BusinessDay 04 Dec 2019

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esperate fraudsters are deploying new strategies to access part of the N126 billion unclaimed dividends in the Nigerian capital market, BusinessDay investigation has revealed.

These fraudsters go as far as opening bank accounts for individuals from unbanked areas of the country just to get Bank Verification Number (BVN) which is one of the requirements in the electronic-Dividend Mandate Management System (e-DMMS), an initiative by the Securities and Exchange Commission (SEC) to eradicate

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news you can trust I ** wednESDAY 04 DECEMBER 2019 I vol. 19, no 4489

Fraudsters recruiting unbanked Nigerians to access unclaimed dividends

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fgn bonds

Treasury bills

361.71 306.95

3M 0.00 7.12

NGUS FEB 26 2020 363.50

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6M

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McKinsey, Tufano outline reforms Nigeria must undertake to lift growth LOLADE AKINMURELE, DIPO OLADEHINDE, ENDURANCE OKAFOR & SEGUN ADAMS

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ime is running out for Africa’s most populous nation, which has only managed to lift 4 percent of its population from poverty over the past two decades, to reconsider its growth agenda.

Emerging Markets (EM) from China to Vietnam have far outperformed Nigeria in that period, having seen poverty levels slide 60 percent and over a billion people taken out of poverty, according to global consulting firm, McKinsey & Company.

While Nigeria has stuttered, 11 recent outperformers like Ethiopia, India and Belarus have achieved 5 percent growth rate

in the last 20 years, according to a report presented by Fiyinfolu Oladiran, a partner at McKinsey & Company, at the BusinessDay CEO Forum, Tuesday.

The presentation by McKinsey revealed Nigeria has everything to be a leading economy across the world, thanks to its young growing labour force, high adoption of technology and abundant natural resources.

However, economic growth has not been sufficient enough to drive development as a vibrant labour force remains underutilised and uncompetitive while basic infrastructure continue to fall short of rising population.

“Despite relative improvement in the World Bank ranking, Nigeria is still a poor place to Continues on page 38

Continues on page 38

Inside All On, Rockefeller Foundation launch $3.5m grant for Nigerian off-grid entrepreneurs P. 2 DSS raises alarm over plots to destabilise Nigeria P. 2

L-R: Louis Odion, senior technical assistant to the president on media and publicity, office of the vice president; Aigboje Aig-Imoukhuede, chairman, Wapic Insurance; Peter Obi, former governor, Anambra State; Peter Tufano, dean and professor of finance, Said Business School/keynote speaker; Emeka Ihedioha, governor, Imo State; Mazen Mroue, chief operating officer, MTN, and Frank Aigbogun, publisher/CEO, BusinessDay Media Limited, at the 10th edition of BusinessDay CEO Forum Nigeria, with the theme “Nigeria at CrossRoads: The Private Sector Opportunity” in Lagos, yesterday.

Pic by Olawale Amoo

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DSS raises alarm over plots to destabilise Nigeria

…dismisses suit against IGP INNOCENT ODOH, Abuja

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L-R: Wiebe Boer, CEO, All On; Mary Worzala, chief of party, Power Africa Nigeria; Epibere Clarke, SA on energy to the CBN governor; Aisha Abba Kyari, associate VP, Nigeria Sovereign Investment Authority, and David Rogers, deputy director, USAID Nigeria, during the quarterly Nigeria off-grid sector donor and investor coordination meeting held in Lagos.

All On, Rockefeller Foundation launch $3.5m grant for Nigerian off-grid entrepreneurs ISAAC ANYAOGU

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he Rockefeller Foundation and All On, a Nigerian offgrid energy impact investment company funded by Shell, on Tuesday announced the launch of the All On Hub, a facility that will build the capabilities of off-grid entrepreneurs in the Nigerian energy sector The Hub is being funded through a $3.5 million grant from The Rockefeller Foundation, a data, science and innovation-driven philanthropy focused on ending energy poverty and improving livelihoods by accelerating the expansion of affordable, reliable and sustainable electricity, All On said in a press statement.

The Hub will seek the best off-grid energy entrepreneurs at ideation, angel, growth, and market entry stages, and prepare and support them to scale their businesses. The goal is to

dent energy poverty which sees over 28 million households and 11 million Small and Medium Enterprises (SMEs) in Nigeria without access to reliable on-grid energy.

“The Nigerian energy market is at a unique juncture, with unprecedented political will and leadership, a vibrant and innovative group of entrepreneurs, and growing access to capital all coming together in what could be a pivotal moment,” said Ashvin Dayal, senior vice president of The Rockefeller Foundation’s Power Initiative.

“The All On Hub has the potential to significantly support the growing number of private sector actors to get to scale, and ensure the overall sustainability of the nascent, private off-grid energy sector,” Dayal said.

It is hoped that when these businesses succeed, it will lead to new, reliable sources of energy for low-

income households and SMEs, helping to close the energy access gap for some of the most vulnerable populations in Nigeria.

“We are excited to collaborate with the Rockefeller Foundation to establish the All On Hub because of its strong reputation for making a positive impact in communities across the world for more than a century,” said Wiebe Boer, CEO of All On. “The establishment of the All On Hub will provide a facility and structure that will ensure we unearth and support the best energy entrepreneurs who will lead the private sector in our journey to provide clean, reliable, and affordable energy to transform the social-economic status of unserved and underserved communities together,” Boer said.

Damilola Ogunbiyi, managing director and CEO of Nigeria’s Rural Electrification Agency (REA), said the collaboration

between All On and The Rockefeller Foundation would “create a pipeline of scalable, investable and sustainable energy businesses that will benefit from the enabling environment provided through the REA and accelerate access to energy, sparking longterm economic growth”.

Under the Paris Climate Change Accord, Nigeria committed to cutting carbon emissions by at least 65 percent and clean energy provides the quickest way to meet this need. Off-grid clean energy represents a viable electrification solution that can empower local communities, is tailored to local needs and conditions, is rapidly scalable and environmentally sustainable.

Over the next three years, companies supported by the All On Hub are expected to provide thousands of new connections to low-income households and SMEs in Nigeria.

CBN’s Anchor Borrowers’ Programme supports 1.5m farmers in 4yrs …creates 2.5m jobs across agric value chain HOPE MOSES-ASHIKE & ONYINYE NWACHUKWU, in Owerri

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he Central Bank of Nigeria (CBN) on Tuesday said the Anchor Borrowers’ Programme has supported more than 1.5 million farmers across the 36 states of Nigeria in cultivating 16 different commodities over 1.4 million hectares of farmland since inception.

The programme, which was launched by President Muhammadu Buhari on November 17, 2015,

is intended to create a linkage between anchor companies involved in the processing and smallholder farmers (SHFs) of the required key agricultural commodities.

Edward Lametek, deputy governor, corporate service, CBN, disclosed this at the ongoing seminar for finance correspondents and business editors with the theme ‘Galvanizing Development Finance and Monetary Policy for Growth’ organised by the CBN in Owerri, Imo State capital.

He said the programme www.businessday.ng

has also supported the creation of over 2.5 million jobs across the agricultural value chain.

Lametek said the CBN’s intervention in the rice value chain in Kebbi and o t h e r r i c e -p ro d u c i ng states across the country increased local rice production from 2.5 million tonnes in 2015 to 5.8 million tonnes in 2017, as well as cotton intervention with the flag-off of input distribution to 150,000 cotton farmers, cultivating 150,000 hectares in 23 states of the federation.

Currently, the cotton planted by these farmers has begun fruiting, while some are ready for harvest and off-take.

“We are currently also paying additional attention to cassava because the commodity has many different uses along the value chain.

The value chain has enormous potential for employing over 2 million people in Nigeria,” Lametek said.

There is sufficient evidence of significant reductions in the country’s

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Continues on page 38

he Department of State Services (DSS) on Tuesday said it has uncovered syndicated plots by some undesirable groups to cause a breakdown of law and order in various parts of the country including Abuja, the Federal Capital Territory.

The secret police said the arrangement was to instigate protests, mass action and violence with a view to causing anarchy and destabilising the country.

In a statement by Peter Afunanya, its public relations officer, the DSS said the predetermined actions by the groups have been designed to take place simultaneously in the major cities across the geopolitical zones in the coming weeks.

Although it did not name the groups plotting the alleged breach of law and order, there are, however, suggestions that the development may not be unconnected with alleged planned protests by groups clamouring for the

freedom of Omoyele Sowore, activist and a former presidential candidate, who is currently in the DSS detention and was said to be mobilising his supporters for nationwide protests.

“This is more so that the plotters are identical, also targeting the yuletide seasons to accomplish their sinister motives.

Considering the implications of these on public safety and national security, the Service wishes to warn the anti-democratic elements responsible for these heinous plots to desist forthwith from their inglorious acts,” DSS said in the statement.

The secret police advised parents to rein in their wards and enjoin them not to allow themselves to be used to foment trouble. It also called on heads of academic and public institutions to warn their students and employees, respectively, against engaging in any untoward activity against public order.

r$POUJOVFT POMJOF BU www.businessday.ng

Again, laying of 2020 budget suffers setback …as Reps adjourn plenary over colleague’s death JAMES KWEN, Abuja

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he laying of the 2020 budget before the House of Representatives suffered another setback on Tuesday following adjournment of plenary to Wednesday because of the death of Ja’afaru Iliyasu, member representing Magama/Rijau Federal Constituency of Niger State.

The House had last Wednesday, November 27, deferred the laying of the 2020 budget by the Appropriation Committee till Tuesday, December 3, to ensure a thorough job by the House.

But the budget could not be laid at the Tuesday plenary as the House adjourned immediately after members converged to honour and pray for their deceased colleague who passed away on Monday morning at his Maitama residence in Abuja.

Femi Gbajabiamila, speaker of the House, had earlier expressed sadness over the demise of Iliyasu who had just returned to Abuja on Sunday after a retreat organised for members of the House Committee on Public Accounts in Lagos.

Gbajabiamila said he was

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“deeply shaken” by the demise of the Niger lawmaker whom he described as a gentleman who showed great willingness and determination to work with his other colleagues to make good laws for the country.

He described Iliyasu’s passing as painful, saying the deceased would be remembered for his commitment to representing the interest of his people and Nigerians as a whole.

“I woke up this morning only to hear the sad news of the passing away of our great colleague, Rep Ja’afaru Iliyasu,” Gbajabiamila said in a statement he personally signed.

“Rep Iliyasu was a gentleman and a determined lawmaker who wanted to make his mark in service to his country. Unfortunately, death took him away at this time.

Within the last few months that he had been in the House, he proved himself to be a worthy legislator,” he said.

Gbajabiamila prayed God to grant the deceased eternal rest and give his immediate family, constituents and the people and government of Niger State the fortitude to bear the loss.

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Catholic Church of divine mercy and unusual entrepreneurs Small Business handbook

Emeka Osuji

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he sound of entrepreneurship is blaring very loud and clear in Nigeria. It is helping to douse the noise in the heads of so many, who have nothing to do or do not know what to do. For too long, many Nigerians have been structured to the periphery of their national economy, where they have endured the loud sound of lack and the absence of hope. Now, it seems like enough is enough and they are ready to resist the voice of melancholy, and to chart new directions through entrepreneurship.

Although we have always been enterprising, I am not sure we have devoted this much time and other resources, to prepare young entrepreneurs, as we are doing currently. What with the many seminars and gifting sessions, exhibitions and competitions going on in different parts of the country, all aimed at discovering and promoting the entrepreneurial spirit of the youth, in particular, and our people in general. Books are being presented, even as we acknowledge that reading is no longer the high passion of many. The trend is rising, especially when we find that most of these events are sponsored and bankrolled by the private sector and non-profits, including the Church.

The Catholic Church of Divine Mercy (CCDM), in the opulent Lekki area of Lagos has been in the forefront of this new drive towards youth empowerment, and entrepreneurship development. For the second year in a row, it organised one of such events

tagged the Unusual Entrepreneur, as part of its annual Unusual Praise musical event. Last week, it held a seminar, which provided a platform for very distinguished entrepreneurs, intellectuals and very successful business people to speak with over 600 youths on different aspects of entrepreneurship. At the end of the sessions, 251 participants, selected from every Catholic Church in Lagos, and some non-Catholic denominations, won prices ranging from N50,000 to N1 million. Indeed, there were three star prices of N1million each. The participants had competed on various aspects of company formation, including the preparation of Feasibility Studies for starting a business. The event climaxed with the annul Unusual Praise Christian musical concert that drew Gospel music stars from far and near.

The event was actually spectacular touching on some keys lesson.

Although the CCDM provided all the funds and logistics for the competition, only one of its members won a price, and it was not among the star prices.

This speaks to the lesson of integrity – one good for Nigerian leaders and corruption fighters.

That alone warrants some clap offering to Monsignor Nwaezeapu, the self-effacing spirit-filled Parish Priest who is behind the wave of transformation happening in the CCDM and indeed, the entire Lekki axis of the Archdiocese of Lagos, where he is planting churches, retreat centres and schools, in every open space he could afford.

We seek social interventions like this.

They have done great things that are impacting the society more than the multibillion political social intervention programmes going on in many states. Those of us to whom they have assigned some of the youths to mentor, even from last year’s winners, feel proud and obliged. It is my hope that the mentors will not subsume the learning and hand-holding needs of these young people under our piles of never-ending work, especially as

mentees increase in number.

Another important lesson is that all the three star prices of N1m each were won by women! There was no question of gender sensitivity or soft landing for anybody. All participants were given equal opportunity but the men fizzled out before those three Amazons. It shows that the women are coming for us. It is good that the Church is in the forefront of this equal opportunity effort. It is in line with the rising fervour of evangelism in the CCDM. We must now emphasise the mentoring aspect of this great event. Mentoring, according to The Economist Magazine and Tim Hindle (author of Management Ideas and Gurus) “is a relationship between two people in which one of them offers advice and guidance to help the other develop in a particular area”. It is an age-old phenomenon, practiced world-wide in the Arts, particularly music and painting, where mentees have sad at the foot of the Masters to drink from the wellspring of their masterly knowledge. The CCDM under Monsignor Nwaezeapu is therefore giving a good gift to humanity by promoting this tradition, within the spiritual framework of honesty and integrity.

As we begin to properly organise the finer aspects of certain parts of our national life, it may be time for us to also insist on best practice and the attribution of recognition to what works. One inalienable benefit of the First Industrial Revolution is that nobody needs to reinvent the Wheel. It is there to be used, copied and adapted or modified. And it doesn’t matter that some people are already on the Fourth Industrial Revolution, while others are yet to accept the culture of industry, to say nothing about understanding it. We must go for standards and best practice.

I suppose that once we have properly and successfully set up an enterprise, the next thing is to also run it properly and successfully. It is time therefore for us to learn from those who succeeded in what we are trying to do. One such

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it may be time for us to also insist on best practice and the attribution of recognition to what works.

One inalienable benefit of the First Industrial Revolution is that nobody needs to reinvent the Wheel

Dr Osuji is head of the department of Economics at Pan Atlantic University Lagos. eosuji@ pau.edu.ng @Emekaosujii

The African continental free trade area and health financing in Nigeria

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ifty four African countries including Nigeria are signatory to the agreement establishing the African continental free trade area (AfCFTA) which came into force on May 30, 2019. Its objective is to increase intra-Africa trade with free movement of goods, services and people across borders. It is also intended to stimulate inclusive economic development in African countries and create jobs, leveraging lessons learnt from existing regional economic communities.

The AfCFTA builds on several years of negotiations by stakeholders at national, regional and continental levels alongside support from development partners. Although free trade could exacerbate inequalities, African countries have agreed to implement AfCFTA with trading under the agreement planned to begin in July 2020. The focus is to maximize benefits of better trading relations within the continent and minimize risks through various national, regional and continental instruments. With a continental market as seen in the European Union, African countries can be better integrated with the global value chain.

Liberalization of goods and services is a central theme of AfCFTA with two major phases of on-going negotiations. The first phase involves defining protocols to manage movement of goods and services as well as resolve disputes within the free trade area. The second phase focuses on designing appropriate mechanisms to manage competition, investments and intellectual property rights. It is expected that removal of tariff and non-tariff barriers will increase the volume of trade within Africa building on increased productive capacity and comparative advantages across major sectors.

Removal of tariffs and increase in tax revenue during AfCFTA implementation could lead to a net increase or decrease in government revenue with significant implications for social investments. Although government revenue may drop by a sizeable margin due to removal of import duties, there is an opportunity to increase revenue through expanded tax base and improved tax administration capacity. A net increase in revenue will be good news but a net decrease coupled with increased government spending on infrastructure to boost productive capacity and trade may crowd-out funding for the health sector. Although health is a political decision, its financing can be buoyed by favourable economic realities.

Nigeria is heavily dependent on its extractive sector to finance government budget.

Government revenue as a percent of GDP is less than 10 percent. As the largest exporter of oil on the continent, Nigeria’s slow pace of diversifying the economy can undermine its fiscal stability in the face of fluctuating commodity prices and uncertainties in global trade. A significant percentage of government revenue is currently devoted to servicing debts.

In fact, the nation may be spending up to three-quarter of its revenue on debt servicing by 2022. This impacts negatively on the fiscal space for social investments unless they are ring-fenced. Despite recent reforms to improve revenue generation from non-oil sectors, the result is not large and quick enough to meet on-going financing needs.

The country’s largest untapped resource is its human capital. Substantial investments in human capital development through adequate health and education financing can increase

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the country’s outputs and per capita income.

The 2014 National Summit on Universal Health Coverage (UHC) shows Nigeria is committed to the wellbeing of citizens: UHC is a major target within the Sustainable Development Goal (SDG) 3. It is a noble aspiration which guarantees access to high-quality health services to citizens without financial hardship. There is widespread global and country support for the agenda with the newly agreed United Nations UHC agreement and Nigeria’s Health Sector Strategic Development Plan (2018 – 2022).

Although Nigeria has evidence-based health policies and plans, public financing for health is historically low. Health sector allocation has been less than 6 percent of total government expenditure in the last decade – lower than the recommended 15 percent in the 2001 Abuja Declaration. According to the World Health Organization (WHO), health spending in 2016 was 3.6 percent of GDP while public spending on health was only $10 per capita - one of the lowest in the world. Majority of health spending (about 75 percent of total health expenditure) is out of pocket: a quarter of households spend at least 10 percent of household income on health.

Development assistance for health (DAH) generally represents about a tenth of total health expenditure – a crucial source of financing for specific programs. As a middle-income country, Nigeria may have limited access to external DAH, particularly grants and concessional loans, in the nearest future. This is therefore the best time to raise more money for health and use it wisely to improve health indices.

The National Health Act mandates government to devote at least 1 percent of its Consolidated Revenue Fund towards a Basic Healthcare

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people are the Japanese who have used technology to neutralise their natural resource deficit. Even in North America, with all its prolific innovators and technological progress, having a Japanese car in the garage is probably the rule rather than the exception.

Some of us may have come across the story of a Toyota executive whose duty it was to re-engineer the Toyota Sienna car, for the export markets of North America. The gentleman began by getting out of his office and into a Sienna car, for a drive through several cities in the United States of America, covering 53,000 miles, and recording every observation he made of the car in motion. That cross-country ride gave the engineer, Yuji Yokoya, a personal experience of the behaviour of the Sienna, under all kinds of road and weather conditions. The result was a new Toyota Sienna minivan that was not only more stable on rough road but also very child-friendly and capable of serving as a living accommodation for extended stay for a family with children.

The Japanese call that approach to management, Genchi Genbutsu. It means rolling up one’s sleeves and going to the scene of the event, known in Japanese as the gemba. Those to be mentored are now at the scene of event. They must stoop low and focus on learning from their mentors.

The CCDM has taken mentoring and hand-holding a step further than just sharing of experiences. By contributing capital for the youth to start their own businesses, while being mentored, the church has given them a big push forward. While speaking to the participants at the Unusual Entrepreneur seminar last week, I reminded them of the need to learn the modern habit or record-keeping so as not to mistake sales for profit – a major cause of high infant mortality in business.

ABIODUN AWOSUSI Provision Fund (BHCPF) alongside additional domestic and external financing. The Consolidated Revenue is total government revenue before it is shared across all levels of government.

Largely tax-financed, the BHCPF is intended to expand health insurance coverage through national and subnational social health insurance schemes for Nigerians particularly the poor and vulnerable. It will also ensure primary health centres have adequate resources to operate optimally and key government agencies can manage health emergencies and epidemics. A phased implementation of the BHCPF creates room for iterative learning across states before nationwide expansion.

The success of a continental free trade agreement rests on a healthy workforce. Nigeria needs to urgently prioritise human capital development to reap the benefits of innovation, trade and investments. While the government is investing heavily in much needed physical infrastructure, there is useful evidence that investing in people can increase our national output and set the country on the path to prosperity. Besides, a change in government revenue during AfCFTA implementation will have a direct impact on the BHCPF. Here are two crucial ways to ensure adequate health investments.

