT

MARKETS

Emerging markets rebound from August blues, attract $37.7bn portfolio capital SEGUN ADAMS

E

merging markets (EM) bounced from one of its worst performing months after portfolio flows hit $37.7 billion in September as non-resident portfolio flows continue in a pendular motion that has so far characterized the year.

Equity flow and debt flows were $10.3 billion and $27.6 billion respectively while net capital flows into EM were $30.9 billion in August, according to a report by the Institute of International

Finance (IIF).

The Washington-based institute noted that unlike in August where daily flows tracker recorded 18 out of 21 days of negative flows, September saw only 6 out of 21 days of negative flows.

China which accounts for a large chunk of flows saw $9.2 billion during September compared to $1.6 billion, 475 percent more than it recorded a month before.

Meanwhile, in a show of confidence in EM debt securities, inflows into the fixed income space rose to $27.6 billion in September although EM (excluding

of inflows to China), with the other regions seeing only marginal gains.

China) equity flow was $1.1 billion. “ We believe the outlook

for equity flows to nonChina EM remains difficult given the large amount of hot money that has already gone to EM in recent years, which we see as having resulted in a positioning overhang, a structural drag on new inflows,” IIF said in the report.

Net Capital flows to Nigeria in August rose to $1.3 billion compared to $0.8 billion in July. Nigeria’s flow was higher than South Africa’s $0.8 billion although it was less than $1.5 billion by Egypt which saw a decline month-onmonth.

With $2.1 Billion already seen in July and August, Nigeria might be set to

rebound from a depressing $0.8 billion net capital flow in the second quarter of 2019 after it had seen $3.3 billion flow in the first three months of the year.

India saw $19.6 billion net capital flow in August, the most among the 23 Ems tracked. China had the worst, a negative $9.4 billion net flow.

IIF noted that the positive outcome was uniform across all regions. Debt flows in EM Asia were $13.3billion, followed by Latam ($6.3bn), EM Europe ($4.0bn) and AFME ($3.9bn). Regarding equity flows, EM Asia saw an inflow of $9.0billion (explained mainly by $9.0bn

“ We e s t i m a t e o u r broader measure of net capital flows to EM (including banking and FDI flows) was $30.9 billion in August, a sharp improvement from last month,” IIF said.

Since the start of the year MSCI Emerging Index, which tracks performance of emerging market stocks, has risen some 4 percent.

A dovish stance by developed economies seen at the start of the year buoyed carry trade in emerging economies although an escalation of the trade war as the year progressed bit hard of EM. An increase in the USChina trade tensions in May caused a rapid deterioration in global risk appetite, resulting in an important outflow episode.

While sentiment improved in June, a re-escalation of the trade conflict in August caused another outflow episode.

Potential triggers for further risk-off episodes proliferate, including further increases in trade tensions, IIF noted.

OIL & GAS

NIPCO mulls LPG production in new investments surge … Increases market share in Nigeria OLUSOLA BELLO

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IPCO Plc, has announced plans to go into production of Liquefied Petroleum Gas (LPG) in new investments surge.

Sanjay Teotia, managing director of the company, who disclosed this on the sidelines of NIPCO’s 15th Annual general meeting (AGM) in Abuja, pointed out that conscious efforts are in place in preparation for the take off of the LPG production. “ Yo u r c o m p a n y i s thinking of venturing into LPG production against the background of the nation’s richness in natural gas. In the near future, we are going into its produc-

tion,” he said.

The strategy to diversify and grow the streams of income through the expansion of the company’s oil and gas business, Teotia said, would gain more momentum.

Currently in LPG storage space, NIPCO, the company’s helmsman said, “we not only possess the largest but the most active as well as the supplier of choice.

“Our shareholders will continue to smile with good returns on their investment year in year out but with a caveat that challenges in the sector are addressed headlong by concerned stakeholders” , he asserted Stating that the company does not “envisage job

loss or lay off,” the NIPCO’s boss expressed “hope to improve our employment status with opportunities for more vibrant and experienced personnel to give added impetus to our excellent service delivery phenomenon.

“Our growth plans for the future would be hinged on focused implementation of our strategic intent of exceeding customer’s expectations in all our line of businesses.”

In pursuit of NIPCO’s resolve to be relevant in the industry, Teotia said; “our backward integration blueprint would be further intensified with a view to making it consequential on our balance sheet in 2019.

“We will also remain

focused on delivering on our strategic objectives of being company of first choice in the industry with the ultimate aim of generating more values for our shareholders and stakeholders in general.”

In a review of operation in the 2018 financial year, the NIPCO boss said that fifteen years of operation in a stormy industry such as ours is great achievement worthy of applause.

He noted that the period under review being the preceding year before the 2019 General elections was permeated with cautious investment thus having a general toll on the economy.

“The expected passage of the Petroleum Industry Governance bill did not

materialize with the industry still in want of a robust policy capable putting the industry on a solid footing for the future.

“Job security is becoming a mirage in the sector, a feat that might have a bleak impact on the economy.

“The sector had remained regulated leaving the National Oil Company as the sole importer of Premium Motor Spirit [PMS], popularly called petrol,” he said.

With the continued regulation of the sector as against deregulation, operators, Teotia said, had no control on margins as turnover is shooting up with no concomitant improvement on profit “Your company was however able to drive its

growth plans through expansion of some of its core business activities and a backward integration of its business lines.

He pointed out that the company has put more investment in the white and gas business to boost more revenue and deliver significant returns to you all adding “we were able to optimize cost without necessarily sacrificing quality service delivery.”

According to him, NIPCO sustained its steady growth through strategic implementation of the promoter’s intent hinged on exploring opportunities in the hydrocarbon industry with a view to exceeding customer’s expectations.

Editor: LOLADE AKINMURELE (lolade.akinmurele@businessdayonline.com) Graphics: Samuel Iduh

20

Thursday 03 October 2019

BUSINESS DAY

Thursday 03 October 2019

BUSINESS DAY

INTERVIEW

21

‘We are building framework for a Gas Academy that will offer certified Gas training courses’ AUDREY JOE-EZIGBO, is the president of the Nigerian Gas Association (NGA). In this interview with OLUSOLA BELLO, Joe-Ezigbo talks about NGA’s role in the promotion and protection of the gas industry in Nigeria. She also shares her thoughts on the unfolding key developments in the industry. Excerpts:

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What is the role of NGA in the promotion and protection of the interests of the gas industry in Nigeria?

What we do is to ensure that on one hand, we engage with the government to understand their outlook and intentions for the industry and then we share with them our own insights on the workings of the industry, and potential impacts of their proposed actions on the

industry and our members. On the other hand, we also engage with our members to ensure there is also clarity on their part regarding the government’s objectives.

Essentially, we push for mutual understanding and collaboration so that, as much as possible, the government and the industry are not working at cross-purposes.

We are constantly in engagement with government at various levels, from the executive to the legislature. We engage with the ministries for petroleum resources, power, trade and industry, with the NNPC. We also engage with the Department of Petroleum Resources (DPR), Central Bank (CBN), Nigerian Investment Promotions Commission, and a host of other MDA’s who have one form of oversight role in our industry.

NGA was a key player in the shaping of the PIGB, the 2017 National Gas Policy, the draft National Fiscal Policy. We are working with the DPR now on the review of the National Gas Network Transportation Code. We also work with other sector-specific gas industry groups to ensure we are driving the same agenda for the gas industry, and so much more.

I must tell you that so far, our engagements have been encouraging and we are hopeful for significant traction for the industry over the shorter to medium term.

You recently led the NGA team to meet with Vice President Yemi Osinbajo?

Indeed, I was privileged to lead members of my council and association into a meeting convened

by Vice President Osinbajo at the instance of NGA. We had a very robust engagement. We highlighted the criticality of certain issues which, in NGA’s view, are militating against the progress of the power sector, and more broadly, the domestic gas industry.

In NGA’s view, there is integral role of thermal power generation in the attainment of the ERGP objectives, the 7 Big Wins, and the importance of power sufficiency to Nigeria’s competitiveness and ability to take full advantage of the African Continental Trade Agreement (AfCTA).

‘

We shared with the Vice President our take on the critical illiquidity issues in Nigeria’s power sector and the fact that, a lot more needs to be done beyond the payment assurances which have in themselves so far proved inadequate in resolving the issue.

NGA’s recommendations in this regard hinge on the necessity for us to address the power tariffs once and for all. We must build a selfsustaining (willing buyer, willing seller) gas-to-power market and for this to work seamlessly, we must establish market-reflective tariffs in the power sector.

There is also the lingering issue of forex exposures being borne by gas suppliers to the power sector arising from the investment and revenue currency mismatch; investments in the gas sector are made in dollars while gas invoices are paid in naira at the CBN rate, resulting in a value erosion of about 60/Mscf or 18% of value of gas sold. This is a situation that degrades project economics, profitability and viability and ultimately makes the gas sector unattractive to investors.

Another major point of discussion was centered on what the NGA sees as sustainability issues in the domestic gas market; the arbitrary fixing of gas prices across the value chain, and some draft resolutions and recent gazettes put out which portend an unsustainable supply and distribution of gas to the last mile customers. Towards the tail end of the last administration, there were policy moves that totally negate the direction of the National Gas Policy which was signed in 2017 as well as the thrust of the Domestic Gas Supply and Pricing Regulations and Policy 2008, both of which enshrined the movement to a liberalised gas market guided by a willing buyer-willing seller pricing philosophy. Our primary concern is that in trying to subsidise one sector, the entire downstream commercial sector, which is the main anchor of liquidity in the gas value chain, is being sacrificed.

We discussed with Vice President Osinbajo regarding NGA’s view of interface issues between the supervising ministries in the gas-to-power sector. In the last administration, NGA had unfettered

We are constantly in engagement with government at various levels, from the executive to the legislature. We engage with the ministries for petroleum resources, power, trade and industry, with the NNPC www.businessday.ng

‘

Can you tell us about the role of the NGA in Nigeria’s gas industry?

GA is the umbrella association that represents the entire players and participants within the gas industry value chain. We are the voice of the gas industry in Nigeria.

Primarily, NGA was set up in 1999 to champion use of natural gas as a preferred fuel in Nigeria and to advocate on all issues relating to natural gas for the benefit of the industry and the nation. We are a chartered member of the International Gas Union (IGU), therefore, we also represent Nigeria on the global landscape of gas associations.

We are non-political, non-partisan and independent organisation driven by 4 cardinal value propositions, the foremost is our advocacy for the right policies, regulatory frameworks and enabling legislations to ensure that our gas industry is moving in the right direction.

We do a lot of capacity building through various learning and development platforms designed to enhance the industry and the public’s understanding of gas. We advocate for the highest levels of safety and quality standards within the gas industry. We do a lot of work centered on investment promotions within Nigeria, and of course, also facilitating cross-border partnerships across the African region, as well as globally. We are the most authoritative resource for industry data and thus, lend ourselves to potential investors who are looking to substantiate information and data concerning various aspects of the industry.

The NGA has quite a robust membership base comprising upstream exploration and production companies, midstream transportation and processing companies, downstream distribution companies, power generation and distribution companies, as well as various end users who deploy gas as fuel or feedstock. Additionally, we have several members who are non-core gas players, but whose operations service the gas industry, including banks and other financial service providers, legal firms that specialize in energy law, maritime companies, insurance companies, consulting companies and the like. We also have individual associate members and a large student membership.

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has potential to generate a GDP impact in the region of $1billion per annum from a resource which we are otherwise literally burning in the air at flare sites.

So we see it as a laudable and bankable program. However, like any other new program, there are clarifications that need to be made and refinements that need to happen so that the workability of the program is not impacted. I can tell you that some of our members are questioning why they should be penalised for safety flares which are an international HSE mandate.

Some of our members have suggested that, rather than the onesize-fits-all approach, the penalties should have been segmented in order to address the distinct operations of marginal field operators.

There are concerns about when the penalty regime actually kicks in. The bottom line is that if this program can be successfully implemented, it can completely change the narrative about Nigeria as a gas flaring nation.

Audrey Joe-Ezigbo

access and the ear of the Minster of State for Petroleum Resources, but we were largely unsuccessful in our attempts to engage with Ministry of Power. Given that about 80% of our national power generation is thermal, the gas-to-power chain is critical to our achieving any aspirations concerning power in Nigeria. This is a reality we cannot get away from.

NGA’s recommendation is the establishment of an integrated Energy Ministry, but in the absence of this, a cabinet portfolio for gas or other mechanism(s) to ensure a holistic engagement of gas Industry issues in general, and gas-to-power issues in particular, at the highest levels of government.

Indeed, NGA commends Vice President Osinbajo for the seriousness which he accorded our request for the meeting, and his pulling into the room all the key power sector stakeholders including the Ministry of Power, NERC, NBET, the Central Bank of Nigeria and the DPR amongst others.

Among other commitments, VP Osinbajo has directed that NGA must be represented in all deliberations and consultations relating to gas and power, to ensure @Businessdayng

that the government always feels the pulse of industry stakeholders before choosing a course of action. He also constituted a subcommittee to come up with an action plan for the resolution of some of the specific issues we had raised.

What are your expectations from the new Minister of State for Petroleum Resources?

What is of paramount importance in ensuring the success of Minister Timipre Sylva is that it is his own personal determination to steer the ministry in the right direction, and that he remains in constant consultation and communication with his stakeholders, from his ministry and the various MDA’s that interface with his ministry, to the NGA and other professional associations within Nigeria’s energy sector. He has clearly started off on the right footing.

In terms of our expectations, we would be happy to see an acceleration of the progress of the 7 Big Wins, especially Big Win 3 which is the Gas Revolution. Within Big Win 3 are plans for gas infrastructure development, gas revolution projects, reduction of gas flaring and gas-to-power.

I was very glad to hear him define amongst his priority focal areas, the progression of the Nigerian Gas Flare Commercialization Program (NGFCP) and the aggressive promotion of the passage

of the Petroleum Industry Bill (PIB). It is encouraging to see that in addition to any new initiatives he may bring on board, he is clearly going to build on the work that has already been done by former Minister Emmanuel Ibe Kachikwu.

Continuity of policy direction is key. He must be able to move whatever was working to the next level, and then also work assiduously to resolve any lingering challenges he might have inherited, of which there are many. NGA certainly wants to see a more aggressive approach towards the implementation of the National Gas Policy.

What is your take on the bankability and marketability of the NGFCP? The NGFCP is a highly laudable initiative and it is an integral part of attaining Big Win 3 and the National Gas Policy. According to the NNPC, Nigeria flared 282.08 billion standard cubic feet of natural gas in 2018, which is about N234bn that should otherwise have been channeled to developing our infrastructure. You will appreciate that while the volume of gas flared in Nigeria is down from about 2Bscf/d where it was 10 years ago, flaring still constitutes a colossal waste of resources. Is it bankable? I believe so, and if there are concerns around its bankability, the onus is on us to ensure that those concerns are properly addressed.

This is a program which by their estimation

We have been hearing about a proposed National Gas Network Code for years. Are there any developments on this?

Yes, there have certainly been quite a few developments with respect to the National Gas Transportation Network Code. And you are right, it has been quite a few years in the making, starting from about 2003 when the then Ministry of Petroleum Resources commissioned the development of a network code for Nigeria. NNPC took another stab at this in 2010 and an oversight board was set up comprising representation from the Nigerian Gas Company (NGC), the DPR, the Gas Aggregation Company of Nigeria (GACN) and the Ministry of Petroleum Resources. In fact, the output from this effort was presented to the House of Representatives around 2013. A lot of work has however been ongoing since last year between the DPR, NGC and others to produce the current draft that is at hand.

The DPR has formally issued the draft Code and ancillary documents to the NGA for our review and inputs, which is currently ongoing. A stakeholder engagement session is also being organized by the DPR, at which forum there will be an industry-wide joint review of the final document which will be sent in for regulatory approval.

The Code will ensure a higher level of market efficiency, transparency, flexibility and liquidity.

It will enable gas trading and gas swaps across the nation. It will allow new participants enter the gas market without the inadequacy of infrastructure being as much of a constraint or dent on project economic viability and so on. It will also greatly enable the viability of programs like the NGFCP. www.businessday.ng

With the current limitations of the existing pipeline infrastructure, what are the strategies to reach the unserved market?

Last mile connectivity has actually been a huge challenge that has impacted on the development of the downstream gas industry for decades, especially as a result of the inadequacy of our pipe network. In recent years, we have seen virtual pipeline technology solutions come in to fill the gap and ensure gas is able to get to unserved and remotely located industries or plants. Today we have several compressed natural gas (CNG) players, as well as liquefied natural gas (LNG) players making significant investments and expanding the frontiers of domestic gas-based industrialisation.

The NGA continues to commend those of our members who have very bullishly decided to invest in the deployment of virtual technology to address the infrastructure gaps, particularly as they face their own unique sets of challenges.

Virtual technology and lastmile delivery of natural gas by way of CNG and LNG is certainly significantly more expensive than gas delivery through pipelines. This is primarily because of the added costs of the equipment for delivery and storage, compression and/or regasification, security, logistics and so on. These virtual options are still comparatively significantly cheaper than any alternative liquid industrial fuel such as diesel (AGO), and therefore they make sense over the short to medium term. Long term however, we must as a nation work quickly to develop a robust network of pipelines crisscrossing the entire nation.

Do you see the FID on the NLNG Train 7 impacting on other LNG projects such as Ok LNG and Brass LNG? The NLNG is one of the founding corporate members of the NGA and remains one of our most committed members to date. They have done great work for the industry and their communities, and indeed their contributions to the nation are invaluable. The Train 7 FID is long overdue and I have no doubt that it will bring multiplied benefits to Nigeria. Will this be instrumental to bringing the OKLNG and Brass LNG projects to the fore any faster?

I do not think so, otherwise the successes of the previous trains should have been more than enough reason for those projects to have come on stream years ago. There are other underlying issues relating to those projects. The global gas industry is changing, and the global LNG industry is changing even more so. The Africa LNG space is evolving rapidly. Our domestic gas markets are also changing. If there is broad recognition and appreciation of the success of the NLNG

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project, model and company; we need to progress the OK LNG and Brass LNG projects as rapidly as we can.

In what way is the NGA ensuring the next generation is being equipped with the right skills set to steer the industry?

As the industry has evolved over the past few years, we have recognised that there is a growing need to ensure that the right skills sets and competencies are being built in the industry. The pace at which new projects and technologies are unfolding, and at which existing skilled personnel are aging, retiring and relocating has been a cause for concern to us. Thus, capacity building is one of our focal areas.

NGA runs various programs and learning initiatives through which we contribute to the body of industry knowledge and technical skills. Every year, we organise Business Forum where we bring in subject matter experts to speak to different aspects of the industry operations. We host an international biennial conference and exhibition which allows technology players and global industry players and participants to interact and share experience, forge alliances. At our conferences and events, we always make provision for our student

members to attend.

NGA also has a flagship Learning Solutions program which is our dedicated training for gas professionals. We also use this platform to offer training for non-gas professionals who are looking to gain better understanding of the industry.

We are currently building the framework for a Gas Academy which will offer a fully certified Gas training courses. The preliminary work on this has been done and we are moving shortly into the finalising of the modules. The Gas Academy will run as a mixture of on-site and online deliveries, with internships and examinations being prelude to graduation and certification. @Businessdayng

We are also developing modules that will be targeted at our student members, particularly those in higher institutions that have dedicated oil and gas engineering departments. The objective is to equip them to be more attractive to employers by the time they graduate. We have engaged with the Nigerian Content Development and Monitoring Board (NCDMB) in this regard, as we propose to partner with them as part of our contribution to the Nigerian Content development and the building of local capacity.

At 20, would you say the NGA has lived up to expectation as the voice of gas industry in Nigeria?

I would say that it has been a difficult journey but rewarding, nonetheless. We have seen the NGA grow from its initial formation with just a few members, primarily the international oil companies and the NNPC, to the very robust membership base we have today. We have evolved from a small association back in the day to an invaluable strategic partner to our members, the broader industry and the various levels and arms of government.

Going forward, I see NGA taking on more of a leadership role on the international front. We are members of the International Gas Union

(IGU). In 2018, for the first time, we were able to get a Nigerian, the first African at that, appointed to the position of Vice Chair, IGU Exploration and Production working committee; which we are in line to Chair come 2021. This will open the door for other Nigerians take on the leadership of other IGU communities, thereby increasing the NGA’s role and relevance in the international discourse of gas.

NGA has come into its own.

Today we are a recognised stakeholder and authoritative voice, a key resource and reference point for gas and gas-related matters in Nigeria and beyond. We still have a lot of work to do, but we are certainly up to the task.

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Thursday 03 October 2019

BUSINESS DAY

COMPANIES&MARKETS

Business Event

OIL & GAS

NIPC denies 15 others tax relief, extends application for two companies OLUFIKAYO OWOEYE

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he Nigerian Investment Promotion Commission has rejected the application of 15 companies seeking pioneer status under the Industrial Development Income Tax Act. The Pioneer Status Incentive was established by the Industrial Development (Income Tax Relief ) Act, No 22 of 1971 and is a tax holiday which grants qualifying industries and products relief from payment of corporate income tax for an initial period of three years, extendable for one or two additional years.

The products or companies suitable for pioneer status are industries or products that do not already exist in the country.

Analysis of the second quarter Pioneer Status Incentive report for the period ended 30th June obtained by BusinessDay from the NIPC website

showed that 15 companies had their applications rejected, among them is Flour Mills of Nigeria Plc, West Africa Packaging Limited, Daraju Industries Limited, Promasidor Nigeria Limited, Dangote Cement Plc Ibese Lines 3&4, and Obajana line 4, Guinness Nigeria Limited, Others are Ultimus Constructions Ltd, NG Clearing Ltd, Umugini Asset Company, Aristocrats Industries Ltd, Guinness Nigeria Limited, StrongPack Limited, Grit System Ltd, Scott Industries Limited and Flexipack Ltd. The report stated that two fir ms, Oando Oil Limited and ATC Nigeria Limited had their applications extended while 181 other applications were still pending., while approval in principle was given to 10 firms, these are Amarava Agro Processors Ltd, Solis Agro Ltd, Indigo Feeds Nigeria Ltd, Polar Petrochemicals Ltd, Royal Pacific Group Ltd, Wacot Rice Ltd, Olam Hatcheries

Ltd, Crown Flour Mills Ltd, Gowus Nigeria Ltd, and Harvestfield Industries Ltd. It put the number of firms currently benefiting from the tax incentive scheme at 32 notably among them are Mojec International Limited, Fidson Healthcare Plc, Lafarge Africa Plc, Indorama Eleme Fertilizer chemical limited among others, while 104 companies had abandoned their applications with the NIPC. Providing reasons for the rejection, the commission in the report stated that the requests from two out of the 15 firms were time-barred, while the activities of 10 other firms were not covered under the pioneer status-incentive list.

For the other three companies, it explained that their applications were rejected because their expansion projects were not eligible under the Industrial Development Income Tax Relief Act.

L-R: Popoola Ajayi, member, board of trustees, Lagos State Employment Trust Fund (LSETF); Bimpe Gisanrin, team lead, women banking, Access Bank; Adewunmi Oni, acting director, programmes/coordination, LSETF; Olusegun Onilude, chairman, Badagry Local Government Area, and Layode Bamidele, supervisor for health, Badagry Local Government Area, at the LSETF W-Initiative Grassroot Stakeholder’s Engagement in partnership in Badagry LG recently.

HEALTHCARE

Medcourt partners Austrian firms for cutting-edge solutions in Healthcare, Banking SEGUN ADAMS

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agos-based Medcourt Support Services, a Pan-African focused Health Solutions company, in synergy with two international firms, is launching Austrian technologies to improve services in Nigerian hospitals, banks and supermarkets.

The products which include fire alarm systems, communication gadgets, in-house transportation systems, among others, feature the latest solutions for healthcare, financial services firms that prioritize safety and efficiency at the workplace.

Sumetzberger GmbH, one of the companies at a seminar hosted by the Austrian Embassy, specialises in the development and implementation of pneumatic tube systems.

The technology provides a secure and reliable transport solution for transferring materials and samples in hospitals and laboratories as well as cash handling and administrative processes in banks and industry.

The second company, Schrack Seconet AG, which currently designs more than 10 hospital projects in Ni-

geria, creates innovative information and communication systems that interlink patients and nursing staff in hospitals.

The local presence of Sumetzberger GmbH, a technological leader in the field of pneumatic tube systems, and Schrack Seconet, a provider of fire alarm systems, communications systems for hospitals and security systems, would improve healthcare delivery by providing unique innovations tailored for developing nations and ultimately improving patient care, Medcourt said.

Adegboyega Oridota, Managing Director, Medcourt Support Services, reiterated the company’s commitment to positively contributing to health-care solutions focused on the improvement of healthcare across Africa which contributes just one percent to global health expenditure despite making up to 15 percent of the world population.