Note: The rest of this article continues in the online edition of Business Day @https://businessday.ng Awosusi is a TEDMED Research Scholar and Health Economist at Health Systems and Development Enterprise.

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comment Character Matters with Daps

Dapo Akande

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omeone once asked me, “How did we get here?” How did our society degenerate to this level? And from my own limited knowledge and understanding, I did my best to give an answer. Not sure I did it much justice but one thing I know however, is that it didn’t happen overnight. It was gradual but consistent, and this might explain why we didn’t notice enough to halt the descent.

We all pretty much, without exception share in the blame, because by our actions or inactions we implicitly support or accept bad behaviour. This is so every time we reserve special seats in church for people who cannot possibly offer an honest answer regarding their source wealth. We knowingly encourage thievery when a friend or relative receives a government appointment and we spare no expense in hosting them to a shindig. We lead our children in the way to go when they hear us lying on the phone that “we’re almost there” while we’re still at home with our feet up, watching football or our favourite television series. We blur the lines between right and wrong when we as parents teach our children that life is about

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It’s time we change the narrative winning at all cost, by trying to bribe the teacher of the school maths team, to slot our child in when it’s obvious he or she has no reason being there.

Lecturers degrade society’s moral standard when they insist on having carnal knowledge of their students as a condition to giving them a pass mark. Less conscientious female students preferring to take the short cut, encourage same by offering what they have to get what they want.

All of these and more brought us here. Unfortunately, to correct all this will certainly be a long and tortuous journey entailing arduous, deliberate and consistent effort. The mere fact that it would be slow and those of our generation may not even live long enough to enjoy the full benefits of such collective effort may also prove to be a disincentive to even bother but it simply must be done.

I found myself incensed recently in traffic when a motorist decided to drive against traffic, thereby blocking vehicles in my lane in the process. Before you knew it, I was out of the car telling the motorist off for his selfish and undisciplined behaviour.

Thankfully others joined me to condemn his actions. The person sitting in the front passenger seat who I assume was his employer, began to beg us and was visibly embarrassed by the unwanted attention his driver’s action had directed his way. It doesn’t take a soothsayer to guess what he’s likely to say the next time his driver wants to try such nonsense again. By refusing to accept bad behaviour as the norm and rejecting the usual “this is Nigeria” to explain away all manner of indiscipline, at least one mind-set may well have been reset.

Not too long ago, I engaged one of my brothers in a discussion. I couldn’t for the life of me understand why in the most recent instalment of the Big Brother Naija franchise, someone whose character was undoubtedly the

most onerous and least endearing amongst the housemates got so close to winning. She by far had the largest number of supporters and was only prevented from being the first to breast the finish line tape by an umpire who had to resort to the rule books to insist wrong must remain wrong which subsequently led to her disqualification. Had it been left to the voters, she was looking like an unstoppable train despite her obvious lack of manners or any sense of civility, her unnecessarily abrasive disposition and generally anti-social behaviour.

The fact that she even got so far spoke volumes of the times we find ourselves in. The long and the short of it is we must stop rewarding bad behaviour.

My brother said something about this which not only shed much needed light but also made a lot of sense to me. He said, “Tacha represents the hope of a generation that seeks to become successful by remaining unchanged and taking the line of least resistance. An attack on Tacha is regarded as an attack on their dreams. Tacha is them and they are Tacha. Tacha thumbs her nose up at society’s unwritten code of behaviour and accepted pathway to success.

Many of our youths believe that in the current climate, there is little to be gained by behaviour modification and that rather, self-expression, “being real” offers the attainable and more realistic route to success.” This really hit the nail on the head for me but saddened me further as it revealed just how much work needs to be done. Seemingly oblivious to the fact, our valueless, morally redundant, power hungry and unfathomably selfish leaders have by their behaviour and dare I say, unwittingly supported by our good selves, created amongst our youths, a Frankenstein who we now have no clue how to tame.

Still on this but coming at it from a slightly different angle.

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Many of our youths believe that in the current climate, there is little to be gained by behaviour modification and that rather, self-expression, being real offers the attainable and more realistic route to success

Call me liberal or a new-age parent if you will but I for one am not someone who believes in continuing to over protect children from the “dangers” of this world even as they develop into young adults. By all means, monitor as diligently as you can and when they step out of line, discipline them with understanding and in love but most importantly, plant the right seeds of values and age old virtues in them. Children must be allowed to develop restraint and yes, they may make some mistakes along the way.

It’s far better they make those mistakes while young, learn from them and move on than to hedge them so much that when the inevitable day comes and the hedge is removed, the very novelty of freedom causes them to lose their heads.

It can be amusing when we see people do naughty things as youths because we know we did the same at their age but when it’s done at a more advanced age, it’s not just sad but it’s always a cause for great concern for loved ones. Likewise, the child who misbehaves and isn’t cautioned as a way of discipline is not the lucky one, contrary to what his belief might be at the time. He may later live to regret not being given the opportunity to develop the strength that comes with the ability to resist, no matter how attractive the wrong step may appear to be.

It’s really not your close marking that will matter at the end of the day but the core values you were able to plant inside of them during their formative years. Maybe the Jesuits had us in mind when one of them coined this: “Give me a child for the first seven years and you may do what you like with him afterwards.”

Changing the nation…one mind at a time.

Akande is a graduate of the University of Surrey, UK, author of the acclaimed book: “The last fight: A personal journey to discovering values.” Contact: dapsakande25@gmail.com

Nigerians #SayNoToSocialMediaBill

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his is very important. We already have enough laws covering falsehood in speech - slander, defamation, and libel - and a Cybercrime Act that is heavy-handed as it is. Disingenuous to speak of developed countries; they, in addition to existing laws, hold platform owners accountable.

The same government that didn’t pass the Data Rights and Privacy Act is flying through the Anti-Social Media Bill.

Do we have enough laws protecting

children, protecting women & girls?

(Don’t mention the sexual harassment bill because the plan is to lock it only to schools - wonder why).

We insist other countries are doing it. Can we copy their healthcare, their roads, and their light first? This Bill is bad. This Bill is why we need compulsory electronic voting in the NASS, so we see the enemies of free speech, the ones who want to clamp down on our freedoms.

My people say you don’t give a knife to

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a person with a hot temper to peel yam.

This government (federal and state) has already shown they do not care for the rule of law; there are surplus examples.

Criticism equals treason and court orders are flouted by the minute. This bill is bad faith.

Hello people, call your legislators and your traditional rulers. Write in the papers, on social media, do radio. Whatever you can do, speak up. It is possible to defeat this bill again (this is the 3rd time

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CHIOMA AGWUEGBO

in 5 years anti-social media legislation has been touted).

12

Wednesday 04 December 2019

BUSINESS DAY

Editorial Publisher/CEO

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)

Bashir Ibrahim Hassan

GM, BUSINESS DEVELOPMENT (South) Ignatius Chukwu HEAD, HUMAN RESOURCES Adeola Obisesan

Culture sector boom undermines the case for protectionism

T

he continued successes of the Culture sector of the Nigerian economy are one poignant example of the case against the protectionism Nigeria has pursued in the last four years allegedly to protect local industries. The Nigerian film industry, as well as the music segment, continues to demonstrate that Nigerian economic players do not require any contrived protection to excel.

What they need above all is an environment of policies that enable them to unleash their competitive and comparative advantage.

Take Nollywood. In three weeks in November 2019, Living in Bondage set a box office record of N103 million, recording more turnover than any other movie, local or foreign.

Data by the Cinema Exhibitors Association of Nigeria shows that Living in Bondage drew more patronage than the second highest-grossing film, Disney Studios’ Maleficent.

The Disney film hit N96million in six weeks, twice as much time as Living in Bondage.

American science fiction film

The Terminator: Dark Fate took four weeks to gross N78 million in third place.

The success of the sequel of the film that set Nollywood on its path in 1992 follows a trend of box office successes for Nigerian movies since the return to the cinemas and better production values. Even more spectacular successes have attended films such as The Wedding Party and King of Boys at the cinemas. Nigerians trooped to the cinemas to appreciate the productions.

Filmgoers did not need the federal government compelling people to watch only local movies, banning the entry of foreign films or prohibiting them from watching them. As an analyst noted, “Nigerians are not necessarily hooked on foreign films.

Instead, they are hooked on quality and affordable items, be they local or foreign, and the successes of the film industry is proof.”

Nigerian films are doing very well on Netflix, Africa Magic and other channels and platforms for movie consumption. They also excel on Spotify for music.

Indeed, Nigerian movies were the inspiration for the birthing of the

African Magic channels on DSTV, and they have the most channels on the platform.

Or take music. Nigerian artiste Burna Boy recently earned a nomination for the Best World Music Album at the upcoming 62nd Annual Grammy Awards and topped the Top Ten list of African musicians compiled by CNN. Five Nigerian artistes featured in the compilation. They include Tiwa Savage, Yemi Alade, Mr Eazi and Wizkid.

African Giant, the album that fetched the Grammy nomination, was released in July featuring the collaboration of major global studios and producers. It is the fourth studio album of the artist.

The collection is an ambitious mixture of Afro-fusion, Afrobeat, dancehall, pop and hip hop.

Culture is an area of comparative advantage for Nigeria.

Nigeria now has a vibrant and growing cultural industry that responds to consumer demands with best practices in production values. The movie and music industries have thrived with no protectionist walls from the government. They employ more staff than the civil servants that service Nigeria’s bureaucracy.

Citizens across the African con-

tinent and the Black Diaspora consume their products while they compete admirably against foreign movies and music at the increasing number of cinemas and platforms in Nigeria.

Protectionism refers to government actions and policies that restrain international trade, often done with the intent of protecting local businesses and jobs from foreign competition. Typical methods of protectionism are tariffs and quotas on imports and subsidies or tax cuts granted to local companies. From an abrupt land border closure to restrictions on importation of some items, the Federal government has been keen to protect domestic industries against foreign competition.

The successes of our cultural industries contradict the economic and political reasons for border closure and other aspects of the protectionism wall. BusinessDay agrees with analysts that the best measures would be closing the infrastructural gap, better management of the key rates and economic policies that enable the release of the energies and vibrancy of Nigerian entrepreneurs rather than unsustainable border closures or tariff walls.

EDITORIAL ADVISORY BOARD Imo Itsueli Mohammed Hayatudeen Afolabi Oladele Vincent Maduka Opeyemi Agbaje Amina Oyagbola Bolanle Onagoruwa Fola Laoye Chuka Mordi Mezuo Nwuneli Charles Anudu Tunji Adegbesan Eyo Ekpo Wiebe Boer Paul Arinze Boye Olusanya Ayo Gbeleyi Haruna Jalo-Waziri Clement Isong

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Donald Trump’s struggle to revive the US rust-belt Trade tariffs were supposed to lift the steel industry and boost the president’s re-election bid, but many producers are struggling

James Politi

A

s the daytime shift ends at the sprawling Great Lakes Works steel plant south of Detroit, there are only a dozen or so customers at Mr K’s Saloon, huddled around a few tables after a friend’s funeral. Behind the counter, Amanda, the 29-year-old owner of the bar, where a beer costs just $1.50, bemoans the poor state of business. The number of burgers she’s been serving to hungry workers has plummeted since the factory idled one of its blast furnaces and announced plans for 200 lay-offs this year.

“In the steel industry, it’s not always perfect. Some years are good and some years are bad,” she says. “But I feel like this has been one of the worst in a long time.”

The struggles of the factory, run by Pittsburgh-based US Steel Corporation, reflect the torpor that has descended on US manufacturing in 2019.

Industrial activity has stagnated across the US economy, but particularly in several rust-belt states that could

determine the outcome of Donald Trump’s re-election bid next year, in a worrying sign for the White House and its trade policies.

After entering office in 2017, the US president pressed ahead with an aggressively protectionist agenda, including 25 per cent levies on imported metals in early 2018 and an escalating tariff war with China. The aim was to regenerate pockets of blue-collar, industrial America left behind by globalisation like the socalled “downriver” towns near Detroit.

The upheaval to global commerce driven by Mr Trump has delivered a significant hit to the world economy, exacerbated geopolitical tensions with China, heightened volatility in global markets and angered allies in Europe, North America and Asia.

But for all the economic and diplomatic fallout, the domestic economic returns have been small for the US president, especially in the rust-belt.

Employment levels in primary metals production — and US manufacturing overall — made solid gains last year, but have fallen back in 2019. The ISM’s index of US manufacturing activity has contracted for the past three months.

In Michigan, where Mr Trump prevailed over Hillary Clinton by a tiny margin of just 10,704 votes in the 2016 race, manufacturing jobs dropped by 4.2 per cent in October, or 26,800 positions, on a year-on-year basis, according to US labour department figures.

Although the data was depressed by a

‘

There’s softness in the auto industry, there’s softness in the steel industry and we’re beginning to feel the ripples of the tariffs

strike at General Motors that has since been resolved, there is little to cheer about in the state.

Chart showing steel prices have crashed in 2019 “There’s softness in the auto industry, there’s softness in the steel industry and we’re beginning to feel the ripples of the tariffs,” says Marick Masters, a professor of business at Wayne State University in Detroit.

“The climate is much more uncertain and much more doubtful about what the future holds.”

The background to such uncertainty is Mr Trump’s trade war. For the past two months, the US and China have been locked in discussions about pausing the dispute and avoiding a further escalation in tariffs. But any accord would be limited in nature if it happens.

China is expected to boost its purchases of US farm goods and make some commitments on intellectual property, currency and market access, in exchange for a reprieve from American levies. But it is not prepared to revamp its economic model to turn away from industrial subsidies and the forced transfer of technology, along the lines that Mr Trump has been seeking.

US officials insist that the thornier issues will be tackled in a subsequent stage of negotiations, but this is unlikely to take place before the 2020 election, if at all — further exposing the US president to criticism that his

trade bluster has delivered paltry results for industrial America.

The suffering at US Steel, a staple of industrial America since its founding

by John Pierpont Morgan in 1901, will be particularly jarring for Mr Trump and his team. Robert Lighthizer, the US trade representative and an Ohio native, spent years as the company’s top external trade lawyer, waging its battles against imports. In July 2018, Mr Trump chose a once-idled US Steel plant in Granite City, Illinois, to declare that his policies had succeeded, adding symbolic significance to the company’s downturn in fortunes.

“After years of shutdowns and cutbacks . . . workers are back on the job, and we are once again pouring new American steel back into the spine of our country,” the president said.

But those words may have been spoken prematurely. Since then the benchmark price for hot-rolled band steel in the US, which had spiked after the tariffs were introduced, has fallen from above $1,000 a metric tonne to about $567 in November. Meanwhile, US Steel’s shares are now trading at less than a third of their value in early 2018. The company reported a loss of $84m in the third quarter of this year, its first since 2017. Beyond the lay-offs in Michigan, US Steel cut jobs in Gary, Indiana, East Chicago, Illinois, and the Iron Range of Minnesota, blaming “challenging market conditions”.

FT

The currency of infrastructure

V

ery late in 2018 (nearly exactly one year ago), two of my colleagues at AFC successfully led their respective heavy industry and syndications teams to secure more than half a billion Euros in longterm project financing from international and regional financiers, for the major petroleum refinery in Cote d’Ivoire. The funds were secured in both CFA Francs and Euros, at highly attractive interest rates for the borrower.

The conclusion of this important financing followed a long, tortuous syndication process; and the final transaction was very finely calibrated to meet the specific needs of financial investors and credit insurers, a landmark achievement for the teams. Painstaking structuring aside, there was one critical factor upon which this highly complex transaction depended for its success: the currency of Cote d’Ivoire. Put simply, the same innovative structure and highly favourable financing terms would likely have been entirely impossible if the country did not have its currency pegged to the Euro.

For good or ill, African infrastructure is primarily financed in hard, convertible, globally traded currencies. The reasons for this are too complex to cover in a short article, but in summary: the critical factors of production for the typical long-term infrastructure assets are all sourced internationally and are therefore priced in hard currency. These include low cost debt financing, technical expertise, equity capital, construction equipment, intellectual property, key hardware components, software, high-value parts and even steel supplies. For three reasons, this would normally not be anything to be concerned about.

Firstly, Africa is an exporter and earner of hard currency internationally, the proceeds of which can be utilised to pay for infrastructure.

Secondly, well-managed African currencies would normally stay sufficiently stable over

time to comfortably repay hard currency borrowings. And thirdly, improvements in regional and domestic financial markets capabilities will ultimately create hedging solutions and local currency options to mitigate hard currency financing risks.

In reality, most African countries face an infrastructure financing challenge that stems from the failure (to varying degrees) of each of the three preceding assumptions. As of December 2019, there are fourteen west and central African countries that have procured a unique solution to this challenge, and Cote d’Ivoire is one of them. But this admittedly imperfect and historically controversial solution is now under great political pressure across the so-called Francophone African countries. Specifically, a popular movement appears to be afoot (and gaining momentum) towards the removal of the link between both of the CFA Francs and the Euro, a connection that has been in place (originally to the French Franc) for the entire modern history of these countries.

Much of the rationale for the agitation is political rather than economic (the relationship is considered colonial, patriarchal and exploitative). In fact, the economic arguments for and against the arrangement are far less prosaic, and worthy of deeper consideration.

These arguments have been repeatedly extensively elsewhere and need not detain us now, but essentially the debate boils down to a face-off between the certainty of monetary stability and the potential of fundamental macroeconomic restructuring. In simpler terms, any of the fourteen countries electing to withdraw from the controversial connection would almost certainly face significant uncertainty in relation to future inflation, interest rates, capital inflows, and consequently foreign currency exchange rates.

At the same time, such an existing country

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might also then possess greater flexibility in relation to fundamentally altering its economic structure to focus on non-commodity exportled growth (but this is a challenging path by itself, dependent on several other politically difficult structural adjustments). Overall, a caseby-case analysis would need to be undertaken, to determine which countries might be better off outside the CFA zone, as there is no generic answer applicable to all, given their different trade and economic profiles.

For now, one simple fact is eminently evident: infrastructure is easier and cheaper to develop, operate, finance and maintain in countries that maintain a hard currency peg.

The single most important reason for this of course is inflation, an unfortunately underrated African macroeconomic demon. Inflation translates directly to financing and operational costs, and infrastructure projects are extremely sensitive to such variation in prices. To use one basic illustration, consumers of electricity, and users of a tolled road or buyers of refined petroleum would absolutely not tolerate an 11.3 percent annual increase in their usage tariffs; versus, say 1.0 percent.

The former is the 2019 IMF forecast consumer price inflation in Nigeria, and the latter is the exact same statistic for Cote d’Ivoire. Financiers of infrastructure are no different from consumers; and their hard currency return expectations are also set with a careful eye on the present value of future cash flows. Again, high inflation rates are destructive to future values, making projects harder to do in countries suffering from this affliction. In summary, much of the fundamental basis for any modern human development at all is monetary stability; and thus sacrificing some degree of political control over monetary policy might not be a terrible trade-off relative to this all important benefit.

Perhaps the more important point is that

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Fola Fagbule currency pegs, however well-intentioned are “spit-and-glue” solutions which detract from addressing the underlying issue: domestic institutional capacity to manage and maintain monetary discipline through appropriately independent and counter-cyclical policy making.

Without a doubt, the first prize for every African country should and must be the development of strong domestic institutions that can withstand political pressure in relation to currency management (the most unassailable raison d’etre for the CFA zones).

Ultimately, local currency financing solutions are the holy grail of African infrastructure; which is why several other colleagues and I at Africa Finance Corporation are very focused on this area of work. One of the many on-going outcomes of that work (in Nigeria) is the amazing progress of InfraCredit (a company AFC has invested in), which has begun to successfully catalyse long-term domestic pension fund liabilities into infrastructure investments. Long may this continue! Several other initiatives are underway (stay tuned!), and we look forward to a future when the most important African infrastructure projects will be financed predominantly in local African currencies.

Fagbule, is Senior Vice President, Africa Finance Corporation. His Twitter handle is @folafagbule

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Wednesday 04 December 2019

BUSINESS DAY

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How border closure creates investment opportunities in agribusiness Josephine Okojie

T

he ongoing border closure by the Federal Government has created investment opportunities for potential investors across the value chains of various agricultural commodities.

Since the government’s shutdown of the country’s land borders in August, Nigerians have been compelled to shift their consumption preferences to local commodities.

This has spurred demand i n c ro p a n d l i v e s t o c k products across the country and created investment opportunities for potential investors in rice – a key staple in the Nigerian market, and poultry production, among others.

“The demand for how local chicken has increased tremendously since the border closure. Buyers are visiting our farms daily t o ma ke o rd e r s w h i c h we have not experienced before,” said Onallo Akpan, director-general of Poultry Association of Nigeria (PAN).

“There is so much room for anybody that wants to invest in poultry business right now. We currently cannot meet the demand so we need more investments

in the sector to increase production” Akpan said.

He stated that local production has increased to about 7,000metric tons while stressing that if the border closure persists, the country could cascade its production to 1.5metric tons in six months.

Prices of frozen chicken and life birds have also surged since August because of the huge demand-supply

g a p, m a k i n g h e a d l i n e i n f lat i o n a c c e l e rat e t o 11.61percent in October from 11.24 in September.

Similarly, food inflation accelerated to 14.09 from 13.51percent over the same period.

Experts say the country will further experience price increases in poultry products as the festive season approaches, noting that the country cannot currently

Chi Farms makes record sales of chicken SEYI JOHN SALAU

A

s individuals and business es continue to count losses considering the rising price of staple food on the back of the recent border closure, CHI Farms Limited, a member of the TGI Group, recently hit an all-time record sale of its frozen poultry meat.

The organisation says the sales turnout was a result of increased productivity and expanded capacity of the company.

The business also attributes it to the strict implementation of the border closure that has supported its local production and sales.

The Federal Government in August closed the

Nigerian land border to curb smuggling and tackle illicit trades between neighbouring nations.

“We are very pleased with these numbers. We have invested a lot in our business processes and we are glad that the government is taking active steps to protect the businesses in Nigeria,” said Tunji Olaitan, the managing director of CHI Farms limited.

According to Olaitan, the border closure with the Benin republic restricts the importation of goods into Nigeria.

He opined it was due to the smuggling activities that took place at the border.

“The border closure has since helped many Nigerian businesses,” he stated.

Martin Middernacht, executive director, CHI Farms, said the farm is www.businessday.ng

taking steps to invest in preparation for next year, taking a futuristic approach to its business model and strategy.

“Although our sales are at the highest point, there is still a market demand gap that we will position ourselves to fill. We will significantly invest to meet the emerging demands for our quality chicken in 2020,” said Middernacht. “ There is additional demand for our chicken and we are investing to meet this demand, especially for the upcoming festive season. Our capacity has grown and we are expectant for even more growth”, said Temim Garba, CHI Farms’ head of sales, stating that the demand for CHI farms’ chicken has doubled over the last three months.

meet demand in chicken and turkey production despite expansion programmes being embarked upon by farmers and millers.

The 2016 Agriculture Promotion Policy document released by the Federal Ministry of Agriculture put Nigeria’s annual chicken consumption at 200 million birds and supply at 140 million birds, indicating a gap of 60 million birds.

To bridge this gap and drive down cost, investors can take advantage in the production of chicken and turkey.

Also, in rice production, there is an ever-increasing demand for the staple, especially during the festive season.

The United States Department of Agriculture (USDA) put Nigeria’s milled rice 2018/2019 production

at 4.78 MMT, up over 2.5 percent from 2017/18 figure of 4.66 MMT. However, the 4.7 million MT milled rice in 2018 is still 2.3 million MT below Nigeria’s 7 million MT annual demand as stated by the country’s Agricultural Ministry.

This shows a huge opportunity for investors across the rice value chain.

“We are making so much profit in the sale of rice right now. I am buying paddy and milling it in the north to supply markets in the south,” a trader who is currently taking advantage of the border closure and does not want his name mentioned on print told BusinessDay. “This is the best time to invest in the rice value chain,” he advised.

Muhammed Augie, chairman, Rice Farmers Association, Kebbi chapter said: “Since the surge in prices, farmers who have abandoned growing rice have returned and even other farmers are shifting to rice cultivation because the market is there.”

“A bag of paddy rice now cost N8,500 as against N10,000 sold two weeks ago. This is because we are growing more and the har vesting s eas on just commenced,” Augie said.

‘Regular fruit juice intake enhances anti-oxidants for healthy living’

R

ecent researches have shown that regular fruit juice intake enhances antioxidants in the human body system which is necessary for a wholesome healthy life.

This was disclosed by Olusola Malomo, a registered nutritionist and national publicity secretary of the Nutrition Society of Nigeria (NSN), at the November edition of his monthly healthy living dialogue an initiative supported by Chivita as part of its ‘Noadded Sugar Campaign’.

According to Malomo, while food is widely believed to be an important source of the key nutrients the body needs for growth, development and maintenance of tissues.

New findings have revealed that fruits which include 100% or pure fruit juices and

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vegetables are the primary sources of antioxidants in our diet.

The research indicated a strong positive correlation between consumption of fruit juice and antioxidants.

Antioxidants are essential for preventing premature ageing, vision loss, mood disorders, and heart diseases.

Antioxidants are found in certain foods and may prevent some of the damage free radicals cause in the human body by neutralizing them. Factors that increase the production of free radicals in the body can be internal such as inflammation, or external, such as, pollution, UV exposure and smoking.

The nutritionist, who is also a dietician, stated that it has been proven that 100% fruit juices made from orange, apples, Pineapple, Red Grapes, raspberries, @Businessdayng

strawberries, red currants, cherries, pears, guava, mangos, and watermelon are rich in antioxidants.

“100% fruit juice contains bioactive compounds with antioxidant properties. As such, fruit juices have the potential to improve the antioxidant status in the body,” he said As humans, he said, we all desire a healthy life, and as such rely heavily on the nutrients, vitamins and minerals derived from our daily food consumption to stay healthy.

“Regardless of your motive for food consumption, be it for pleasure or remedy, one of the best measures to building and sustaining a healthy lifestyle is to regularly complement mealtimes with antioxidantrich food and beverages such as vegetables and 100% fruit juice.” he added.

Wednesday 04 December 2019

BUSINESS DAY

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Unlocking the investment potential in greenhouse farming Josephine Okojie

G

reenhouse technology has the potential of making Nigeria attain selfsufficiency in vegetables and fruit production.

The adoption of g re e n h o u s e t e c h n o l o g y in farming has been seen as a way of narrowing the increasing food gap in the country as the population continues to grow faster than food production.

Nigeria is currently populated by 200 million people who must be fed.

However, there is still much d e m a n d -s u p p l y g a p i n most of its food, even as the population growth rate stands at 2.6 percent per annum.

Experts believe that with greenhouse farming techniques, Nigeria can reduce its food insecurity risks.

As a result, lots of farmers are now embracing the use of the technology and BusinessDay recently went on a tour across greenhouse farms in Lagos and Ogun state respectively to see the operation of the technology first hand.

Greenhouse is a technology that uses framed or inflated structures covered with transparent or translucent material large enough to grow crops under partial or fully controlled environmental conditions to get optimum farm growth and productivity.

The technology is fast gaining popularity among Nigerian farmers because it enables them to grow exotic vegetables, flowers, and fruits throughout the year and help to improve the depleting water table.

This means farmers can grow crops at any time of the year. The technology gives plants exactly what they need – the perfect climate, the right amount of light, the right amount of nutrition, exact amounts of water and carbon dioxide and proper ventilation as well as protect the plants from pests and diseases.

Crops such as tomatoes, cucumbers, peppers, eggplant, lettuce, and basil among others which command high prices in markets can be cultivated with greenhouses.

According to experts, farmers using greenhouse technology can recoup their investment within the shortest possible period as the average yield of a vegetable grown using the technology yields about 30 times more than on the same square meter in an open field farm.

“It is a technology that delivers a unique farming t e c h n i q u e t hat e nab l e s increased high-quality production all year round,” Oscar Walumbe, integrated project manager- sustainable livelihoods, Dizengoff Nigeria said.

“It is a technique with good management provides a steady income for the farmer as well as the transfer of knowledge on how to improve the quality of their products, reduce field losses and ensure higher profit for their investment,” he added.

He stated that most people think that greenhouse farming is too expensive while explaining that it is so because of the initial investment in buying the materials for the structure which could run for as low as N1.9 million per 8 by 24 meters greenhouse including inputs for a full year.

He further explained,

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however, that the expenses on the initial greenhouse investments are easily offset by the high yields that a farmer makes from the investment.

“Depending on the market price farmers can recoup their investment 100percent within 3years,” he said.

“Nigerians can now leverage on the immense opportunity offered by the Dizengoff full package to create employment for our youths,” he further said.

C u r r e n t l y , N i g e r i a’s demand for vegetables is put at over 2.3 million metric tons per year and the country is only able to produce just about 1.8 million metric tons, with the adoption of greenhouse technology, the country will be able to narrow the gap.

Countries like Kenya and South Africa in Africa are already leveraging greenhouse technology to boost their fruits and vegetables production.

Vegetables and flowers

grown under greenhouses have given high returns and top quality produce. The potential of floriculture under protected cultivation is huge for global markets.

“Growing your crop using a greenhouse is a very wise decision. You grow more using less space,” Dokun Ogunbodede, managing director, Sedfort Limited told BusinessDay on a visit to his greenhouse farm in Ogun State.

Ekun Oladavids agronomists on a greenhouse farm visited

by BusinessDay during a recent tour said that the demand for his ball pepper (Falkor 1), hot pepper (super Habarnero F1) and tomatoes (Eva F1 and Zara F1) are very high.

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“O n o u r g re e n h o u s e farm, we do three cycles for tomatoes and two for pepper yearly,” Oladavids said.

“We harvest 60kg to 70kg weekly of pepper and sell a kg for N700 while well sell bell pepper for N1,000. For tomatoes, we harvest 50kg weekly and sell N600 per kg,” he said.

He noted that for hot pepper, after transplanting from the nurser y to the greenhouse, it takes seven weeks to reach maturity and from the day of first harvest, farmers will continue to harvest until it reaches five or seven months before ending the cycle.

But despite this potential in greenhouse farming, not

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all the farmers using the technology for the cultivation of crops are maximising the potentials owing to poor management practice and inadequate market access among others.

“One thing that most of the farmers are forgetting is that greenhouse needs to be managed just like any other farming, for instance, poultry farm,” Walumbe who was earlier quoted said.

“If you do not feed your birds when it is supposed to be fed, it result will be poor so also if you do not take care of the greenhouse farm, your production will be poor,” he explained.

“Another thing is the market price. Before you start the greenhouse farm always start from the market backward, so that you do not produce something that is still a loss on the market side,” he added.

He advised any potential farmer that wants to adopt the greenhouse technology must ensure they have a market before commencing production, adding that within three years they ought to have recouped their investments by 100 percent.

He added that if the farmers do things correctly, they ought to have an average of five to six cycles.

An example of one of the farms visited is Ecology Green Multifunctional Farm, Ikise Village, Off Omu-Ijebu Road, Ogun State.

A c c o rd i n g t o A k e e m O wokoniran who is the manager of the farm, “we started seven months ago and we made up our minds to do things correctly. You can see the clean surroundings here. We are also adopting best management practice in line with advice from our partners.”

“Here we have integrated the cultivation of other crops such as yam, cashew trees in the open surrounding field,” he said.

These other crops planted in the open field create additional income for the farmer and help him maximise the opportunities in using the technology.

Also, a number of farmers w h o h av e a d o p t e d t h e Dizengoff Nigeria greenhouse complete package where they are provided with the technology and inputs such as seeds and soluble fertilisers for a year are already enjoying high productivity from the system.

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Wednesday 04 December 2019

BUSINESS DAY

COMPANIES & MARKETS

COMPANY NEWS ANALYSIS INSIGHT

INDUSTRIALS

FTN Cocoa sees first revenue growth since 2015. Here’s why SEGUN ADAMS

A

listed cocoa processor struggling with capital for its day-to-day operations has turned to financiers outside Nigeria to post its first revenue growth in three years after local bank loans proved too expensive and rigid, the company said.

FTN Cocoa Processors, a notable processor, and exporter of cocoa commodities made about N602 million in 2018, its latest annual financial result shows. This is 636 percent more than it made in the prior year, halting a decline in sales since 2015.

“Because we are basically into exports, we are talking to financiers outside Nigeria and that accounted for the little turnover we did,” Akinrinola Laoye, an Executive Director at FTN Cocoa Processors told BusinessDay over the phone. “With working capital, we can boost

revenue to N10bn-N12bn annually.”

Laoye said the company has “done some little contracts” with the financiers which want to test the waters before a fuller commitment.

The foreign financiers were not named nor the amount under consideration.

FTN Cocoa ran into difficulties when one of its foreign partners, Transmor Commodity USA, went into liquidation in 2017, affecting FTN’s ability to fund its dayto-day operations.

The cocoa processor had in 2015, signed an off-take agreement with the US company but with the deal gone bad, the company turned to local lenders to finance its operations.

However, FTN recently ended up having its head office taken over by a local bank it owed, forcing it to operate from a rented apartment and reconsider its financing strategy.

“The company has been

having issues borrowing locally because the cost of local money is high,” FTN told BusinessDay. While the Exports Stimulation Facility, an intervention fund, has been difficult for FTN to obtain due to a bank guarantee requirement, the company will steer clear of local bank loans because of the unavailability of power which increases its cost while the country’s port situation means longer time to convert goods to cash, a situation banks do not consider when asking for loan repayment, FTN said.

“For that reason, getting money at double digit-more than 20 percent doesn’t make sense and we do not want to go back to where we are coming from,” Laoye said. “We do not longer owe any Nigeria bank.”

The company’s result stated it has discharged the United Bank for Africa loan obligation and paid Union Bank loan.

FTN said it sustained a

gross loss of N284 million compared to a gross loss of N251 million in preceding year.

However, the Board mentioned that the core investor that assisted in liquidation of bank loan will be providing working capital in due

course and company will be able to procure raw materials and produce at optimum level.

The company has a short term loan facility from Zedcrest Capital Limited and Swiss Finance Solution Lim-

ited to meet some of its urgent working capital needs.

Despite the rebound in revenue, the cocoa processor noted a high cost of production which resulted in continued gross and net loss in 2018.

L-R: Ope Oyinlola, regional sales/marketing manager, Axxela; Debo Barandao, director-general, West African Gas Pipeline; Senam Gbeho, executive secretary, The Gas Consortium, and Henry Sanyaolu, regulatory liaison manager, Axxela, at the 2019 Ghana Gas Forum in Accra, Ghana. The event focused on ‘Promoting Dynamic Policymaking towards the Optimization of Regional Gas Resources’, with Axxela re-affirming its commitment to spurring regional industrialization via sustainable investments and innovative energy infrastructure.

Oil&Gas

Nigeria content gets boost as NigerStar7 acquires new operational vessels OLUSOLA BELLO

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igerStar 7, an oil and gas services operator, has acquired and reflagged additional two offshore construction vessels to boost its operations in the oil and gas sector.

The company acquired and reflagged the Seven Antares and Seven Inagha offshore construction support vessels, as part of its investment in Nigeria and support for government policies on local content.

Seven Antaresone of the vessels is a modern pipelay and accommodation vessel with 300 tonnes crane, ideal for conventional offshore projects in shallow and slightly deeper waters, while the other one, Seven Inagha is a modern jack-up accommodation and crane barge, suited to shallow water depths.

It said NigerStar 7 was created by Subsea 7 and

Jagal in response to the opportunities created by the Nigerian Oil and Gas Industry Content Development Act. A n w a r Ja r m a k a n i , chairman of NigerStar 7, Jagal and NigerDock, said at a ceremony to unveil the vessels in Lagos, “NigerStar 7 is focused on creating employment opportunities and capacity development, supported by a modern and versatile fleet of marine assets, permanently imported and proudly Nigerian flagged.”

He said NigerStar 7 had been growing its presence in Nigeria with operations in Lagos, Port Harcourt, Warri, including marine facilities at the strategic Nigerdock Support Base, owned by Jagal.

Yann Cottart, chief executive officer, NigerStar 7, said: “Our mission is to build human and material capacity to cost-effectively serve Nigeria’s offshore

energy industry and our vision is to be recognised by our clients as the contractor of choice. Today, with the new additions to our vessel fleet, we are closer to our goal.”

“Our vision is to be the leading Nigerian offshore contractor serving the country’s offshore energy industry with the capability and capacity to execute the largest and most complex offshore projects.”

According to the company, it said it noted that following recent announcements by the Federal Government of Nigeria, new strategic targets had been set to increase national oil production to three million barrels per day.

“This latest acquisition

by NigerStar 7 of two construction vessels places the company in good stead to support the region,” it added.

Speaking also at the event the Nigerian Na-

tional Petroleum Corporation (NNPC), charged International oil companies (IOCs), on the need to build human capacity to drive growth in the nation’s oil and gas industry, as this is the only way to domesticate what it achievable internationally.

Mele Kolo Kyari, group managing director, NNPC said: “We believe whatever can be achieved internationally, can be achieved locally. I assure you of NNPC’s continuous support and patronage.

We are also counting on the support of our local and international partners, service providers as well as regulators across the industry value chain.

Kyari who was represented by Musa Lawan, general manager, National Petroleum Investment Management Services (NAPIMS), said the acquisition and reflagging represents an-

other milestone in attaining greatness in the upstream sector of the Nigerian oil and gas industry.

He added that NNPC has over the years remained faithful in promoting the growth of Nigerian companies through effective processes to enable Nigerian contractors and service providers to compete in developing in-country capacities to reduce capital flight.

The NNPC boss said when he assumed office as group managing director he emphasised NNPC’s strategic aspirations to achieve 40 million barrels of natural reser ves and grow oil production to 3 million barrels per day and gas of 15 million cubic feet by end of 2022.

He said the aspiration serves as an opportunity for companies ready to

seize the moment to play important roles in helping NNPC and the industry to achieve the feat.

Earlier, the Executive Secretary, Nigerian Content Development and Monitoring Board (NCDMB), Simbi Wabote, said the flagging of the two vessels marks another milestone for the attainment of 60 per cent of Nigerian ownership of vessels in the marine sector, which currently stands at 40 per cent.

Wabote, represented by the General Manager, Capacity Building, Ama Ikuru, said: “Our target is to have a fully-built FPSO in the country to drive the oil and gas industry.”

He appealed to operators in the industry to fully maximise the capacity of the vessels and other vessels coming up in the industry, while also calling on local and foreign investors to invest in the nation’s oil and gas industry.

Wednesday 04 December 2019

COMPANIES&MARKETS

BUSINESS DAY

19

Business Event

DEALS

Waltersmith Petroman wins Equitorial Guinea’s oil block license OLUFIKAYO OWOEYE

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igerian integrated energy company, Waltersmith Petroman Oil Limited, has been awarded Block EG-23 in Equatorial Guinea’s Niger Delta basin, following a competitive bidding process in Equatorial Guinea’s 2019 licensing round (EGRONDA 2019).

Chikezie Nwosu, Chief Executive Officer said the Government of the Republic of Equatorial Guinea offered to the International Industry a total of 27 oil and gas blocks and the entire Country for Mining exploration and received 21 offers.

Following the evaluation

of the different packages of offers received from interested companies, Block EG-23 which hosts the Estaurolita gas discovery was granted to WalterSmith-Hawtai Energy- GE Petrol SA. GE Petrol, EG’s national oil company has a 20percent participating interest in EG23 while Waltersmith and Hawtai Energy Hongkong have 40%percent participating interest each. The EG-23 block is a shallow offshore block with water depths of about 100m.

The commercial agreements are expected to be ratified by all parties, the Equatorial Guinea Ministry of Mines and Hydrocarbons and the Equatorial Guinean Parliament in the

coming weeks and signed by the President of Equatorial Guinea.

Chairman of Waltersmith Petroman Oil Limited, Abdulrasaq Isa, expressed his appreciation to the Government of Equatorial Guinea for having confidence in Waltersmith as a company, and affirmed its readiness to bring its experience and capacity to Equatorial Guinea and collaborate with its partners.

The oil company earlier promised to contribute about 271 million litres of refined products annually towards the development of Nigeria’s economy after the completion of its modular refinery currently being built at Ibigwe field in the Ohaji/Egbema Council Area of Imo state.

L-R: Chuka Obi; Creative Director, Insight Publicis; Mr. Wale Edun, former Commissioner of Finance, Lagos State; Dr. Tendai Mhizha, Chief Executive Officer, Insight Publicis; and Mr. Yemi Babington-Ashaye, President, United People Global (UPG) at the ‘UPG2019: Toward a Greater Lagos’ initiative held recently at the BWC Hotel, Victoria Island

COMPANY RELEASE

Bosch partners with iCreate Festival 2019 to deepen vocational training in Africa

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osch Nigeria is a partner of the iCreate Festival 2019, where the festival aims to bring awareness to various vocational training, which is essential for building talent in Africa.

Skills enhance lives, which is the fundamental reason for Bosch Nigeria for collaborating with iCreate Festival. The festival brings awareness to various skill sets such as hairdressing, plumbing to name a few, Bosch Nigeria focuses on the construction segment of the iCreate Festival initiatives where Bosch Power Tools is the preferred power tools used by the competitors in the participating segments.

Additionally, Bosch is supporting with technical expertise and training focusing on safety.

Bosch Nigeria participated in the Regional Technical and Vocational Skills Competition in Kaduna (Northern Region) on the 26th-27th April 2019 and in Enugu (South East) on the

19th-20th July 2019. The national Finals is scheduled to take place in Lagos (South West) on the 4th-5th December 2019.

All three events will also feature exhibitions, entertainment and panel discussions around TVET and youth empowerment.