Guido Stock, the Commercial Counsellor at the Austrian Embassy in Lagos said the event underscored the importance of safety and security as well as the wellbeing of patients in Nigeria.

“This event shows that the

latest technology for security is available in Nigeria,” he said.

The Austrian Commercial Counsellor expressed his strong belief that Austria, looking back to a long tradition in the rendering of outstanding public healthcare, is in an excellent position to contribute to overcoming the health care challenges Nigeria is facing.

“West Africa and Nigeria specifically are among the most important markets for Austrian companies looking beyond their traditional markets in Europe and North America,” Stock added.

The Austrian Commercial Counsellor also said there would be more innovation from Austrian companies to help improve the delivery of services in different sectors in Nigeria.

The exclusive event had over 60 professionals and industry thought leaders in the architectural, construction and healthcare sector in attendance.

Advantage Austria, an international intelligence and business development services provider for both Austrian companies and their representatives abroad, was represented by the Commercial Section of the Austrian Embassy in Lagos.

www.businessday.ng

L-R: Samson Akejelu (r), marketing manager, Spectranet Limited, receiving the internet service provider of the Year (Consumer) award scooped by Spectranet 4G LTE from president, Association of Telecommunications Companies of Nigeria (ATCON), Olusola Teniola at the 3rd Nigeria Tech Innovation and Telecom Awards held in Lagos at the weekend.

L-R: Kazeem Oladepo, regional executive, MainOne; Funke Opeke, CEO, MainOne; Stephen Jennings, founder/CEO, Rendeavour; and Bright Owusu-Amofah, CEO, Appolonia City, at the partnership agreement signing between MainOne and Rendeavour for new MDXi Data Center in Appolonia City, Accra, Ghana recently

L-R: Oladimeji Samfolusaye, director of strategy & finance, Global Shebah Limited; Patricia Duru, chief financial officer, Interconnect Clearing House Nigeria/secretary, Chartered Institute of Management Accountant (CIMA) Nigeria Branch; Rabiu Olowo Onaolapo, commissioner for finance, Lagos State; Oluseyi Olanrewaju, finance director, Vodacom Business Africa Nigeria/chairman, CIMA Nigeria Branch; Tokunbo Oyeneyin, senior manager, PwC, and Femi Adebayo, director, commercial finance, 9mobile, at a courtesy visit to the commissioner in Ikeja recently.

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@Businessdayng

24

Thursday 03 October 2019

BUSINESS DAY

cityfile Concern grows over gender based crimes in A/Ibom ANIEFIOK UDONQUAK,

C

Maintenance work by the Lagos State Public Works Corporation ongoing at Ikeja Under-Bridge inward Alausa Secretariat

Sanwo-Olu looks away as Lagosians risk lives on Airport Road JOSHUA BASSEY

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ometimes one finds something curious about government and governance in Lagos State, Nigeria’s commercial nerve centre that prides itself as a megacity. It is either that politicians who run the state do not care enough about the safety and welfare of the citizens or they are too busy with themselves to see the danger that ordinary citizens face on daily basis.

This was how, Adekunle Ajala, a retired federal servant, who resides in Ajao Estate along the Lagos airport road, expressed his frustration over the lack of urgency in handling issues that border on the safety of the people in Nigeria’s most populous city.

Ajala’s outburst, like many other residents of the state, stems from the absence of pedestrian bridges along the newly reconstructed Muritala Mohammed International Airport (MMIA) Road, Lagos.

The elder statesman is one of thousands of residents of Ajao Estate and the adjoining Mafoluku communities, who risk their lives daily to cross what is now a ten-lane expressway in a built-up area of the metropolis without overhead pedestrian crossing.

No thanks to the previous

nor the present managers of affairs in the state, who haven’t seen the urgent need to complete the abandoned pedestrian bridges, almost six months after the road was hurriedly commissioned

by President Muhammadu Buhari, on the invitation of Akinwunmi Ambode, immediate past governor of Lagos State.

Ambode had been denied the ticket to seek a second term in office by his party men, and obviously not wanting his predecessor, Babajide Sanwo-Olu to take the ‘glory’ for his signature projects, the former governor had invited President Buhari to commission the reconstructed airport road and Oshodi Transport Interchange (OTI) without fully completing the projects.

Since leaving office on May 29, there have been allegations against the former governor, with the operatives of the Economic and Financial Crime Commission (EFCC), recently visiting his Epe and Ikoyi homes to conduct a search. The EFCC had frozen accounts allegedly linked to the ex-governor while in office, in which about N9.9 billion was said to have passed through. Ambode subsequently denied the allegation.

It was gathered that the current administration had withheld further payments to contractors in respect of some projects awarded www.businessday.ng

under the Ambode’s government, the airport road being one of such, with the citizens bearing the brunt.

On Tuesday, August 6, a woman in her forties later identified as Gracia, narrowly escaped being crushed by a commercial bus (Danfo) some metres away from the 7/8 Bus Stop along the road.

Gracia was crossing to Ajao Estate from the Mafoluku end when she suddenly sighted the approaching vehicle. A confused Gracia was said to have hurriedly retreated but ended up colliding with a motorcycle and sustained some injuries.

Juliana Adegoke, a resident of Ajao Estate, who witnessed the incident, said such was their fate on the road. According to Adegoke, the excitement that greeted the reconstruction of the once neglected road has since given way to lamentation, as residents of the neighbourhoods now live with danger, crossing the road.

“We appreciate the fact that after years of neglect, the last administration took the initiative to reconstruct the federal road, but the absence of pedestrian bridges has left us competing with fastmoving vehicles on the road.

We’re worried that since the administration of Babajide Sanwo-Olu took over in May, nothing has been done about this situation,” said another resident, Joy Attah.

Aramide Adeyoye, the special adviser to Governor Sanwo-Olu on works and infrastructure did not take calls or respond to SMS sent to her cell phone seeking to know what the government is doing about the road.

However, Olujimi Hotonu, the permanent secretary in the ministry of works and infrastructure, when contacted said that the government was aware of the situation.

“There are action plans on the governor’s table to complete the work. We have four bridges on the airport road. But the plan is also to extend the reconstruction work to Toyota bus stop where additional bridge would be constructed,” said Hotonu.

He, however, cited funding as the challenge, assuring, however, that the government would mobilise the contractors back to site to complete the bridges.

President Buhari commissioned the road on April 24, 2019 amid criticisms against its non completion.

The road was redesigned from four to ten lanes with two flyover bridges at Mafoluku and the Haji Camp and four pedestrian overhead bridges which were never completed before the commissioning.

The reconstruction has eased gridlock on the road and boosted Nigeria’s image locally and internationally.

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oncern is mounting in Akwa Ibom over the r ising cases of Gender Based Violence (GBV), with the state governor, Udom Emmanuel pledging his administration’s readiness to partner with security agencies to bring perpetrators to justice.

Men are daily reported to be molesting young ladies even in a broad day light.

Udom, who addressed journalists during a media parley said it was brought to his attention that four men walking the street in Uyo, the state capital, grabbed a young girl and took her to a house where they raped her repeatedly.

According to the governor, this is something that is unheard of, to forcefully grab a girl in a broad day light, adding that it was the height of irresponsibility which

could not be tolerated.

The governor added that the good thing about the incident was that three of the perpetrators had been arrested explaining that security agencies were on the trail of the other suspect.

The governor’s observation came less than three weeks after his wife, Martha made a similar remark in Mkpat Enin during the grand women empowerment organised by a socio cultural group, Mboho Uforo Mkpat Enin.

“We have so many cases of rape, children are being defiled, the most painful is that of fathers defiling their daughters, I will keep on sounding this warning until this nonsense stops,’’ she said.

The governor ’s wife urged mothers not to allow their female children to be alone adding that her office will continue to prosecute suspects to serve as a deterrent to others.

‘Shoemakers aiding development of Osisioma’ GODFREY OFURUM, Aba

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ctivities of the Aba finished leather cluster- comprising shoe, belt, bag and trunk box makers, located in Osisioma Ngwa, has brought development to the community, Udochukwu Nwogu, transition committee chairman, Osisioma Ngwa local government area of Abia State, has said.

Nwogu made the observation when he received a delegation of Leather Products Manufacturers Association of Abia State (LEPMAAS), the umbrella body of shoe, belt, bag, trunk box

and hart makers in Abia State, led by Okechukwu Williams.

He thanked LEPMAAS for the role they played in restoring peace in Umuehilegbu Industrial Market and promised to partner them in sustaining the adult literacy education programme, an initiative of LEPMAAS, Forward Africa and the Abia State government.

The TC chairman, who was represented at the meeting by Amarachi Nwafor, promised that the local government would commence grading of roads as soon as the rains were over, and also provide free medicare to the people.

3 jailed in Ibadan for impersonation REMI FEYISIPO, Ibadan

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hree persons found guilty in cases filed against them by the Ibadan zonal office of the Economic and Financial Crimes Commission (EFCC) have been sentenced to prison terms by a Federal High Court, sitting in Ibadan.

The accused, Augustine Ekeson, Obinna Ureahi Ifeanyi and Osho Olalekan Micheal were convicted on September 26, 2019 Justice Patricia Ajoku, after considering the facts of an amended one-count charge against Obinna and @Businessdayng

Ifeanyi, pronounced them guilty and sentenced them to two years imprisonment each.

The duo had earlier been arraigned on a three-count charge based on the allegations raised against them in a petitioned received from one Mobolade Dele Akinbuluma, a doctoral student of the University of Ibadan.

Akinbuluma alleged that the accused hacked into her email account to misrepresent themselves as staff of a Kenyan University where she was to undertake a study as part of her doctorate programme.

She was, in the process, defrauded of N875,490.

Thursday 03 October 2019

BUSINESS DAY

Investor

25

In association with

Helping you to build wealth & make wise decisions NSE All Share Index

Market capitalisation

NSE Premium Index

N11.721 trillion

Week open ((20– 09–19)

31,924.51 27,698.69

N13.484 trillion

27,698.69

Week close (27– 09–19)

27,675.04

N13.472 trillion

2,302.03

Year Open

Percentage change (WoW) Percentage change (YTD)

-0.09 -11.95

2,241.37

-0.99 4.87

The NSE-Main Board

NSE ASeM Index

1,456.29 1,105.74

1.12

NSE Insurance Index NSE Consumer Goods Index NSE Oil/Gas Index

130.95

723.46

NSE Lotus II

NSE Ind. Goods Index

NSE Pension Index

291.84

2,272.45

1,254.54

1,212.79

801.09

1,438.19

774.30

1,131.21 1,136.12

344.35

110.56

533.52

213.67

1,755.97

1,093.55

989.72

338.69

113.89

560.36

238.51

1,767.14

1,073.49

989.81

-1.64

3.01

5.03

11.63

0.64

-1.83

0.01

-20.90

-13.28

-18.03

0.00 -2.46

-22.35

NSE Banking Index

426.64

774.30

1,118.08

NSE 30 Index

0.43 -19.83

-15.10

-9.95

-25.17

-21.08

Focus shifts to Q3 earnings as companies disclose ‘closed periods’ … Market currently not for the nervous Iheanyi Nwachukwu

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nvestors have shifted their attention to the state of thirdquarter (Q3) financials which listed companies will be approaching the Nigerian Stock Exchange (NSE) with in few weeks to come. This comes as equities price deterioration makes investors look towards dividend yields.

In show of the fast approaching Q3 earnings season, companies are increasingly publicising the “Closed Period” for transaction in their shares which is required to prevent insiders trading ahead of public dissemination of their financial results.

In line with the post-listing requirements of the Nigerian Stock Exchange for quoted companies, the Board of Directors of United Bank for Africa Plc will meet in Abuja on Thursday, October 17, 2019 to consider, amongst other matters, the Group Unaudited Accounts and Financial Statements for the Third Quarter (Q3) ended September 30, 2019.

In the same vein, the Board of Directors of GTBank will meet on October 16 to consider the group’s unaudited account and financial statements as at September 30, 2019.

The closed period for trading in the shares of the bank commenced on September 30.

Likewise, the Board of Directors of Access Bank Plc will meet on October 25 to consider and approve the bank’s

L-R: Yomi Adebanjo, company secretary; Segun Adebanji, chairman of the board; Fidelis Ayebae, MD/CEO; Olufunmilola Ayebae, non-executive director, during Fidson Healthcare Plc’s 20th AGM held recently in Lagos.

unaudited Q3 financials for the same period to September 30. In line with the post-listing requirements of the NSE, a closed period in respect of transactions on Access Bank shares is from October 1.

On October 29, the Board of D i re c t o r s o f T r a n s n a t i o n a l C o r p o ra t i o n o f Ni g e r i a P l c (Transcorp) will meet to consider among other things the unaudited financial statements of the company for the Q3 ended September 30, 2019. Its closed period commences on October 14 until 24hours after the release of the company’s Q3 results.

With some largely capitalised companies seen recording significant

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capital appreciation lately, analysts expect portfolio rebalancing activity in early part of this month to spur buying interest in the market.

Their optimism comes despite that drought of positive news dampened investors’ appetite for shares of listed companies in September.

“We expect the market to remain pressured given global risk-off sentiments and weak domestic participation. Nonetheless, we note that valuations remain attractive while price deterioration has resulted in expected dividend yields on some stocks rising significantly to levels on par with yields on Treasury Bills.

Hence, we advise that long-term

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investors consider appropriately timed investments”, said research analysts at Cordros Capital.

While stock buyers factored in risk-off sentiments in the global economy, as well as macroeconomic and structural issues in Nigeria, the 21-day trading period in September witnessed a mix of bargains and profit taking which resulted to only N60billion in gains.

The Nigerian Stock Exchange (NSE) All Share Index (ASI) gained 0.38percent last month which helped moderate record negative returns year-to-date (YtD) to -12.09percent.

“The bearish sentiment in the market is expected to continue as

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there are no major catalysts to boost investor confidence, although we see opportunities for bargain hunting”, said Afrinvest research analysts.

While noting that the Nigerian market is currently not for the nervous, Afrinvest analysts said they expect the Index to continue to wander within the negative territory.

“But why are we pessimistic? All indicators strongly suggest there are no possible triggers to herald a rebound in the near term.

“In line with recent trend, the Negative Directional Movement Index (-DMI) still outstrips the Positive Directional Movement Index (+DMI) and continues to display a superstrong ADX (Average Directional Movement Index), indicating the NSEASI’s reluctance to rise to glory,” the analysts stated further.

The NSE ASI had opened the review month at 27,525.81points but it stood higher at 27, 630.56points as at September 30, 2019. Also, the value of listed stocks moved up from September open level of N13.391trillion to N13.450trillion as at September 30.

The local bourse closed the last trading session in the third quarter (Q3) of 2019 in the red as sellers took profit on gains made in preceding week. This happened despite the late rally seen on Monday September 30 in the shares of Nestle Nigeria Plc (3.71percent), Total Nigeria Plc (7.92percent), CAP Plc (9.89percent), GTBank Plc (5.80percent) and Dangote Cement Plc (0.53percent).

26

Thursday 03 October 2019

BUSINESS DAY

Investor Helping you to build wealth & make wise decisions

United Capital Investment Views

Investor’s Square

Equity Market: Clutching the edge of negative territory

•Have you been shabbily treated by your registrar, stockbroke r or other capital market operators?

Let us know and investor will help you investigate and report back.

E-mail: iheanyi.nwachukwu@businessdayonline.com

I

n the previous week, the broad market performance was largely mixed, as the week took off on a negative note but closed on a bullish footing.

In all, the NSE-ASI declined by 9 basis points (bps) week-onweek (w/w) and year-to-date (YtD) loss slid to -11.9percent, to close at 27,675.0 points.

In terms of market value, market capitalisation shed about N11.5billion w/w, settling at N13.5trillion.

Activity levels for the week was unenthusiastic, as average value and volumes traded declined by 11percent and 13.8percent, to N3.3billion and 219.3million respectively.

Looking at the performance of the major sectors we track, three out of five edged upward, with the remaining two receding. The Oil & Gas (+11.6percent) led the winners’ chart, as sector heavyweights, SEPLAT (+21percent) and TOTAL (+20percent) recorded massive gains. The Consumer G oods (+5percent) and Insurance (+3percent) sectors

also jumped, spurred by NESTLE (+11.2percent) and CONTINSURE (+20.4percent).

Contrariwise, the Banking (-1.6percent) and Industrial Goods (-1.8percent) sectors trended southwards, as GUARANTY (-4.9percent) and CCNN (-9.9percent) recorded losses.

Investor sentiment was underwhelming, evident by the market breadth of 0.6x (previously 1.4x), as 21 stocks gained while 36 stocks ended in the red territory. This week, we could see a continued cyclical performance in the equities market, as market participants factor in risk-off sentiments in the global economy, as well as macroeconomic and structural issues in Nigeria.

Money Market: System liquidity remain buoyant Overall system liquidity remained at a comfortable level in the prior week as

naira injections outweighed outflows. The major inflow for the week was in the form of OMO maturity (N422.1bn) that hit the system on Thursday.

Meanwhile, inflow from retail FX refunds at the end of the week was net out by a corresponding outflow via the bi-weekly retail FX sales on Friday. Outflows were in the form of OMO sales (N302.7billion) and Bond Sales (N100billion). In all, average interbank funding rates open buy back (OBB) and Over Night (O/N) rates traded largely in the single digit region to close the week at 8.9percent.

At the primary market segment, the CBN was only able to mop up 71.7percent of the N422.1billion OMO maturity that came in on Thursday. In line with recent trend, demand at the auction was tilted towards the high yielding 364-day bills (bid to cover: 2.3x, previously 2.5x) while demands for the other tenors were underwhelming (bid to cover, 84-day: 0.02x and 184-day: 0.07x). Accordingly,

while stop rates on the 84-day and 184-day bills were kept at the prior auction level, stop rate on the 364-day bill fell marginally to 13.48percent (previously 13.50percent).

Elsewhere, at the secondary treasury bills market, the buoyant level of liquidity in the system despite activities at the primary money market segment gave market bulls leg to run. This was as average yield was down 33bps w/w to 13.3percent. This week, we expect the CBN to maintain its liquidity tightening stance as N606.4billion worth of NTB (N134billion) and OMO (N472.4billion) are scheduled to mature on Wednesday and Thursday, respectively.

We expect the activity at the primary market to weigh on the secondary NTB market performance, as investors sell ahead of their funding obligations.

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B o n d Ma r ke t : D M O remain wary of borrowing cost In the Bonds space, the Debt Management Office (DMO) conducted its Sept19 bond auction during the week, offering N150billion – shared between re-opened 5-year (N45.0billion), 10-year (N50billion), and 30-year (N55billion) notes. Compared to the Aug-19 auction, investors demand improved considerably as bids worth 1.1x the initially offered amount turned up at the auction (Aug19: 0.7x).

H o w e v e r, t h e D M O remained wary of borrowing cost, allotting only 66.7percent (N100billion) of the initially offered amount via competitive bids while satisfying N46.6billion of its funding needs via non-competitive bids, to take the total issuance at the auction to N146.6billion.

Notably, most of the demand was for the 10-year and 30year notes (Bid to cover ratio: 10-year; 1.5x and 30-year; 1.7x) while demand for the 5-year note was underwhelming at 0.3x the offered amount.

Nonetheless, marginal rates at the auction cleared higher compared to the last auction in Aug-19; 5-year note up from 14.29percent to 14.39percent, 10-year note up from 14.39percent to 14.43percent and 30-year note up from 14.59percent t o 1 4 . 6 4 p e r c e n t . A l s o, average yields at the domestic secondary bond market traded up w/w, from 14.1percent to 14.2percent.

Elsewhere, at the Eurobond market, we saw some new issuances from South Africa, Ecuador, Bahrain and Abu Dhabi, during the week. However, the poor performances of those bond at the secondary market had a of contagion effect on other Emerging/Frontier Market dollar notes (Nigeria inclusive). Accordingly, the Nigerian secondary Eurobond market saw a bearish turnout as yields on FGN dollar bonds trended higher across the curve and average yield advance by 12bps w/w to 6.4percent.

However, interest in Corporate Eurobonds remained positive as we saw continue buying interest in banks’ dollar notes.

Thus, save for SEPLAT’s 2023 note which saw a selling pressure, yields on other corporate dollar notes declined marginally w/w.

Economy & markets

ACTN holds breakfast meeting …to discuss implications of CBN 5-year policy thrust

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he Association of Corporate Treasurers of Nigeria (ACTN) will tomorrow Friday, October 4, 2019 hold its breakfast meeting.

The theme of the breakfast meeting is “The Central Bank of Nigeria (CBN) 5-Year Policy Thrust: Implications for the Corporates” with focus on the possible impacts on the operating business environment within the next five years.

The breakfast meeting is part of ACTN objectives to provide value for its members, organisations and the Nigerian economy through advocacy, standards development and education/enlightenment.

As part of the efforts of the association towards the education and enlightenment of its members, ACTN regularly host breakfast meetings where issues on economic policies as well as policy directions and their impacts on the activities of the corporates are reviewed and discussed with regulators, economists and

financial markets experts as lead speakers/discussants The keynote speaker at tomorrow’s event which holds in Lagos is Bisi Lamikanra, partner and head of advisory services of KPMG in Nigeria and the financial services sector across Africa. Also highly experienced bankers would be on ground to discuss the policy thrust from the bankers’ perspective.

The Central Bank of Nigeria, on June 25, 2019 unveiled its policy thrust for the next five years aimed at supporting Nigeria’s macro-economic growth and development.

The policy document outlined a number of objectives and prominent among them were: to achieve double-digit GDP growth in the next five years; to bring down inflation to single – digit; improving the payment systems infrastructure and driving financial inclusion to 95percent by 2024; maintaining the existing exchange-rate policy regime of a managed

float and recapitalization of the banking industry.

In order to achieve these targets, the CBN identified some key priorities namely; to preser ve domestic macroeconomic and financial stability, create robust payment system infrastructure, work with the Deposit Money Banks to improve access to credit for small holder farmers, Micro, Small & Medium Enterprises, (MSMEs) consumer credit and mortgage facilities for bank customers, grow external reserves and support efforts at diversifying the economy through intervention programmes in the agricultural and manufacturing sectors.

The Association of Corporate Treasurers of Nigeria is an association established to foster the interests of Corporate Treasurers in the Nigerian financial markets by providing a platform for policy advocacy, discussions on issues of mutual interest, education and standard development of the corporate treasury function.

WASRA will aid mobilisation of funds for infrastructure – Uduk

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he acting DirectorGeneral of the Securities and Exchange Commission (SEC) Mary Uduk, has stated that one of the mandates of the West Africa Securities Regulators Association (WASRA) is to provide the necessary regulatory platform for capital market operators to play a major role in mobilising funds.

These funds she said would finance infrastructure and contribute to the development of the process that will integrate and ultimately develop the regional capital market.

Uduk stated this in Abuja Tuesday while announcing that the West Africa Capital Market Integration Council has commenced registration for the inaugural Biennial West Africa Capital Market Conference (WACMaC) to be held from the 28th to the 29th of October, 2019 at Sofitel Hotel Ivoire, Abidjan, Cote D’ivoire.

The Conference has as its theme “Positioning West Africa Capital Markets to Achieve Sustainable and Real Economic Growth

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Through Integration and Sound Regulation” and seeks to provide a forum for key stakeholders to discuss the pertinent issues relating to infrastructure financing across the region as well as proffer solutions or recommendations that will help shape the development and integration of the region’s capital markets.

The public conference according to the acting DG, will feature over 40 distinguished speakers and panelists, from Africa and beyond, including

Mary Uduk @Businessdayng

senior policy makers, business leaders, investors, thought leaders, and keynote speakers such as Mark Napier - Director, FSD Africa, Eunice Egbuna - Director-General, West Africa Monetary Institute, M. Constatin Dabiré - Special Adviser to the Prime Minister in charge of Public Private Partnerships, Burkina Faso.

Other are Jonathan Aremu – Consultant ECOWAS Common Investment Market, David Ashiagbor - Coordinator, Making Finance Work for Africa, and Chinua AzubuikeCEO Infrastructure Credit Guarantee Limited to mention a few.

“The conference is expected to feature sessions on financing infrastructure deficit in the region through the capital market, sustainable financing, Capital Market Integration and Fintech, Investor Protection in an Era of Integration and the Contribution of Investment Funds to Financing the Regions needs among others.

“Organisations interested in sponsoring the event can learn more on the conference website” she stated.

Thursday 03 October 2019

BUSINESS DAY

27

Investor Helping you to build wealth & make wise decisions

Market Review

Fixed Income, Currency market turnover hits record high of N23.21trn Iheanyi Nwachukwu

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urnover in the Fixed Income and Currency (FIC) markets for the month o f Au gu s t 2 0 1 9 wa s N23.21trillion, representing a 41.87percent (N6.85trillion) month-on-month (MoM) increase on the turnover recorded in July 2019 (N16.36trillion).

FMDQ Fixed Income and Currency Markets Monthly Report shows the record FIC market turnover for August represents 43.36percent (N7.02trillion) year-on-year (YoY) increase from the turnover recorded in August 2018 (N16.19trillion).