The Skill Competition element of the event engages young skilled Africans aged between 18 and 28 to hone their skills and to compete with the very best in their sector such as carpentry, tiling, plumbing, automobile mechanics, solar or electrical installations, welding and fabrication, garment making industry, make-up art, shoe and leatherworks, art, app development, graphic design, web design, robotics and cooking.

In 2018, Bosch Nigeria and other partners like GIZ, Sterling Bank Plc, Julius Berger Nig Ltd, Mafita UKAid, the German Embassy Abuja, Industrial Training Fund (ITF) and Trace amongst others played strategic roles as major sponsors of the event.

For Example, 45 winners from 14 skill trades received cash prizes, equipment, endorsement deals, internship and job placements, training and mentoring. The 14 Gold medallists were crowned as iCreate Skill Champions representing each trade and will attend the World Skills Competition in Kazan, Russia in August 2019.

The Skill Competition is an innovative strategy to curb the high youth unemployment, promote skill excellence and prepare youths for jobs of the future. By directing attention on vocational skills, iCreate Africa is addressing the societal perspective affecting the acceptance of technical skill trades while upgrading the value of skilled professions.

Bosch has been present in Africa since 1906, at present in thirteen African countries: South Africa, Egypt, Morocco, Kenya, Angola, Mozambique, Nigeria, Namibia, Botswana, Zambia, Ghana, Algeria and Tunisia.

L-R: Nireti Adebayo, MD/CEO of Whyte Cleon Limited; Niyi Adebayo, director, Whyte Cleon Limited/CEO, Bodani Advisory; Peter Bamkole, CEO, EDC, Lagos Business School/chairman, International Breweries Foundation; Nse Ikpe Etim- multiple award winning, Nollywood Actress; Seun Togan, project owner, Cleon Walk, and Anu Eso, managing partner, AEC Legal, at the Annual Fitness and Mental Health Awareness Campaign, tagged “Cleon Walk” organized

by Whyte Cleon Limited.

L-R: Adesina Adegoke , GM, plant operations, Intercontinental Distillers Limited (IDL); Hope Gbagi, head of sales, IDL; Patrick Anegbe, MD, IDL ; Abdulkabir Adeyemi Obalanlege, Olota of Otta Awori Kingdom, and Mobolaji Alalade head of marketing, IDL, at handover of a 20kva generating set to the Olota ‘s palace by Intercontinental Distillers Limited in Ota, Ogun State

L-R: Portfolio Manager, National Premium Brands, NB Plc., Sarah Agha; Marketing Director, NB Plc., Emmanuel Oriakhi, Music Superstar, Niniola; Head of Consumer Banking, Access Bank, Adaeze Ume; Brand Manager, Star Lager, Onyebuchi Nwangwu; at the Lagos concert of Access The Stars.

L-R: Omolara Banjoko, marketing manager, Three Crowns Milk; Abigail Oluwasegun (MOTY’19 Winner); Kafayat Salami (MOTY’19 Winner); Chinwe Okoroafor (MOTY’19 Winner ); Omotayo Egberongbe, junior brand manager, Three Crowns, and Akeem Audu, brand manager, Three Crowns, at the grand ginale of Three Crowns Mum of year 2019 campaign.

20

Wednesday 04 December 2019

BUSINESS DAY

Wednesday 04 December 2019

BUSINESS DAY

FEATURE

21

Wooing Chinese investors for greater Lagos Last week, the Lagos State governor, Babajide Sanwo-Olu returned from China where he led some cabinet members on an investment drive. During the trip, Sanwo-Olu held talks with investors, financial institutions, multilateral bodies, institutions and government agencies in Guangzhou, Shenzhen and Beijing for collaboration towards the actualisation of the Greater Lagos Agenda. JOSHUA BASSEY examines what transpired.

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ith an estimated 22 million people, Lagos obviously stands out as the most populous city, not only in Nigeria, but also on the African continent.

With the huge population come the challenges of provision of infrastructure, traffic and waste management, transportation, employment, security, among other urban related issues that continue to put immense pressure on governance.

Across the world, governments are seeking collaborations with investors to meet the growing needs of the people.

Governor Babajide Sanwo-Olu is no stranger to such developments. Since assumption of office six months ago, Sanwo-Olu has made relentless efforts to attract local and foreign investors in the quest to address the challenges associated with the burgeoning population of the megacity state. His election seemed to have boosted global confidence in the capacity of Lagos to realise its potentials as one of Africa’s leading economies.

Into the elections that heralded him into office, he preached T.H.E.M.E.S, an acronym for his government’s programme. T.H.E.M.E.S, which stands for Traffic Management & Transportation, Health & Environment, Education & Technology, Making Lagos a 21st Century Economy, Entertainment & Tourism as well as Security & Governance, is a dashboard created for driving and measuring the Greater Lagos Agenda of his administration.

Beyond being a development framework for government, it is also an accountability guide for the public. With T.H.E.M.E.S Sanwo-Olu has signaled the capacity to keep global attention on Lagos State quite positive, hence the trip to China where he displayed the audacity for his agenda.

The quest to turn Lagos into a 21st century economy is one of the critical elements of Sanwo-Olu’s agenda.

He also knows that a functional city supports business growth. With this awareness, the governor is reaching out to more developed economies and societies for models and supports for building Lagos.

southern China for centuries.

Sanwo-Olu’s choice of Guangzhou for a twin-city partnership with the province which is acknowledged as the commercial center of China could be as a result of his admiration of its Beta+ Global Global City ranking, and perhaps because the intensity of Ma Xingrui’s headache doubles his, judging by the size of Lagos population, estimated at 22 million people.

The partnership agreement between Lagos and Guangzhou is a deliberate step for Sanwo-Olu. He stretched his hands across the Atlantic to understand why some cities routinely attract the best companies, the top talent, and the most investment dollars.

Although his experience may have revealed that presence of the right mix of factors such as business activities, human capital, information exchange, political engagement, and positive experiences that help organisations and people to thrive makes one city more attractive than the other.

The Lagos Smart-City Agenda From the Guangzhou Traffic Management Centre, managing the entire vehicular traffic and emergency management services are just a click of buttons. The orderliness on the roads of Guangzhou, a city with a major terminus on the silk road, perfectly matches the picture of Sanwo-Olu’s ideal Lagos.

The tour, after a demonstration of responsiveness to distress calls by emergency agencies, triggered an action that will make Lagos smarter.

With about seven million people in five million vehicles and 200 commercial buses on Lagos roads daily, the governor must have reasoned that things must be handled differently to bring orderliness to Africa’s most populous city.

At the discussion about transforming Lagos into a smart city and collaboration with leading technology giants, Huawei and Ehang, as well as some reputable urban development organisations, including Zhuhai Holding Investment Group, the socio-economic importance of Lagos to the world, and Africa in

particular, was the central point.

“We are at the stage of building critical infrastructure that that will make our city more habitable. We want technology to drive economic innovation, public security, health management, waste management, traffic management, government processes and services to the public,” said Sanwo-Olu while assuring the companies of the readiness of Lagos State to take its rightful place in the comity of megacities by transforming into a smart city.

Even though Sanwo-Olu signalled to the potential partners that Lagos State Government may not have the big cheques to sign for the total transformation, now, he nevertheless informed them that “it is a journey we know will take us into the future we really should be as Africa’s most populous city and 7th largest economy.”

He assured that the “vitality of our 22 million people and political stability are valid collateral that should provide comfort in the collaboration we are seeking.”

One of the companies, Huawei, which has an impressive footprint in smart-city development in South Africa, Dubai and across Asia said through the head of its Nigeria office, Eric Zhang while taking the governor and team on a tour of the company’s campus in Shenzhen, with the company’s global vice president, Enterprise Business Group, Laurent Fan, vice president, Government & Public Utility, David Zhang and, global public safety expert, Peter Goulding, said that “Huawei is excited that Lagos State is planning digitisation of its assets, processes, operations and public service facilities”.

“I am familiar with Lagos State and I know that the state needs this transformation and is capable of embarking on it. As someone who is very familiar with Nigeria and Lagos State especially, our company, Huawei is ready to work with Lagos on the transformation journey. I know that transforming Lagos into smart city is an exercise that will happen in phases, but the most important requirement is government’s commitment, which you have demonstrated”, he added.

Likewise, the Ehang,the China-

A Chinese businessman explaining a point to Governor Sanwo-Olu (standing akimbo).

based world’s leading autonomous aerial vehicle (AAV) technology platform company’s delegation led

by Shiny Biu, the company’s director, Strategic Cooperation said “the company is ready to partner with the state and is open to discussing the appropriate models that will fittingly serve the goals of the two parties”.

With Ehang, the governor thinks that “like other megacities in the world, Lagos State is still faced with some challenges that will require very innovative solution. For instance, emergency situations will require urgent and speedy response, just as when there are security challenges because safety of lives and property are very important to our government”.

This may mean that Sanwo-Olu is considering collaboration in urban air mobility, including passenger transportation and logistics, smart city management and aerial solutions, because Ehang is the forerunner of cutting-edge AAV technologies and commercial solutions in the global Urban Air Mobility industry.

Trade, Investment & Industry To keep Lagos ahead and sustain its status as a foremost economy in Africa, the state needs to leverage its influence to attract quality investments, global businesses and large scale enterprises. Even though its GDP of $136 billion and nominal per capita income of about $5,000 suggest the prosperity of the state, indicators are unequivocal about the fact that the state is yet to maximise its potentials.

Perhaps this realisation may be Governor Sanwo-Olu’s push and

Building Strategic Alliances While in China, Sanwo-Olu reached out to his counterpart, Ma Xingrui, the governor of China’s Guangzhou Province on a Twin City Agreement between Lagos and Guangzhou Province.

What Lagos is to Nigeria, Guangzhou is to China. Therefore, there is a strong fit in the collaboration between the two cities. With 44.2 million people in its metro area, Guangzhou is the biggest city in China, and has remained an important port in www.businessday.ng

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@Businessdayng

propelling force. Hence, his methodical knock on Chinese investors’ doors to make Lagos the home of their businesses. In China, he met and invited two Fortune 500 companies to locate plants and operations in Lagos State.

“As you know, Lagos is the largest city in Africa with a population of over 22 million people and the state economy is 7th largest on the continent of Africa. The state is central for easy distribution of products and a fertile ground for recruiting highly skilled workforce that will help further the innovation for which Gree Electric Appliance is globally reputed”, he told the company’s leadership, adding that “we are the major driver of Nigeria’s fifteen places improvement on the World Ease of Doing Business Index, and we will continue to drive the process for continual ascension of Nigeria on the index”.

The company expressed gratitude for the invitation, and interpreted the opportunity to expand into Lagos as a channel to increasing its share of the air-conditioning market to the region of 35% and annual production capacity from of residential air-conditioners (RAC) and central air-conditioners (CAC) from more than 60 million and 5.5 million sets respectively.

Like the Zhuhai-based Electric Appliances Inc., Gree, the board of Guangzhou Automobile Company (GAC Motors Group), led by Zeng Qihong as chairman, expressed willingness to come into the African market through Lagos.

Board members at the meeting include Feng Xingya, president, GAC Automobile Groups, Zhang Yuesai, director general, Yu Jun, director general of International Business and Kamel Zheng, regional sales director, African Region, and Zeng Qihong, the Group’s chairman who said “the Group is considering expanding strongly into international markets”.

“With the governor’s invitation, we are

quite confident and encouraged that coming to Lagos will be exciting. We will look into the process of establishing an operation in Lagos after our international business department has visited to carry out a visibility study of the market. But we are optimistic about coming to Lagos because of the market size and the significance of the economy to Africa” said Qihong.

It is anticipated that GAC Motors operations in Lagos will contribute to the development of the state’s economy and encourage technology transfer between the Chinese and Lagosians. GAC Group is ranked 189 on the list Fortune 500 companies, with total revenue for 2018 being $53 billion and profit standing at $10 billion.

It is believed that when companies like GAC Motors and Gree Electric Appliance come to Lagos, they will contribute to the growth of the state’s economy and encourage technology transfer to the local economy.

Infrastructure Development In a move to address the infrastructure deficits that have held down Lagos from its envisioned greatness, the state has started making impressive efforts that will make roads smoother, connections easier with bridges in the right places, address housing deficit through disciplined urban development programmes and ease intra-city community with the introduction of a multimodal transportation system.

When all these are fully delivered, Lagos will be a beautiful example of what African’s can make of their continent. The anxiety to address extant infrastructural gaps was noticeable in Governor Sanwo-Olu’s interactions with development partners and multilateral agencies in China.

In Beijing, at the headquarters of the China Railway Construction Company (CRCC)), the governor who attended a project review meeting with a leading political figure and

chairman of CRCC), Chen Fenjian, listed projects Lagos State would require collaboration and investments from the Chinese corporations to build to completion.

“In Lagos State, we have a number of projects that we are putting on the table for you to consider even though their award will be via a competitive and rigorous bidding process that will guarantee that the projects are delivered to specifications and in a timely manner too”.

“These projects include the construction of the 4th Mainland Bridge in Lagos, our railway projects – Blue Line, Red line, Yellow Line and Purple Line, the Lekki Free Trade Zone access road, water, power and urban development projects across the state” said Sanwo-Olu. Also, at a different engagement with China Civil Engineering Construction Corporation (CCECC) and China Harbour Engineering Company (CHEC), the company working on the Lekki Deep-sea Port, which upon completion may contribute 70% of Lagos State GDP, Governor Sanwo-Olu emphasised the importance of the 4th mainland bridge to the government and people of Lagos State.

“Construction of the 4th mainland bridge is extremely important to our government because of the positive effect it will have on our lifestyle and Lagos economy,” said Sanwo-Olu. Waste Management Amidst the drive for functional infrastructure, industrial development and social security, Lagos still has its eyes on maintaining an ecologically balanced environment.

Even though this indication has emerged severally in the governor’s interactions with urban development corporations pitching their impressive footprints in Macao, Hong Kong and Hengquin for replication in Lagos, the discussion with Dyna Green Group, a Beijing-based company dedicated to the industry of recycling economy and renewable energy, affirmed the state government’s commitment to environmental cleanliness and ecological balance.

Muyiwa Gbadegesin, managing director, Lagos State Waste Management Authority (LAWMA) let out the impression that the agency must have found an operational model in the activities of Dyna Green in their discussion of investment and construction, operation and management, technology development and supply of the core equipment.

The scope of the bilateral talks also covered the processes for the treatment of urban household waste and medical waste, as well as providing the overall solution for the urban waste treatment.

“This model and partnership will pretty work well for Lagos State. www.businessday.ng

We generate about 14,000 metric tonnes of waste daily, which aside from when taking off the streets contributes to wellbeing, could also bring forth energy and other useful by-products if recycled”, said Gbadegesin.

Over the past three months, the state waste management strategy appeared to have undergone revival with the introduction of several initiatives and new waste-evacuation plan. Similarly, government is looking to commission a recycling plant, and continue with overhauling of the transfer loading plants to strengthen the capacity of the agency to keep the streets of Lagos clean.

However, with the combination of population, income and urbanisation, Lagos will need a more sustainable approach to its waste management. The meeting of these elements in a fast-growing city and economy like Lagos compels a holistic waste management regime.

Public-Private Partnership (PPP) With the array of needs that the Lagos State governor confronted investors, development partners, lending agencies and financial institutions with, one may begin to think about the capacity of the state treasury to execute limitless number of projects.

On the contrary, the state has awakened a collaborative model between investors and the government to foster its development initiatives and ideas. In quest to sustainably build a greater Lagos, the govern-

ment has revived its PPP model.

“We are at the stage of building critical infrastructure that that will make our city more habitable. We want technology to drive economic innovation, public security, health management, waste management, traffic management, government processes and services to the public” Sanwo-Olu informed the investors.

Most importantly, the contribu-

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tions of the state to Nigeria’s notching 15 places higher on the Ease of Doing Business Index is a testament to the efforts of the current government to make the state an attractive destination to investments, a notion reinforced by an extract “In Lagos, commerce is our mainstay” published by the state in the Friday, November 22, 2019 edition of the Financial Times of London’s Invest in Nigeria Report.

As Africa’s most significant sub national government, boosting of a GDP of $136 billion, which is bigger than the economies of 46 countries and population size of 22 million, which makes Lagos the most populous city on the African continent, the state surely needs to grow sustainably.

The PPP model, therefore, may be a catapult that will take Africa’s 7th largest economy beyond its present position and help effect a greater growth above 4% expected in 2019.

Like other megacities, Lagos State has identified its social challenges, and pursued the opportunities in their resolution through credible and dependable partnerships.

Like Governor Sanwo-Olu, the state commissioner for information and strategy, Gbenga Omotosho, is optimistic that Lagos is walking the path of faster growth and development.

“Yes, we have some social challenges, but therein are opportunities for growth, prosperity, development.

T.H.E.M.E.S offers a glimpse of openings for investors to sow into our fer-

munity since May 29, 2019 when it assumed office.

However, the government, notwithstanding limited resources, is expected to have its skin in the game.

For the large-scale investments in infrastructure development, industry establishment and power, investors’ dollar is expected to find succour in government’s cent, beyond the state guarantee.

Accordingly, Sanwo-Olu presented areas of intervention and projects to the China Development Bank, which granted $629 million loan for the Lekki Deep-sea Port construction, China Exim Bank that has provided over 60% of funding for Chinese companies executed projects in Nigeria, may be in the region of $38 billion and China Export & Credit Insurance Corporation (SinoSure), the risk management leg of Chinese government’s investment outflow to creditors ahead of the Lagos projects.

As Nigeria’s most significant subnational government and a major economy in Africa, the state of affairs in Lagos remains a major point of interest to stakeholders across the globe.

The centrality of Lagos to economies in the African sub-region and her place as one of the largest cities in the world are some of the reasons the state remains on the world’s lens.

Indeed, the world has been worried about the seeming lack of direction to take the state to a premium position on the socio-economic map of the world.

tile economy, because it is our path to becoming greater”, said Omotosho.

But Sanwo-Olu is selling his vision for a greater Lagos with vigour and commitment. His attitude in propagating his plans for the state, often times, provides a peep into his heart of good intentions and purpose. Though a politician, he has come to public service with candour, and without a doubt, the journey to actualising the greater Lagos vision is on track.

Projects Funding There is an unmistakable sense that every letter of the acronym T.H.E.M.E.S is an investment opportunity in the thriving economy of Lagos judging by the government’s unfolding plans and engagement of the international investment com@Businessdayng

22

Wednesday 04 December 2019

BUSINESS DAY

BANKING Nigerian banks now stronger on back of improved capital buffers, liquidity Stories by HOPE MOSES-ASHIKE

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he Nigerian banking system is said to be now stronger due to the fact that capital buffers and liquidity in the system have continued to improve.

The banking industrywide Capital Adequacy Ratio (CAR) had increased from 10.2 percent in December 2017 to 15.5 percent in September 2019.

The percentage of non-performing loans in the banking sector had reduced from a high of 14.7 percent in January 2017 to under 7 percent as at October 2019.

Credit conditions in the banking system had improved supported by the CBN’s new policy measures announced in June 2019, which require banks to maintain a minimum 65 percent loan to deposit ratio.

“Banks in the country are now able to recover delinquent loans from customers’ accounts in other banks,” said Godwin Emefiele, governor of the CBN at the 54th Annual Bankers’ Dinner organized by the Chartered Institute of Bankers of Nigeria (CIBN) in Lagos on Friday, November 29, 2019.

He said the measures now placed Nigerian banks in a much better position towards supporting

a stronger economic recovery. This, he said, had increased gross credit by N1.16 trillion between May and October 2019.

Emefiele listed the Bank’s priorities for 2020 to include support for greater economic growth, price stability and low inflation, even as he hinted on the continued tight monetary policy stance of the Bank and the establishment of a Bankers’ Charitable Endowment Fund.

The CBN governor announced the establishment of a Bankers’ Charitable Endowment Fund that will fund a major charitable initiative every year starting in 2020. According to him, the Bankers’ Charitable Endowment will directly fund strategic social programmes in states and

local communities across Nigeria. He expressed the hope that the Fund would spur a trend across other industries and sectors to collaborate and work together to better the lives of all Nigerians.

On the country’s external reserves, the Governor said the Bank’s effort at supporting domestic production in the agriculture and manufacturing sectors among other policies, had continued to encourage foreign exchange inflows into the Nigerian market.

According to him, over $60 billion worth of transaction had taken place since the inception of the Investors’ and Exporters’ window in April 2017, adding that Nigeria’s foreign exchange reserves were above $40bn as at October 2019, com-

pared to $23bn in the same period in 2016.

He also highlighted the Bank’s effort in development financing, which he said the CBN had sustained in order to help support growth in critical sectors of the economy such as agriculture and the manufacturing sectors, through programmes such as the Anchor Borrowers’ Programme, the Commercial Agriculture Credit Scheme and the Bankers Committee AgriBusiness/Small and Medium Enterprises Investment Scheme(AGSMEIS).

Alluding to the economic face-off between some countries, as well as the likely challenges the economy could face due to moderate oil prices, he stressed the need for Ni-

geria to build up the necessary buffers that would protect the economy from pressures in the global market. He then restated the need to boost local production and diversify the country’s export base.