Treasury Bills and FX product segments remained the major contributors to turnover in the FIC market, jointly accounting for 79.33percent of the total FIC market turnover in August 2019 and representing an 8.95percent increase in their joint contribution recorded in July 2019 (70.38percent).

FX Market Total FX market turnover in August 2019 was $25.69billion (N9.32trillion) representing a 76.82percent ($11.16billion) MoM increase. Analysis of FX turnover by trade type indicates MoM increase across all categories, with Member-CBN trades recording the highest percentage MoM increase at 125.45percent ($3.88billion), while Member-Client trades recorded the highest MoM increase in dollar (nominal) terms, at $6.28bn (68.92percent).

Further, analysis by product type indicates that the MoM increase in

FX turnover was mainly driven by the 82.18percent ($6.47billion) MoM increase in FX Spot turnover, with FX Derivatives turnover also reporting a MoM increase of 70.48percent ($4.69billion).

In August 2019, the 38th Naira-settled OTC FX Futures Contract (NGUS AUG 21 2019) with a total contract value of $638.23millon matured and was settled, with the Central Bank of Nigeria (CBN) introducing a new contract, NGUS SEP 30 2020 for $1billion at $/365.47.

This brings the total value of OTC FX Futures Contracts offered and settled since inception to date to circa $29.30billion and circa $11.01billion in open contracts.

In August 2019, the CBN Official Spot rate depreciated by $/N0.15 to close at $/N307. Similarly, the closing rate for the Naira against the US Dollar at the Investors’ and Exporters’ (I&E) FX Window depreciated by $/N1.25 to close at $/N362.93, while the parallel market rate remained constant at $/ N360 in August 2019.

Fixed Income Market (T.bills and FGN5 bonds) In August 2019, total OMO bills issued was N15.14trillion, representing a MoM decrease of 1.17percent (N0.18trillion), whilst average T.bills outstanding was N2.58trillion, representing a MoM increase of 0.78percent (N0.02trillion). Furthermore, average outstanding FGN bonds recorded a MoM increase of 1.74percent (N0.15trn) to close at N8.77trillion in August 2019 from N8.62trillion reported in July 2019

Trading intensity for FGN bonds decreased from 0.15 in July 2019 to 0.14 in August 2019, while trading intensity for T.bills increased to 0.51 in August 2019 from 0.35 in July 2019.

YTD Trading intensity for T.bills and FGN bonds stood at 3.62 and 1.11 respectively compared to 3.47 and 1.03 recorded in the corresponding period in 2018, indicating a marginal pick up in fixed income secondary market liquidity.

In August 2019, T.bills within the 3M - 6M maturity bracket were the most actively traded among the short-term securities (that is 1M – 2Y) accounting for 35.24percent of the total Fixed Income market turnover, while FGN bonds within the 15Y – 20Y maturity bracket were the most actively traded among the medium to long-term securities, accounting for 4.19percent of the total Fixed Income market turnover.

Weighted average yields on the short- and medium-term Fixed Income maturities increased by 1.84percent and 1.11percent respectively in August 2019 which may be

attributed to tight system liquidity which triggered selloffs, particularly on the shorter end of the yield curve.

Conversely, weighted average yield on long-term maturities decreased by 0.15percent as investors sought securities with higher returns, with the 2037 FGN bond showing an increase in demand. However, inflation-adjusted yield remained positive across all tenors in the period under review.

Money Market (Repurchase Agreements /Buy-Backs and Unsecured Placements/Takings) Turnover in the Repurchase Agreements/Buy-Backs segment of the Money Market increased MoM from N3.38trillion in July 2019 to N3.42trillion in August 2019, representing a 1.23percent (N0.04trillion) MoM increase, whilst recording a 36.91percent (N0.92trillion) YoY increase from the turnover recorded in August 2018 (N2.50trillion).

The MoM decrease in total turnover in the Money Market by 0.59percent (N0.02trillion) to N3.51trillion in

August 2019 indicates a MoM decrease in liquidity in the inter-bank market.

Consequently, the average Money Market O/N and OBB rates increased by 529bps and 500bps respectively to an average of 13.95percent and 12.87percent in August 2019 from 8.66percent and 7.87percent in July 2019.

Turnover in Unsecured Placements/Takings in August 2019 was N0.09trillion, representing a 41.43percent (N0.06trillion) MoM decrease from the N0.15trillion recorded in July 2019, and a YoY increase of 32.56percent (N0.02trillion) from the turnover recorded in August 2018 (N0.07trillion).

Market Surveillance Total number of executed trades reported on the E-Bond Trading System in August 2019 was 18,652 representing a 26.50percent (3,907) MoM increase from the number of trades executed in July 2019 (14,745), driven by a MoM increase in T.bills trades by 32.87percent (4,182). However, FGN bonds trades declined by 13.59percent (275).

This, alongside market penetration strategy and cost optimization are a few of many initiatives to sustain growth and return value to shareholders that the company is currently pursuing.

According to the Chairman of the board, Segun Adebanji, Fidson continues to strengthen its operating facilities with expansion and retooling. “Old machines and equipment have been disused

and replaced with modern ones.

We are currently expanding our cap a c i t y u t i l i z at i o n t h rou g h increased production and contract manufacturing for other notable companies in the industry’’.

He also said the company is poised to reposition the business through business realignment and useful industry collaboration in order to take advantage of the growth opportunities in the market

Fidson pays 15 kobo per share dividend Iheanyi Nwachukwu

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idson Healthcare Plc last week held its Annual General Meeting (AGM) for the financial year 2018. In keeping with its policy to return to shareholders, a dividend of 15kobo per share was proposed and approved at the AGM.

The company recorded an increased turnover of 15percent from N14.06billion in 2017 financial year to N16.23 billion in 2018. However, because of the increased cost of sales from 49percent margin in 2017 to 61percent and increased Finance cost (up by 92percent), Fidsons’ Profit Before Tax for the period was down to N160.9 million from N1.6bilion in FY 2017.

Having concluded its Rights Issue www.businessday.ng

in June 2019, the company has already taken steps to improve its financial structure. The capital raise was towards refinancing expensive debt and working capital funding in a bid to improve its margins.

The company continues to leverage its WHO-certifiable factory, having recently executed a partnership with GSK that will see it manufacture for its West African operations going forward.

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28

Thursday 03 October 2019

BUSINESS DAY

ENERGYREPORT Oil & Gas

Power

Renewables

Environment

FG settles controversy over VAT on imported LPG ...Says it is not applicable Stories by OLUSOLA BELLO

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he controversies over whether Value Added Tax (VAT) should be paid on imported Liquefied Petroleum Gas LPG or not has finally been put to rest as The Federal Government has confirmed its removal on the product.

With this decision by the government price of LPG, otherwise known as cooking gas, would be relatively stable, thus attracting more investors and consumers into the sector.

Babatunde Fowler, Chairman, Federal Inland Revenue Service, FIRS, cleared the air on the issue when members of the Nigeria LP Gas Association and others met with Vice President Yemi Osinbanjo, in Abuja.

He said the measure was targeted at growing the LPG sector.

Meanwhile stakeholders have identified the strategy

R-L: Yemi Osinbajo, Vice President, Tony Atta, MD, Nigeria LNG, Andy Odeh, of LNG, and Yakubu Nuhu, president, Nigeria LPGA, during LPG stakeholder’s meeting at Aso Rock to be deployed to achieve the two million metric tons production and storage capacity per year as part of the 5-Year long LPG Expansion Plan Target of the current administration.

Four new terminal service providers are schedule to come upstream before the end of the year 2019 among whom are Rainoil, Technoil,

Prudent Energy etc.

They also spoke well about the need for cylinder penetration as a critical success factor in deepening the impact of LPG in the Nigeria economy.

To achieve this it was learnt that the government is working closely with NLPGA to put in place a cylinder penetration scheme and also embark on nationwide aware-

Nigerian Content Development: Chevron show case accomplishments and Commitment

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s Nigeria progresses in its quest to acquire oil and gas technology and build indigenous capacity to service the oil and gas industry, International Oil Companies (IOCs) and other companies are expected to play an active role in Nigerian Content Development (NCD) in the industry.

One company that had imbibed the Local/Nigerian Content Development philosophy well before the Nigerian Oil and Gas Industry Content Development Act (NOGICD Act) was enacted by the Government,is Chevron. Chevron Nigeria Limited (CNL), Operator of the Nigerian National Petroleum Corporation(NNPC)/CNL Joint Venture, is at the fore front of promoting Nigeria’s ideals of economic and social development.

Over the years, the company has continued to add value and partner with Nigeria as it commits itself to the vision of being “the globalenergy company most admired for its people, partnership and performance”.

C h a i r m a n / Ma n a g i n g Director,CNL, Jeff Ewing, explains the company’s stance on NCD thus: “At Chevron Nigeria Limited, we demonstrate our commitment to the socio-economic Olusola Bello, Team lead,

development of Nigeria by building mutually-beneficial partnerships, and supporting the policies of government on Nigerian Content Development.We have helped in building the capacities of several Nigerian businesses by allocating substantial scopes of our major capital projects to Nigerian companies. Chevron is also helping to grow the Nigerian economy by contributing to the development of communities in the areas of our operation. We do all this, not just because it is required by the law, but because it is the right thing to do.”

The various areas in which Chevron implements the NOGICD Act in Nigeria include human capacity development, facility fabrication, construction and installations. Others include support for facility acquisition, facilitation of partnerships between local and foreign contractors, and provision of opportunities for local community contractors through work scope allocation in Chevron’s major capital projects in Nigeria.

On human capacity development, Chevroncompleted construction training for 161 Nigerians on welding, fabrication andcraft at Nigerdock facility, Snake Island, Lagos for itsSonam Development Project.

Also on the Agbami Phase 3

Graphics: Joel Samson.

Development Project, Chevron sponsored four Nigerian engineers for subsea engineering training in France in partnership with NCDMB and Technip Offshore Nigeria Limited. The training also included two visits to manufacturing plants in France andNorway. Chevronis currently training six young Nigerian Engineers in subsea engineering at FMC Technologies facility, Federal Ocean Terminal (FOT) Onne, Rivers State. In addition, five Nigerian Engineering graduates sponsored

by CNL, also completed subsea training at Marine Platforms Limited in Port Harcourt. One of the trainees was offered fulltime employment with Marine Platforms Limited(MPL) as a Marine Cadet.

CNL’s accomplishments in human capital development include training 14 earth science graduates in two batches under the 12-month skills acquisition programme initiated

by NCDMB. CNL also offered scholarships to Nigerian seamen for dynamic positioning training at PEM Offshore Limited, a marine training facility with a contract worth $1 million and collaborated with NCDMB to assist over 600community graduates to register in the Nigeria Oil and Gas Industry Content Joint Qualification System (NOGIC JQS).

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ness campaign The challenge of delays of NLNG vessels to discharge at Apapa,Lagos is being looked into by the government so that vessels carrying imported LPG are giving preference with the attendant lead time and turn-around time implications on the businesses in the value chain.

This is happening not-

withstanding the heavy investment borne by NLNG at refurbishing 2 out of the 3 existing Jetties currently in use.

Nigeria Liquefied Natural Gas (NLNG) has in the meantime reiterated its commitment to deepen the penetrating and consumption of domestic LPG and hope that the Train 7 facility, when in full operation will reduce the gap in the demand and supply of LPG in Nigeria.

It also requested that it will be appropriate to grant NLNG the first right of refusal to berth its vessels at the jetties as and when due.

NLNG is committed to delivering 350,000 tonnes of LPG into the Nigerian market annually and has signed Sales and Purchase Agreements (SPAs) with fifteen off-takers (all Nigerian companies) for the lifting of LPG for the domestic market.

The intervention, which is in line with company’s vision of helping to build a better Nigeria, has significantly contributed to the stimulation and development of the do-

mestic LPG market in Nigeria and has effectively brought down the price of cooking gas from over N7, 000 in 2007 to less than N3, 500 per 12.5kg cylinder today Nuhu Yakubu, President, NLPGA, described The Nigeria LP Gas Association is the umbrella body of all stakeholders in the LP Gas sector in Nigeria. The primary objective of the Association is to promote the use of LP Gas in Nigeria at affordable costs.

“It also aims at protecting the interests of the LP Gas industry and the entire Nigerian socio-economic environment at large, through public policy advocacy, creation and facilitation of commercial and industrial opportunities, provision of business development services and observance of the highest standard of operational and business ethics. The association represents the opinion of the stakeholders on all matters, which impact on the investment environment and the Nigerian economy as a whole.”

Ikeja Electric provides educational items to School

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keja Electric Plc. (IE), has been applauded by Ijede community for its efforts at enhancing the academic standard of the primary pupils in the community by donating educational packs including bags, exercise books and pens to support pupils of Anglican Primary School, Ijede.

The company through an initiative tagged “Back to School’ campaign had in line with its Corporate Social Responsibility (PCSR) objectives.

Staff of Ikeja Electric made the presentations to the school.

Salisu Fatiu Jimoh, executive chairman, Ijede Local Council Development Association (LCDA), who was represented by secretary to Local Government, Olam-

biwonu Kunle, commended Ikeja Electric for the kind gesture towards students of Anglican Primary School and he promised his support to the DisCo. He said: “We appreciate Ikeja Electric for what they are doing here today to support the school and students. We thank everyone that made this programme a success. By the grace of God, we shall continue to grow in strength and increase in leaps and bound.”

Austen Taiwo Oduloye, Education Secretary, Local Government Education Authority (LGEA), while speaking at the occasion applauded the gestures by Ikeja Electric noting that the Company is doing a great job.

He said: “I am bold to say that Ikeja Electric is the leading Disco in Nigeria. What they are doing here today is Corporate Social Responsibility which allows people to recognise their good work, appreciate them more and also know your constraints.

“We appreciate this gesture and we expect the company to do more for other schools too. Immediately these students get home, their counterparts in other schools will ask them how they got these items from Ikeja Electric. And they will expect the company to come to their school as well. We implore your company to put other schools in mind. God bless Ikeja Electric,” he noted.

‘Industrialists should embrace solar energy to ease power problems’ SIKIRAT SHEHU, Ilorin

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wara State deputy governor, Kayode Alabi, has stressed the need to fix the power problems to ensure industrial development of the nation.

The deputy governor made the call in Ilorin while receiving members of the Nigerian Association of Small Scale Industrialists Kwara State chapter in his office recently.

According to him, the pro-

vision of regular and stable supply of electricity is the key to the industrial revolution of the country, calling on relevant organisations to do the needful.

He says: “We need to follow the example of China and Malaysia to encourage and boost small scale businesses in Nigeria as such will provide employment for the people.”

Alabi advised the people to embrace solar energy, describing it as the solution to the problem of electricity in

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Nigeria and especially Africa.

Solomon Olawoyin, chairman of the association says the body which was established in1978 promote entrepreneurship had also conducted seminars for the Youths to enhance the economy of the state.

Olawoyin commended the state government for its positive approach to governance, adding that the people are already feeling its impact especially in the areas of road rehabilitation, water and essential services among others.

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LegalBusiness BD Business Law Industry Report Practice Intelligence Partnerships

Creative Industry looks to B&I for direction

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ey players in the creative industry have called on the Media and Entertainment Group of leading commercial law firm, Banwo & Ighodalo B&I) to provide direction and expert counsel to the industry in Nigeria.

This call was made at a special creative industry event tagged, ‘An Evening with Creatives, Investors and Regulators’ organised by the firm at its new office in Ikoyi, on Thursday September 26th, 2019.

The theme of this event was, ‘Unlocking the Capital in the Creative Industry’.

Among those who made the call was Nigeria’s top music artist and actor, Bankole Wellington, also known as Banky W; Big Brother Nigeria, anchor, Ebuka ObiUchendu, Celebrity Photographer, Kelechi Amadi Obi; Comedian, Tee-A and several others.

Speaking about entertainment in Nigeria, Banky W stated, that while the show part of the industry was seemingly successful, the business side of things was rife with a lot of challenges.

He said, “Take Collections in Nigeria for instance. These are a complete mess. At best, it is ineffective and riddled with all forms of corruption. As part of our move to finding solutions to these issues, we would like to ask B&I right here and now, to give us a dedicated team from its Media & Entertainment Group, to help us look into some of these issues. We are willing to sign up with you now and to work with you to ensure we get this right.

Others noted that there were very obvious shortfalls in Nigeria’s copyright laws and hoped that they can get good guidance on how to continue to do business against this framework, and at the same time work with policy mak-

INSIDE President Buhari commissions NIC edifice as Justice Adejumo retires 30

Seni Adio appointed a director of Odu’a Investment Company Limited.

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Rule of law and lessons for IBA 2019 31

L-R: Michael Nzewi; Asue Ighodalo; Mohammed Garuba, and Mezuo Nwuneli L-R: Joke Silva: Femi Banwo, and Fola Adeola

L-R: Airtel MD, Segun Ogunsanya, Asue Ighodalo, Founding Partner, B&I and Ken Etim, Managing Partner.

L-R: Kelechi Amadi; Asue Ighodalo; Ifenyiwa Ighodalo; Mezuo Nwuneli, and Bankole Wellington (Banky W).

ers and regulators to change some of these things.

In his response, founding partner and the group’s head, Femi Olubanwo, assured creatives and investors that the M&E team of 18 lawyers, made up of media, entertainment, IP and commercial litigation lawyers was equipped to provide well tailored solutions for the industry.

Also speaking at the interactive meeting, the director-general of the Nigerian Copyright Commission (NCC), John Asein who was

industry of the vices that plague it.

“While piracy is a major concern in the industry, it is not the only challenge the industry faces.

There are several rights issues as well. As creatives, you must understand your rights and you must learn to manage these rights. You cannot get the right financing if your intellectual property rights are not well protected. You cannot get investors to invest in your idea or creative work, if you do not understand the legal implications of the business. This is why this

a guest at the event, blamed the prevalence of piracy in the country on lack of cooperation between creative industry practitioners and regulators and hoped that advisors such as, B&I would do well to bridge this gap.

He said, “Nigeria has enormous creative assets. However, we must note that we are nowhere near our full potentials. The growth we have recorded in the creative industry today, can be greatly enhanced and multiplied if we collaborate and work strategically to rid the

engagement with all participants of the creative business is quite relevant.

Asein commended B&I for organising such a valuable industry engagement involving all critical stakeholders i.e. creatives, investors, regulators and of course the advisors; noting that collaboration and cooperation amongst all stakeholders was crucial for the success of the industry and the nation’s economic growth.

He thus, called on those preContinues on page 32

Copyright Protection and Enforcement Rules OSEROGHO & ASSOCIATES

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opyright Protection is very important to every country’s economic development as such protection motivates and promotes research, creativity and innovations.

Copyright can be described as the monopolistic exclusivity that the Creator, Owner, Assignee or Licensee to a Literary, Musical, Artistic, Cinematograph Film, Sound Recording, Broadcast and other ancillary similar works, enjoy over the use and reproduction of a copyrighted work in any original published form, language or medium.

Advantages of Copyright www.businessday.ng

Protection One of the most obvious advantage of having protection to a copyrighted work is that it gives to its owner, assignee or licensee exclusive proprietary control over how the work can be used by other

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persons.

The second advantage to copyright protection is the extensive civil and criminal penalties that any infringement to a copyrighted work attracts.

A third benefit is the international protection that is now available as a result of various national and international conventions’ which protect copyright reciprocally.

Copyright Protection Tenures The Originator, Assignee or Licensee of Literary, Musical or Artistic works, other than photographs, retains exclusivity over their original work for the entire duration of their lifetime. Their estate however only enjoys such @Businessdayng

exclusivity for seventy (70) years after the originator of the work dies.

Owners of Cinematograph Films, Photographs, Sound Recordings and Broadcast Recordings enjoy copyright exclusivity for fifty (50) years after the end of the year when the copyrighted work was first published.

Registration of Copyright Ownership of Copyright is automatic in many jurisdictions.

An elevated level of protection can however be accorded by the voluntary registration of the work with the Copyright Regulator in your country.

Civil Infringement and Reliefs A protected Copyright is infringed when a person, without Continues on page 30

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NIC complex commissioned, as President of court retires

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he annex of the National Industrial Court (NIC) headquarters in Abuja, was on Monday September 30th, 2019 commissioned

by President Muhammadu Buhari.

The occasion also marked the retirement of the President of Industrial Court, Hon. Justice Babatunde Adejumo OFR upon attaining the mandatory retirement age of 65.

Justice Adejumo used the opportunity to thank Almighty God and also educate the gathering about how is journey to Industrial Court started, praised all stakeholders who have contributed in one way or the other for his success in office, and prayed that Almighty God will reward them abundantly.

The event had in attendance, distinguished members of the bar and bench, the Secretary to the government of the federation, Boss Mustapha, Chief Law officer of the Nation, Attorney General and Minister for Justice Abubakar Malami SAN, Minister Federal Capital Territory, Mallam Musa Bello, Governor of Ondo State, Oluwarotimi Akeredolu, who was represented by its deputy, Agboola Ajayi, National Assembly members both serving and past, Senior Advocates of Nigeria, members

of the Nigerian Bar, Captains of Industry and many others to mention a few.

Other legal luminaries and

jurists in attendance were former Chief Justices of Nigeria, His Lordship, Hon. Justice Aloma Mariam Muktar, and Hon.

Justice Mahmud Muhammed, the current Chief Justice of Nigeria, Hon. Justice (Dr) I. T. Muhammed, Justices of Court

of appeal serving and retired, Judges of the High Court, National Industrial Court, and other coordinate courts.

Seni Adio appointed a director of Odu’a Investment Company Limited.

Copyright Protection and Enforcement...

he current chairman of the Nigerian Bar Association Section on Business Law (NBA-SBL), Seni Adio, SAN has been appointed a director of Odu’a Investment Company Limited – an investment company set up for the business interest of old Western States of Nigeria, which includes, Oyo, Ogun, Ondo, Osun and Ekiti States of Nigeria.

Adio’s appointed was conveyed in a letter signed by the Secretary to Oyo state government, Olubamiwo Adeosun.

The NBA-SBL Chairman, who is an indigene of Oyo State, is expected to sit as the Oyo state representative on the board of the company, which is currently involved in diverse economic activities in property development and management, hospitality, telecommunications, printing and publication, agriculture, among other things.

A Senior Advocate of Nigeria (SAN), Seni Adio, is a highly skilled commercial litigation lawyer with extensive expertise in Maritime law, Energy (Oil and Gas), Telecommunications, Gaming and Entertainment, Health Law, and Capital Markets transactions.

As Chairman of the NBA Section on Business Law, he continues to work actively with the Nigerian Economic Summit Group (NESG) and the National Assembly (NASS), through a working group called the NASSBER (National Assembly Busi-

a licence or authorisation of the Owner, Assignee or Licensee of such copyrighted work, exercises acts of control, use or performance of the work.

Some of the reliefs available to the Copyright Proprietor where his copyright is infringed or breached includes instituting a law suit at the Federal High Court closest to where the infringement occurred claiming for among other reliefs, Damages, an account of the revenues earned from such copyright infringement and an Injunction to restrain any further infringement of the Owner’s Copyright.

No damages will however apply for a copyright infringement where the alleged offender was not aware and had no reasonable grounds to suspect that it was infringing on the rights of a Copyright Owner, Licensee or Assignee. Despite the latter, an account of the profits derived can be demanded for as compensation for the copyright infringement.

Criminal Infringement and Penalties Unless proven to the satisfaction of a Court of Law that an alleged copyright offender did not have prior knowledge or reason to suspect that he was dealing with a copyrighted work, such an alleged offender will be exposed to, in addition to some of the enumerated civil liabilities mentioned above, criminal liabilities for any copy-

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ness Environment Roundtable).

He is also a member of the Presidential Committee for Impact and Readiness Assessment of the Africa Continental Free Trade Area (AfCFTA), set by President Muhammadu Buhari in 2018.

The committee was charged with the responsibility of addressing risks associated with signing the agreement, while assessing of the potential costs and impact of the AfCFTA for Nigeria in relation to the benefits, identify the short, medium and long-term measures to prepare Nigerian businesses for the take-off of the AfCFTA trading bloc and a back-up plan that covers selected scenarios; and, review the trade remedy options to safeguard the Nigerian economy from predatory and other unfair trade practices. www.businessday.ng

Continued from page 29

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righted work that he reproduces or imports for sale, hire or for any trade or business benefit without the prior consent of the copyright owner.

The penalties if found guilty of any of the above offences is a fine or a term of imprisonment not exceeding five (5) years, or to both the fine and the term of imprisonment.

Collecting Societies Any person or group of persons who are in the business of negotiating and granting copyright licences, collecting and distributing royalties in respect of such copyrighted works, on behalf of more than Fifty (50) owners, assignees or licencees, in any category of copyright protected works, must apply for and be issued a Collecting Society’s Licence; or in the alternative, a Certificate of Exemption from the issuance of a Collecting Society’s Licence by the Copyright Regulator.

In order to ensure that every Collective Society, which is also known as a Collective Management Organisation (“CMO”) acts ethically when granting licences to copyrighted works to which the CMO actually have the legal authority to administer, collect and distribute royalties, the CMO must make available to its clients to whom copyright licences are granted, on non-discriminatory terms, the CMOs complete repertoire of the copyrighted works in respect to which the CMO has representative authority; with the tariff regime and usage measuring mechanism for @Businessdayng

the use of the copyright.

It is unlawful for any person or group of people to purport to perform the duties of a Copyright Collecting Society without the prior approval of the Copyright Regulator. Monetary fines and terms of imprisonment apply for any breach of this statutory pre-licence requirement.

Conclusion Copyright protection is continuing to be a very big global problem, especially with the limitless sharing of content over the internet between various countries and continents. The latter makes national and international monitoring, tracking and enforcement of copyrighted works particularly challenging.

Weak institutional structures and the duplication of Collecting Societies or CMOs have served the interests of the copyright infringers more than those of the lawful owners of copyrighted works.

Copyright owners and users have also not elevated their personal education on copyright use and protection. Neither are there properly documented copyright agreements, which will enable easier exploitation of the benefits, which accrue from the use of a copyright.

“Weak institutional structures and the duplication of Collecting Societies or CMOs have served the interests of the copyright infringers more than those of the lawful owners of copyrighted works.”

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LegalBusiness

Rule of law and lessons for IBA 2019 …. A perspective from the NBA President The annual conference of the International Bar Association (IBA), which took in Seoul, South Korea has just ended and there have been very significant take-home lessons for participants at this conference. The president of the Nigerian Bar association was kind enough to share some very vital points which stood out at the three sessions of the Rule of Law Forum during the conference. These, according to him, focused entirely and solely on the assaults by various regimes around the world on the independence of the judiciary, the independence of the legal profession and best practices to address the persecution of lawyers and judges, and the threats to the independence of the legal profession. EXERPTS….

“I

t was consoling, in some sense, to learn that the attacks on lawyers have progressed in other climes from the old and outmoded method of charging lawyers for sedition and treason to the new style of charging them for money laundering and other such criminal acts, all in a contrived plan to cow lawyers and degrade the independence of the profession. I easily identified with that and thought wryly that EFCC did not invent the wheel after all.

The Rule of Law Forum sessions ought to have been a must for all of us Nigerian lawyers – and there were actually plenty of us who attended.

The sessions put in perspective the consistent and loud protestations by the NBA against the attacks on the independence of the judiciary and the independence of the legal profession by the EFCC in particular and other government agencies and officials.

In all climes, these attacks always represent the initial symptoms of tyranny; indeed, the fabrics of democracy and freedom are gradually but consistently and indubitably destroyed when the independence of the judiciary and the independence of the legal profession are attacked and eroded. Speaker after speaker made these points and examples of these attacks around the world were also shared.

Neri Javier Colmenares, a Philippines’ lawyer activist, identified 3 (three) methods of the attack on the independence of the legal profession. The first is physical elimination. In Philippines, 42 law-

Paul Usoro, SAN

yers and a number of judges have so far been killed under the regime of Rodrigo Duterte who, ironically is a lawyer, a former State Prosecutor and Colmenares’ Law School classmate. The second strategy is the weaponizing of the law i.e. the use of law as a weapon of assault.

Colmenares, for example, was charged for kidnapping and others have been charged for money laundering and such other crimes. The third assault strategy is the public vilification/media trials of lawyers and the judiciary. Sometimes, these public vilifications pave the way for physical elimination. Clearly, we have been and are experiencing the second and third strategies in Nigeria; we need to fend these off before it degenerates to physical elimination of lawyers.

“Open for business?

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t the IBA Showcase session, themed “Open for business? – Lessons in opening legal markets from around the world”, which was organised jointly by the BIC International Trade in Legal Services Committee, the Law Firm Management Committee, General interest Committee, and the Presidential Task Force on Open/ Closed Legal Markets, top legal prac-

titioners across the globe, including Mfon Usoro, considered several burning questions, which arise both before and after foreign law firms are permitted establish a presence in a newly open jurisdiction.

The panel looked at how the presence of foreign law firms can impact on a local legal market; how market opening has affected clients, the local profession, the local justice

The question was asked, why do these intolerant regimes attack lawyers? Two reasons were advanced: first, they attack us for who we are i.e. lawyers who defend the rights of people. In other words, simply by being lawyers, we are endangered.

Second, they attack some of us for the causes we take on and, in this category, fall human rights activists and other lawyers who represent persons that are persecuted by regimes and in the process expose the ugly underbelly of these regimes.

Intolerant and autocratic regimes, it was pointed out, tend to ascribe the alleged crimes of the clients to the lawyers, believing without any basis that the lawyer and his client represent birds of the same feather.

This is one form of criminalization of law practice, with lawyers system and the bar, as well as how it has worked for the foreign law firms themselves.

The debate centred on the merits of different models, timetables and regulatory regimes for market opening, and what the IBA can do to share this knowledge and experience.

Speakers at this highly interactive roundtable, led by a panel of distinguished speakers include, Chunghwan Choi, of Lee & Ko, Seoul, South Korea; Member, SPPI Council Advisory Board, Past VP (International Affairs) Korean Bar

Members of the panel www.businessday.ng

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being criminalized solely because they defend clients who may not be in good standing with the regime. It was also highlighted that the attack on the independence of the legal profession always constitutes an indirect attack on and degradation of the independence of the judiciary. It is only the Bar that can fight for the independence of the judiciary and therefore an emasculation of the Bar through attacks on the independence of the legal profession results in the direct erosion of the independence of the judiciary, it was pointed out.

Vigilance, we were reminded, must be our watchword, as lawyers and we must consistently speak out and loudly too whenever these attacks occur. Also important was the point made by Baroness Helena Kennedy, QC, the Executive Director of the IBA Human Rights Institute, to the effect that no lawyer should consider himself safe, not even the commercial lawyers. In other words, the attack on the independence of the legal profession is not limited to attacks on human rights lawyers but extends to all of us – including those of us who may feel secure in our commercial law practice cocoon – and it was in that context that she mentioned instances that commercial lawyers are now being hauled to court for trial on trumped up charges of money laundering. I truly identify with that.

It was emphasized that these twin pillars of independence – independence of the judiciary and the independence of the legal profession – must be the concern of all of us, no matter our areas of practice Association; Stephen Denyer, of the Law Society of England and Wales, London, England; Immediate Past Chair SPPI; Moira Huggard-Caine; TozziniFreire Advogados, São Paulo, Brazil; IBA Council Member; National Board Vice-Chair, Association of Brazilian Law Firms; and Seth Kim, of Sheppard Mullin, Seoul, South Korea; Member, Special Committee for International Cooperation and Disciplinary Committee for Foreign Legal Consultants, Korean Bar Association.

Others were, Xiaoming Li, of Han Kun Law Offices, Beijing, China; ND former partner, White & Case; Steven Nelson OF Dorsey & Whitney, Minneapolis, Minnesota, USA; and Past Chair, BIC International Trade in Legal Services Committee; Geoff Nicholas, of Freshfields Bruckhaus Deringer, London, England; Tony O’Malley, of Global Leader, PwC Legal Services Network, Sydney, New South Wales, Australia; Amir Singh Pasrich, ILA Pasrich & Company, New Delhi, India; and LPD Council Member; our own Mfon Usoro, who is a Member of the BIC International Trade in Legal Services Committee; and Gregory Vijayendran SC, President, Law Society of Singapore, Singapore. @Businessdayng

because the attack on the profession ultimately affects all of us. Recent events in Nigeria – i.e. the detention and harassment of lawyers – indeed bear this out. It was also pointed out at the sessions that the independence of the judiciary and the legal profession are not for the benefit of lawyers; they are actually for the benefit of the society and this is because, once the lawyers are cowed, the fundamental right of the citizens to be represented by lawyers of their choices is destroyed and indeed justice dispensation is threatened and decimated. These twin pillars of independence should therefore be the concern of everyone in the society and we must educate the public and raise awareness in that regard.

Solidarity and unity amongst lawyers, it was emphasized, is also key. United, it is easy for us, as lawyers to fight both for the independence of our profession and the independence of the judiciary.

United, we can fend off these attacks and incursions. It is always the plan of intolerant regimes that the lawyers be disunited and factionalized which makes it easier for them to attack both the independence of our profession and the independence of the judiciary. We must stand together in fighting against these early signs and indicators of intolerance and tyranny. And we must sensitize the citizenry to the fact that if they succeed in silencing the lawyers, the society as a whole is in peril.

There are very rich and pungent lessons that we must all learn, as Nigerian lawyers, from the IBA Rule of Law Symposium as captured in this my Reminisces. I am also humbled seeing these issues, which I have consistently raised in my numerous NBA Releases, starting from my Inaugural Address of 31 August 2019, being articulated so forcefully at a global IBA stage.”

• Paul Usoro, SAN, NBA President

More reports from IBA

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n another development, the IBA President, Horacio Bernades Neto, during the IBA Council meeting, spoke most glowingly of his mission to Nigeria in August for the NBA Annual General Conference (AGC).

Neto, informed the Council how impressive it was to witness the AGC which has 12,000 delegates at the conference, a number which he acknowledged was double the number of delegates the IBA has ever had in any of its Annual Conferences), and which was so well organized and quite rich in content.

The Nigerian representatives at this meeting - the NBA president, Paul Usoro, SAN; the NBA General Secretary, Jonathan Gunu Taidi and Prof. Konyinsola Ajayi, SAN, received a resounding applause from the entire Council.

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Continued from page 29

sent to take advantage of the opportunity presented by the organisers to move the industry forward.

The event was attended by several A-List actors, music artists, film and music producers, TV producers, directors, celebrity photographers and videographers, creative writers, celebrity stylists, amongst whom were, Joke Sylva, Mo Abudu of EbonyLife TV,

Shaffy Bello, Paul Okoye (of PSquare) and his wife, Anita; Kunle Afolayan, Ebuka Obi-Uchendu, Bankole Wellington, Dakore Egbuson Akande, Deyemi Okalanwo, Tola Odunsi; Lala Akindoju Fregene and Gbubemi Fregene (Chef Fregz), Demi Banwo, Bidemi Zakariyau Akande and Akin Akinkugbe.

Others were, Bola Atta, Group Director, Corporate Communica-

tions, UBA and Executive Producer RedTV; Babatunde Obaniyi of United Capital, the project financing and lending arm of UBA Plc; Ini Dimma Okojie, Sharon Ooja Egwurube, Emeka Ossa, Chiko Ejiro, and Mike Nliam, Koye Kekere-Ekun, Zik Zulu Okafor, Seyi Siwoku (Jungle), Fela Oke and several others.

Structured as a partnership comprising over 90 Solicitors,

Banwo & Ighodalo has been consistently ranked as a leading law firm in the areas of Capital Markets, Securities, Mergers & Acquisitions; Corporate Finance & Restructuring, Project Finance and Foreign Investment & Divestments, Energy & Natural Resources and Intellectual Property.

The Firm’s Media and Entertainment Group provides legal

advisory services to clients in the music, fashion, advertising, film and television industry. The team works with clients in the creative industry to attain effective protection for their brands, intangible assets, concepts, business operating plans and information technology, ensuring that the client’s products and services are compliant with local law and regulatory standards.

L-R: Tola Odunsi; Bola Ata; Akin Akinkugbe, Banky W

Ini Dima-Okojie (Left) and Michael Nzewi

Shaffy Bello (R) with another guest.

Kunle Afolayan (r), with Zik Zulu Okafor

L-R: Oladele Ogunlana, with Tee A

L-R: Bidemi Zakariyau Akande; Netochi Ndukwe, and Koye Kekere-Ekun

Kemi Ajayi, Chief Operating Officer, B&I (L), with Theodora KioLawson, Manager, Legal Business, BusinessDay newspaper.

Bankole Wellington (Banky W), Ebuka Obi-Uchendu and Deyemi Okanlawon.

Ifenyiwa Ighodalo (L) and Yewande Zaccheus

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TECHTALK Innovation

Apps

Fin-Tech

Start-up

Gadgets

Ecommerce

IOTs

Broadband Infrastructure

Bank IT Security

Nigeria @59: Smart City ambitions dim as investment in fixed wireless, wired technology at -1% Stories By FRANK ELEANYA

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mart City is a buzz phrase Nigeria’s political office holders like to throw around when they attend a technology conference abroad or they are trying to woo foreign investors to invest in the country.

Successive leaderships in Lagos State, Nigeria’s most populous state and the nerve center of its commercial activities are quick to point to two or three smart city projects they have going on.

But going by the sorry state of fixed wireless and wired technology in the country, the reality of a smart city may take at least a decade to achieve.

Data from the Nigerian Communications Commission (NCC) showed that the growth of fixed wireless and wired technology remained at 0.1 percent by the first half of 2019. This is unlike mobile technology (GSM) which has grown by 99.70 percent in the same period.

According to McLaren Duncan and Agyeman Julian authors of the 2015 book, ‘Sharing Cities: A Case for Truly Smart and Sustainable Cities’ a smart city refers to an urban area that uses different types of electronic data collection sensors to supply information which is used to manage assets and resources efficiently. This includes data collected from citizens, devices, and assets

that are processed and analysed to monitor and manage traffic and transportation systems, power plants, water supply networks, waste management, law enforcement, information systems, schools, libraries, and other community services.

Mckinsey research projects that smart city industry will be a $400 billion market by 2020 and these cities are expected to generate 60 percent of the world’s GDP by 2025.

Giving that 68 percent of the world’s population is expected to live in urban areas, by 2050 according to the United Nations, it does make sense to see why Nigerian leaders believe that developing smart cities is the

future. It also represents an opportunity to repurposed many Nigerian cities into well planned urban centers. Currently, nearly all of them are built regardless of laid down city plans.

Nigeria’s first serious step into smart city projects was the Nigerian Smart City Initiative (NSCI) in August 2017.

The NSCI plans to rely heavily on the application of ICT and smart technologies in the administration, development, and management of Nigerian cities with a view to achieving better connectivity in the transport sector, secured environment, decent affordable housing, efficient sanitary and waste disposal system, urban regeneration and upgrade

in the cities. The initiative intends to cover more than 50 percent of all Nigerian cities.

With the coming on board of the NSCI, the federal government through the ministry of Communication, pledged commitment to provision of the required infrastructures and application of smart concepts to transform Nigeria’s urban areas into functional, safe, serene and responsive cities capable of satisfying the demand of the city dwellers at sustainable levels. This reliance on ICT for national physical development is also meant to push the country to a position of a technology hub in Africa sub-region.

A smart city derives its concept from the internet of

things (IoT), crowdsensing and cyber-physical cloud computing which enables it to provide a comprehensive network of connected devices.

In addition, smart sensors and big data analytics to enable the move from IoT to realtime control.

In other words, the amount of internet capacity required to power a smart city is beyond the scope of what a mobile technology network can handle and at less than one percent investment in fixed wireless and wired technology Nigeria basically not ready.

Mobile technology or Global System for Mobile Communication which is the most widely used in the world, is an open and digital cellular technology used for transmitting mobile voice and data services operate at 850MHz, 1800MHz and 1900MHz frequency bands. In terms of capacity, the digital system has an ability to carry 64 Kbps to 120 Mbps of data rates.

Fixed wireless technology, on the other hand, is a super high-speed, dedicated, broadband service that has the capacity to connect enabled devices to the internet. It offers symmetric bandwidth speeds that are suitable for organizations that require reliable access to the internet for constant upload and download, instant browsing, video conferencing and other forms of business collaborations that depend on the internet.

Examples of technologies required to power a smart city include Wireless Sensor Networks (WSN), the Internet of Things (IoT), Cyber-Physical Systems (CPS), robotics, Unmanned Aerial Vehicles (UAVs), fog computing, cloud computing, and big data analytics. Utilizing these technologies provides many advantages and services in smart cities.

Fixed wireless shares some similarities, particularly in terms of carrying capacity and network reliability with wired technology.

The major difference is that in the case of the latter there is a physical connection to a physical location (home or business) through a cable.

For Nigeria to build and sustain a smart city, it requires reliable and robust networking and communication infrastructures to enable the efficient exchange of messages among the different components of the systems that provide a particular service. It also needs to adopt a long-term approach like prioritizing investment in fiber connectivity and creating an enabling environment for fixed wireless investors to thrive. Smart cities are typically served by different networks built by traditional telcos, cable operators, emerging internet providers like Google, neutral host providers, utilities and municipalities and Nigeria should be investing in this.

Nigerian police officers reign brutality, extortion on ‘suspicious’ tech community ...Police arrests not permanent solution ...Tech community leaders crowdfund to end harassment

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layers in the Nigerian tech community are being forced to look over their shoulders in fear as officers of the Nigerian police, especially in many parts of Lagos, are targeting young tech professionals, meting out brutality and extortion as they claim to be looking for internet fraudsters.

Tony Astro, a software engineer narrated how he nearly lost his life in the hands of officers of the Nigerian police force who claimed that for having a laptop in his bag, he was a “suspected” fraudster.

According to Astro, two police officers intercepted him at Ketu and demanded to search his phone. After seconds of going through the contents of his mobile phone, they ordered him to the station.

“Next thing they pointed guns at my leg, telling me to enter another bike they stopped and go with them to

their station. I entered and one of the men asked for a million naira and he’d let me go,” Astro recalled in a Twitter thread. “And I’m like 1 million?? Where would I get that from? I told him I’m not what you think. I’m a software developer at this company. He said everything na yahoo yahoo still. He physically harassed me on the bike. To every onlooker on the street, I was a criminal of some sort.”

At the station, Ogudu Area Command, his belongings including a laptop, watch charger, phone chargers, and office jotters were seized. He was again ordered to open his laptop by one of the officers.

“About 4 other policemen were there, making a total of 6. The next thing was slaps and punches, here and there. All I could hear was “confess you’re an internet fraudster.” I kept saying I’m not a fraudster, I’m a developer for a company,”

he said.

The policemen had Astro locked up with no proof or evidence that he was an internet fraudster. One of the men promised to let him go only if he parted with N500,000.

When he would not cooperate, they went through his account balance on his phone. On seeing the money in it, they requested that he go to the ATM and clear “every dime”.

Out of fear for his life - by now Astro said he had been beating severally - he agreed to do as he was told.

“As soon as I got back, they took me back to the cell and counted the money. Then they said “you can check all your things if they’re complete.”

All that was in my head was a remote job. I have to leave this country at the end,” he said.

Astro’s experience is one of many reported by several software developers who have fallen prey to security operatives.

Also, the unwarranted show of force - while it is an indication of widespread lack of intelligence about the tech community and a refusal to learn officers of the Nigeria police force - is an additional burden on members of the community who have lived through authorities knee-jerk economic policies that have put many businesses in jeopardy and forced many creative developers to relocate from Nigeria.

“No one should be afraid to go out with their phones and their gadgets,” said Odun Eweniyi, co-founder and COO of PiggyVest. “For over a year now, we’ve asked the government to #EndSARS. We need to come together to stop the menace of harassment and extortion. Enough is enough.”

The Nigeria police complaints unit has said they are commencing investigations into the incident, however, many say previous investiga-

tions and arrests have done little to permanently address several other incidences that have been reported to it. Moreover, victims’ compensation has never been on the table.

“The same government handing out N3 million loans to young people to learn software development cannot protect them from rogue law enforcement agencies,” said Bosun Tijani, co-founder of Co-Creation Hub (CcHUB).

In time past, the force leadership claimed it has arrested officers involved in cases of brutality. Segun Awosanya, a police reform activist and a lawyer, said a coalition he leads had pushed the government to put in place a protocol that could potentially put a stop to the many incidences of brutality while priority is given to the Police Reform Bill and Police Trust Fund at the legislative level. Nevertheless, the current IGP thought otherwise and re-

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turned things to the status quo.

“On the one hand, we may need to put culpability to where it belongs by holding the IGP responsible for all the deaths since his repeal of a working protocol and on the other hand put pressure on the House of Representatives, for concurrence on the bills before assent by the President,” Awosanya said.

Meanwhile, leaders of the tech community have vowed to fight back and have commenced a crowdfunding effort aimed at using legislative and judicial processes to address the problem.

“If we are to turn the frustration of today into actual action of tomorrow we will need material resources. People are already donating,” said Jason Njoku, founder of Iroko TV who also announced a donation of N10 million to the efforts. “It needs to be a community effort.

Even if it is N1,000, it’s okay.”

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news Bag of rice to sell above FG’s minimum...

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the country closed its land borders, the price of rice, a major staple in the Nigerian diet, has soared by 86 percent to an all-time high of N27,000 per 50kg from N14,500 before the border closure, an indication that local rice farmers do not currently have the capacity to meet local demand.

Sellers of rice in Lagos, the country’s commercial nervecentre, are currently hoarding the commodity in anticipation of selling at a higher price during the festive period when demand for the product is usually higher.

“The price of imported parboiled rice is increasing daily because of the border closure and lots of traders are now warehousing it to sell in December,” said a trader at Daleko market in Mushin, Lagos, who gave her name as Adegoke.

“We believe that the price will go as high as N50,000 per bag if the borders remain closed,” she said.

Local parboiled rice is not left out of the party as the price of a 50kg bag of Lake Rice, a product of a collaboration between Lagos and Kebbi States, has also increased by 22 percent from N13,500 five weeks ago to N16,500, BusinessDay market survey finds.

In Kebbi, northeast region of the country, a 50kg of Labana Rice sells for N15,000 as against N13,500 sold before the border closure.

The United States Department of Agriculture (USDA) puts Nigeria’s milled 2018/2019 rice production at 4.78 million tons, while the Federal Ministry of Agriculture puts the country’s domestic demand at 7 million tons per annum.

This shows a demandsupply gap of 2.2 million tons, meaning domestic supply is insufficient for the country to feed its 200 million people.

“The government did not put in place adequate plans before shutting down the border. The decision has only worsened the sufferings of Nigerians,” said Afri-

canFarmer Mogaji, head of agriculture and agro-allied group, Lagos Chamber of Commerce and Industry (LCCI), in a response to questions.

“We still do not grow enough rice to feed our population and the government is yet to fix issues of insecurity and kidnapping that have been a major threat to food security in the country,” Mogaji said.

He said that millers cannot ramp up production if farmers fail to increase their production, adding that lots of farmlands were abandoned owing to issues of insecurity.

Mogaji’s assertion is evident in the second-quarter Gross Domestic Product report as growth in the sector slowed to 1.7 percent compared to 3.1 percent in the first quarter.

This was attributed to the disruption of farming activities in April through June by armed bandits. Also, the shortfall in supply since the border closure has caused severe hardship for consumers.

“How do I afford to buy a bag of rice for N27,000 when I earn only N30,000? What will I have left to feed my children and for our upkeep?” asked a buyer at Mushin market who gave her name as Chukwu.

“We have been managing since but the recent border closure that has led to an increase in food items has made things worse for us,” she told BusinessDay. The reading of the headline inflation for September will capture the price growth triggered by the border closure when released in a few days’ time, experts say.

Mazi John Okoli, a rice dealer in Anambra, said many families are unhappy owing to the increasing food prices that have caused untold hardship in the country.

“It is difficult for families as the high cost of food items in the markets is seriously affecting their lives. Husbands and wives of many poor families are quarrelling daily because they cannot afford to feed twice daily,” Okoli said.

L-R: Roberto Hofmeister Pich, guest lecturer; Tunde Ope-Davies, director, Centre for Digital Humanities and HOD, English, University of Lagos; Bola Oboh, director, of research and innovation, University of Lagos; Daniella Kneissl, Humboldt office, Germany, and Stephan Traumannbdl, consul general of Germany, Lagos, during the official launch of the Centre for Digital Humanities, University of Lagos.

Nestle, Olam, Dangote, Unilever scramble for N100bn...

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and spices added to enhance the flavour and taste of food.

“In addition to ongoing urbanisation, Nigeria is witnessing a change in eating habits, with consumers shifting to less traditional foods,” Euromonitor International said in its November 2018 report on ‘Sauces, Dressings and Condiments in Nigeria’.

Euromonitor said an increasing urban population, which is time-poor due to the ongoing growth of a formal working culture, would continue to boost demand for packaged seasonings products which offer greater convenience. Unilever has emerged as one of strongest market leaders in the market, offering different varieties of Knorr stock cubes and Royco.

Analysts say its products are gaining traction among the middle-class.

But the Fast-Moving Consumer Goods firm’s products are competing with Nestlé Nigeria’s Maggi brand, which is popular among various classes of households.

Nestle sells 80 million Maggi cubes daily, according to a recent presentation by the firm.

Apart from different brands of Gino seasonings, Dangote, through its subsidiary NASCON, is also a major

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CBN debits 12 banks N499.1bn...

billion, to N16.39 trillion in about four months to September 26, 2019, however not all the banks were successful.