“We should encourage Nigerians to consume goods that can be produced in Nigeria, knowing full well that a time will come when we may not have the foreign exchange to aid such activities, if we continue to rely on earnings from the export of crude oil,” he emphasized.

As part of the Bank’s priorities for 2020, he said the CBN was determined to maintain its stable exchange policy stance in the near to medium term given the relatively high level of

reserves. He said the Bank would also sustain these efforts in 2020 as part of our plan to reduce our financial exclusion rate to under 20 percent over the next year.

The CBN governor said the Bank will also improve access to credit for farmers and SMES by deepening its intervention efforts through the Anchor Borrowers’ Programme, Commercial Agriculture Credit Scheme and the Real Sector Support Funds, amongst others. Similarly, he said the Bank, in pushing to improve access to finance and credit, would protect them from unfair banking and lending practices by maintaining oversight on the banks and other financial institutions.

In addition to making sure that financial institutions support the growth of the real sector, Emefiele said the CBN, working with the Nigerian Export Import Bank (NEXIM), improve access to the N500bn facility designed to support the growth of Nigeria’s non-oil exports.

While disclosing that the Bank, working with the fiscal authorities, will support the recovery of the economy, the CBN governor reiterated that Nigeria was open to business and urged investors to take advantage of the investment opportunities in Nigeria. He assured that investments in Nigeria would be duly protected by the authorities.

Ecobank, Standard Chartered lead in Capital Importation to Nigeria in Q3

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ational Bureau of Statistics (NBS) says Ecobank Nigeria and the local unit of Standard Chartered Bank have joined Stanbic IBTC Bank to become foreign investors’ favourites for investment deals.

Details of the Bureau report showed that out of 26 banks foreign investors used to deploy foreign capital into the country, the most investment came through Stanbic IBTC Bank. The bank attracted $1.63 billion worth of investment in the third quarter of this year, lower than $1.76 billion it had in the previous quarter.

Ecobank followed with $754.38 million worth of foreign investment, while Standard Chartered Bank, a wholly-owned subsidiary of UK-based Standard Chartered Bank occupied the third position by attracting $502.47 million inflows. Access Bank got $477.55 million; Rand Merchant Bank, $430.15 million; Citibank Nigeria Limited; $350.95 million; while First Bank of Nigeria had $307.94 million.

According to NBS, while the total value of capital importation into the Nigerian economy fell by 7.78 percent to $5.36 billion in the third www.businessday.ng

quarter of 2019 from the previous quarter, Ecobank Nigeria attracted $754.38 million

worth of foreign investment, representing 55.41 percent more capital thus making

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the bank foreign investors’ favourites for investment deals.

C o m m e n t i n g , Adetokunbo Uko, Country Treasurer, Ecobank Nigeria, said the Bank was leveraging on its pan-African strategy to attract capital to the nation’s economy, stressing that the Bank remains committed to increasing capital flows to Nigerian financial market.

According to her, “As a gateway to the African market for foreign direct and portfolio investments, Ecobank Nigeria is leveraging on its Pan-African platform, people and products to con@Businessdayng

tribute to the financial and economic development of Nigeria through provisions of foreign exchange solutions and fixed income products to local and foreign customers.” “We remain committed to our African strategy, to increase capital flows to Nigerian financial market through enhanced product offerings, good customer experience and transparency in all transactions” She restated the Bank’s commitment to redouble its efforts on all fronts to remain foreign investors’ favourite for investment deals and also claim its rightful position in the industry.

Wednesday 04 December 2019

BUSINESS DAY

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MARITIMEBUSINESS Shipping

Logistics

Maritime e-Commerce

NNPC needs to provide contracting tonnages for Nigerians to invest in vessels - stakeholders …As SOAN hinges competitiveness on acquisition of more ships amaka Anagor-Ewuzie

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or Nigerian ship owners to compete favourably with its foreign counterparts, the Nigerian National Petroleum Corporations (NNPC), must provide the contracting tonnages that would enable Nigerian operators to invest in vessel acquisition, stakeholders have said.

To them, NNPC, which is the biggest employer of marine assets in Africa, can be an enabler by providing those contracts of carriage that would make vessel acquisition a more bankable investment in Nigeria.

Speaking with newsmen, at the maiden edition of the Lagos International Shipping Expo organised by the Shipowners Association of Nigeria (SOAN) in Lagos recently, with the theme: “Shipping, Global Economy and National Development,” Mina Oforiokuma, member, Governing Council, Nigerian Content Development & Monitoring Board (NCDMB), said these marine assets feed the import of petroleum products into Nigeria

and services the export of petroleum products.

Oforiokuma, who spoke on what Nigeria needs to do to increase the number indigenous players in its shipping sector, stated that opportunities in the Direct Sales and Direct Purchase (DSDP) of Crude oil contract especially importation of refined products, can be

reserved for Nigerians.

According to him, if Nigerians have the technical capability to run the kind of vessels needed by International Oil Companies (IOCs), those IOCs can give contracts to Nigerians to perform on their cargoes, and “with those contracts, Nigerian ship owners can go to the bank to get the fund

that would enable them to buy vessels.”

“Government has a great role to play especially in creating enabling environment for private investors to come into the maritime sector. However, the amount of vessels owned by Nigerians has actually increased and our tonnage capacity has also grown in both the

Shippers’ Council, FRSC sensitise stakeholders on Truck Transit Park in Lagos amaka Anagor-Ewuzie

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s the global community approaches the festive season, the Nigerian Shippers’ Council (NSC) in collaboration with the Federal Road Safety Corps (FRSC) has conducted a sensitisation rally to educate stakeholders on the importance of Truck Transit Pack (TTP) to the overall safety of road users in Nigeria.

TTP is a public rest area located off the road, designed to provide temporary rest location for drivers. It is primarily intended for short-term parking services where truck drivers can get fuel, food, restroom, shower and basic supplies like oil and spare parts as well as repair their vehicles.

It is an initiative of the NSC aimed at helping to ease the congestions on the roads. Under the initiative, private investors and the state governments are critical partners.

The NSC is also partnering with other relevant stakeholders on TTP utilisation.

However, when fully operational, TTP will afford cargo owners the means to monitor the movement of cargoes through a cargo tracking system to be located in respective TTP locations.

Hassan Bello, executive secretary/CEO of the NSC, said at the sensitisation rally themed, ‘Truck Transit Pack: A Panacea for Crash-free Haulage Operations in Nigeria,’ that the initiative was part of the effective collaboration between the NSC and the FRSC to better manage and enlighten stakeholders.

According to him, the major purpose of the initiative was to promote safety and security of cargoes and haulage vehicles while in transit.

This, he said, will also help in reducing pilferage and theft of cargoes while in transit and provide transit trade with landlocked neighboring countries.

“The collaboration with www.businessday.ng

the FRSC is to ensure smooth movements of goods facilitated through the use of truck transit packs. The truck transit packs will also bring about increased in internally generated revenue, wealth creation and boost local economies of the states,” said Bello, who was represented by Samuel Vongtau, special duties, director of the NSC. Boboye Oyeyemi, the Corps Marshal of the FRSC said the collaboration is an attempt to put sanity on the roads.

According to him, both organisations have agreed on the way forward to better manage road carnage.

“The roads are filled up because there are trucks that must carry out their business and we cannot stop them from doing their business.

But, what is important is that we are making progress in terms of congestion. And with what Dangote is putting in place; we expect that within a very short time, you will witness a lot of improve-

ment,” said Oyeyemi, who was represented by Victor Nwokolo, assistant Corps Marshal (ACM).

Suleiman Adamu Danzaki, of the NURTW and senior special adviser to the president on labour matters, said there was need for synergy between Lagos and Ogun states on modalities to better manage transport and truck related issues.

Danzaki said if care was not taken, the bridges leading into Nigeria’s ports city in Apapa will collapse due to the level of heavy duties and haulage vehicles packed on the bridges.

The sensitisation initiative is one of the strategies adapted to fast-track and bridge infrastructure deficit particularly in the transport sector and reduces road carnage. Furthermore, as a build up to the establishment of the TTP across the country, the NSC and the FRSC signed a Memorandum of Understanding (MoU) on trucks management and regulation in 2017.

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downstream and upstream sectors,” he said.

Oforiokuma stated that Nigeria also needs to look at in-country technical capacities and capabilities in managing maritime assets because Nigeria has the greatest amount of marine assets operating on her territorial waters.

Earlier in his presentation, Rotimi Amaechi, Minister of Transportation, said boosting indigenous ship ownership would enable Nigeria to compete favourably in the international scene.

Amaechi, who was represented by Grace Atiegoba, director, Reform, Coordination and Service Improvement, said the Federal Government is aware of the challenges in the industry and working to ameliorate them.

According to him, government is also eager about marine notice as it provide important issues on safety, general guidance to shipping and marine communities.

He further stated that government was concerned about the non-disbursement of the Cabotage Vessel Financing Funds (CVFF), poor infrastructure and poor maritime institutions in the

country.

Also, Gbemisola Saraki, Minister of State for Transportation, who was represented by Bola Muse, president of Women in Maritime Africa (WIMAfrica) said maritime, is the backbone of global trade.

She said that the jobs and livelihood of billions of people in the developing world and the standard of living in the industrialised world depend on shipping.

Saraki further stated that shipping is critical to the achievement of the 2030 Agenda for the Sustainable Development.

Mkgeorge Onyung, President, Ship Owners Association of Nigeria (SOAN) said that indigenous shipping operators need to acquire more ships to become competitive in the global shipping trade.

He said that acquiring more Nigerian owned vessels would enable ship owners to unlock economic prosperity of Nigeria and to create thousands of new jobs. He called on President Muhammadu Buhari to assist Nigerians by creating enabling business environment and provision of the finance needed to acquire more ships.

Here’s the newly elected 40-member council of IMO Assembly

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he Assembly of the International Maritime Organization (IMO) has elected the following 40 states to be members of its Council for the 2020-2021 biennium sessions.

At the IMO Council election held in London on Friday, 10 states with the largest interest in providing international shipping services were elected into the Category (a), and they include China, Greece, Italy, Japan, Norway, Panama, Republic of Korea, Russian Federation, United Kingdom, United States.

Category (b), comprises of another 10 states with the largest interest in international seaborne trade and they include Argentina, Australia, Brazil, Canada, France, Germany, India, the Netherlands, Spain and the United Arab Emirates.

While Category (c), is made up of 20 States not @Businessdayng

elected under (a) or (b) above, which have special interests in maritime transport or navigation and whose election to the Council will ensure the representation of all major geographic areas of the world.

The Category C members include Bahamas, Belgium, Chile, Cyprus, Denmark, Egypt, Indonesia, Jamaica, Kenya, Kuwait, Malaysia, Malta, Mexico, Morocco, Peru, the Philippines, Singapore, South Africa, Thailand and Turkey.

The Council is the executive organ of IMO and is responsible, under the Assembly, for supervising the work of the organization. Between sessions of the Assembly, the Council performs all the functions of the Assembly, except that of making recommendations to Governments on maritime safety and pollution prevention.

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Wednesday 04 December 2019

BUSINESS DAY

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Wednesday 04 December 2019

BUSINESS DAY

PENSION today

25

In Association With

Micro pension beneficiaries to enjoy tax relief, access to healthcare, credit facilities

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nformal sector employees that key into the micro pension plan being driven to expand the nation’s Contributory Pension Scheme (CPS) will enjoy incentives including tax relief, access to healthcare as well as some credit facilities to support their businesses.

These are some of the hidden benefits that Pension Fund Operators and working out to attract potential contributors into the plan developed for informal sector workers.

Abisola Onigbogi, executive director, Technical ARM Pensions made the disclosure at the 2019 Journalist workshop titled ‘Expanding Coverage Of The Pension Industry’ organised by the National Pension Commission(PenCom) held in Benin, Edo State.

Onigbogi said these are some of the arrangements being worked out between the operators and the regulator to attract a large number of the informal sector into the scheme.

He noted that the informal sector has a huge potential to contribute significantly to the pension sector because apart from having a concentration of about 70 per cent of total workforce in Nigeria amounting to 60 million people, the informal sector is a big sector income contributor to the economy.

Onigbogi noted that of the informal sector population, there is the semiformal population comprising of the small and medium enterprises; organised informal population comprising of the associations, corporative and the unions; and there is the unorganised informal population comprising of the unofficial individuals.

He also stated that efforts are ongoing to ensure partnership with service providers to provide access to basic services such as health care, insurance services among others, with the aim of bringing more persons in that net into the pension scheme as a greater percentage of Nigerians which represent the informal sector are still out of the pension coverage.

“There is also the plan to digitalise the process through mobile enabled transactions in such a way that there is convenience, and value driven approaches, he said.

Onigbogi also said “We need to deepen financial inclusion which stands at 65 per cent through mobile phone subscription. There are currently 172 million mobile subscribers, and therefore we need to make it easier for contributors to contribute to their pension account from the comfort of their mobile phones.

“Providing means of identification by enrolees he noted has been the major challenge , stating that operators were working with the regulator to ensure that the requirements are relaxed a little to encourage more people into the scheme, he said.

L-R: Daisy Ekineh, trustee member, Pension Fund Operators Association of Nigeria(PenOp); Bamidele Salam, deputy chairman; Ibrahim Shekarau, chairman, Senate Committee on Establishment and Public Service; Aderonke Adedeji, president, PenOp; Hassan Rurum, chairman, House Committee on Pension Matters; deputy chairman, Senate Committee on Establishment and Public Service; Ehimeme Ehioma, head, surveillance, National Pension Commission(PenCom) and Wilson Ideva, MD/CEO, High Street Consulting at the Workshop for Joint Committee for Establishment and Public Service of the Senate and House of Representative Committee on Pensions held in Uyo, Akwa Ibom, State.

Aisha Dahir-Umar, acting director general, PenCom in her opening remarks at said the theme of the workshop describes the Commission’s current strategic focus, which aims to expand access to pension via the CPS, as a veritable tool for economic development.

She said this aligns with the pension reform objective of old age poverty reduction and improvement in the welfare and general standard of living.

“The quest to expand coverage of pension is being pursued through some transformational initiatives especially the Micro Pension Plan.”

She said “As you are aware, the MPP, which was launched in March 2019 by President Muhammadu Buhari is targeted at the informal sector and self-employed who are not mandatorily covered under the CPS. “It is noteworthy that the MPP was designed with significant flexibility in recognition of the peculiarities of the targeted population.”

According to her, as at September 2019, the number of registered contributors under the CPS has grown to 8.85 million while pension fund assets have grown to N9.58 trillion.

Dahir-Umar further stated that this growth indeed justifies the Commission’s emphasis on the safety of pension funds as bedrock for sustaining the CPS, and assures all stakeholders that the pension reform remains steadily on course.”

She also stated that these modest milestones

notwithstanding, the commission and operators are committed to actualizing the growth potentials of the pension industry.

She also noted that the Enhanced Contributor Registration System (ECRS) is an in-house developed ICT application which was deployed in June 2019 to enhance the integrity of the contributors’ database.

“It has also been integrated with the National Identity Management Commission (NIMC) database to help authenticate the uniqueness of individuals seeking to register under the CPS.” The ECRS provides a platform for the registration of Micro Pension Plan Participants and is a major step towards the introduction of the transfer window, which will enable contributors change to the PFAs of their choice, in line with Section 13 of the Pension Reform Act (PRA) 2014, the director general stated.

Section 2(3) of the Pension Reform Act, 2014 extended coverage of the Contributory Pension Scheme to self-employed persons with the objective to avail the contributor access to regular stream of retirement income at old age and improves living standards of the elderly.

Besides, it will enable contributors benefit from the various incentives to be offered by the PFAs; deepen financial literacy and inclusion, secures financial autonomy & independence of retirees; passage of wealth to survivors in the

event of death; increases national savings & long term funds; promotes growth & development of the capital, mortgage and insurance markets and overall positive effect on the national economy as pension asset increases.

The informal sector being discussed here is largely uncovered by any structured pension and represents over 70 percent of Nigeria’s total working population.

Some of the peculiarities of the individuals that operate within the informal sector that is hoped would benefit from the micro pension scheme include irregular flow of income, highly mobile and flexible jobs, lack of permanent work address, lack of official means of identification and other documents, typically excluded from pension systems prior to PRA 2014 and they are also largely uneducated.

EFInA Access to Financial Services in Nigeria 2014 survey shows that the total adult population of Nigeria is 93.5 million and 37.6 million adults representing 40.1 percent of the total adult population operate within the informal sector. It also show that 8.6 million adults, that is 9.2 percent of the adult population get their main source of income from the formal sector while 49.4 million adults, that is 52.8 percent of the adult population is under 33 years.

The result of the survey further shows that 58.7 million adults, that is 62.8 percent of the adult population own a mobile phone.

IS NOW RC634453

Diamond Pension Fund Custodian Limited 1A, Tiamiyu Savage Street, Victoria Island, Lagos State.

Tel: 01-4613753, 2713680, 2713954 Fax: 01-2713955 Email: info@accesspfc.com Website: www.accesspfc.com

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@Businessdayng

This section is created to increase awareness and deepen knowledge about the Contributory Pension Scheme.

If you have enquiries or contributions, send to this e-mail: accesspfcbusday@yahoo.com

26

Wednesday 04 December 2019

BUSINESS DAY

insurance today

E-mail: insurancetoday@businessdayonline.com

Lessons for Nigeria as Kenya leads in insurance penetration using agency network ...expert recommends 100,000 agents for Nigeria Modestus Anaesoronye

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enya insurance industry has 25,000 agents serving 40 million population, and its insurance penetration is about 3 percent, whereas Nigeria has 10,000 agents serving 200 million population and its insurance penetration is 0.3 percent.

Report also shows that insurance penetration in Kenya has largely been influenced by intermediaries (agents), and this is said to contribute about 73 percent of the penetration rate.

What that implies is that Nigeria has

the capacity to increase its penetration level if it is able to increase agency workforce in the market.

An insurance agent is a person or organization who/that solicits, negotiates, or instigates insurance contracts on behalf of an insurer and can be independent or an employee of the insurer.

While insurance penetration is the most common measure of growth in the industry and is measured by the amount of insurance premiums paid by all policyholders as a percentage of GDP Coenraad Vrolijk, regional chief executive officer, Allianz Africa told Business Day in an interview that there are 25000 agents in Kenya selling insurance to 40 million people, so Nigeria should have

L-R: Emmanuel Otitolaiye, chief financial officer, Linkage Assurance Plc; Mayowa Adeduro, managing director/CEO, Law Union and Rock Insurance Plc; Taoheed Sikiru, compliance officer, Linkage Assurance Plc; Ganiu Musa, group managing director/CEO, Cornerstone Insurance Plc; Sunday Thomas, acting commissioner for Insurance; and Tope Smart, group managing director/CEO, NEM Insurance Plc during the Celebration of Life of Mercy Omotunde Daniel(late), mother in-law of the Insurance Commissioner in Ilorin, Kwara State

NAICOM to host African regulators with discuss on Index-based Agricultural Insurance Modestus Anaesoronye

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he National Insurance Commission (NAICOM) is set to host the 3rd General Assembly of the Association of African Insurance Supervisory Authorities (AAISA) between December 9 - 10, 2019 at the Transcorp Hilton, Abuja.

AAISA is the umbrella body set up to bring together insurance supervisory authorities from all parts of Africa with the objective to amongst others: Promote co-operation among supervisory authorities in Africa; assist countries in human resource development, and create a forum for the standardisation of in-

surance laws and supervisory structures on the African continent.

As part of NAICOM’s support for capacity development of member countries, the General Assembly will be complemented with a seminar on Indexbased Agricultural Insurance (IBAI).

The seminar topic is in synch with the priority of the federal government of Nigeria to diversify the economy, boost its Gross Domestic Products and the national insurance support for capacity to handle emerging risks.

The Commission, in collaboration with African Re is ensuring the attendance of internationally certified specialists in Agric-index as facilitators at the seminar. www.businessday.ng

100,000 agents, but today has only 10,000 agents.

He said that what is driving insurance in Kenya is not corporate insurance as penetration from that segment is either 0.4 or 0.5 or 0.6 .

“The difference is retail and one of the big differences is the mobile operators’ sales but in addition, all of the insurance industry have really big agents workforce and branch network and they work with the banks. So you take the top 5 insurance companies you are going to have 15-20,000 agents between them.”

On what Allianz is doing to grow the retail market, he said at Alliance we strongly agree that retail insurance is what thrives penetration and usefulness

of the population.

“If everyone has insurance, that is when it starts to make sense, the reason we have increased our agents workforce from basically nothing to 1000 precisely is that the agents are not selling to companies but individuals in life and non-life.”

Vrolijk also stated that the larger part of Allianz growth ambition is in retail, not just in Nigeria but across the continent and that’s same story everywhere.

Nigeria in particular, has very low penetration and that is why I would love to work with the phone companies to also sell through phones and our team is working on that so we will see how far we go but these are important and critical to the growth really, he said.