“All banks have strived to meet it, but not all did,” Ahmad Abdullahi, director of banking supervision at the Central Bank of Nigeria, said but did not say what banks.

The Central Bank however in its quest to stimulate domestic growth further raised the 60 percent lending threshold by 5 percent points subject to a quarterly review and asked banks to channel credit to the real sector espe-

cially the Small and Medium Enterprises, retail mortgage and consumer lending.

The economy has grown by an average of less than two percent since it exited the 2016 recession and slowed to 1.94 in the second quarter of 2019. Analysts say the banks have shown capacity to meet up with the new requirement although a few may still falter.

“Banks have learnt their lessons from the period of high assets quality issue most of the banks have strengthened their risk management framework; this would help them be in a better position www.businessday.ng

to streamline lending to these sectors,” said Jerry Nnebue, banking analyst at Lagosbased CardinalStone.

Cordros Securities in a report said the new policy geared towards driving risk asset creation could potentially result in N860.49 billion in loans created at the top end of the range, given the new 150 percent weightings for exposures to the SMEs, Retail, Mortgages and Consumer Credit.

Meanwhile analysts at Chapel Hill Denham expressed concern that asset quality might deteriorate if banks do not lend carefully,

changes in consumer tastes are driving the seasonings market, with new entrants innovating affordable products that come in economy packs.

Olam’s spices such as chillies, onions and garlic have also continued to perform well owing to efficient distribution system.

Euromonitor said in its report that new entrants such as Sosaco Nigeria and SyvaFrank International have performed well in fast growing categories such as tomato pastes and purées, herbs and spices owing to aggressive distribution strategies and the offer of a wide range of pack sizes, particularly small ones. AACE has emerged as a market disruptor with its Jollof Seasoning, Fried Rice Seasoning, Curry Powder, Pepper Soup Spice Mix, Suya Mix, among others.

“Taste and aroma are two major determinants of what consumers buy,” Ifeoma Ike, banker and mother, told BusinessDay. Onga by Promasidor is also highly demanded in Nigeria, with the brand popular in various parts of the country.

More than half of Nigeria’s 200 million people are under 18 and the majority live in urban areas. The middleincome families cook at least twice with these seasonings each week, with the poor using them at least once.

“A food without seasoning is wasted because nobody will eat it. In addition, cooking and eating is a daily activity,” said

player. The company launched classic seasonings cubes in Kano in 2018.

Fatima Aliko Dangote, executive director, commercial, said the seasoning cubes and stew mix were created with a special blend of herb and spices to give Nigerians a unique taste and aroma.

Nestle, which does not break out its numbers from Maggi sales, nevertheless reported N168 billion as revenues from its food segment in 2018, which includes Maggi, Cerelac, Nan and Golden Morn. Seasoning revenue for NASCON was up 21 percent in 2018 to N942 million. It is estimated that NASCON controls 1 percent of the seasonings market in Nigeria, giving a total estimated market size of about N100 billion.

Unilever reported N44.4 billion as revenue for its food segment in 2018, which includes seasoning.

In 2017, Nestlé launched ‘Maggi Naija Pot’ – a new seasoning cube developed in Nigeria based on the strong understanding of local cuisine. This was followed by the launch of ‘Maggi Signature’.

The major strategy used by makers of seasonings in Nigeria is to tailor their products to local tastes and increase appeal to an increasingly healthconscious population.

“The new product includes a commitment to use familiar

and common ingredients, which is another step towards fulfilling our ambitions to help individuals and families live healthier, happier lives,” Mauricio Alarcon, managing director and chief executive officer of Nestle Nigeria, said at the launch of Maggi Signature earlier this year.

If you think that West African Seasoning Company Limited’s Ajonomoto is down and out, you are wrong. The brand’s perception is poor, as admitted by its managing director, Junichi Niki, in 2018, but it is popular among local food vendors.

“In spite of the bottlenecks hindering the manufacturing industry in Nigeria, Ajinomoto has continued to surpass the expectation of shareholders, selling over 250 million sachets every month,” Niki said while unveiling Ajinomoto’s brand ambassadors in Lagos last year. The era of traditional seasonings such as ‘Iru’,‘Okpei’ and ‘Dawadawa’ is gradually phasing out in homes of the upwardly mobile and predominantly young population who live in cities as they increasingly prefer packaged seasonings with better aroma.

The growth of fast-food joints is helping the packaged seasonings market, fuelling innovation in the industry.

Seye Johnson, an independent retail market analyst, told BusinessDay that constant

recalling the 2016 economic downturn which made bank loans go bad.

According to the National Bureau of Statistics (NBS), lenders’ bad loans slowed in the second quarter of 2019 to the lowest level since 2016, despite a slowdown in the domestic economy in the period.

Non-performing loan (NPL) declined 14 percent to N1.44 trillion in the second quarter compared to a 6 percent drop in the first three months of the year, analysis on selected banking sector data by the National Bureau of Statistics (NBS) shows.

Year-on-Year NPL fell 25.62 percent.

Senate moves to amend PSC Act, probe...

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reading.

Tagged “Communication Service Tax Bill, 2019”, it is being sponsored by former Senate Leader Ali Ndume.

The Bill stipulates that tax shall be levied on electronic communication services like voice calls, SMS, MMS, data usage both from telecommunication services providers and internet service as well as pay per view TV stations.

Ndume, while fielding questions from journalists after the bill was presented for the first time, explained that it will enhance distribu@Businessdayng

tion of wealth where ordinary Nigerians would benefit.

According to Ndume, it is unhealthy to increase VAT because it will greatly affect the economy by astronomically jacking up prices of goods and services.

A copy of the Bill sighted by journalists reads that “there shall be imposed, charged payable and collected a monthly Communication Service Tax to be levied on charges payable by a user of an Electronic Communication Service other than private Electronic Communication Services”.

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MADE in aba Abia will be hub of shoe manufacturing in Africa - Ikpeazu GODFREY OFURUM, Aba

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overnor Okezie Ikpeazu of Abia State has reiterated the resolve of his administration to ensure that the state becomes the hub of shoe manufacturing in Nigeria and Africa.

This is as he announced that the proposed NIBRA shoe factory at Obuaku in Ukwa West Local Government area and Abia State automated shoe factory, located in Aba, are expected to commence production in December, 2019.

Ikpeazu, while addressing journalists after a tour of some of his projects in Abia North Senatorial zone, said that the state is determined to be the major supplier of shoes, not only to about 200 million Nigerians that need them, but to others in Africa and other parts of the world.

“Apart from our artisans that are well skilled in shoe manufacturing, we have also entered into agreement with a Brazilian firm, who are also known in the manufacturing of shoes and that gave birth to what is today known as NIBRA. NIBRA is acronym for Nigeria Brazil.

“Infact, NIBRA shoe factory in Ukwa West is a shoe village, because they are building a factory that w i l l e m p l oy ov e r 6 , 0 0 0 people, where all kinds of shoes will be manufactured for export.

“And because we expect that shoe factory to start production any time from now, they have even gone ahead to start negotiation with the major shoe importers in Lagos to come and see prototype of the kind of shoes they will produce so that they would be major vendors of those shoes when they hit the market”.

The governor affirmed t h at w o rk h a s re a c h e d advanced stages in the two shoe factories that are about to be opened in Abia State.

According to him, “the NIBRA Leather City at Obuaku is progressing rapidly, while the massive factor y building for the Abia State Automated Shoe Factory, located in Aba, has been completed, with installation of machines imminent.

“It is my projection that despite the initial delays, our dream of automated shoe production will commence in Abia State before the end of 2019”.

He explained that the Enyimba Economic City Project is also fully on course with key preliminary components of the project being tidied up, stressing that formal groundbreaking and c ommenc ement of

construction works will hold soonest.

Ikpeazu, who was elated at the progress of shoemakers the State took to China to learn automated shoe production, stated that they are poised to resume at the Abia State Automated Shoe Factory, as pilot producers.

“In the meantime, they are all doing well having expanded their operations and incorporated new skills.

One of them just won an award for the Best Female Entrepreneur in Nigeria with a brand new car and N1 million, as award prize, which she has just brought to show to me.

“Who says that something is not happening for those who are dedicated, committed and ready to work in Abia State?. “ My c o m m i t m e n t t o creating jobs for the teeming youths of Abia State remains unwavering and with the

Okezie Ikpeazu, governor, Abia State

number of different public private partnership (PPP) projects we have on ground,

it will be jobs, jobs, jobs in Abia State going forward”, he promised.

How broken Aba-Ikot-Ekpene Road hurts Abia economy ODINAKA ANUDU

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here were looks of abandonment on the faces of passers-by along Aba-Ikot- Ekpene road on September 19. The road links Abia to Akwa Ibom— two states in the oil-rich South-East and SouthSouth regions of Nigeria.

In the 1990s, Aba shoe and textile makers ferried their products to Akwa Ibom through the road.

But the road now looked as forlorn as its passersby. The Aba section was overrun by dirty water.

The middle of the section bordering Umuokpo and Onicha Ngwa communities in Obingwa Local G ove r n m e nt A re a wa s covered by comfortablysat green grass.

“They have abandoned us to our fate,” Nonso Obima, a shoemaker at Ariaria, who lives in Ogbor Hill area of the road, said.

“They have cut off the section through which we supply our shoes and textiles to neighbouring states and Cameroon,” he cried.

Ta l k i n g a b o u t abandonment, the ro a d w a s aw a rd e d o n December 13, 2012, to Arab Contractors OAO Nigeria Limited at the cost of N3.780 billion. The road links Aba to Akwa Ibom

and Cross River in Nigeria, and Cameroon in Central Africa. It was supposed to start from Ikot-Ekpene, criss-cross Aba and end in Owerri. The road was to be dualised, but much of Aba—Ikot-Ekpene axis was not. Those who live around confirmed that the project was started in 2012 but abandoned midway. Reliable sources said after a long period of abandonment, the contractor ran to the Ministr y of Works complaining that the contract was undervalued.

T h e f e d e ra l e x e c u t i v e council thereafter approved additional N6.17 billion in 2018, which is yet to be released.

S t r a n g e l y , Mi n i s t e r of Information Lai Mohammed listed this roa d a s one of t he 69 ongoing projects in the South-East in August 2018. When BusinessDay visited this road in 2018, work was not going on as it was discovered that t h e c o nt ra c t o r m e re ly parked vehicles at a private residence in-between the United Evangelical Church and Onyedika Industries, Alaoji Ntigha. The long and short stor y is that the contract is yet to be completed seven years after being awarded.

Around 2011, this road had over 40 filling stations, 50 restaurants, www.businessday.ng

the axis, told BusinessDay. “But most of them have closed shop,” he said.

Past presidents have neglected this important road, using it as a bait for the state during general elections.

The road has been in this state for more than 1 5 ye a r s, w i t h f e d e ra l govenment officials playing politics with it.

In Ma rch th i s yea r, Solomon Akpulonu, deputy majority leader of the Abia State House of Assembly, said the state of the road was impacting negatively on the economy of Abia.

“I’m begging the Federal Government to urgently commence rehabilitation work on the abandoned Aba–Ikot Ekpene Road.

Many communities in Obingwa East State Constituency have been cut off from Aba and the neighbouring towns in Akwa Ibom State d u e t o t h e d e p l o rab l e condition of this road,” he said, while addressing his constituents.

He said over 500 business outlets located along the Aba-Ikot Ekpene Road had closed down due to the poor condition of the road, pointing out that the then visit of the Minister of Power, Works and Housing, Babatunde Fashola to the road was yet to bear fruit.

s e v e n h o t e l s, ove r s i x manufacturing firms, three farm settlements and tens of super markets, among others, Ben Ihu, a resident of one of the towns along

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news

N9.12trn budget: Finance minister, heads of MDAs meet Senate, Reps over 2020 MTEF/FSP ...deliberate N350bn budget deficit SOLOMON AYADO, Abuja

M L-R: Adesoji Adetona, consultant histopathologist, Synlab Nigeria; Samuel Osaghae, senior lecturer and honorary consultant, University of Benin; Olutoyin Ajala, chief executive officer, JBS Medicare Services; Deborah Onoja, lead dietitian/founder, Sapphire Nutrition and Diet Consultant, and Babafemi Adenuga, associate professor, family medicine, Howard University College of Medicine, at the healthier aging conference.

Over $40bn gap exists among African women in SMEs - AfDB Cynthia Egboboh, Abuja

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frican Development Bank (AfDB) has announced that over $40 billion funding gap still exists among Africa women in Small and Medium Enterprises (SMEs) in Africa.

Ebrimal Faal, senior country director, AfDB, said this in Abuja on Wednesday, stating that ensuring capacity building among Africa women had remained a cross-cutting issue for the bank, as over $40 billion gap had been identified in women small medium enterprise in Africa.

Faal, speaking at the conference on strengthening women’s

involvement in Public Private Partnership (PPP), said the bank had developed the Affirmative Finance for Africa Women (AFAW), which seeks to raise $5 billion for Africa women in SMEs. “The fiscal space available to the government to fill the identified gap is small, hence the private sector need to be involved in addressing the gap in the continent. At the moment women comprise over 40 percent players of the small and medium enterprises.

“We have developed the Africa development bank gender market system to set target for gender mainstreaming to track gender report,” Faal said.

Senate imposes tax on communication services SOLOMON AYADO, Abuja

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bill to enact a legislative action to impose tax on communication services was on Wednesday presented in Senate for first reading.

The bill, it was gathered, is crafted to replace the 2.2 percent increase in the Value Added Tax (VAT) being planned by the Federal Government.

Finance minister, Zainab Ahmed, had announced the proposed VAT increase.

Tagged “Communication Service Tax Bill, 2019” it is being sponsored by former Senate leader, Ali Ndume.

The Bill stipulates that tax shall be levied on electronic communication services like Voice Calls, SMS, MMS, data usage, both from telecoms providers and internet service as well as Pay per View TV stations.

Ndume, while fielding questions from journalists after the bill was presented for the first time, explained that it would enhance distribution of wealth where ordinary Nigerians would benefit.

According to Ndume, it is unhealthy to increase VAT because it will greatly affect the

According to Faal, it is important to highlight the barriers that hinder women capacity and limit the opportunities of female entrepreneurs in PPP arrangements.

Aisha Buhari, Nigeria’s first lady in her remark, said the integration of gender perspectives in infrastructure development, design and implementation would address the gaps in infrastructure delivery as they affect women, and would have profound impact on the socio-economic growth and transformation of the nation and enhance the living conditions of women.

“It is initiatives like these that confirms the vibrancy of the

regulatory agency and its effort in institutionalising partnership between the public private sectors towards accelerated growth and development of our country.

“While change must reflect the various indices of economic progress, it is imperative that it must deliver significant improvement in the living conditions of all Nigerians, especially women. It is therefore my sincere hope that this strategic conference will assist with a clear road map that will recognize the critical importance of gender considerations in the design, development, and implementation of PPPs and infrastructure in Nigeria,” she said.

Why Arik Air now operates foreign crew on Abuja, Port Harcourt routes

economy by astronomically jacking up prices of goods and services.

A copy of the Bill sighted by journalists reads thus: “There shall be” imposed, charged payable and collected a monthly Communication Service Tax to be levied on charges payable by a user of an Electronic Communication Service other than private Electronic Communication Services.”

“The tax shall be levied on Electronic Communication Services supplied by Service Providers.

“For the purpose of this clause, the supply of any form of recharges shall be considered as a charge for usage of Electronic Communication Service.

“The tax shall be paid together with the Electronic Communication Ser vice charge payable to the service provider by the consumer of the service.

“The tax is due and payable on any supply of Electronic Communication Service within the time period specified under sub-clause (5) of whether or not the person making the supply is permitted or authorised provide Electronic Communication Services. www.businessday.ng

IFEOMA OKEKE

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assengers who flew Arik aircraft to Abuja and Port Harcourt recently expressed surprise on why the airline uses foreign crew on these routes.

BusinessDay’s checks show that the airline recently entered into a wet lease agreement with a Tunisian airline, which requires that the lessor will provide the crew that will operate the leased aircraft.

Banji Ola, Arik Air communications manager, who confirmed the development to BusinessDay, says he does not know the nationality of the crewmembers but the lessor provided the crew as the agreement states.

“We are operating a wet lease. I don’t know the nationality of the crew but the airline is a Tunisian airline.

A wet lease agreement operates Aircraft Crew Maintenance Insurance (ACMI). In a wet lease arrangement, the aircraft owner provides the aircraft, the insurance, the crew and the maintenance,” Ola states.

He discloses that the wet lease will last six months in

the first stage and the aircraft operates into Abuja and Port Harcourt every day.

Nigerian Civil Aviation Authority (NCAA) says there is nothing unusual if indigenous carriers consider aircraft wet lease as options for survival.

All that is required from the operator is to furnish the regulatory body with the terms of such deal in line with statutory requirements.

Sam Adurogboye, general manager, public affairs, NCAA, says the regulator does not frown at domestic airlines securing and operating leases, which is a temporary arrangement to take care of some situations.

Adurogboye says the NCAA was aware of the wetlease agreement between Value Jets and Arik Air, affirming that it was an operational agreement to assist the airline.

“The NCAA has been notified by Arik Air of its wet lease agreement with Value Jets. It is nothing unusual in global aviation; wet leasing of aircraft is an interim measure to take care of aircraft scarcity, such that the airline does not have operational issues.

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inister of finance, Zainab Ahmed, and heads of government departments and agencies Wednesday met with members of the Senate and House of Representatives over the 2020-2022 Medium Term Expenditure Framework (MTEF) and the Fiscal Strategy Paper (FSP).

President Muhammad Buhari had, barely a week ago, submitted the budget framework to the National Assembly.

The Federal Government’s expenditure budget is estimated at N9.12 trillion (this includes grants and donor funds of N36.39bn). This is slightly higher than in 2019 of N8.92 trillion.

The National Assembly through the Senate president, Ahmad Lawan, had assured that it would intensify legislative processes to ensure the budget was passed before the end of December.

Yesterday, lawmakers, the minister and relevant parastatals converged on National Assembly at a public hearing organised by the joint committee on finance, a committee chaired by Adeola

Solomon Olamilekan.

The meeting agreed that Nigeria needed N350 billion to fund the 2020 budget and it was incumbent on government parastatals to proffer adequate financial solutions to reconcile the deficit.

Parastatals were charged to submit their official positions to the committee for onward considerations.

In his welcome speech, Adeola explained that the hearing was aimed at evolving the financial transactions to correct anomalies and block revenue leakage.

He said, “The committee is poised o ensure that revenue collected is appropriately used in the development of the country.”

The Senate president, while declaring the event open, said the hearing “was to bring understanding on how to eradicate leakages and manage resources and channel them to greater infrastructural development.”

According to Lawan, Nigeria needs N350 billion to fund the 2020 budget and it is one of measures that Senate has moved to review the production-sharing contract, PSC to recover N7 trillion the Federal Government lost in petroleum contracts.

Coscharis commissions N12bn rice mill to inch Nigeria towards self-sufficiency Josephine Okojie

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oscharis Farms Limited has commissioned its N12 billion ultra-modern state-of-the-art rice mill, with a capacity to process 40,000 metric tons of paddy per annum.

The investment, sited in Igbariam, Anambra State, has already created over 470 direct and indirect jobs, as the company participates across the value chain - from seed multiplication to production and processing.

Cosmas Maduka, chairman, Coscharis Group, a parent company of Coscharis Farms Limited, said during the commissioning Wednesday, “The plan to build a rice processing mill is motivated by our desire to fix a problem. We want to create more jobs and also want to build skills in the region, and contribute significantly to ensuring that the country attained selfsufficiency in rice production.’

He noted that the processing mill had come to stay and improve the quality of life of the indigenes while driving economic growth and development.

He applauded the Federal Government for its various initiatives in supporting agriculture, saying the president had a clear agenda of food sufficiency in the country.

Similarly, he appreciated the Anambra State government for supporting the initiative right from the start and for creating a conducive environment that had made the investment possible.

“Coscharis Farms Limited did not achieve these important milestones alone, we enjoyed the partnership and cooperation @Businessdayng

of many,” he said.

Nigeria’s milled rice production is currently put at 4.78 million metric tons, while domestic demand is put at 7 million MT per annum, indicating a demand-supply gap of 2.2 million MT, data from the United States Department for Agriculture state.

But with the rice produced and milled by the Coscharis Farms, the country’s deficit will be further reduced.

Speaking also, Godwin Emefiele, governor, Central Bank of Nigeria, said the project was a national reference to the apex bank, as it was funded under the N200 billion Commercial Agriculture Credit Scheme (CACS) intervention of bank.

Emefiele stated that the mill would not only milled rice paddy produced by its farm, but also the ones grown by smallholder farmers under the Anchor Borrowers Programme.

“The fact that Coscharis Farms Limited is a reality today is an attestation to the fact that the objectives of the administration of President Mohammadu Buhari towards diversifying the Nigerian economy and creating jobs through focused intervention in critical areas is yielding results,” he said.

Willie Obiano, governor of Anambra State, said the Coscharis Farms played a strategic role in his efforts in transforming the state into an agrarian state that had impacted positively Anambra rice production.

“As a state, our rice production has grown over the years and we produce 345,280 metric tons of rice in 2018,” he said.

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Thursday 03 October 2019

news Vehicle dealers slam NCS for losses suffered over business shutdown AMAKA ANAGOR-EWUZIE

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ehicle dealers across Lagos State have condemned the Nigeria Customs Service (NCS) for shutting down their businesses in search of cars smuggled through land borders.

Affected dealers, including Elizade Motors-Toyota Nigeria Limited, Stallion Motors, Coscharis Motors and Globe Motors, described the action as harassment and an attempt by the NCS to label them as smugglers.

While bemoaning the massive losses suffered since the action, the dealers said as responsible citizens, they contribute to economic growth through job creation and payment of taxes and duties worth over N20 billion to the Federal Government on annual basis.

They however wondered why the Customs only focused on dealers in Southern part of Nigeria when smugglers, who contribute next to nothing to the economy, were having a field day in the Northern part of the country.

For instance, to clear re-

cent models of cars like Toyota Corolla, it costs over N3 million duty; Toyota Prado SUV, costs over N9 million; one Land Cruiser costs over N15 million as import duty; one Lexus SUV takes N18 million as duty, and G-Wagon cost about N21 million as duty.

Therefore, a dealer that has about 70 cars pay an average of N10 million per car, which is about N700 million.

Willie Anumudu, chairman of Globe Motors, who stated they were taken aback by the Customs’ action, said they were yet to have clearer view of what was happening.

He said Customs used to come to their offices to take inventory of their stock, and check chassis numbers but this time was to seal their shops.

Speaking on the issue, an official of Coscharis Group, who pleaded anonymity, said Customs action would be counterproductive to government’s foreign investment drive.

The official said Coscharis represented international companies of repute that would not be involved in smuggling of vehicles.

“As a responsible entity, we

do cooperate with all agencies of government. If Customs needs any information about our business, they should have asked rather than sealing our showrooms before calling us for a meeting,” the official said.

Another dealer, who sells luxury cars in Ikeja, who also spoke on condition of anonymity, said cars were smuggled into Nigeria with connivance of corrupt Customs officers.

According to him, “We are not smugglers, we bring in our cars through the ports and pay duties. We add to the economy by creating direct and indirect employment. In my office alone, I have over 20 staff. Clearing agents, mechanic, licensing agents all depend on us for survival,” the dealer said.

He said genuine businessmen cannot continue to suffer because of corruption and inefficiency in Customs.

“Customs has not told us why they locked our shops. We have complied 95 percent with the rules guiding importation of cars through land borders. Nobody is bringing cars through Cotonou anymore because we all know what the rules are,” the dealer said.

150,000 persons benefit from skills development, job creation initiatives – Obaseki

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ov e r n o r G o d w i n Obaseki of Edo State says his government has provided employment opportunities to not less than 150,000 persons in the state through various skills development and job creation programmes aimed at stimulating Micro Small and Medium Enterprises (MSMEs) in the state.

Obaseki said single-digit interest loan facilities were also extended to some of these persons, which became necessary to drive the state’s economy by leveraging the power of small businesses.

Speaking at the Edo State Special Day at the ongoing 2019 Abuja International

Trade Fair (2019AITF) organised by the Abuja Chamber of Commerce and Industry (ACCI), the governor said his administration had attained 75 percent (150,000) of his promise to create the 200,000 jobs in his first term in office.

Represented at the trade fair by the deputy governor, Philip Shaibu, Obaseki said his administration was creating a business environment driven by the private sector to build the capacity of youths to become self-reliant.

The governor said, “One of our cardinal pillars is to develop our youths and we have policies and programmes to equip young people with skills, not just for the artisans

but also graduates. They say some of our youths are not employable even when they have the certificates.

“So, we created a skills acquisition programme both for artisans and these graduates. We have created an artisan hub, what we call the industrial hub, where you can come and establish your small businesses. The facility has 24-hour power supply to enhance productivity.”

He added, “In Edo State, you must earn a living and the best way to do that is to ensure you are skilled. Skilled labour is what we emphasise in Edo State and we are not only emphasising it, we are creating it.”

Sujimoto’s 5th anniversary: Celebrating resilience, growth ENDURANCE OKAFOR

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o commemorate its fifth-year anniversary, Sujimoto Construction Limited, a Lagos-based indigenous real estate company, weekend, held guests spellbound by the breathtaking beauty, architectural sophistication and quality of finishing of the already soldout GiulianoBySujimoto, as guests were given a tour of the building before being ushered into the event venue.

One of the guests, a socialite who has spent the majority of her life abroad, said; “I had

thought your online pictures were exaggerated but seeing the Giuliano in person is a different experience because it is more beautiful and mesmerizing in real life. The impeccable finishing is also very exceptional. ” Segun Osoba, Governor Dapo Abiodun, ex-governor of Cross River State, Donald Duke, Mo’Abudu, and top dignitaries, including some Alist celebrities and top business leaders who were part of the over 1,820 guests that came out to celebrate with Sujimoto@5 in Africa richest square meter, Banana Island, described the www.businessday.ng

event as indeed a night of glitz, glamour, and grandeur.

Speaking at the event, the MD/CEO of Sujimoto, Sijibomi Ogundele, was very quick to appreciate everyone including critics. According to him, “pessimists don’t know this, but they contribute more to our success than our failures.”

The Luxury Real Estate genius metaphorically compared the Sujimoto story to the Chinese Bamboo tree, explaining how it takes 5 years to nurture and groom the tree before it finally breaks ground, and grows 30 meters tall in five weeks. https://www.facebook.com/businessdayng

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44 BUSINESS DAY

Thursday 03 October 2019

news Rensource gets international recognition over solar power initiative SEGUN ADAMS

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ensource, a distributed energy firm headquartered in Lagos, has gained international recognition over its solar power initiative. The company was recognised at a panel session with the theme – “Need for renewable energy at scale” at the Bloomberg Business forum held in New York City during which a documentary of the company was screened to the audience.

“It is a real story that helps us indicate that committing to sustainable future can actually be achieved. It is a story about a young female entrepreneur who helped create a solar power startup initiative in Lagos,” Christine Lagarde, European Central Bank president-designate and former IMF chief, said, while introducing the video documentary screening to the audience at the forum.

The energy company provides reliable, affordable essential services such as clean energy and other value-added services to consumers who previously had little or no access to such services.

“We build solar hybrid utilities that provide energy to businesses and everyday people so that they do not have to use generator,” Anu Adasolum, chief operating officer, Rensource,

said.

Rensource was incorporated in 2016 and commenced deployment of solar home systems to residential customers in the same year through a lease-toown or outright purchase model.

According to Adasolum, the goal is to solve the country’s power problem, as “the entire country runs on millions of generator with so little power.

We cannot effectively run our hospitals, factories and homes that way.”

In late 2016, Rensource launched its ‘Power-as-a-Service’ business model that involved the provision of power to homes and small and medium sized businesses in exchange for affordable monthly payments, with Rensource retaining ownership and responsible for operations and maintenance of the solar systems. Through this model, Rensource has installed energy solar systems in over 300 locations in Nigeria.

In December 2017, the firm diversified to a ‘Powered-byRensource’ business model, which is a full-service platform for project development, operations and financial arrangement of off-grid micro utilities across Nigeria powering SMEs in commercial centres such as markets and industrial estates. “In just four years, we have powered about 10,000 SMEs,” she said.

Bassey Andah Foundation set for book launch

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reparations are in top gear for the book launch and Endowment of Research Chair for the Bassey Andah Institute of African and Asia Studies, University of Calabar.

The book launch titled ‘Bassey Andah: A call to service’ chronicles the many aspects and phases of Bassey Andah’s life and services, and is billed to hold at the Nigerian Institute of International Affairs (NIIA), Victoria Island, Lagos, on October 4, by 10am.

The event, which will be graced by eminent personalities and scholars, including Professor Emeritus, Ayo Banjo, former vice-chancellor, University of Ibadan (who is a special guest of honour). Other special guests of honour are Peter Obi, former governor of Anambra State as well as Professor Zana Akpagu, vice-chancellor, University of

Calabar, while Donald Duke, ex-governor of Cross River State is the chairman of the occasion.

The book will be reviewed by Reverend Professor Emele Uka, former prelate, Presbyterian Church of Nigeria.

Bassey Andah, who died December 22, 1997, was a professor, researcher, scholar and teacher. He was a university professor at University of Ibadan before his demise and was appointed professor in 1978 after putting a total of 24 years of meritorious service for the university.

The book provides a vivid account of the unfolding and diverse nature of Bassey Andah’s hugely successful research and teaching career as a pioneering African scholar in his field, and his impact on a whole generation of practitioners that emulated and followed after him.

Obaseki sacks all SAs, SSAs ... fresh appointment to be announced within 30 days

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do State governor, Godwin Obaseki, has approved the termination of the appointments of all his Senior Special Assistants and Special Assistants with immediate effect.

In a statement, Osarodion Ogie, secretary to the State Government, said: “This development is in line with efforts to reorganise the governance structure to enhance efficiency in service delivery to Edo people.”

He noted, “Fresh appointments will be announced within the next 30 days.”

According to Ogie, the state government offers its immense gratitude to the outgoing assistants for their services and assures of continued cordial relations in the years ahead.

He said, “They are hereby directed to hand over all government property and documents in their possession to the Office of the Secretary to the State Government.” www.businessday.ng

L-R: Obianuju Arinze, member, International Cake Exploration Societie (ICES); Omolara Ikpen, treasurer; Kazim Olusegun, head, food service business, FrilandCampina WAMCO; Susan Ogunbayode, country representative, ICES, and Amanda Sam-Wobo, communication director, at the 2019 Nigeria Cake Expo in Lagos, yesterday.

Pic by Olawale Amoo

Lagos determined to make more residents homeowners in 24 months - Commissioner CHUKA UROKO

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agos State government has assured of its determination to make more residents homeowners within the next two years, adding that it is committed to ensuring that more Lagosians gain access to homes irrespective of their ethnicity or political persuasion.

Moruf Akinderu-Fatai, the state commissioner for housing, who gave this assurance at a meeting with the private sector partners and joint venture investors, recently, underscored the importance of the contribution of private investors in collaboration with government.

He, however, lamented that many investors involved had not complied with the time frame stipulated in their contract agreements. “Many of the private partners have not met up with the timelines thereby littering the state with many uncompleted housing schemes and causing delays in actualising government’s mandate,” he said.

The commissioner also revealed that the completion of all ongoing housing schemes was a major strategy the state intends to deploy in meeting its target, urging the investors to complete the schemes allocated to them or have their contracts revoked.

“All housing schemes that

had been contracted out to private sector partners and joint investors are to be completed within the time frame indicated in the contractual agreements or have them cancelled,” he said.

Earlier, the participating investors had cited encumbrances, disappointments from funding partners and conflicts with various host communities as major difficulties faced.

The commissioner advised the investors to prove their capabilities and justify government’s confidence through working out solutions to these challenges.

“While government will do its best to intervene in some of

the situations, we expect every investor to do self-audit before coming forward to take up the responsibilities of state housing scheme,” he said.

“The need to bridge the housing deficit is urgent and cannot wait till eternity to be solved,” he added.

Wasiu Akewusola, permanent secretary of the ministry, warned investors who did not comply with directives and instructions from government professionals on quality of materials and procedures, saying government would not accept or endorse any shoddily completed houses from investors in the interest of the safety of future homeowners.

Don says 52% of nation’s resources not ‘Leadership, cultural shift key to utilised for development future of banking industry’ IDRIS UMAR MOMOH, Benin

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s much as 52 percent of the nation’s natural resources are not being harnessed for national development, Abdulrauf Sanya Ogunsakin, an associate professor of economics, Ekiti State University, says.

Ogunsakin noted that the non-utilisation of the nation’s abundant natural resources for the benefit of its citizens has led to poverty in the land.

He made the remark while delivering a lecture titled “Effective management of natural resources for sustainable economic development in Nigeria: impediment and antidotes” at the 8th annual symposium organised by the Muslims Students’ Society of Nigeria (MSSN) at Auchi, Edo State.

“Nigeria has abundant resources such as crude oil, gold, tin, silver, bitumen, coal, lime stone, Iron- ore, lead, zinc, columbite, marble, vast arable land, water and suitable climatic condition, but it is only harnessing 48 percent of the resources.

“From the available records on macro-economic perfor-

mance by World Bank, International Monetary Fund, Reserve Bank, among others, countries with natural resources do not seem to have any significant growth advantage over those with little or none of the major resources,” he said.

He however lamented that the East African countries, poor in terms of natural resources, were out-performing Nigeria rich in natural resources.

Ogunsakin explained that a structural shift in the economy and inadequate commitment to programme implementation were some of the reasons Nigeria had not achieved sustainable development.

He opined that Nigeria has a well-balanced economy with five principal export commodities such as cocoa, palm oil, rubber, groundnut and cotton.

In his remark, Ibrahim Shekarau, the former governor of Kano State noted that over-dependence on crude oil has robbed the nation of the opportunity to develop and translate its abundant natural resources for the economic good of the people.

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Daniel Obi

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anaging director of Philips Consulting plc, a consulting firm in Africa, Robert Taiwo, says banking requires culture and leadership more than technology to survive in a digital transformation.

Speaking on the topic “Driving Digital and Innovation” at Chartered Institute of Bankers of Nigeria’s annual banking and finance conference in Abuja, recently, Taiwo, according to a statement, advised organisations to begin to pursue digital transformation differently if they want to survive in a digital-led economy.

As per digital transformation and change, he says, “The components are technology, culture, and leadership. I believe the technology will take care of itself, especially in Nigeria where we’ve leapfrogged in terms of digital and our use of emerging technologies. Nigerian banks must now begin to focus on changes in culture and leadership.”

He stresses the need for organisations to make the transi@Businessdayng

tion from a command-andcontrol culture towards an adhocratic culture that promotes speed, impact, and openness.

He also advocated a shift from the traditional methods of leadership to transformational leadership that relies more on empathy, coaching and empowerment. “This is the kind of leadership we need to drive digital economy 4.0,” he advises.

He also encourages public and private sector institutions on the need to ensure an increase in digital literacy. While a lot is happening in this space, he says, “We still have a lot of work to do.”

Continuing, he notes, “I know that government at the federal and state levels are rolling out digital awareness programmes. The private sector is also pushing out programmes around digital training and new technologies. But we do need to step up.”

Taiwo leads Phillips Consulting, a consulting services firm providing business strategy, digital, technology, human capital, digital learning, and international development professional services.

Thursday 03 October 2019

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POLITICS & POLICY Reps begin deliberation on N8.7trn 2020 MTEF/FSP Thursday …As Gbajabiamila inaugurates finance, appropriation, other committees ...APC chairs 80, PDP, others left with 25 JAMES KWEN, Abuja

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he House of Representatives would begin deliberation on the N8.7trillion 2020/2022 Medium Term Expenditure Framework (MTEF) and Fiscal Strategy Paper (FSP) sent to the National Assembly for consideration last week by President Muhammadu Buhari.

Femi Gbajabiamila, speaker of the House, hinted this Wednesday at the inauguration of the 105 Special and Standing Committees, including that of Finance and Appropriation that are primarily saddled with the responsibility of working on national budget.

According to Gbajabiamila, there was going to be a meeting of the Standing Committee on Finance chaired by James Faleke (APC, Lagos) after the inauguration look at the MTEF/FSP to enable the House begin discussion on the document at the next (Thursday) plenary.

The MTEF /FSP which contains the benchmark, upon which the 2020 Budget would be predicated, pegged the projected budget profile for the year at N8.7 trillion, and $55 oil price benchmark

as against $60 used for the N8.9trillion 2019 Budget.

The Speaker, in his speech during the inauguration, charged the leadership and members of the various committees to be dutiful in the discharge of their constitutional responsibilities of oversight and law-making, ensure that their conduct is always without reproach and their service is motivated only by considerations of the best interests of the country.

According to him, “You know as well as I do, that our country for several years has been contending with serious challenges on multiple fronts.

From the economy to na-

tional security, social justice to healthcare, infrastructure to the environment and climate change, this is a time that calls for determined efforts to achieve substantive reform and ensure that our country can overcome its challenges and take advantage of the opportunities that abound for economic advancement and social development.

Gbajabiamila sued for the cooperation and collaboration of Ministries, Departments and Agencies of government as it is only through joint efforts that the various arms of government can meet the objectives of the administration and keep the

promises made to the Nigerian people.

“We in the House of Representatives intend without reservation to exercise the full authority of the legislature as it relates to the oversight of the MDAs. However, our purposes are not punitive, neither are our intentions adversarial, but in furtherance of our shared objectives of national development, peace, progress and prosperity for all,” the Speaker stated.

He vowed that House will be fully supporting and empowering its Committees for effective oversight, particularly the Committee on Legislative Compliance.

The Speaker also directed the ad–hoc committees on the Niger Delta Development Commission and the Ports and Harbours to conclude their investigations and submit their reports by Friday the 4th of October 2019, while all other ad-hoc committees should conclude their activities and submit their reports before the 14th of October.

Out of the 105 Committees inaugurated, 85 are chaired

by All Progressives Congress (APC) members while 25 are chaired by minority parties, particularly the main opposition People’s Democratic Party (PDP).

Ortom tasks council chairmen on tax deduction ...As NULGE demands financial autonomy BENJAMIN AGESAN, Makurdi

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enue State Governor, Samuel Ortom has urged local government chairmen to adhere strictly to statutory deductions that provide funds for teachers’ salaries, training of local government staff, pension for local government retirees and remittance to traditional councils.

Ortom was represented by the Secretary to the Benue State Government, Tony Ijohor at a workshop organised

by the Bureau for Local Government and Chieftaincy Affairs to sensitise the key actors on the operational guidelines which prevent the state governors, financial institutions and other stakeholders from accessing allocations of local governments from the federation account.

The governor maintained that the Bureau still had the powers to supervise local councils despite the implementation of Nigerian Financial Intelligence Unit (IFIU) guidelines.

He also charged local governments to abide by INFIU directives until the court takes contrary decision because according to him, the governors had approached the court to seek interpretation of the INFIU guidelines.

In his comment, chairman of Nigerian Union of Local Government Employees, Terungwa Igbe demanded full autonomy of the Local government.

“We cannot be declared autonomous while another tier of government will be controlling our finances. We

need full autonomy so that we can develop the third tier of government,” Igbe said.

Earlier in his welcome address, the Special Adviser to the Governor, Bureau for Local Government and Chieftaincy Affairs, Jerome Torshimbe said, the Bureau remained resolute in playing its supervisory role for the implementation of the INFIU guidelines. He however identified poor network and delay in transaction as some problems militating against smooth implementation.

We will respect separation of powers - Sanwo-Olu …Tasks Judges to restore citizens’ confidence in court

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agos State Governor, Babajide SanwoOlu, on Wednesday promised that his administration would uphold the principle of separation of powers and support the judiciary in the state.

The governor spoke while meeting with members of Community Court of Justice (CCJ) of the Economic Community of West African States (ECOWAS) led by the President, Justice Edward Asante.

Asante was, however, represented at the meeting by the Nigerian representative at CCJ, Justice Modupe Atoki.

Sanwo-Olu reiterated that his administration would continue to assist the judiciary in the administration of justice in the state, noting that the administration would remain law-abiding and avoid actions that may set the executive against the judicial arm.

He said: “As a government, we will continue to understand and appreciate the principle of separation of powers enshrined in our Constitution. We understand that an independent judiciary is critical to maintaining peace and harmony. We will do all we can to support administration of justice and ensure that the executive respects the spirit of the law that brought us to power.”

He charged judicial officers to discharge their duty without bias or favour to any class of people, stressing that courts must restore people’s confidence in judicial process to promote peace in the society.

“The court must be the last hope of the common man. We want our citizens to take the full advantage

of the court services and desist from taking laws into their hands. Through the office of the Attorney-General, we will be informing our citizens of the services of the court and continue to preach to them to be law-abiding. In the event of human rights abuses, we should be able to show them that the court is always available for redress,” Sanwo-Olu said.

Justice Atoki said the visit was to promote improved access to the court by person or group of persons whose rights are being violated. She noted that the court was established in 1991 by 15-member state of ECOWAS and commenced full deliberations in 2001.

Atoki said Nigeria had a good compliance level with the ECOWAS court, pointing out that about 11 of the 25 unfavourable decisions pronounced by the court had been obeyed by the Federal Government.

She said: “The court since 2001 has been impactful on the member states and the essence of the visit is to inform the Lagos State’s leadership and Nigeria on the need to access the ECOWAS court on issues that affects human rights. Individual or governments can seek a redress when rights are violated. We are here to say the ECOWAS court still exists and has been impactful through judgments that had been rendered across West Africa.”

Atoki, who described Sanwo-Olu as “a lucky choice” for Lagos, said there would be further interactions with the leadership of the State’s judiciary for partnership in administration of justice.

CSOs’ protest rocks Lagos Assembly INIOBONG IWOK

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oalition of Civic Society Organisations (CSOs) have urged the Lagos State Governor, Babajide Sanwo-Olu, to urgently intervene in the crisis in all tertiary institutions in the state, calling for a functional visitation panel which would comprise labour unionists, students’ representatives, and school management representatives.

The CSOs, which comprises Sahara Education Develop-

ment Initiative (SEDI), Committee for Defence of Human Rights (CDHR), United Action Development (UAD), and Work Bond International Network (WIN), also called on the Nigeria Labour Congress (NLC) and Trade Union Congress (TUC) to wade into the crisis so as to find lasting solutions.

The group therefore, demanded the reinstatement of five ASUU-LASU officials illegally dismissed by the Bayo Ninalowo-led governing

council, and the Vice Chancellor, Lanre Fagbohun.

Other demands of the coalition includes: immediate reinstatement of ASUU-LASU check-off due said to have been illegally stopped by Lanre Fagbohun since January, 2019.

They also demanded the immediate promotion of union officers and loyalists who were allegedly denied promotions by the university administration.

The CSOs further charged the governor to investigate N198 million pension funds

of LASU staff allegedly used to buy exotic cars and immediate investigation of the N1.3billion NEEDs funds also allegedly mismanaged by Obafunwa and Fagbohun.

One of the leaders of the group, Kunle Wiseman Ajayi, urged the government to resolve the matter quickly.

“We will continue the protest until our demands are met. Nigerians are suffering, the country is rich yet our people are suffering. They are wasting our resources, they

are even using our resources to fight us,” he said.

He added that there were several issues in all the tertiary institutions in Lagos State, stressing that all the ivory towers in the state were in a big mess.

“When workers of LASPOTECH fought over the salary scale that have been accepted nationwide and have not been implemented in the school, 38 workers of the institution were arrested and detained in Kirikiri Maximum Prison.

“Just a week after, one of them died after they were released. Also, five of the nonacademic staff of LASPOTECH were victimised and unjustly punished.

He added that five lecturers were unjustly sacked in LASU while demanding for their immediate reinstatement.

His view was, however, corroborated by Omotaje Olawale, who said they had held several meetings with the state government on some of the issues.

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Thursday 03 October 2019

BUSINESS DAY

FINANCIAL TIMES

World Business Newspaper

RICHARD HENDERSON, COLBY SMITH AND JOE RENNISON IN NEW YORK

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lobal stocks sold off heavily on Wednesday after poor US jobs data compounded a string of weak manufacturing reports and geopolitical concerns, a pile-up of risks that sets the stage for a rocky fourth quarter.

With the UK in the throes of Brexit talks with the EU, its benchmark FTSE 100 closed more than 3 per cent lower, for its worst day since January 2016 — exceeding the fall following the UK referendum in June 2016.

Major US stock indices were also down in the New York morning.

The S&P 500 was off 1.8 per cent and the technology-heavy Nasdaq Composite was down 1.7 per cent.

Investors crowded into the safest corners of the US stock market, buying up utilities, real estate, consumer staples stocks, the only sectors in positive territory. Energy stocks dropped by the most, shedding 9 per cent, followed by healthcare stocks, which slipped 6 per cent.

With the consumer accounting for 70 per cent of the US economy, investors feared that poor jobs data could spill over into weaker spending, said Liz Young, chief market strategist for BNY Mellon Investment Management.

“If the labour market starts to weaken and we start to see lay-offs, then the consumer will start to get nervous,” Ms Young said.

Private employers added 135,000 jobs last month, according to payrolls processor, compared with a downwardly revised 157,000 in

Global stocks sell off as economic fears mount The UK’s FTSE 100 has its worst day since 2016 and US jobs data spooks investors

© AP

August — the figure for that month had previously been recorded at 195,000.

The September figure was the weakest in three months, missing economists’ expectations for 140,000, according to a Reuters survey. On Tuesday, a US manu-

President says French initiative could form ‘acceptable’ base to restart negotiations

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ran’s president Hassan Rouhani said on Wednesday that the Islamic republic believed the path was open for negotiations with major powers over its nuclear activities and regional policies.

A French initiative to update the 2015 nuclear deal — in crisis since US president Donald Trump abandoned it last year — could provide an acceptable base to restart talks, he said, provided that the US showed that it was willing to “move toward” the lifting of sanctions.

Iran has long made softening of US sanctions a prerequisite for talks over the nuclear deal. Mr Rouhani, who was in New York with other world leaders for the UN General Assembly last week, refused to take part in a direct telephone conversation with Mr Trump over a secure line arranged by France, with the Iranian side blaming the US administration’s refusal to ease economic sanctions for its decision.

But Iran’s president did not insist on this precondition for talks on Wednesday, instead clarifying that Tehran was positive about an initia-

tive by French president Emmanuel Macron to grant Iran a $15bn credit line to enter into comprehensive negotiations with the US and other key powers.

“It is not over and the path [to negotiations] is not closed while Europeans and others are still making efforts,” Mr Rouhani said in the cabinet meeting that was broadcast live on the state television. “I told the French president that the outlines of his initiative are acceptable to us but not the phrases. He said those could be amended in a meeting of foreign ministers.”

Mr Rouhani defended his decision not to negotiate with Mr Trump in New York and said that it was a “smart move not to be fooled by private messages” of the US president.

The White House “blocked” negotiations by sending contradictory messages in private and public, he said.

“I told our European friends that ‘shall we believe you that the US is ready [to lift sanctions] or shall we believe the US president who repeated twice in public speeches that sanctions would be further strengthened?’” he said. “How could we be confident [about the outcome]? At least they [the US] should admit their path [of sanctions] has been wrong.” www.businessday.ng

good. On the negative side, there is this global industrial slowdown.”

Stocks fell across Europe. The DAX index of German blue-chips shed 2.5 per cent, while the continent-wide Stoxx 600 was 2.6 per cent lower.

“Investors are responding to

Manhattan apartment price slump worsens

Iran’s Rouhani says path open for nuclear talks NAJMEH BOZORGMEHR IN TEHRAN AND VICTOR MALLET IN PARIS

facturing survey showed its weakest reading in a decade.

“The market is grappling with this intellectual tug of war,” Ron Temple, head of US equities at Lazard Asset Management. “On the positive side, the vast majority of the consumer data still looks pretty

Boris Johnson saying he will go for a no deal Brexit again this morning,” said Max Gokhman, head of asset allocation for Pacific Life Fund Advisors. The whole situation will get more volatile as we get closer to the October 31 deadline.”

The uncertain geopolitical outlook also weighing on investor confidence in the US and Europe, said David Lafferty, chief market strategist at Natixis Investment Managers.

“If you were sitting around for some geopolitical good news to offset the softness in the macro data, that isn’t happening,” Mr Lafferty said. “Things are getting dicier for Trump and impeachment. [Elizabeth] Warren is surging in the polls and Boris Johnson is continuing to threaten a hard Brexit.”

The benchmark 10-year US Treasury yield fell a further 4 basis points on Wednesday, to 1.59 per cent, and futures markets indicated traders’ increasing expectations of another rate cut by the Federal Reserve at its meeting at the end of this month.

“It seems like the manufacturing data really spooked people,” said Jon Hill, an interest rate strategist at BMO Capital Markets. “It was really bad. Then ADP today didn’t change the narrative. It confirmed the slowing pace of job growth.”

Third quarter decline was worst in almost a decade, with luxury market hit hardest LINDSAY FORTADO IN NEW YORK

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anhattan apartment prices suffered their worst slide in almost a decade in the third quarter as buyers stayed away from multimillion-dollar purchases while newly-built luxury properties continued to flood the market.

Median prices fell 12 per cent in the quarter from the year earlier, the worst drop since the last three months of 2009, according to Core, a New York City real estate broker.

The median price fell to $999,950, the first time it dipped below $1m in four years, according to Core’s data.

The slump was due in part to the introduction of a progressive mansion tax at the end of the second quarter, brokers said, and an expectation that prices could fall further. Sales also took longer to close and a pile-up of inventory worsened the glut.