L-R: Sunday Thomas, acting commissioner for Insurance; his wife and other family members during the Service of Song of Mercy Omotunde Daniel(late), mother in-law of the Insurance Commissioner in Ilorin, Kwara State

Premium Pension deepens CSR with donations to Schools, IDPs, Orphanage homes Modestus Anaesoronye

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remium Pensions Limited (PPL), one of Nigeria’s leading Pension Fund Administrators (PFAs) with Assets Under Management (AUM) in excess of N700 billion has deepened its Corporate Social Responsibility programmes, with donation of educational materials to select schools, internally displaced persons and orphanage homes across the country.

The donations are in line with our determination to impact the society where we do our business, according to a statement signed by Aliyu Mohammed Ali, head corporate communications of the Company.

The interventions are aimed at touching the lives of the beneficiaries positively.

Some of the CSR interventions include presentation of exercise books to Abia and Kaduna States. Other donations include food items and mattresses to Clapai Orphanage in Plateau State and clothing items to Inter-

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nally Displace Persons (IDPs) in Borno State.

Manual boreholes were also constructed for Rawayya Village in Zamfara State as well as Karu Abattoir and Old-Kutunkun village in Gwagwalada within the Federal Capital Territory.

Also included include - the provision of solar-powered lights in Federal University Dutse, Jigawa State and providing financial assistance to Onyekachi Ezekwe for surgical operation.

“As a responsible corporate entity, Premium Pension Limited cannot stand aloof when the opportunity to help people in need and contribute to the development of the society arises” said the Umar Sanda Mairami, Managing Director/CEO, “Corporate Social Responsibility (CSR) is an integral part of the company’s corporate governance architecture for which we have won international awards”.

Premium Pension is one of the leading Pension Fund Administrators with offices across the country. The company has over N700 billion in Assets Under Management.

@Businessdayng

Wednesday 04 December 2019

BUSINESS DAY

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Wednesday 04 December 2019

BUSINESS DAY

Harvard Business Review

MANAGEMENTDIGEST

Why Google’s move into patient information is a big deal DAVID BLUMENTHAL

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recent agreement between Google and Ascension, a huge national health system, is yet another sign of how the digital revolution is transforming health care. We are at the dawn of a new era in which clinicians will be able to apply in real time the collective human experience in treating any particular problem to the care of every patient with that condition.

But the critical reactions to the agreement — under which Ascension will send to the Google cloud the clinical data it collects on its 50 million patients, and Google will process that data to help Ascension better manage its patients and its finances — make it clear that changes of this magnitude are never smooth. The announcement generated concerns about patient privacy and the misuse of information for the private gain of third parties. It triggered an investigation by the U.S. Department of Health and Human Services and calls from members of Congress for further inquiries. We are obviously at the beginning of what will likely be a long, contentious and vital debate over how to manage personal health information in the digital age.

Patients have an undeniable right to privacy and control over their personal health data. Doctors and hospitals need leeway to use patient information in their care. Patients, health professionals and the larger society have an interest in learning from our collective experience with care to better prevent and treat disease. And tech entrepreneurs want a return on their capital when they add value to the management of health care data. The coming debate will be about how to manage these sometimes conflicting interests as health information technology revolutionizes our health care system.

Here are the fundamentals underlying the AscensionGoogle relationship: Ascension sits on troves of data accumulated from caring for millions of patients who pass through its facilities. That data used to be locked away in paper records.

With the near-universal adoption of electronic health records over the past decade, it can now flow instantly to wherever it’s

useful, provided that patients’ privacy is protected.

This has several immediate benefits for patients. Their personal histories are always accessible when they get care at Ascension (and possibly elsewhere). Ascension’s doctors and nurses can potentially learn from the experience of all Ascension’s patients with similar conditions as they care for any individual patient. And by applying search technologies and artificial intelligence, Ascension may also be able in real time to mobilize lessons of the entire scientific literature to bring to bear on individual patients. That literature is so enormous that even the most experienced clinicians have difficulty keeping up with it. Ascension’s experience may also inform medical research more broadly.

The challenge is that accomplishing these innovative uses of electronic data requires a range of informatics, analytics and research skills that most health systems don’t possess. That’s where Google comes in. It has IT skills that Ascension can never hope to equal. And Google has been gobbling up nationally renowned clinician leaders and researchers to create a deep bench in health care informatics and research.

In this, Google is not alone.

IBM Watson has been in this field for some time. Amazon and www.businessday.ng

Apple seem to be following suit.

And there are a flock of startups eager to add value to health care by mining patient data. When health care, which accounts for 18% of the U.S. economy, suddenly enters the digital age, the business opportunities are huge.

Google is reportedly not charging Ascension for its services, but future customers are unlikely to be so fortunate.

The legalities, of course, cannot be set aside for long.

The Google-Ascension deal will likely expose the personal health information of millions of Ascension patients to Google employees. Doesn’t this violate the Health Insurance Portability and Accountability Act of 1996?

Health care providers routinely cite HIPAA as a tough, nononsense statute that severely inhibits their ability to share patients’ information with each other and even with patients themselves and their families.

Despite its reputation, HIPAA is full of holes, and lawyers for Google and Ascension likely found ample room in the law to support their agreement. For one thing, health care providers who are regulated under HIPAA, so-called covered entities, may share personal health information without patient consent for three main purposes: treatment, payment and operations.

Treatment means that clinicians can discuss their patients

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with other treating clinicians without getting patients’ consent each time. Payment means providers can use personal health information to get paid by insurers. And operations means that providers can use personal health information to address the critical operational needs of their organizations, including improving the quality and safety of their care. When a covered entity uses a third party to fulfill any of these purposes, that outside entity becomes a so-called business associate, and must conform to HIPAA regulations as well.

The data management activities that Google will undertake for Ascension may very well qualify as meeting Ascension’s operational needs to improve the quality of its care, and Google could, in that capacity, serve as a business associate.

Under this interpretation, the sharing of patient data without patient consent could be legal under HIPAA. The U.S. Department of Health and Human Services, which enforces the HIPAA statute, is examining the relationship.

However, even if the relationship turns out to be legal, it raises significant issues. The lawmakers who created HIPAA never anticipated the internet, IT behemoths like Google and Apple or the skill of hackers. It is one thing to share a dusty old @Businessdayng

paper record with an outside entity. It is quite another to send electronic versions off into the cloud where — despite a third party’s best efforts — it might be hacked from anywhere on earth.

HIPAA is likely no longer sufficient to reassure patients that their electronic health data is adequately protected.

Another question surrounds rights to commercial benefits likely to flow from collaborations between health care organizations and IT companies. These agreements will surely produce a bounty of intellectual property that will be profitably sold without patient information (think algorithms and software) to other health care providers and even to other businesses that develop and market health care products (think pharmaceutical and device companies and health plans). But these profits will be derived from the personal health information of millions of patients. Should they be given the opportunity to consent to these business uses of their data? Should they share in some small way in the gains?

These and other questions will have to be addressed to realize the individual and societal benefits of the health information revolution.

David Blumenthal is president of the Commonwealth Fund.

Wednesday 04 December 2019

Harvard Business Review

BUSINESS DAY

29

MANAGEMENTDIGEST

The risks of using AI to interpret human emotions MARK PURDY, JOHN ZEALLEY

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What do people really feel? his has never been an easy thing for companies to determine. For one thing, emotions are inherently difficult to read. For another, there’s often a disconnect between what people say they feel and what they actually feel.

A lot of companies use focus groups and surveys to understand how people feel. Now, emotional artificial intelligence technology can help businesses capture the emotional reactions in real time — by decoding facial expressions, analyzing voice patterns, monitoring eye movements and measuring neurological immersion levels, for example. The ultimate outcome is a much better understanding of their customers — and even their employees.

Because of the subjective nature of emotions, emotional AI is especially prone to bias. One study found that emotional analysis technology assigns more negative emotions to people of certain ethnicities than to others. AI is often also not sophisticated enough to understand cultural differences in expressing and reading emotions, making it harder to draw accurate conclusions. A smile might mean one thing in Germany and another in Japan. If left unaddressed, conscious or unconscious emotional bias can perpetuate stereotypes and assumptions at an unprecedented scale.

Based on our research and experience working with global clients, we see businesses using emotional AI technology in four ways: — UNDERSTANDING HOW EMOTIONALLY ENGAGED EMPLOYEES ACTUALLY ARE: When AI is used to gauge employee emotions, it can have serious effects on how work is allocated. Employees often think they’re in the right role, but upon trying new projects might find their skills are better aligned elsewhere. Some companies are already allowing employees to try different roles once a month to see what jobs they like most. Here’s where bias in AI could reinforce existing stereotypes. In the U.S., where 89% of civil engineers and 81% of first-line police and detective supervisors are male, an algorithm that has been conditioned to analyze male features might struggle to read emotional responses and engagement levels among female recruits. This could lead to flawed role allocation and training decisions.

— IMPROVING THE ABILITY TO CREATE PRODUCTS THAT ADAPT TO CONSUMER EMOTIONS: With emotion tracking, product developers can learn which features elicit the most excitement and engagement in users.

Take, for example, Affectiva’s Auto AI platform , which can recognize emotions like joy and anger and adapt a vehicle’s in-cabin environment accordingly. Cameras and microphones can pick up on passenger drowsiness — and may lower the temperature or jolt the seat belt as a result. A smart assistant might change its tone in response to a frustrated passenger.

But a biased adaptive in-cabin environment could mean that some passengers are misunderstood. Elderly people might be more likely to be wrongly identified as having driver fatigue (the older the age of the face, the less likely it is that expressions are accurately decoded).

This could lead to higher insurance premiums for older people, as the data would suggest that, despite many prompts to rest, the driver pressed on.

— IMPROVING TOOLS TO MEASURE CUSTOMER SATISFACTION: Companies like the Boston startup Cogito are giving businesses the tools to help their employees interact better with customers. Its algorithms can not only identify “compassion fatigue” in customer service agents, but can also guide agents on how to respond to callers via an app. An upset customer might, for example, call to complain about a product.

Recording and analyzing the conversation, Cogito’s platform would then suggest that the agent slow down or prompt them on when to display empathy. A biased algorithm, perhaps skewed by an accent or a deeper voice, might result in some customers being treated better than others — pushing those bearing the brunt of bad treatment www.businessday.ng

away from the brand. A male caller could be subject to less empathy than a woman, reinforcing societal perceptions of men as “emotionally strong.” Or a female caller might be viewed as a less tough negotiator, resulting in less compensation being offered. The agents themselves may not possess these biases, but, clouded by the misconception that the algorithms are highly accurate, they may follow their advice blindly. In this way, biases spread.

— TRANSFORMING THE LEARNING EXPERIENCE: Emotional insights could be used to augment the learning experience across all ages. It could allow teachers to design lessons that spur maximum engagement, putting key information at engagement peaks and switching content at troughs. It could offer insights into the students, helping to identify who needs more attention. China is already introducing emotion-detection systems into classrooms to track students’ focus. But, if biases exist, wrongly suggesting someone is disengaged could result in learning experiences tailored toward certain groups rather than others, given different learning styles.

Incorrect engagement readings could affect learning outcomes all the way to the workplace, meaning that even in work training programs, only a fraction of employees could enjoy full professional development.

Some technologies are better than others at tracking certain emotions, so combining these technologies could help to mitigate bias. A Nielsen study testing the accuracy of neuroscience technologies such as facial coding, biometrics and electroencephalography found that when used alone, accuracy levels were at 9%, 27% and 62% respectively. When combined, accuracy levels shot up to 77%. Testing the results with a sur-

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vey brought this up to 84%. Such combinations therefore serve as a check on the accuracy of results.

Having diverse teams creating emotional AI algorithms will be crucial to keeping bias at bay and fully capturing the complexity of emotions. This means not just gender and ethnic diversity, but also diversity in socioeconomic status and views — negating anything from xenophobia to homophobia to ageism. The more diverse the inputs and data points, the more likely it is that we’ll be able to develop AI that’s fair and unbiased.

Companies will also need to be vigilant about not perpetuating historical biases when training emotional AI. While historical data might be used as a basis to train AI on different emotional states, realtime data will be needed for context. Take smiles, for example. One study showed that of the 19 different types of smile, only six happen when people are having a good time. We also smile when we are in pain, embarrassed and uncomfortable — distinctions that can be drawn only with context.

Emotional AI will be a powerful tool, forcing businesses to reconsider their relationships with consumers and employees, and redefining products as we know them.

As businesses foray into the world of emotional intelligence, the need to prevent biases from seeping in will be essential. Failure to act will leave certain groups systematically more misunderstood than ever — a far cry from the promises offered by emotional AI.

Mark Purdy is managing director with Accenture Research, where Omaro Maseli is a senior analyst.

John Zealley is senior managing director and customer insight and growth global lead at Accenture. @Businessdayng

3 ways to motivate your sales team — without stressing them out SCOTT EDINGER

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t’s widely accepted that if you are in sales, you will have a quota. Achieve your quota, good job. Miss your quota, bad job. Miss your quota by a lot or miss it multiple times: no job. This creates stress for individual sellers and the sales organization as a whole.

While it is the sales team’s job to bring in business, simply cranking up the heat to get the numbers you want can backfire. Too much stress in any professional situation will mask talent and lead to poor decision-making.

Stress does help us get the job done, but only to a point.

Too little stress, and you’re in the weak performance zone; too much anxiety, and performance is impaired. In the middle, an optimal level of stress produces what we’d call peak performance. The technical term for that zone is eustress, which is exactly where leaders should set the pressure to create optimal results.

Leaders can maximize performance by engaging with sellers in these three areas: — FOCUS ON CREATING AN EXCEPTIONAL EXPERIENCE: The sales experience is a vital differentiator when customers evaluate their options.

— FOCUS ON THE SALES PROCESS: If you want to create a process that will help your sellers sell, match it to how buyers buy. In each phase of the sales process, there are a few key actions that influence whether an opportunity will progress to the next stage.

— FOCUS ON COACHING: Leaders can provide good models of what to do, followed by practice, clear feedback on specific skill improvements and follow-up to incorporate feedback into performance — not just once, but over and over again as a skill set is honed to proficiency and then mastered.

As a leader, you have the greatest influence on the stress levels of your team. Pressure may create diamonds out of coal, but you are working with people.

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Wednesday 04 December 2019

BUSINESS DAY

TRANSPORTATION Motoring

RailBusiness

ModernTravel

Roads

group’s Toyota dealership forum explains brand care essence “Infinity “Value Drive 2019’’

…As year-end travel plans gather momentum

commences kept

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MIKE OCHONMA Transport Editor

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ne of prime considerations is returns on investment among auto dealerships in today’s automotive business in Nigeria.

But at Elizade Nigeria Limited (ENL), the Toyota dealership go extra mile every year beyond corporate profit drive to making sure that its customers both individual, government and corporate fleet owners derive the best possible value driving the Toyota brand through quality after-sales service and spares.

Generally, new cars are fully redesigbed every four years.

Occassionally, the model cycle for a specific car or truck lasts more than six years. In between redesigns, every year, models are given a face-lift to help keep them looking fresh and more enticing.

It was the importance attached to automotive care that ENL once in a year meets its customers to keep them abreast of the current happenings with the Toyota family.

Last week in Lagos, ENL organised the 2019 ‘Drivers Education Forum’ with the theme ‘’Toyota MY Ride, Elizade my Choice’’, in an event that attracted several Toyota drivers drawn from the diverse customer base from different parts of the country.

The one-day brainstorm presented an opportunity for ENL after sales service to educated the audience on the ‘principles and rules of engagement’ that should be adhered to by the customers if they are to get the best performance from their vehicles.

Adaghe Osazuwa Joseph,

manager incharge of accounts and finance, while making a presentation to the audience on behalf of Demola Omotosho, after sales service manager of Elizade Nigeria Limited said some of the benefits of the drivers education programme is to give customers regular update on Toyota products, to carry out a continuous improvement (joint kaizen exercise) to customers, to open doors to new opportunities, giving customers that confidence of Toyota ownership, allow room for positive growth and positive improvement.

The expectations of ENL delerships across the country according to Adaghe Osazuwa Joseph is to know more about vehicle operations, to eliminate or prevent related problems by securing scheduled and unscheduled maintenance or repairs.

Other expectations is to identify and know how preventive maintenance will help reduce the possibility of vehicle failure and reduce the risk of accident,

Akaehoumen Gospel, higher fire superintendent, Lagos State Fire Service; Adaghe Osazuwa Joseph, manager, finance/accounts ENL, Henry Ojuoko, senior manager, dealer devt/special projects of Toyota Nigeria Limited, Kolawale Nasir, head, human resources, ENL and Pinaki Sarkar, country manager, Sumitomo Rubbers, SA (Pty) Limited at the 2019 Elizade Toyota Drivers’ Education Forum held in Lagos recently.

improved knowledge of the important roles that safety plays in Toyota customers operations such as enthroning safety standards among drivers as well as having a broad knowledge of tyre maintenance.

The ENL drivers’ forum was told by the facilitator that the dealership expects the partici-

pants to show interest in learning new things whenever the opportunity arises. He said that potential benefits are really huge with nothing to lose. After the presentation, the audience took turns to ask questions that had to do with service guidelines and procedures including tyre fitment tips.

s the Festive Christmas season rents the air, Infinity Group, Nigeria’s leading tyre, battery, lubricants, solar/renewable energy solutions and premium automobile accessories company, is offering its customers, a chance to experience Infinity’s quality automobile aftermarket products and get amazing gifts nationwide with the annual Infinity “Value Drive 2019”. This year’s Value Drive promo now in its 17th edition runs from December 1 to 31 this year.

Infinity Tyres Limited is the authorized importer and marketer of premium tyre brands such as Pirelli, Infinity, Ceat, Eternity, Battery brands such as Exide, Infinity, Nova and Eternity, Global lubricant Brand, Motul, Eastman Brand of Renewable Energy Solutions as well as Eternity standby and traction battery range.

The promo assures customers of a chance to win amazing gifts instantly on purchase of products from Infinity sales and service outlets. Gifts include Motul lubricants and Infinity coolant and based on the value of the purchase, customers can win up to an Inverter and Battery as well.

Moyo Ekiran, of Infinity Tyres Limited, Ikeja Branch, on behalf of the Infinity Management, expressed delight as she described the “Value Drive Promotion” as the unique platform through which the company shows appreciation to its loyal customers.

The singular reason for the success and consistent growth of Infinity Tyres she said was customer’s trust in the brands and superior service quality of the company in Nigeria. She further said that the local market, though competitive is highly inclined in favour of companies that deliver products and services of highest quality.

On her part, Angela Nnedu of the Infinity Tyres Limited, Lekki branch in Lagos took the opportunity to thank customers all over Nigeria for their patronage. She said the management of Infinity Tyres is aware that many Nigerians travel during the festive season.

New Motul range targets slice of lubricants market MIKE OCHONMA

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n keeping with group’s commitment to bring world-class products for its valued customers, Infinity group has diversified its business with the successful introduction of Motul automotive lubricant into the Nigerian market.

Infinity group is launching Motul range of products in Nigeria after extensive testing in market for over one year which has now landed the group as the exclusive distribution partner for Motul range of products for Nigeria.

Motul; a 165 years old French company which was founded in 1853 has since grown to become one of the leading lubricants manufacturer of the world.

Today, Motul which is present in more than 160 countries including with presence in over 24 countries in Africa and designs, elaborates and distributes lubricants with higher technical value added.

As a pioneer in many synthetic and semi-synthetic products, Motul has

L-R: Ratnesh Prasad, Said Ammar, Arshdeep Chadha, Stephane Mathieu, Olivier De Pennart , and Vineet Mathur at the launch of Motul Lubricants in Nigeria at Federal Palace Hotel, Victoria Island, Lagos

always favoured innovation, research and development. The company is also a leader in the motorcycle lubricants market in the world.

In the motorsports field, many manufacturers trust the lubricant brand for its technological developments in car/bike racing. Motul has also developed close relationships with manufacturers such as Nissan, www.businessday.ng

Yamaha, Subaru, Toyota, Honda and Suzuki etc.

Motul was the first lubricant manufacturer to use the ester technology for the formulation of its 100 percent synthetic car oils. The vegetable-based esters benefit from lubricating properties, anti-shear quality and exceptional resistance to high temperatures.

“300V”, Motul’s flagship range, experi-

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enced great development thanks to its presence on the most prestigious car/ bike races.

With its research and development capacity divided in two entities working respectively on “Automotive” (automobile, two-wheels, boat) and “Industrial” lubricants, the range of products includes car lubricants, car care products, motor cycle lubricants, motor cycle care products, industrial lubricants (including food grade lubricants) and marine lubricants.

Motul Industrial lubricant products are used in many areas such as steel industry, mechanical engineering, machinery and equipment manufacturing, cement industry, food industry, pharmacy and cosmetics, wood, glass and minerals, chemistry, plastics and rubber processing, watchmaking, textile industry, auto and car parts manufacturers, rail transport, aeronautics etc.