“It’s one of the steepest yearover-year declines I’ve seen,” said Garrett Derderian, the managing director of market analysis at Core.

“We’ve seen buyers take a virtual pause, especially for apartments over $3m.”

Property developers showed

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signs of concern, switching tactics on condominium and co-op apartments that had been scheduled to be sold. Instead, they pitched some as rent-to-buy units, split up penthouse suites into smaller apartments, and offered discounts in the hopes of luring reluctant buyers.

Extell Development, one of the largest property developers in New York City, recently began offering rent-to-buy apartments at its 815unit condo building One Manhattan Square in the Lower East Side neighbourhood. Renters that go on to buy their apartment will get their annual rent off the purchase price.

Earlier this year, Extell had offered to waive common charges for buyers at the building for up to a decade.

Other buildings, including One Hundred Barclay in Tribeca and a boutique development in West Chelsea, have followed suit in offering rent-to-buy units, said Mr Derderian.

“The move to rent-to-own is the most troubling of the packages that developers have offered,” Mr Derderian said. “If you do rentto-own, it’s because there are no buyers.”

During the mortgage crisis of 2007 and 2008, some developers @Businessdayng

shifted condo buildings over to luxury rentals in order to stem losses because no one was buying, but none have done so yet this cycle, he said.

Manhattan property prices have been slumping for a couple years following the introduction of changes to the federal tax code, while rent has hit all-time highs in the city.

The total number of sales in the third quarter was down 6 per cent from the same period last year, while inventory was up 8 per cent.

Properties spent an average of 192 days on the market, the longest since the last quarter of 2012 when apartments in Manhattan took 193 days to sell, according to Core.

Sales skewed heavily towards the lower end of the market, with contracts for condos and co-ops signed in the third quarter up 35 per cent for properties that cost less than $500,000, while contracts for apartments priced above $20m fell by 33 per cent.

The revamped mansion tax, which came into effect at the end of the second half, is a levy on home purchases that rises from 1 per cent on properties worth more than $1m to 3.9 per cent on units sold for more than $25m.

Thursday 03 October 2019

FT

BUSINESS DAY

49

NATIONAL NEWS

Trump claims ‘coup’ as Ukraine pressure mounts President lashes out after state department watchdog asks for meeting over impeachment probe DEMETRI SEVASTOPULO AND AIME WILLIAMS IN WASHINGTON

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onald Trump said he was the victim of a “coup” as a government watchdog requested an urgent meeting with lawmakers in connection with an impeachment investigation into the president.

The US president made the claim on Tuesday as Mike Pompeo, his secretary of state, tried to stall the impeachment inquiry, in which Mr Trump is accused of pressuring a foreign leader to investigate Joe Biden, the former vice-president and his potential rival in the 2020 presidential race.

“I am coming to the conclusion that what is taking place is not an impeachment, it is a COUP, intended to take away the Power of the People, their VOTE, their Freedoms, their Second Amendment, Religion, Military, Border Wall, and their God-given rights as a Citizen of The United States of America!” the president tweeted on Tuesday evening.

The coup assertion capped a tumultuous day in Washington as Mr Trump lashed out at Democrats while several of his officials, including Mr Pompeo and attorney-general William Barr, came under scrutiny over their roles in the scandal.

Since entering office in January 2017, Mr Trump has frequently accused Democrats of pursuing a “witch hunt” against him and has claimed that intelligence officials and bureaucrats were part of a “deep state” trying to undermine his presidency.

But Mr Trump has become even more assertive on Twitter over the past few days after the release of a whistleblower report. The report claimed that the president had abused his office for personal gain in trying to persuade Ukraine to interfere in the presidential election by investigating Mr Biden and his son Hunter.

Hours after Mr Pompeo accused Democratic-controlled congressional committees of trying to “bully” state department officials, Steve Linick, the state department inspector-general, requested an urgent meeting with lawmakers in the House of Representatives and the Senate.

Three people familiar with the situation said Mr Linick would on Wednesday share documents related to Ukraine, which is at the heart of the scandal that has led to Mr Trump becoming only the fourth US president to face an impeachment inquiry.

One person said Mr Linick would meet lawmakers in a secure facility on Capitol Hill, suggesting that the documents were sensitive.

The impeachment inquiry in the House of Representatives was sparked when a CIA official filed a complaint with the intelligence community’s inspector-general that said White House officials were concerned Mr Trump had abused his office for personal gain in a July 25 call with his Ukrainian counterpart.

Earlier on Tuesday, Mr Pompeo accused Democrats of trying to intimidate state department officials, as he resisted demands for current and former officials to answer questions related to the impeachment inquiry.

The House foreign affairs committee last week told the state department it wanted to depose five current and former departmental employees in connection with the call between Mr Trump and Volodymyr Zelensky, the Ukrainian president.

Mr Pompeo pushed back against the request in a letter to Eliot Engel, the committee’s Democratic chairman.

The state department did not respond to a request for comment about the move by its inspectorgeneral to request an urgent meeting with lawmakers.

In his letter, Mr Pompeo said the officials were not obliged to appear without receiving formal subpoenas.

The committee heads — who included Adam Schiff, head of the intelligence panel, and Elijah Cummings, who leads the oversight panel — told Mr Pompeo that he was now considered a witness in the investigation.

“Secretary Pompeo was reportedly on the call when the president pressed Ukraine to smear his political opponent. If true, Secretary Pompeo is now a fact witness in the House impeachment inquiry,” the three chairs wrote. “He should immediately cease intimidating department witnesses in order to protect himself and the president.”

They added that any effort to intimidate witnesses or prevent them from appearing was “illegal” and would be “evidence of obstruction of the impeachment inquiry”.

Mr Pompeo confirmed on Wednesday that he was in fact on the call between Mr Trump and Mr Zelensky.

Mr Barr has also come under scrutiny in connection with a phone call that Mr Trump held with Scott Morrison, the Australian prime minister, after officials restricted access to the transcript of their conversation.

The New York Times reported that Mr Barr had asked Mr Trump to seek help from Mr Morrison in connection with a review of the Russia investigation overseen by special counsel Robert Mueller.

Follow Demetri Sevastopulo on Twitter: @dimi www.businessday.ng

Mike Pompeo for the first time publicly confirmed he was part of the call between Donald Trump and his Ukrainian counterpart that has led to an impeachment inquiry © AFP

Mike Pompeo confirms he was on Trump-Ukraine call

US secretary of state under scrutiny in impeachment inquiry for his contacts with Kiev MILES JOHNSON IN CATANIA, ITALY

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i k e P o m p e o, US secretary of state, has admitted for the first time listening in on the phone call between the president of Ukraine and Donald Trump that has sparked an impeachment investigation into the US president.

Speaking on an official visit to Italy on Wednesday, Mr Pompeo confirmed media reports of his presence on the call between the two leaders, which has prompted a whistleblower to accuse Mr Trump of attempting to trade favours with the Ukrainian leader in return for intelligence he could use against Joe Biden, his potential Democratic rival in the 2020 presidential race.

Mr Pompeo has come under increasing scrutiny for his role in the scandal, with the secretary

of state attempting to stall an impeachment investigation into Mr Trump’s behaviour, which the US president has described as a “coup”.

“Was I on the phone call? Yes, I was on the call,” Mr Pompeo said in a press conference in Rome. “It was about taking down the threat Russia poses there in Ukraine, helping the Ukrainians get graft out of their government, and to help this new government in Ukraine build a successful thriving economy.”

Mr Pompeo said he had been trying to defend employees of his department from what he said was intimidation from Democratic lawmakers, following congressional demands for documents and testimony from current and former officials.

“What we objected to was the demands that deeply violate principles of separation of powers. They contacted state department employees directly

and told them not to contact legal counsel . . . We won’t tolerate folk on Capitol Hill bullying and intimidating state department employees,” Mr Pompeo said.

Despite Mr Pompeo’s defiance, the Democrats leading the investigation signalled their intent to keep pressing forward quickly. Elijah Cummings, who chairs the House oversight committee, on Wednesday threatened to send a subpoena to the White House for documents connected to the probe. Rudy Giuliani, the president’s personal lawyer, has also received a congressional subpoena.

The publication of a whistleblower complaint last week added fresh details to allegations that Mr Trump had abused his office by asking his Ukrainian opposite number Volodymyr Zelensky to investigate Mr Biden and the business dealings of his son, Hunter.

WTO clears US to impose $7.5bn of EU tariffs in Airbus dispute European goods face punitive levies after ruling in long-running trade case PEGGY HOLLINGER IN LONDON AND JAMES POLITI IN WASHINGTON

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uropean producers of w ine, whisky, luxur y goods and aircraft parts are bracing for hefty tariffs on exports to the US after the World Trade Organization authorised almost $7.5bn in annual punitive levies to repair damage done to Boeing by illegal EU aid to Airbus.

The decision handed down by arbitrators at the Geneva-based trade body on Wednesday paves the way for largest retaliatory action in WTO history.

If the Trump administration presses ahead with plans to impose the tariffs, it would further sour trade tensions with the EU at

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a time when the global economy is already slowing down due to expanding commercial conflicts around the world.

Early next year the EU is expected to win approval for its own tariff offensive — possibly running to billions of dollars as well — over illegal aid to Boeing. Together the two decisions are expected to end a 15-year battle over subsidies to the US and European aerospace industries, just as China’s statebacked Comac is preparing to shake up what has for decades been a western duopoly in the aerospace market.

Cecilia Malmstrom, the EU trade commissioner, said in a statement that it would be “short-sighted and counterproductive” for the US to impose the tariffs, highlighting the like@Businessdayng

lihood that the EU would soon be allowed to do the same in the Boeing case.

“The mutual imposition of countermeasures . . . would only inflict damage on businesses and citizens on both sides of the Atlantic, and harm global trade and the broader aviation industry at a sensitive time,” she said.

If the US and the EU reach a deal to settle their dispute, the tariffs could be avoided, but so far they have not engaged in serious negotiations. Ms Malmstrom blamed Washington. “The EU has, as recently as this July, shared concrete proposals with the US for a new regime on aircraft subsidies, and a way forward on existing compliance obligations on both sides. So far, the US has not reacted,” she said.

50

Friday 24 May 2019

BUSINESS DAY

FINANCIAL TIMES

COMPANIES & MARKETS

@ FINANCIAL TIMES LIMITED

France seeks crackdown on short sellers and activist investors Recommendations include widening the disclosures of short positions DAVID KEOHANE AND HARRIET AGNEW IN PARIS

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rance is seeking new ways to crack down on shortsellers as the country reacts to a growing wave of activist investors targeting some of its bestknown companies.

A cross-party government commission published recommendations on Wednesday aimed at preventing short-sellers and activists from unfairly destabilising French corporates.

These included widening the disclosures of short positions to derivatives instruments, pushing for more transparency around the borrowing and lending of stock, and investigating whether market functions are jeopardised once short selling reaches a certain volume of shares.

The push against short sellers comes amid increasing activist activity in France and an investigation by the French markets regulator, the AMF, into prominent US short-seller Muddy Waters’ attack on French retailer Casino. Muddy Waters, which closed out its short position in Casino in 2016, is under investigation by the AMF for market manipulation.

The non-legally binding report also suggests lowering the level at which shareholders must declare their position from 5 per cent to 3 per cent; introducing a fast-track procedure for companies that want to bring cases before the regulator; and allowing companies to respond to activist attacks in so-called quiet periods before results are published.

“These suggestions appear to be about trying to balance the powers in the market,” said Charles-Eduard van Rossum, president of Ravel & Co,

an investment banking boutique. “In the past the government might have gone for a more ‘French approach’ and taken a much harder line.”

The report was presided over

by Eric Woerth, president of the finance commission and a member of the centre-right opposition party Les Républicains, alongside Benjamin Dirx, a member of President Emmanuel Macron’s governing La République en Marche.

It follows French finance minister Bruno Le Maire’s suggestion in March that France would seek more measures to push back against activists, including potentially using public funds to defend companies it deems strategic and at risk from attack.

“It’s a good thing that shareholders are active. Activism is part of a healthy financial market, and Paris is one of them,” said Mr Woerth.

“However, adjustments are necessary to fend off excessive or destructive behaviour, and to ‘level the field’ between corporates and activists.”

The finance commission took feedback from numerous market participants and advisers while compiling its report, including activists Muddy Waters, Third Point, Elliott, CIAM and Amber; investors Aviva and BlackRock; companies such as Casino and Pernod Ricard; and advisers including Lazard and Schulte Roth and Zabel, according to people briefed on the discussions.

Historically, France has been a tough market for activists to crack given the high levels of family ownership, laws that give long-term investors double voting rights, and a perception that the French establishment rallies around some of its most prestigious companies.

Short sellers gain from bets against US brokerages Top trading platforms suffer share price slump in escalating fee battle RICHARD HENDERSON AND JENNIFER ABLAN IN NEW YORK

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he intensifying price war over commissions among the US’s top stock-trading platforms has delivered a $191m boost to investors betting against the sector.

Short sellers, who profit when a stock drops in price, enjoyed the gains from bets against Charles Schwab, TD Ameritrade, Interactive Brokers and ETrade, according to data from S3 Partners.

The sharp share price sell-off on Tuesday was triggered by Schwab’s announcement that it would scrap its $4.95 fee to trade stocks, exchange traded funds and options listed on US and Canadian exchanges, starting on Monday next week.

TD Ameritrade followed suit after markets closed, announcing it too would scrap the commissions it charges investors to trade stocks, ETFs and exchange-traded options.

The decision will cost TD Ameritrade $920m in annual revenue,

according to Citi estimates.

In the resulting share price shake-out, short sellers betting against TD Ameritrade gained $79m, according to the S3 data, after shares in the Toronto-based group slid 25.8 per cent — their largest one-day drop in two decades. Bets against Schwab netted the short sellers $56m as shares in the San Francisco-based group slid 9.7 per cent.

Shorts against Interactive Brokers delivered paper gains of $28m as its share price fell by 9.5 per cent, while a 16.6 per cent drop in ETrade shares offered the shorts a $27m boost.

Tuesday’s moves to cut commissions reignited competition between the retail brokers that had been left dormant for two years.

Peter Crawford, Schwab’s chief financial officer, said the move was a response to the rise of a new wave of zero-fee internet-based brokers like Robinhood, which have gained market share and heaped pressure on established players to change. www.businessday.ng

Rohan Ramchandani was acquitted at trial in late 2018 © Charlie Bibby/FT

Currencies trader sues Citi over ‘malicious’ prosecution Former euro trader seeks $112m in damages over ‘fabricated’ case against him KATIE MARTIN IN LONDON

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former Citigroup currencies trader is suing the bank for at least $112m, alleging that the bank “framed” him to protect itself in the throes of a market manipulation scandal that eventually led to him facing the possibility of a decade in jail.

In a case with potentially profound implications for the way banks and regulators treat individuals connected to allegations of industrywide wrongdoing, Rohan Ramchandani claims in a suit filed in New York on Wednesday that the bank singled him out for intense scrutiny from UK and US regulators in a “secret scheme” to “dirty up” his name.

The bank “knowingly” encouraged the US Department of Justice to pursue an antitrust case against him “without probable cause” in an effort to shield itself from greater damage, Mr Ramchandani claims, adding that his previous boss and one of the bank’s lawyers had repeatedly asserted he had done nothing wrong. Mr Ramchandani was acquitted at trial over the matter in late

2018, three years after Citi reached a $1.3bn settlement with the DoJ and the Federal Reserve.

“Employers should not be allowed to throw innocent employees under the bus, nor to play judge, jury and executioner, in an attempt to limit their corporate liability,” Mr Ramchandani said in a statement.

The bank said the claims are “without merit”. It said it would contest them vigorously.

The 39-year-old’s case relates to a currency-trading scandal that erupted in 2013, and which hinged on claims that traders were colluding to move exchange rates in their own favour around the time that daily benchmark rates are calculated. At the time, Mr Ramchandani was the European head of the currencies trading desk at Citi — a heavyweight bank in this market.

Mr Ramchandani, a Briton based in London, became a focus for regulators and for the press in part because he was a member of an informal electronic chatroom with several traders at other banks that at times was jokingly referred to as the “Cartel.” He was suspended in October 2013 and dismissed in Janu-

ary the following year.

In late 2014 and the spring of 2015, the bank settled with regulators in the UK and US, paying a total of over $2bn in fines. That process culminated in Mr Ramchandani, along with two other members of the “Cartel” facing a criminal trial for antitrust violations in the US. The British trio were swiftly acquitted, sparing them from 10 years in a US prison.

Mr Ramchandani’s grievance is that among the hundreds of currency traders across London, and the dozens in developed-market currencies that Citi fired, it was his chatroom communications alone that formed the basis of the bank’s UK and US settlements. This, he says, reflects an effort by Citi to sully his reputation, putting him under undue legal scrutiny in addition to scuppering what was once a high-flying career. He says he has been unable to work in financial services since his dismissal, despite his acquittal.

“Citi quite literally fabricated an antitrust case for the DoJ against Ramchandani based upon knowingly false allegations that he engaged in market manipulation and collusion,” the suit reads.

How the Federal Reserve could fix the repo market Central bank urged to restart asset purchases to soothe short-term funding glitches COLBY SMITH AND JOE RENNISON IN NEW YORK AND BRENDAN GREELEY IN WASHINGTON

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he Federal Reserve is facing urgent calls to find a permanent fix to short-term funding strains that unsettled markets last month, and avoid another bout of volatility at the end of the year when the demand for cash is expected to rise again.

Traders were shocked in September when the typically staid market for repurchase agreements — where banks and investors borrow money in exchange for Treasuries and other

https://www.facebook.com/businessdayng

high-quality collateral — went haywire. The “repo” rate jumped as high as 10 per cent, prompting accusations that the Fed had lost control of short-term interest rates.

A series of cash injections by the central bank brought the rate back down, but policymakers and investors are pushing for a longer-term answer to the market’s problems. “[The Fed] is doing the right things right now with the short-term repo facilities, but it is merely buying time,” said Bill Campbell, a portfolio manager at investment firm DoubleLine Capital.

Market participants have coalesced around one answer: asset @Businessdayng

purchases. When the Fed buys Treasuries from the market, it simultaneously credits banks’ reserve accounts to pay for them, increasing the amount of cash in the financial system. But opinions remain divided on how much debt the central bank should buy and at what maturities.

There is, at least, general agreement that something fundamental needs to be done. At the worst of the market stress, a series of daily $75bn cash injections morphed into $100bn overnight operations and three two-week loans, with banks’ appetite for funding initially outpacing what was on offer from the Federal Reserve Bank of New York.

Thursday 03 October 2019

FT

BUSINESS DAY

51

ANALYSIS

A year after Jamal Khashoggi’s murder, talk of ‘mistakes’ is cheap Campaign to burnish Saudi crown prince’s image will fail while repression and war continue ROULA KHALAF

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he important thing about mistakes is to “learn from them and not repeat them”, Mohammed bin Salman told an interviewer this week. The statement was part of the 34-yearold Saudi crown prince’s campaign to burnish his sullied image and reassure the world that he had reached political maturity.

Timed to coincide with the oneyear anniversary of the savage murder of Jamal Khashoggi, the prominent Saudi columnist, the prince’s high-profile appearance on American television was undoubtedly welcomed by governments and businesses still uneasy about re-engaging with Saudi Arabia. They, and those who have already rehabilitated MbS, as the crown prince is known, would do well to examine whether any lessons have indeed been learnt. They will find ample reason for doubt.

The premeditated murder and dismemberment of the writer at the Saudi consulate in Istanbul was an atrocity, not a mistake. No leader should have to learn on the job that such savagery is not part of governing. Still, it is a relief to know that there will be no more Khashoggi affairs and that MbS accepts accountability for the killing on October 2 last year, even if he continues to deny western intelligence assessments that he ordered it.

A year on, however, there is no

evidence that Saudi Arabia’s de facto ruler has shed his reckless streak.

Last week the Financial Times reported that the government was shaking down some of its wealthiest families, coercing them to buy into the initial public offering of state oil group Saudi Aramco to help Riyadh achieve the $2tn valuation the prince is banking on.

This gangster-style behaviour has been a hallmark of MbS’s tenure. Before Khashoggi there was the Ritz affair, a seizure of assets in the guise of an anti-corruption campaign. Some of the same business people detained at Riyadh’s Ritz hotel in the 2017 sweep, who were made to part with cash and assets, have been targeted for the IPO. Such conduct could well backfire: it undermines the credibility of the IPO and damages Aramco’s reputation as the most professional and wellmanaged company in the kingdom.

Meanwhile, the level of repression in Saudi Arabia shows no sign of easing. Detained women activists who had campaigned for the right to drive are still incarcerated; some are said to have been tortured. Saudi Arabia’s military campaign in Yemen, misguided from the start, has delivered nothing but humanitarian catastrophe. The Iran-backed Houthi rebels who Riyadh sought to crush claimed responsibility for the brazen September attack on Saudi oil facilities that drove up oil prices and shook the markets.

Clean energy shares streak ahead of fossil fuel stocks Sharp fall in wind and solar costs has made renewables cheaper than coal and gas HENRY SANDERSON

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nvestors who bet on a shift from fossil fuels to clean energy are being richly rewarded as solar and wind stocks outperform oil and gas shares by a widening margin this year.

The iShares Clean Energy exchange-traded fund has risen by 32 per cent so far this year, streaking far ahead of the oil-dominated Vanguard Energy ETF, which has risen by only 1 per cent.

In August, the renewables fund bettered the fossil fuel ETF by the biggest margin in five years.

Renewable energy developers have been benefiting from a sharp reduction in the cost of wind and solar in recent years, which has made them cheaper than coal and natural gas at certain times in many markets.

The cost of solar has fallen 85 per cent since 2010, while wind power has dropped about 50 per cent, according to Bloomberg New Energy Finance.

Renewable stocks also outperformed oil and gas shares in 2017 and 2018, although both sectors ended last year down.

So far this year, the largest renewable energy ETF in the US, Invesco Solar, has risen 58 per cent.

Low global interest rates are also helping, making it easier to fund solar and wind projects that have high

upfront costs but low operating costs, said Deirdre Cooper, who runs the Investec Global Environment fund.

“Decarbonisation is the largest investment the world has ever had to make in peacetime and the yield curve is giving us an extremely attractive environment in which to make that investment,” Ms Cooper said.

The stock rally has come despite a fall in global investment in clean energy during the first half of 2019, sparked by a reduction in government subsidies for renewable energy. Investor sentiment has remained positive in part because a number of large economies have made longer-term pledges to reach net zero emissions, which would eliminate fossil fuel power.

The strong performance of the renewables sector marks a turnround from the years immediately after the financial crisis, when investor bets on green energy quickly soured.

Shares in the iShares Clean Energy ETF fell 80 per cent between 2008 and 2013.

This year, in contrast, oil companies have been far less of a draw despite high dividend yields and a greater focus on capital discipline.

“One thing the market is really grappling with energy companies at the moment is how to value them,” Thomas Holl, a fund manager at BlackRock, said. www.businessday.ng

President Trump’s transactional world view always implied the possibility of his own abandonment © AP

Chances of Republicans deserting Trump are underrated Once the US president stops being useful, by his own logic, they have no reason to stay loyal JANAN GANESH

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pon dismissing his chief of staff in 1973, Richard Nixon said that he loved him “like my brother”.

The line seems too easy until you remember that the US president had seen two of his own die young. Nixon’s bond with H R Haldeman and other colleagues fortified him well into the Watergate crisis that brought him down.

Excluding his in-laws and blood relations, is there anyone in Washington of whom Donald Trump would make the same comment?

Is there anyone who would say it of him? The point is not about the president’s likeability or otherwise.

It is about his level of support as his own impeachment ordeal nears.

Since the Ukraine scandal emerged, it has been natural to assume total Republican commitment to Mr Trump. Such is the tribalism of a riven nation.

There is another scenario, though, and it does not stop at one or two Republicans peeling away.

Instead, to save itself, the GOP establishment might desert Mr Trump as swiftly and unexpectedly as it bent the knee to him in 2016. Whether this manifests as the Senate supermajority needed for his ousting is still hugely doubtful. But there are other kinds of defiance: a staff exodus from the White House, senatorial refusals

to defend him, the turning of implicated parties on one another.

Sceptics will say this requires the party to wake up from its cringing passivity. But it has been doing that, in fits and starts, for a while now. A dozen Republican senators voted to end the president’s state of emergency over the Mexican border.

Individuals in the executive have tried to subvert him. Others refused to scuttle the probe into Russian meddling in US politics. Senator Mitt Romney has usurped former Ohio governor John Kasich as the party’s most disapproving grandee.

Congressional members have quit and invited the world to infer why.

Mr Trump was being challenged for the GOP nomination even before Ukraine-gate. Parts of the conservative ecosystem — think-tanks, journals — have bucked Trumpism and paid a toll in lost patrons.

I am not suggesting another volume of Profiles in Courage here.