As a specialist in synthetic oils, Motul has become the partner of many @Businessdayng

manufacturers and sports teams for its technological developments in mechanical sports, car and motorcycle racing.

The brand is present in many international competitions as official team supplier to MotoGP, Road racing, Trial, Enduro, Endurance, Superbike, Supercross, Rallycross, World Rally Championship, FIA GT, Le Mans 24 Hours, Spa 24 Hours, Le Mans Series, rally raid, Paris-Dakar and F3 among others.

Wednesday 04 December 2019

BUSINESS DAY

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TRANSPORTATION Motoring

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Roads

Transport varsity will grow railway sector - Buhari ... stimulate technology transfer STELLA ENENCHE, Abuja

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resident Muhammadu Buhari said the establishment of the University of Transportation, will fast track technology transfer, as well as boost development in the railway sector. He made the assertion during the groundbreaking ceremony of the proposed University in Daura, Katsina State last Monday.

According to him, when established, the institution will assist to build the capacity of Nigerian professionals, technicians and human resources in the transportation sector, and also local content in contracts, science, engineering and technology.

It was the President’s expectation that in no time, graduates from the specialised University will be meaningfully engaged, thereby advancing the local content policy of the federal government. This, in the long-run, will have multiplier effect across all sectors of the economy.

“It is therefore my expectation that in no distant future, Nigeria as a result of the graduands from this University will effectively operate and maintain the numerous railway infrastructure and services which my government is vigorously develop-

MIKE OCHONMA

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ing across the country.

“Furthermore, the project is expected to have multiplier effect on the economy as well as on the life of Nigerians and Students in particular.

“The project is expected to generate academic and non-academic jobs and also produce the much-needed platform for Engineers, Technicians and Transportation Managers to gain requisite skills in the area of railway technology, development, management and other related transportation sciences”, Buhari said.

The president commended the contractors, China Civil Engineering Construction Company, (CCECC), for not only building the University, as part of their corporate social responsibility, but also

for their willingness to establish the rolling stock assembly plant in Kajola, Ogun State.

He observed that the the projects are testaments to the innovative contracting model of the Federal Ministry of Transportation which have made technological transfer and sustainability the corner stone of project development in the transportation sector.

“This University and rolling stock assembly plant projects have demonstrated the commitment of CCECC to having a long-term relationship with Nigeria and thus create more avenues for collaboration between the parties and will no doubt assist the enhancement of the bilateral relationship between China and Nigeria”.

President Buhari said.

Minister of Transportation, Rotimi Amaechi at the event recalled that, CCECC had, during the World Transport convention held in China in 2017, declared a commitment to establish the university.

He said the development was aimed at cementing the bilateral relations between Nigeria and China, through tangible corporate social responsibility projects.

Amaechi also expressed optimism that upon establishment, the ivory tower would pave way for the domestication of railway engineering and general Transportation sciences in Nigeria, as an addition to localisation of manufacturing of railways and railway related infrastructure.

CCECC intensifies work on Lagos-Badagry highway MIKE OCHONMA

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he Chinese Construction & Engineering Construction Corporation (CCECC) has intensified project on the Lagos-Badagry highway as the dry season sets in. This is in fulfilment of promises made by Babajide SanwoOlu, the governor of Lagos State.

It would be recalled that motorists and residents living along the axis have been finding it extremely difficult getting to their places of work and businesses as a result of the gridlock along the corridor which has become a recurring decimal.

Excavation and construction of drainages are ongoing at different segments of the road especially under the popular Lagos Trade Fair Complex. At

Winpart, Philips harps on on vehicle safety, driving comfort

Movement along the Lagos-Badagry road has become a way of life with daily lamentaions and exposure to accidents involving the commuting public

the Lagos State University, some banking institutions close to the fence like the Guarantee Trust Bank and other banks have also pulled down their structures to allow for demolition of the fence. Some road uswww.businessday.ng

ers on the Lagos-Badagry axis have been complaining about difficulty in plying the road.

The initiative to expand the four-lane LBE to a 10lane road with light rail in-between was mooted

during the Tinubu regime and started under the Fashola administration in 2009. The initiative was borne out of the need to ease traffic in the state and upgrade the infrastructure. But the 61-kilometre road reconstruction has been hindered by funding problems and litigations by those whose properties are affected by the development, among others, compelling the contractor, China Civil Engineering and Construction Corporation, CCECC, to stop work. According to the schedule, the Okokomaiko to Marina segment of the road expansion project (also tagged Light Blue Rail) was expected to be completed by December 2014 and projected to transport over 19.2 million Lagosians annually.

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inpart Nigeria, a division of CFAO Motors has partnered with Philips in training Dealers, Technicians, and Motorists on modern technologies and innovations in the manufacturing of lighting products in the automotive industry.

Company sources say, the new strategic thinking is in line with its commitment to ensuring that international best practices on road safety and vehicle maintenance are adhered to in Nigeria, The technical training and networking event which had in attendance automotive professionals with the theme; “Knowledge Update on Current Technologies and Future Development in Vehicle Vision” which took place at the Mitsubishi show room in AdeolaOdeku Street, Victoria Island, Lagos, harped on genuine concern for safe-

the use of fake parts”.

On his part, Akhoun Khalil, sales leader, Middle East &Africa After market, from Philips, a leading bulb manufacturer in the world, notes that “road safety starts with seeing and being seen.

More than 80% of accidents occur during nighttime and under bad weather conditions. Breaking this down further, 37% accounts for strong injuries while 46% accounts for the deadly road accidents we see.”

Proffering solutions, Khalil recommended that, motorists ensure the alignment of the headlamps is checked by a professional while halogen bulbs should be replaced after 40, 000km or every two years. Also, he stressed the change of headlights by pairs for symmetrical performance.

Winpart which is currently operational in several African countries is a world-class OEM spare parts brand distributor tofleets, retail shops, independent repair networks, and cus-

L-R: Thomas Pelletier; managing director/country manager, CFAO Nigeria plc, Odewo Mayowa, Superintendent Route Commandant, Federal RoadSafety Corps,Lagos; Akhoun, Khalil, sales engineer, Middle East & Africa Aftermarket, Olivier Buisson, generalmanager, Winpart/AutoFast Nigeria, Kunle Jaiyesimi deputy managing director, CFAO Nigeria, during the automotive professionals networking and technical training event tagged ‘’Knowledge Update on Current Technologies and Future Development in Vehicle Vision at the Mitsubishi showroom, Adeola Odeku, Victoria Island, Lagos recently.

ty and driving comfort.

In his opening speech, Thomas Pelletier, managing director, CFAO Nigeria Plc, said that “CFAO has been committed to delivering value to Nigerian consumers for the past 117 years.

According to him, “we are a partner of choice for leading automotive brands and we take road safety seriously. In a bid to address safety issues, we have collaborated with leading original equipment manfacturers (OEMs) to make genuine auto parts available to Nigerians in less thantwo hours through a quick delivery system.

The use of genuine OEM parts is not only cost-effective but is also necessary to save lives by avoiding mishaps that could result from @Businessdayng

tomers. It is open for B2B and B2C ordering, either through calls or through its e-ordering platforms which will be up in no distant time.

CFAO is a key player in specialised distribution in Africa and in French overseas territories and a partner of choice for major International brands. The Group is a market leader in automotive and pharmaceutical distribution and continues to grow in consumer goods, new technology, and energy solutions.

CFAO has a direct presence in 36 African countries and provides a Gateway to 49 of the 54 countries that make up the African continent. It is also active in seven French overseas territories and in Asia with 15,000 employees.

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Wednesday 04 December 2019

BUSINESS DAY

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@Businessdayng

Wednesday 04 December 2019

BUSINESS DAY

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tax issues Report sees need to mobilise domestic resources …as average tax-to-GDP ratio in Africa remains unchanged Iheanyi Nwachukwu

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he average tax-to-GDP ratio for the 26 countries participating in the new edition of ‘Revenue Statistics in Africa’ was unchanged at 17.2percent for the third consecutive year in 2017.

This was lower than the averages for Latin America and the Caribbean (LAC) at 22.8percent and for the OECD at 34.2percent, underlining the need for urgent action to enhance domestic revenue mobilisation in Africa.

Revenue Statistics in Africa is jointly undertaken by the Organisation for Economic Co-operation and Development (OECD) Centre for Tax Policy and Administration and the OECD Development Centre, the African Union Commission (AUC) and the African Tax Administration Forum (ATAF) with the financial support of the European Union.

Taxation provides a predictable and sustainable source of government revenue, in contrast with the volatility of other important sources of public revenues.

The report was released at the African Union’s 13th Session of the Committee of Directors-General of National Statistics Offices, represent nearly three-quarters of Africa’s GDP. It compiles comparable tax revenue and non-tax revenue statistics for 26 countries in Africa: Botswana, Burkina Faso, Cabo Verde, Cameroon,

Republic of the Congo, Democratic Republic of the Congo, Côte d’Ivoire, Egypt, Equatorial Guinea, Eswatini, Ghana, Kenya, Madagascar, Mali, Mauritania, Mauritius, Morocco, Niger, Nigeria, Rwanda, Senegal, Seychelles, South Africa, Togo, Tunisia and Uganda.

The report shows that tax-to-GDP ratios varied widely across these countries in 2017, ranging from 5.7percent in Nigeria to 31.5percent in the Seychelles. This fourth edition has grown from 21 to 26 countries and includes Equatorial Guinea, Madagascar, Mauritania, Nigeria and the Seychelles for the first time.

While tax revenues plateaued as a percentage of GDP for the Africa (26) in 2017, non-tax revenues (primarily

rents and royalties from natural resources, as well as grants) continued to decline and were lower than tax revenues in all but three of the 26 countries: Botswana, the Republic of the Congo and Equatorial Guinea.

Between 2010 and 2017, an increase in tax revenues equivalent to 1.9percent of GDP on average was offset by a decline in non-tax revenues from 7.5percent of GDP to 5.7percent of GDP. African economies continue to rely heavily on taxes on goods and services, which accounted for 53.7percent of total tax revenues across the 26 countries. Within this category, value-added taxes (VAT) accounted for 29.4percent of total tax revenues.

Meanwhile, corporate income taxes (CIT) generated 18.6percent of total tax revenues – a higher proportion than in LAC and in the OECD – and were equivalent to 2.8percent of GDP in 2017. This is the same level as in 2016, halting the decline in CIT as a percentage of GDP since 2013.

Overall, the tax structure across participating countries has evolved over the past decade, with VAT and personal income tax (PIT) accounting for a higher proportion of revenue generation in 2017 relative to 2008, on average. However, PIT (15.4percent of total tax revenues) and social security contributions (8.1percent of total tax revenues) remain low in Africa.

Reforms to broaden the personal tax base, remove harmful and regressive subsidies, and expand social insurance coverage can assist in domestic resource mobilisation efforts while contributing to inclusive growth.

Enhancing the efficiency of VAT systems can also provide higher and more sustainable revenues, and improve distributional or environmental outcomes. Environmental taxes are found to represent a small but increasing share of tax revenues in Africa and can have an important role in raising revenues and encouraging the transition to a low-carbon economy.

Property taxes are shown to be much lower in Africa than in LAC and in the OECD but have the potential to play a key role in funding better local services. Equally, improvements in governance and spending may also

lead to higher revenues by improving tax morale and making citizens more willing to pay taxes.

A special feature assesses the potential impact of the African Continental Free Trade Area (AfCFTA) on the level and structure of tax revenues, drawing on the detailed data on these revenues in this report.

While AfCFTA is likely to strengthen Africa’s economic growth and increase tax revenues in the mediumto-long term, the elimination of taxes on trade within the region will likely reduce revenues in the short term.

Trade taxes accounted for 11.8percent of total taxation on average in 2017 across the 26 countries in this report. Low-income and least developed countries in the region tend to rely more on trade taxes and are more vulnerable to the shortterm impact of reduced trade taxes, underlining the importance of the flexibility mechanisms envisaged by the AfCFTA. Revenue Statistics in Africa is a joint initiative between the African Tax Administration Forum (ATAF), the African Union Commission (AUC) and the Organisation for Economic Co-operation and Development (OECD) and its Development Centre, with the technical support of the African Development Bank (AfDB), the World Customs Organisation (WCO) and the Cercle de Réflexion et d’Échange des Dirigeants des Administrations fiscales (CREDAF) and the financial support of the European Union.

Change in Royalty Rate for Deepwater Operators – How Sustainable is this for the Government?

Adewole Orobiyi

Introduction ne of the fiscal regimes within the Oil and Gas sector is the Production Sharing Contract (PSC) legislated into law by the Deep Offshore and Inland Basin Production Sharing Contracts Act (DOIBPSCA).

The PSC regime involves an agreement between the concession holders (Nigerian National Petroleum Corporation) and the contractors (International Oil Companies) operating in the deep offshore and inland basin areas.

The regime was widely introduced in 1993 in Nigeria to address the shortcomings of the Joint Venture Agreement as well as encourage foreign investment in the oil and gas industry.

Due to the favorable fiscal and legal regimes, the PSC which initially involved eight International Oil Companies (IOCs) has attracted other IOCs to the oil and gas sector in Nigeria as they were given cer-

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tain fiscal incentives for the more marginal and high-risk projects offshore.

Production Sharing Contract With the recent amendment bill of the DOIBPSCA passed by the Senate on 15th October 2019 with legislative concurrence by the

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House of Representatives on 29th October 2019, there seems to be the view that the favorable fiscal regime which encouraged foreign investment in high-risk deep offshore projects has been eliminated or significantly reduced through the introduction of the flat 10percent

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royalty rate for all Deepwater PSCs exploration activities above 200m water depth and a flat rate of 7.5m water depth for all frontier / inland basin. It also introduces an additional price-based royalty which using the current oil price of about $63pb translates to about 4percent.

@Businessdayng

This effectively takes the royalty rate to 14percent for the operators in the deep offshore locations. The economic impact of this wholesome changes will be far-reaching. Given that royalty is a first-line charge on revenue, this in essence reduces the return on investment for the IOCs in the long term.

The fact that the amendment bill also introduces a new Section that allows for the review of the PSCs every 8 years is also a cause of concern especially for IOCs with license scheduled for renewal in the near future.

In as much as this might discourage companies embarking on deep offshore activities, the ripple effect will be that, it might also lead to low investment in the Sector which will essentially result from uncertainty and lack of clarity thereby reducing the revenue generating power of the Sector. More likely than not, final investment decision (FIDs) may also take longer and in the long term cause a dip in the Nation’s revenue.

Adewole Orobiyi is tax manager at EY (Energy)

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Wednesday 04 December 2019

BUSINESS DAY

cityfile Centre records 89 violent cases against women, children in 12 months

R-L: Eyitope Ogunbodede, vice chancellor, Obafemi Awolowo University; Risqua MurtalaMuhammed, and Solomon Okonkwo, coordinator, Murtala Muhammed Foundation (MMF), at the unveiling of the statue of General Murtala Muhammed at the university.

NKECHI OGINYI, Abakaliki

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Why FG should establish disability commission - Group

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at i o na l A ssociation of the Blind has urged the Federal Government to establish National Disability Commission as prescribed by the law in order to advance the interests of Persons with Disabilities (PWDs) Chairman, Federal Capital Territory (FCT) chapter of the association, Obinna Ekujureonye, made the call on Monday; saying aside driving the discrimination against Persons with Disabilities Prohibition Act, the commission would also help to foster better

enforcement and implementation of the law.

According to him, the Act has provisions for the full integration of PWDs into the society.

“The commission should have the responsibility of providing welfare, education and development for the otherwise vulnerable group. The commission is the most integral part of the law that will boost and give PWDs a sense of belonging in the country,’’ he said.

Ekujureonye tasked the government to live up to the expectations of PWDs in the country by imple-

menting the law to enhance their lives. He said that what PWDs needed was equity, not equality, adding that the non-implementation of the law was an impediment against the full integration of PWDs into society.

He appealed to Nigerians to develop a healthy attitude toward PWDs and learn to cohabit with them while also appealing to the media to always use the appropriate terminologies to depict the plight of PWDs in their reportage and news analyses.

Theophilus Odandwu, programme officer, Dis-

ability Right Funds, also appealed to Nigerians to help reduce the burden of PWDs by creating a barrier-free and accommodating society for PWDs. He said that disabilities would not manifest, “if the society is accommodating.

“Disabilities become obvious when the society has numerous infrastructural, cultural, social and economic barriers,” he argued. Odandwu urged the government and Nigerians to create an inclusive economic plan that would factor PWDs into government plans, strategies and policies.

Oyo begins enforcement against overloading of passengers Agency arrests suspect with state in the last two quarters of 1,072 kg of marijuana REMI FEYISIPO, Ibadan the year, it has become impera-

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ommercial vehicle drivers with more than one passenger on the front seat as well as motorcyclists with more than one passenger would hencefor th b e ar reste d and prosecuted for violation of Oyo State Road Traffic Law, 2019.

Chairman, Oyo State Road Transport Management Authority (OYRTMA), Akin Fagbemi who disclosed this in Ibadan, Monday, said the state has witnessed rising cases of road crashes, attributable to overloading. He called on all motorists to comply with the state road traffic law that bars them from carrying more than a passenger on the front seat, while motorcyclists are also to carry only one passenger, with compulsory use of crash helmet.

“O w ing to the significant number of motorcycle-related road crashes recorded in the

tive and expedient to fully and strictly implement the portion of the state road traffic law 2019, which stipulates that all motorists and motorcycles should not at any point in time carry more than one passenger and must as well utilise the crash helmet.

“In the best interest of citizens of Oyo State, particularly as the Governor Seyi Makindeled administration is committed to the security of lives and properties of the people, the governor has directed, through OYRTMA that all commercial motorists and motorcycles must adhere strictly to the traffic law on the number of passengers to load, so as to avoid accident.”

Fagbemi reiterated the readiness of the state administration to put any offender caught violating the law through the legal process to serve as deterrence for others. www.businessday.ng

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ational Drug Law Enforcement Agency (NDLEA), Niger command, has arrested one suspect with 1,072 kg of substances suspected to be marijuana in Mokwa local government area of the state.

The NDLEA’s commander in the state, Sylvia Egwunwoke, said the 56-year suspect is from Bangi village in Mariga local government area.

Egwunwoke disclosed that the suspect, who had just finished his jailed term on October 8 for similar offence, was arrested following through intelligence report that the suspect was transporting the prohibited weeds to Sokoto State.

“The suspect was arrested by the command last year along Kontagora with 64kg of Indian Hermp and was convicted by a court and served one year jail term,” said Egwunwoke.

She appealed to the public to report suspicious activities of drugs peddlers to relevant authorities in order to rid the state of drug trafficking and its attendant crises.

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he Human Rights and Conflict Resolution Centre (HRCRC), a non-profit organisation in Ebonyi has said that 89 cases of children and gender-based violence w e re re c o rd e d i n t h e state between November 2018 and November 2019.

A c t i n g d i r e c t o r, George Etamesor made the disclosure in Abakaliki while interacting with journalists.

Etames or said that violence against women and children were cases mostly reported in the centre. According to him, three cases out of the figure were handed over to Child Protection Network (CPN ) while others were handled by the centre.

He further noted that majority of cases treated include, gender based and domestic violence, such as spousal battering, physical abuse on children, family dispute, defilement, rape among others.

He said that the centre provided free legal aid services, psychosocial counselling of sur vivors of sexual abuse and other forms of violence.

The human rights activist explained that t h e o r ga n i s at i o n w a s collaborating with othe r b o d i e s t o i n c l u d e, Child Protection Netw o r k , Ju d i c i a r y , Na t i o n a l Hu m a n R i g h t s Commission, security agencies to resolve m a t t e r s . “ We h a d 5 4 cases of domestic violence and 35 cases of violence against children,” said.

Etamesor noted that the organisation has departments that focused on access to justice, conflict reso lution peace building and emergency to promote peace through advocacy and sensitisation campaigns. He e x p l a i n e d t hat s o c i a l construct of societal beliefs and lacks of enlightenment were part of the challenges restr icting the centre to act or address some cases effectively.

NDE drags woman to court over N130,000 debt

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ational Dire c t o ra t e o f Employment (NDE), in Kaduna, has dragged a business woman, Tina Simon to Sharia Court, Magajin Gari, Kaduna, seeking to recover N130,000 loan owed 10 years ago.

The directorate, through its counsel, Hannatu Bello-Maude, told the court that Simon was granted the sum of N163,000 as loan after she received a training in 2009. The counsel told the court that Simon was to pay back the loan in instalments within two years but defaulted and had paid N33,000 only.

Bello-Maude, therefore, prayed the court to compel the defendant to settle N130,000 being the balance of the amount granted her 10 years ago.

The defendant, a resi@Businessdayng

dent of Kaduna metropolis accepted the NDE claims against her.

N. Barde, who represented the defendant however, said that his client paid additional N3,000 earlier before the court session. Barde told the court that Simon’s business premise was engulfed in fire in addition to the fatal accident she had within the period.