But Profiles in Sheepish and Occasionally Effective Dissent would not struggle for case studies. In parts of the country, support for Mr Trump is as bottomless as the hype implies.

In Washington, it can be gossamerthin. Aside from any personal dislike of him, his two dearest projects — protectionism and lower immigration — jar with conservatives reared on laissez-faire. Some Republicans are even willing to put a number on the closeted apostates. Were

the vote held in private, “at least 35” GOP senators would choose to convict the president, according to Jeff Flake, who was one of their number until January. They will not, of course, but the chances of a different and still lethal rebellion are underrated.

What might cause it? Were public opinion to turn decisively for impeachment — the first polls merely lean that way — it would focus minds. Were Mr Trump’s behaviour to deteriorate, his staff would have to decide whether to risk ensnarement in the mess. What put the likes of Haldeman in jail was not Watergate itself but the efforts to cover it up. And that was under a president with some grounding in the rules. Mr Trump, a neophyte in Washington, often appears sincerely dumbstruck by the illegality of certain actions.

Mr Trump must also do without his favourite recruiting sergeant.

In 2016, hatred of Hillary Clinton enlisted wavering conservatives to his cause. Whichever Republican opposed her in the presidential election could count on almost inexhaustible forbearance from the right. Three years on, she is a non-factor. Perhaps conservatives can summon the same dread for the prospect of President Elizabeth Warren (who is some way to her left) or President Joe Biden.

Otherwise, Mr Trump cannot terrorise them into loyalty merely by brandishing the alternative.

Bernie Sanders cancels campaign events after heart scare Democratic candidate’s health could affect contest to challenge Trump DEMETRI SEVASTOPULO IN WASHINGTON AND PETER WELLS IN NEW YORK

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ernie Sanders, the Vermont senator running for the Democratic presidential nomination, has suspended his campaign after undergoing an emergency heart procedure, a development that could upend the race to challenge Donald Trump in 2020.

The Sanders campaign said in a statement on Wednesday that the 78-year-old self-described socialist was

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hospitalised on Tuesday evening after experiencing chest discomfort and ended up having two stents inserted to address a blockage in an artery.

“Senator Sanders is conversing and in good spirits. He will be resting up over the next few days,” said Jeff Weaver, a top aide. “We are cancelling his events and appearances until further notice, and we will continue to provide appropriate updates.”

The suspension comes just four months before the Democrats face the first real test of their campaigns @Businessdayng

with the Iowa caucuses, which kick off party voting in the 2020 race, followed shortly afterwards by the New Hampshire and South Carolina primaries.

It also comes at a pivotal point in the Democratic presidential campaign as Elizabeth Warren, the Massachusetts senator whose campaign platform is similar to Mr Sanders’, eclipses the Vermont senator and starts to catch up with Joe Biden, the former vice-president who for months held a significant lead in polls.

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Thursday 03 October 2019

BUSINESS DAY

Live @ The Exchanges Market Statistics as at Wednesday 02 Oct. 2019

Top Gainers/Losers as at Wednesday 02 October 2019 LOSERS

GAINERS Company

Opening

Closing

Change

MOBIL

N153.5

N139

-14.5

0.3

TOTAL

N129.5

N123.2

-6.3

0.3

NB

N52.5

N49

-3.5

N2.27

0.2

GUARANTY

N29.2

N27

-2.2

N16

0.1

MRS

N18.8

N16.95

-1.85

Opening

Closing

Change

FO

N15.8

N16.4

0.6

FLOURMILL

N14.3

N14.6

NASCON

N13.4

N13.7

CONTINSURE

N2.07

WAPCO

N15.9

Company

ASI (Points) DEALS (Numbers) VOLUME (Numbers) VALUE (N billion) MARKET CAP (N Trn)

27,314.87 3,539.00 175,779,905.00 2.568

Global market indicators FTSE 100 Index 7,122.54GBP -237.78-3.23%

Nikkei 225 21,778.61JPY -106.63-0.49%

Generic 1st ‘DM’ Future 26,006.00USD -515.00-1.94%

Deutsche Boerse AG German Stock Index DAX 11,925.25EUR -338.58-2.76%

S&P 500 Index 2,883.58USD -56.67-1.93%

13.296

Shanghai Stock Exchange Composite Index 2,905.19CNY -26.98-0.92%

May & Baker appoints Daisy Danjuma board chairman as TY Danjuma retires

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heophilus Yakubu Danjuma has retired as a Director and the Chairman of the Board of Directors of May & Baker Nigeria Plc. His retirement took effect from the close of business on September 27, 2019.

May & Baker Nigeria Plc has notified the Nigerian Stock Exchange, the company’s shareholders and the investing public saying it is the outcome of the Board Meeting of the Company held on Friday, September 27, 2019.

Meanwhile Senator Daisy Ehanire Danjuma was appointed as the new Chairman of the Board with immediate effect.

Stock investors record N153bn loss as sell pressure persists Stories by Iheanyi Nwachukwu

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quities trading on the Nigerian Stock Exchange (NSE) closed in the red zone on Wednesday October 2, 2019 due to persisting sell pressure on the Bourse.

As a result, investors books about N153billion loss which pushed the market’s Year-to-Date

(YtD) returns further into the negative zone of -13.09percent. Only 11 stocks gained as against 24 losers.

In the absence of any positive events capable of swaying investors’ sentiment to the positive side, market watchers expect the bearish performance to extend into Thursday trading session. Weekto-date (WtD), the stock market has decreased by 1.30percent due to losses in mid-to-large cap

stocks.

At the sound of trade closing gong on Wednesday, the Nigerian Stock Exchange All Share Index (ASI) decreased by 1.14percent to close at 27,314.87 points as against the preceding day close of 27,630.56 points while Market Capitalisation closed at N13.297 trillion as against preceding day close of N13.450 trillion, indicating a decline of N153billion.

The volume of stocks traded decreased by 9.76percent from 194.7 million to 175.7 million, while the total value of stocks traded decreased by 16.18percent from N3.065 billion to N2.569 billion in 3,539 deals.

The Financial Services sector led Wednesday activity chart with 95.8 million shares exchanged for N1.13 billion, followed

by Consumer Goods with 36.5million shares traded for N675million.

UPDC seeks NSE approval for N15bn Rights Issue

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ealing members of the Nigerian Stock Exchange (NSE) have been notified that UACN Property Development Company Plc (UPDC) through its Stockbroker, Stanbic IBTC Stockbrokers Limited, submitted an application to the Exchange for the approval and listing of a Rights Issue of 15,961, 563, 260 ordinary shares

of 50kobo each at N1 per share.

The Rights Issue is on the basis of 43 new ordinary shares for 7 ordinary shares held. The Qualification Date for the Rights was Monday September 30, 2019.

Recently, the Board of Directors of UAC of Nigeria Plc (UAC) and UACN Property Development Company (UPDC) informed the Nigerian www.businessday.ng

Stock Exchange (NSE), their shareholders and stakeholders that they are considering strategic initiatives involving a recapitalisation and restructuring of UPDC. The initiatives, still subject to the review and approval of the Securities and Exchange Commission (SEC), the Nigerian Stock Exchange, and shareholders of both companies will involve UPDC’s interest in UPDC

Real Estate Investment Trust (UPDC REIT) being unbundled to UPDC shareholders via the allocation of REIT units directly to shareholders of UPDC in proportion to their post-Rights Issue holdings in UPDC (UPDC Unbundling).

UPDC management intends to raise N15.96billion in equity (via a rights issue) to eliminate UPDC’s interestbearing obligations.

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Daisy Danjuma

She was first appointed to the Board of Directors of the Company on July 30, 1999 till October 8, 2003 and later on May 30, 2019.

She is a law graduate of the Ahmadu Bello University, Zaria with over 4 decades post-call experience having been called to the Nigerian bar in 1977.

Regulation of Money Market Funds, securitisation: IOSCO out with updates on peer reviews

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he Board of the International Organisation of Securities Commissions (IOSCO) on Wednesday October 2 published two update reports entitled “Update to the IOSCO Peer Review of Regulation of Money Market Funds (MMFs) and Update to the IOSCO Peer Review of Implementation of Incentive Alignment Recommendations for Securitisation.”

These reports summarize IOSCO’s ongoing efforts to monitor implementation of reforms for money market funds (MMF) and securitisation since IOSCO published its two peer reviews in September 2015.

The reports describe progress by IOSCO members in Financial Stability Board (FSB) jurisdictions in adopting legislation, regulation and other policies covering MMF and securitization, which are G20 priority reform areas. The reports set out the background, methodology and findings that were reported to the G20 Leaders in 2018 and 2019 and were included in the Annual Reports on Imple-

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mentation and Effects of the G20 Financial Regulatory Reforms.

The MMF report covers three topics (valuation, liquidity management and MMFs that offer a stable NAV) and finds that most jurisdictions have implemented the fair value approach for the valuation of MMF portfolios, but progress in liquidity management is less advanced and less even. The securitization report covers two topics (incentive alignment arrangements and disclosure requirements) and finds that, overall, progress remains mixed across participating jurisdictions in implementing the recommendations for incentive alignment for securitization.

The update reports also take note of new regulations yet to come into force or to be applied in various jurisdictions – an indication that implementation of IOSCO’s recommendations may be more complete in future implementation monitoring exercises.

Thursday 03 October 2019

BUSINESS DAY

53

BUSINESS TRAVEL BA’s services into Nigeria perceived by traveller as ‘below standard’ …as airline refutes claims, says aircraft are not old Stories by IFEOMA OKEKE

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ritish Airways, (BA) flag carrier of the United Kingdom, has been accused of offering ‘below standard’ services on Nigeria route as against what it offers on other routes.

A frequent traveller on British Airways wrote to BusinessDay expressing his dissatisfaction with the food, on-board Wi-Fi service and old aircraft used by the airline on the Nigerian route.

The traveller who craved anonymity alleged that the airline only offers these low standard services on Lagos –London route while services on Houston, Canada are better.

However, Kola Olayinka, British Airways Commercial Manager for West Africa debunked some of the traveller’s comments, stating that BA prides itself in serving its customers and will stop at nothing in achieving this at all time.

The traveller who titled his complaint, ‘Memoir while in flight BA to LOS en route London Heathrow’ disclosed that during one of his flights on BA out of Nigeria, Wi-Fi worked on air till London and flights to Houston (BA 195) and other flights Interchange to American Airline, Wi-Fi also worked through out to Houston.

He continued: “Internal flights (American Airlines) had Wi-Fi all throughout and better services.

Wi-Fi also worked on international flights US to Canada (American Airlines 1804 & 2942). However, BA

Canada to London - Wi-Fi never worked. And I do not know why.

“For BA075 from London to Lagos, plane was just too old -fashioned, no USB port compared to slightly sophisticated fleet (BA 092) used for the Canada to London route.

“Just one hour into the trip: Nigeria Customs Form was being distributed. We did not see them in other countries upon entry. For Lunch in BA 075, there was no salad not vegetables but jollof rice and stewed chicken. The entertainment (TV system) took more than one hour to reset. I have not experienced this in any international flight. Definitely there will be an apology or earlier notification. I think it was just a norm for them on this route!!”

The unsatisfied customer went

on to explain that the BA075 old fashioned plane had an in-flight map not too different from Virgin Atlantic it flew to Botswana in 2006.

He further explained that the map just shows overview of destination in view and some nearby countries and cities and the features could not show 3D. (insert pictures). “But the in-flight map in the BA092 (I flew Canada to London) had digitalized on-site 3D map, rotating and showing all angles, nautical miles, nearby cities (and relative distances, as the plane trudges on).

“The plane had no USB port unlike other 21st century planes owned

by BA, and other International and local airlines. It is only Nigeria that such plane could be allowed to fly to (as an international flight) and no one will blink an eyelid. What a

shame!!!

“For more than four hours of flying (and close two hours to destination), no Wi-Fi services (and not in view). I do not think such an international plane will be allowed into UK, US, Canada, Asia and the rest of the developed worlds, even Kenya, Ethiopia, Ghana, not to talk of South Africa. Nigeria needs to wake up,” the traveller stated.

He stressed that Nigeria needs to appraise itself, its standard, relationships, laws and compliance, external remand international relations.

He concluded by stating that it is a shame that BA could insult Nigeria to this level and demeaning that Nigerians will accept such treatment.

In response, Kola Olayinka said BA offers WIFI on selected flights only as its aircrafts are being enabled for

WIFI progressively.

He stated that for the traveller to say BA did not have WIFI, It may well be that the particular aircraft in question did not have WIFI installed.

“I have personally been on a couple of flights out of Lagos with WIFI!” he added.

Speaking on usage of old planes Olayinka said, “We do not fly specific aircraft to Lagos. The same aircraft that comes to Lagos goes on to fly to New York or to Houston as the case may be. We currently fly a remodelled super High J 747 with configuration of 14F, 86J, 30W, 145M. (Lagos) This is a fairly newly-modelled aircraft with modern and most updated inflight entertainment with over 40 Channels and over 100 movies to watch.

On allegation of food, the carrier’s commercial manager said the airline offers variety of meal selections on board including some very popular Nigerian cuisine like Jollof rice, plantain amongst others.

He however admitted that individual choices may sometimes be limited or unavailable as it is difficult to satisfy about 300 passengers on board with specific and detailed requests.

“Custom forms are provided to airlines by the Nigerian authorities and it is to regulate inflow of FOREX from abroad, anyone flying in to Nigeria with over 10,000 dollars is required to fill these forms, there is no way the gentleman could have seen these forms on Houston flights as it is only a Nigerian government requirement for arrivals into Nigeria,” he stated, while responding to the traveller’s complaint on custom forms.

Delta contributes to Global Citizen movement to end extreme poverty by 2030 …Ed Bastian joins Global Citizen CEO coalition

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he Delta Air Lines Foundation has made a generous multi-million dollar commitment to international advocacy organization Global Citizen’s Global Goal Live, a year-long campaign to mobilize resources to end extreme poverty, address climate change and reduce inequality by 2030 as outlined by the 2015 United Nations Global Goals.

“Our commitment to the Global Citizen movement is born out of our determination to make the world better and more connected,” said Delta CEO Ed Bastian. “We’re looking forward to the opportunity to be part of this remarkable effort to end extreme poverty and improve the world around us.”

Bastian will co-chair Global Citizen’s private sector CEO Coalition, which also includes CEOs Chuck Robbins of Cisco, Hans Vestberg of Verizon, Alex Gorsky of Johnson & Johnson and Marc Prichard Chief Marketing Officer of P&G.

In addition to The Delta Air Lines Foundation’s contribution, Delta announced its partnership at a press conference in New York City with representation from the worlds of entertainment, private sector, policy and philanthropy.

Leaders from each sector promised increased efforts to mobilize the next generation of concerned global citizens and demand the attention of and secure commitments from world leaders, policymakers, NGOs and socially conscious corporations.

Delta’s partnership with Global Citizen illustrates the company’s commitment to connecting the world while making it better through environmental stewardship, diver-

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sity and inclusion, and community development.

Delta and Global Citizen will join forces to activate the leading voices on the world’s most significant social and economic challenges while climbing toward a more sustainable future.

Global Goal Live is campaigning to bridge the $350 billion funding gap in the 59 poorest countries in time to reach the Global Goals through three focus areas: sustainability, gender equality and human capital. Delta has contributed significantly in these areas through its own work.

Sustainability Delta’s sustainability strategy drives accountability and evaluates areas of opportunity across the

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business to lower its environmental impact. Since 2005, the airline has reduced its jet fuel consumption, leading to an 11 percent decrease in emissions as Delta works toward its long-term goal of reducing emissions by 50 percent by 2050.

Most recently, Delta invested $2 million in a feasibility study of a biofuel production facility and flew its first of 20 carbon-neutral delivery flights using biofuels and carbon offsets this summer. Delta has capped its carbon emissions at 2012 levels by purchasing offsets and also removed a variety of single-use plastic items onboard, from amenity kits and from Delta Sky Clubs.

Gender Equality Delta works to promote gender equality in the workplace and again achieved 100 percent pay parity for employees in frontline jobs in 2019, in addition to partnering with womenowned businesses through its supplier diversity program.

This year, the airline will celebrate @Businessdayng

its fifth-annual “WING Flight” to close the gender gap in aviation. Delta is also a leading voice in the fight against human trafficking, a criminal and social issue that largely exploits women and children.

The airline has committed $2.5m to Polaris in support of the National Human Trafficking Hotline, provided 100 flights to transport victims and survivors, and has trained over 66,000 employees to detect and report signs of trafficking since 2011.

Human Capital Delta invests more than 1 percent of its net profits each year to communities where the airline’s employees live, work and serve. Last year, that support exceeded $50 million toward focus areas such as health and education. Delta works to improve global wellness as the No. 1 Corporate Blood Donor to the American Red Cross, raising over $14.6 million for Breast Cancer Research Foundation and building 270 homes with Habitat for Humanity in 13 countries.

industry Insight

BUSINESS DAY Thursday 03 October 2019 www.businessday.ng

Lessons from Vietnam’s industrial success ODINAKA ANUDU

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ietnam has shown that success is possible where will is present.

The once backward country has become a classroom study for doctorate degree students of economics who wish to understand how a damaged economy could be transformed into one of the strongest manufacturing hubs in the world.

In an article entitled ‘Evolution of Vietnamese Industry’, researchers Nguyen Thi Tue Anh, Luu Minh Duc and Trinh Duc Chieu pointed out that the industrial sector in Vietnam contributes approximately 34 percent of Gross Domestic Product (GDP), with manufacturing being by far the most important industrial sub-sector, accounting for 87 per cent of total industrial gross output.

According to them, within manufacturing, the food and beverage industry stands out as the most important industry with around 19 per cent of total industrial output.

“One of the most important policy decisions for Vietnam during the Doi Moi process was the shift from a strategy of import substitution (IS) to one of export orientation,” they said.

“Obviously, Vietnamese policy makers wanted to avoid the failure of the Latin American economies and to learn from the successes of the industrialised nations and newly industrialised economies (NIEs) of East Asia, the renowned ‘flying geese’. As a result, during the past decade, Vietnam’s industrial output has grown at an average annual rate of 15.2 per cent and total annual exports have increased 18.1 per cent (GSO various years),” they added.

Explaining further, they said that key to the success was a creation of the right atmosphere for foreign direct investment (FDIs). ”Dynamic foreign direct investment (FDI) and the private sector played key roles in manufacturing and exporting activities, in contrast to the earlier monopolistic behaviour and inefficiency of the centrally planned state-owned enterprises (SOEs),” they disclosed.

Today, the remaining SOEs have become more active and competitive exporters, certainly a reflection of Vietnam’s continued learning process at both country and crosssector levels, they stated.

With these steps, the results have become visible.

Today, it is possible that the clothes and footwear you are putting on right now are from Vietnam.

In 2017, the Southeast Asian country earned $31 billion from exports of textile and garment industry alone, a year-on-year increase of over 10 percent, according to an online information platform Vietnam Briefing.

In 2018, the country made $16.24 billion from footwear, representing a 10.5 percent increase over 2017, according to Lefaso, the Vietnam Leather, Footwear and Handbag

Association.

The country has gone from obscurity to fame in manufacturing, thanks to certain reforms done by the ruling class.

Nigeria and Vietnam have things in common. One is that half of the population in both are less than 35, which provide a ready labour force for industries and firms. But unlike Nigeria, Vietnam has well-trained skilled labour who fit into its industrial dream. This began with reforming the education system, paying attention to sciences and technical subjects, which are indispensable for industrial growth.

Two, agriculture employs more than half of the population in both Nigeria and Vietnam. Similarly, rice is the most important crop in both countries.

More so, both countries have comparative advantage in leather/ shoes and have enormous raw materials in food and agro-allied sector.

But Vietnam took certain steps to get to where it is today.

One of the major steps taken by the country is market reforms. Vo Tri Thanh, a Vietnamese economist, said keys to the country’s growth were an acknowledgement of the private business right; the marketoriented reforms; macroeconomic and social stability, as well as the opening and the integrating of the economy into the regional and world economy, especially in the areas of trade and Foreign Direct Investment (FDI).

Vietnam sees trade as the most important part of its manufacturing sector. In an article entitled ‘Vietnam’s manufacturing miracle: Lessons for developing countries’, three economists Sebastian Eckardt, Deepak Mishra, and Viet Tuan Dinh said Vietnam has numerous bilateral and multilateral free trade agreements, which dramatically cut tariffs, anchored difficult domestic

reforms, and opened up the economy to foreign investment.

“It is estimated that more than 10,000 foreign companies—including major global players such as Samsung, Intel, and LG—operate in Vietnam today, mostly in export-oriented, labour-intensive manufacturing,” they added.

Today a sizeable number of the phones are from the country.

Nigeria has over 50 trade agreements but many of them are not profiting local firms owing to lack of openness between Nigeria and the countries, and low capacity utilisation of most firms resulting from tough business environment. Cost of production is extremely high in Africa’s most populous country as firms provide their own alternative energy to power their businesses.

Vietnam reduced its cost of doing business for enterprises.

The World Bank said in its 2019

”

When do we begin reforms in gas, electricity, industry and financial sectors?” a senior civil servant, who works in a government institution

Doing Business report that Vietnam made paying taxes less costly for companies by reducing the corporate income and value added tax rates while eliminating the surtax on income from the transfer of land use rights. Taxes in Nigeria (state, federal and local governments) today are 54 and are rising as states become increasingly cash strapped.

As a serious country open to business, Vietnam made starting a business easier by publishing the notice of incorporation online and by reducing the cost of business registration. It equally made enforcing contracts easier by making judgments rendered at all levels in commercial cases available to the public online, the World Bank added.

It made exporting and importing easier by upgrading the automated cargo clearance system and extending the operating hours of the customs department.

Scanners at the Customs in Nigeria are barely working, with roads to Apapa and Tin Can ports nightmares.

“Of particular concern and importance to us (MAN) are the challenges we face in moving our raw materials and goods to and from the ports,” Seleem Adegunwa, chairman, Manufacturers Association of Nigeria (MAN), Ogun State chapter, said at a recent CEOs business luncheon at Agbara, Ogun State, when referring to challenges faced by Nigeria’s manufacturers at the ports.

But Vietnam strengthened access to credit by adopting a new civil code that broadens the scope of assets that can be used as collateral.

Most banks in Vietnam, including VietcapitalBank, NamABank and ABBank, lend at between 8 and 8.6 percent, but almost all Nigerian banks lend at above 20 percent, and even up to 30 percent.

The country likewise increased

the reliability of power supply by rolling out a Supervisory Control and Data Acquisition (SCADA) automatic energy management system for the monitoring of outages and the restoration of service.

According to energypedia.info, 100 percent of Vietnamese have access to electricity.

However, things are different in Nigeria, with over half of Nigeria’s population without access to energy, and firms resorting to diesel or gas to fuel their generating sets.

“Vietnam invested in infrastructure, especially in the power sector and connectivity. To keep pace with rapidly growing container trade (which expanded at a staggering average annual rate of 12.4 percent between 2008 and 2016), Vietnam also developed its connective infrastructure, including seaports and marine terminals,” economists Eckardt, Mishra and Dinh said.

Nigeria’s infrastructure is broken, with a number of contracts abandoned by poorly paid contractors. The rail infrastructure is work in progress, making interconnectivity required for economic growth difficult.

Roads are becoming increasingly unsafe as insecurity hurts businesses and investors.

“Vietnam has leveraged its demographic dividend through effective investment in its people. In the latest 2015 OECD Programme for International Student Assessment (PISA)—which tests high school students in math, science, and other disciplines—Vietnam ranked 8th out of 72 participating countries, ahead of OECD countries such as Germany and Netherlands,” they added.

On the contrary, Nigeria is not exploiting its youthful population as many of them are jobless, with others in small business unable to access funds for growth and expansion.

Latest report by the National Bureau of Statistics and the Small and Medium Enterprises Development Agency (SMEDAN) says 2,877 medium scale firms shut down between 2013 and 2017. This shows why unemployment rate is 23.1 percent in the country.

In August 2016, the Manufacturers Association of Nigeria (MAN) and the NOI Polls reported that 222 small-scale businesses closed shops, leading to 180,000 job losses.

“When do we begin reforms in gas, electricity, industry and financial sectors?” a senior civil servant, who works in a government institution, asked.

“We need infrastructure renaissance. Government says it does not have money, but we have idle assets running into billions, including government assets. Why not sell them?

This money can be used to build infrastructure to support businesses.

“Secondly, we need to have an industrial strategy that positions us as either an exporting country or import substitution one,” the civil servant, who would not want his name in print, said.

Published by BusinessDAY Media Ltd., The Brook, 6 Point Road, GRA, Apapa, Lagos. Advert Hotline: 08033225506. Subscriptions 01-2950687, 07045792677. Newsroom: 08169609331 Editor: Patrick Atuanya. All correspondence to BusinessDAY Media Ltd., Box 1002, Festac Lagos. ISSN 1595 - 8590.