The counsel said his client had reported all the incidents to the NDE and they confirmed that.

“We are praying the court to crave for lenient and liberal terms of settlement and we will do everything possible to clear the debts,” he said.

T h e j u d g e, Mu r t a la Nasir however, adjourned the case to December 9 for the two parties to report their terms of settlement. NAN

Wednesday 04 December 2019

BUSINESS DAY

35

FINANCIAL INCLUSION

& INNOVATION

Telcos’ participation in financial inclusion drive will hold opportunity for banks - Moody’s Stories by Endurance Okafor

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ontrary to the argument that banks may be disrupted by the participation of telecommunications companies in Nigeria’s financial industry, Moody’s Investors Service, a global credit rating agency, says it will present the lenders with new opportunities.

According to Moody’s, Telcos who can obtain the mobile money licence to provide financial services to Nigerians will need to collaborate with the country’s financial institutions to deliver their products.

“In the long term, this is positive because Fintechs and even Telcos will need to probably work with the banks, so it will not be a situation where Fintechs will take over the industry,” Peter Mushangwe, an analyst at the financial institution group of Moody’s told BusinessDay. In his comments, Mushangwe said there will be a lot of collaboration between banks, Fintech, and Telcos in terms of providing financial services to their clients. “This will presents banks with the opportunity to reach a more wider audience,” he said.

With a target to include 95 percent of the adult population in Africa’s most

population nation by 2024, the Central Bank of Nigeria (CBN) loosed its policies to allow Telcos and retailers to partake in the financial services industry.

Before October 2018 when the Central Bank released an exposure draft that requested an application from Telcos, retailers and other industry players to apply for Payment Service Bank (PSB) aimed at giving financial access to Nigeria’s excluded population, Nigeria only depended on its bank-led model in driving financial inclusion.

The Central Bank adopted the National Financial Inclusion Strategy (NFIS) in 2012 and was launched

to reduce the percentage of adult Nigerians who do not have access to financial services from 46.3 percent in 2010 to 20 percent in 2020.

Also, the strategy stipulates that 70 percent of those to be included in the financial system by 2020 should be in the formal sector.

The latest figures by EFInA put Nigeria’s financial inclusion rate at 63.2 percent, meaning as much as 36.8 percent of adults still lack access. With the current level, Nigeria is lagging its African peers like Kenya and Ghana who have adopted the mobile money-led financial inclusion model.

Commenting on how the Nigerian banks may be

affected by Telcos participation in the financial space, Mushangwe said: “There would be competition obviously but I would not think that it will be significant enough that it will affect the bank stream profile for example.”

According to moody’s, the limitation of the PSB licence is what will give the banks leverage over the Telcos and as such the deposit money banks will remain the key players in the industry.

“When you look at the PSB in Nigeria for example, the payment banks will not be allowed to do certain things, even the amount of deposits they can hold is limited so the banks will still

F

ating costs of ‘brick-andmortar banks’ are higher due to clients’ smaller account balances, hence, the reduction in outlets.”

But Sheikh noted that mobile banking is now modelled as the best option of driving financial inclusion and reducing cost.

According to the Wolrd Bank Global Findex of 2017, the number of adults with bank accounts in Sub-Saharan Africa’s number increased to 43 percent in 2017, up 9 percent from 2014, while Nigeria’s banked population dropped to 40 percent, down 4 percent in the review period.

The Central Bank in 2012 adopted the NFIS, a strategy that was launched to reduce the percentage of

adult Nigerians who do not have access to financial services from 46.3 percent in 2010 to 20 percent in 2020.

“As financial inclusion policy shifts its focus towards the promotion of digital financial services, regulators and policymakers must address this digital gender gap or risk contributing to even greater disparities in access to financial services between women and men,” the EIU said.

Sheikh, who was in Nigeria recently noted that all hands must be on deck to realise the Central Bank of Nigeria (CBN), Governor Godwin Emefiele’s target of the country attaining 95 percent financial inclusion by 2024.

In the third quarter of

www.businessday.ng

(NFIS).

Africa’s most populous nation performed poorly in the survey even though the overall enabling environment for financial inclusion improved globally, according to the financial inclusion report.

The largest economy in Africa scored lower than war-torn Pakistan(55). Out of 100 points, Nigeria scored 43 points; this is 23.21 percent lower than the 56 points it reported in 2018.

“Nigeria experienced the largest score decrease in the 2019 Microscope, in the Government and Policy Support domain. Its scores also decreased in the Consumer Protection domain and the Products and Outlets domain,” the report read.

BusinessDay analysis of the EUI report revealed that the 43 points score reported

by Africa’s most populous nation were also lower than the 48.2 points it recorded in 2013, almost the same time the NFIS was adopted.

Some of the reasons why Nigeria did record a high score in the 2019 global microscope include the fact that “Nigeria does not incorporate a gender approach in its financial inclusion or financial literacy strategies, does not collect data on financial services for low-income populations and does not have a digital literacy strategy.”

Financial inclusion: Alitheia, IDF Capital raise $20m for African gender-lens fund

Mobile banking: Solution to Nigeria’s financial exclusion - stakeholders or Nigeria to achieve its financial inclusion goal, industry stakeholders have advised the country to maximize the potential of mobile banking technology in deepening access.

According to the industry sources, the need to use technology to drive financial inclusion in a country where only about 40percent have bank account is critical because of the digital disruptions befalling the financial sector, which have left commercial banks struggling to offset high operating costs of opening new accounts, among other challenges.

Arif Sheikh, Vice President, Digital Banking, CR2 “this is because the oper-

have enough to maintain their profile,” Moody’s noted.

Citing Kenya as a typical example, Mushangwe explained that as at the time when Telcos were allowed to play in the financial services industry in the country, the banks suffered in terms of the fees they earned making payments but they also then rolled on the payment platforms to sell loans and other products. The analyst sees the same case for Nigeria.

“We have seen more similar cases in for example Kenya, where the Telcos have been allowed to play for quite a long time and of course the banks sort of leveraged on that to broaden their reach in terms of clients they can sell their products to,” Mushangwe said.

According to the 2019 Global Microscope report

by Economist Intelligence Unit(EUI), digital technology emerged as the main opportunity to expand financial inclusion more quickly, affordably and conveniently for people across the globe and has been the constant thread throughout the advances that have been recorded.

However, data from the report showed that Nigeria was placed among the top nations with the least conducive environment for financial inclusion, this is coming seven years after the adoption of the National Financial Inclusion Strategy

2019, the central bank of Nigeria raised its financial inclusion target to 95 percent. The apex bank plans to achieve this new goal by 2024.

The plan is part of the commitment to further enhance the level of financial inclusion in the country and by implication sustain inclusive economic growth.

The new target according to Emefiele, calls for institutions to re-strategise and refocus initiatives, policies, and schemes that will accelerate the pace of delivery of their respective financial inclusion efforts.

The latest figures by EFInA put Nigeria’s financial inclusion rate at 63.2 percent, meaning as much as 36.8 percent of adults still lack access.

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igeria-based Alitheia Capital and South Africabased IDF Capital have scored $20 million for a joint fund to invest in small and mid-size African businesses boosting women’s economic empowerment and financial inclusion.

The fund, Alitheia IDF, secured $7.5 million from Canada’s development finance institution, FinDev Canada, and $12.5 million from the African Development Bank.

Alitheia IDF aims to invest 50 percent of its capital in women-owned or -led businesses and mobilize $100 million to women-led businesses. Other target impacts include creating 5,000 jobs for women in its portfolio’s supply chain and enabling access to essential products and services for 100,000 women.

The World Bank’s 2017 global Findex database put @Businessdayng

Nigeria’s financial inclusion gender gap at 24 percentage points. Also, the latest figures

by EFInA revealed that 55.9 percent of the financially excluded 36.6 million adults are women; this is 11.8 percentage points higher than the male population at 44.1 percent.

Nigeria’s Aruwa Capital recently launched is own gender lens fund. Unlike institutional investor-backed Alitheia IDF, Aruwa has directed its fundraising efforts at high net worth individuals and family offices in West Africa.

“As financial inclusion policy shifts its focus towards the promotion of digital financial services, regulators and policymakers must address this digital gender gap or risk contributing to even greater disparities in access to financial services between men and women,” the organisations said.

36

Wednesday 04 December 2019

BUSINESS DAY

Live @ The Exchanges Market Statistics as at Tuesday 03 December 2019

Top Gainers/Losers as at Tuesday 03 December 2019 LOSERS

GAINERS Company

Opening

Closing

Change

N13.8

N14.6

DANGSUGAR NB FLOURMILL FIDSON GUARANTY

Company

Opening

Closing

Change

0.8

OKOMUOIL

N49.65

N54.55

4.9

ASI (Points) DEALS (Numbers)

N50.5

N50.9

0.4

UNILEVER

N17.7

N18.45

0.75

N17.85

N18.2

0.35

FLOURMILL

N18.25

N19

0.75

VOLUME (Numbers)

N3.5

N3.75

0.25

ETRANZACT

N2.38

N2.61

0.23

VALUE (N billion)

N29.6

N29.8

0.2

N18.6

N18.8

0.2

MARKET CAP (N Trn)

ZENITHBANK

26,944.32 3,314.00 189,007,353.00 2.883 13.004

Guinness, Stanbic, MTNN, others cause stock market’s new low Stories by Iheanyi Nwachukwu

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igerian equities market reached new low on Tuesday December 3, 2019 as investors continued to take profit in stocks.

Decline in stocks like Guinness, Stanbic IBTC, MTNN, Chemical and Allied Products, Lafarge Africa and others helped fuel the record loss.

Some market watchers had expected equities to shed value this week in the absence of catalysts that spur buy sentiment.

The NSE All Share Index (ASI) moved further down by 0.17percent from 26, 990.59 points to 26,944.32 points.

Year-to-date (ytd) market negative return increased to -14.27percent.

The value of listed stocks also decreased to N13.004trillion. The bond market capitalisation stood at N13.14trillion while that of Exchange Traded Fund (ETF) was N6.483billion.

In 3,314 deals, eq-

L – R: Dave Uduanu, chief executive officer, Sigma Pension Limited; Hilda Nkor, chief executive officer, Society for Corporate Governance, Nigeria; Mr. Bode Ayeku, Company Secretary/Legal Adviser, Nestlė Nigeria Plc; Tinuade Awe, executive director, Regulation, The Nigerian Stock Exchange (NSE); Nornah Awoh, chief Equity Analyst/CEO, Palesa Capital Markets Associates Limited; Godstime Iwenekhai, head of department, Listings Regulation, NSE and Olugbenga Bello, partner, Folashade Alli and Associates during Issuers Engagement Forum at the Exchange in Lagos.

uity investors exchanged 189,007,353 units valued at N2.88billion. Access Bank, GTBank, Zenith Bank, UBA and Fidelity Bank were actively traded stocks.

Guinness Nigeria Plc recorded the highest loss after its share price moved down from N31 to N29, losing N2 or 6.45percent.

Stanbic IBTC followed after its share price declined from N38.15 to N36.8, losing N1.35 or 3.54percent. MTNN

also dipped from a high of N120 to N119, losing N1 or 0.83percent.

Chemical and Allied Products Plc (CAP) also decreased from N24.3 to N24, losing 30kobo or 1.23percent.

Lafarge Africa Plc was on the downtrend, moving from N14 to N13.85. It lost 15kobo or 1.07percent of its day-open value.

Okomu Oil Palm Plc recorded the highest gain seen Tuesday on the Bourse, mov-

ing from N49.65 to N54.55.

It gained N4.9 or 9.87percent. Unilever Nigeria Plc advanced from N17.7 to N18.45, adding 75kobo or 4.24percent. Flour Mills of Nigeria Plc increased from N18.25 to N19, adding 75kobo or 4.11percent.

Etranzact stock price rose from N2.38 to N2.61, adding 23kobo or 9.66percent, while UACN moved from N7.3 to N7.5, adding 20kobo or 2.74percent.

RMB expands business horizons

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and Merchant bank, one of the top players in the investment industry has expanded its business horizons to providing custody solutions for portfolios and securities investment.

The custody solution which was launched at the bank’s client appreciation, art exhibition dinner, began operations during the year with the major aim of protecting client investment and improving its services.

In a bid to offer outstanding services, the firm designed frameworks used to carry out their duties which are safe custody of entrusted assets, clearing and settlement of equities, bonds and money

market instruments, asset service, income collections among others.

Michael Larbie, CEO Rand Merchant bank, said “our brand alignment with creative and intellectual excellence presents a unique opportunity for the art of business to embrace the business of arts providing an empowering platform for extraordinary talent to be showcased Larbie who doubles as the regional head, West Africa added that “the value proposition in our custodial service is premised on the art of safekeeping and speaks to our commitment to provide a seamless administration and a safe haven for our client’s investment” www.businessday.ng

Abiodun Adebimpe, head custody operations, RMB, in an interview said RMB prides itself as a solution thinktank, providing resolutions to clients and also placing client interest at the core which is what brought about the operations He said “in a world of corporate and investment banking, the worth of a portfolio is as important as who keep it; therefore this makes safekeeping of portfolio investments very crucial” he said the custody services provides domestic clients with access to international markets which allows extension of its offerings to over 100 markets outside Nigeria while international clients benefit

end to end service at every stage of the investment cycle.

He said RMB has been able to remain distinct offering top custodian services in African markets because it has continued to proffer solutions t o c l i e n t ’s i n v e s t m e n t challenges and has also been multidimensional in its investment management Speaking on the activities of the bank, he said despite the tough condition of the financial market, RMB has been able to effectively manage its activities because of its outstanding capability as a solution provider with a team of securities specialist with operational and technical expertise.

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Global market indicators FTSE 100 Index 7,158.92GBP -127.02-1.74%

Nikkei 225 23,379.81JPY -149.69-0.64%

Generic 1st ‘DM’ Future 27,328.00USD -461.00-1.66%

Deutsche Boerse AG German Stock Index DAX 12,993.54EUR +28.86+0.22%

S&P 500 Index 3,076.94USD -36.93-1.19%

Shanghai Stock Exchange Composite Index 2,884.70CNY +8.89+0.31%

Abuja Court docks, convicts 19-year-old man for capital market fraud ….used Afrinvest West Africa name, logo to lure unsuspecting Nigerians

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19-year-old man, Damilola Balogun has been docked and convicted of capital market fraud.

Balogun who hails from Kogi State, was arraigned on a one count charge of impersonation contrary to Section 179 of the Penal Code Law, Chapter 89 before Magistrate Ibrahim Mohammed of Senior Magistrate Court Zone 6, Wuse, Abuja.

After the charge was read to Balogun, he admitted committing the offence, saying he used Afrinvest West Africa’s name and logo to lure unsuspecting Nigerians to invest with a 100 percent return on investment within 45 minutes.

After the accused pleaded guilty to the charge, Magistrate Ibrahim Mohammed stated that since the defendant had confessed to the crime, there was no reason why he should not be convicted.

Balogun was therefore convicted under SEC 179 of Penal code and sentenced to oneyear imprisonment without an option on fine.

Pronouncing the sentence, Mohammed stated “You are very talented, you should have used your talent in legal ways to help yourself and your family instead of resorting to crime “Since he is a first time offender this court will temper justice and sentence him to prison for one year without an option of fine Afrinvest had in September 2019 written the Securities and

Exchange Commission (SEC) to report a certain individual by the name Olalekan Balogun for impersonation. They alleged that the man used the name of the company and opened a WhatsApp group to lure investors to invest and get double dividend in 45 minutes.

According to ASP Abubakar Shehu Mandiya of the SEC Police Unit, the culprit opened a WhatsApp group with the name of the company and pretended to be the MD of the company and promised the members if they invest they will get double of what they invested within 45 minutes.

“He operated two different accounts with two different names. The real name of the culprit is Balogun Tanko Damilola and he went ahead to open another online account with Olalekan Balogun in Ecobank. He used the Olalekan Balogun account to receive the fraudulent money” Mandiya said.

When the culprit was interviewed he stated that he is 19 years old and he started the business in June 2019.

“So far I have been able to raise about N30,000 in the account from about 15 investors.

This is because most of the investors pay in mostly One to Two Thousand Naira only, except for one that invested N10,000 only. It is only after discussing with them and gaining their confidence that I now forward my account details for payment.

Balogun Damilola, convicted by the FCT Chief Magistrate Court zone 6 Abuja for Impersonating Afrinvest West Africa Plc and defrauding unsuspecting investors, arrested by Police Unit of Securities and Exchange Commission, Tuesday @Businessdayng

Wednesday 04 December 2019

BUSINESS DAY

37

PERSONALITY Darius Ishaku: Epitome of humility and pragmatism Bashir Ibrahim Hassan

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Darius Ishaku

is also rich in untapped mineral resources, gold, silver, sapphire, petroleum and natural gas, etc.

However, the sad story is that these mineral resources will remain untapped for a long time to come because of so many factors, not the least the Boko Haram insurgency rocking the Northeast.

The governor told a story of his trip to Germany to attending a mining conference that demonstrated his handicap. He tells the story: “I was in Germany in 2016 for a mining show and the guy was telling us how they go 8000 feet down the ground to mine silver and how many metres they go to get gold. You know this specimen bottle they give you in the hospital to get urine and stool for test? That was what they put the silver and gold in and I had a feel of all of them. And when it was my turn to talk I asked for the man who said they go down thousands of metres of to get silver and gold. I opened my containers and showed him: “Does this look like what you go down thousands of metres to get?” and he jumped at it and asked: “Where did you get this?” And I told him it was scooped from the surface. He asked again: “Surface of the earth? Where?” I told him Nigeria. He opened his laptop.

“Where in Nigeria?” I said Taraba in the Northeast. He checked and said: “Aahh! Boko haram. No No No, my country will not even give me permit to go to Nigeria.”

He said: “Oh my God! On the surface?”

“I then stretched my hand and said: ‘This is Gold.’ He asked: ‘Where did you get it?’I told him some people got it from the surwww.businessday.ng

face of the water. He said: ‘Oh my God!’ And I took another one and he said: ‘This is Sapphire’ and I said yes. He was marveled. I became a bride of the conference.

Everybody in the conference was all over me, trying to enquire more about the Gold, Silver and the Sapphire” The civil service is the engine room of running a state. If the engine is decayed the states apparatus, including the ministries, departments and agencies (MDAs), will not function and the entire system of government will collapse. The second story of DDI is on the sorry state of the civil service he met on assuming the mantle of leadership. You are cautioned, the story is quite distressing -- but instructive at the same time -- and it goes like this: “I was still scratching my head as to how I will tackle the payment of arrears of local government staff. As if that was not enough, another council chairman approached my wife with the same request for employment of local council staff. She enquired why the council chairman was interested in only the names but not

“

The Water “ATM” Scheme With over 300 boreholes sank across the state in towns and villages, the new story of water crisis in Taraba, as captured by reporters covering the state development, is summed as “No more going to the stream, no more sickness, no more waking up in the morning to look for water.”

In Jalingo, the state capital, the Governor has spent the largest amount on water supply amounting to N7 billion. In Jalingo today there are “ATM” (debit) cards for accessing water, the first ever in this country. Water sellers no

I will rather pray for God to bring somebody after his own heart, someone who thinks about people first to take over from me

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“

arius, the son of Ishaku, exudes humble persona.

Darius, the Governor of Taraba State, displays pragmatism in the art of governance.

These are my reporter’s firsttime impressions and assessment of the Darius Ishaku, the Governor of Taraba State, on meeting him for the first time at the Government House in Jalingo capital of Taraba State, while working on a project out to assess achievements of State Governors.

Before our planned meeting, I had followed his activities, especially the political upheaval that followed his election in 2015; the re-run of the election; the contest in court over his victory; and variety of news-worthy developments that have emanated from this Northeastern state of Nigeria since then. Four years gone, I went back to Jalingo not to celebrate his re-election last March but to see for myself what he has made of the first mandate.

Darius Dickson Ishaku, who holds two Masters degrees in Architecture and Urban Regional Planning from the prestigious Ahmadu Bello University, Zaria was, at one time or the other, the Minister of Power, Environment and the Minister of State for Niger Delta Affairs before he resigned to contest in the 2015.

In this write-up I allowed the Governor Darius, fondly called DDI, to tell us two of his stories, as there many of them. These are stories of how he found Taraba in 2015, and how he is battling to change those stories positively.

But first, a bird’s eye view of the state. According to Wikipedia, Taraba State lies largely within the middle of Nigeria and consists of undulating landscapes dotted with a few mountainous features, including the scenic and prominent Mambilla Plateau. The state lies largely within the tropical zone and has a vegetation of low forest in the southern parts and grassland in the northern parts.

The Mambilla Plateau, with an altitude of 1,800 meters (6000 ft) above sea level, has a temperate climate all year round.

The Benue, Donga, Taraba and Ibi are the main rivers in the state.

They rise from the Cameroonian mountains, straining almost the entire length of the state in the North and South direction to link up with the River Niger. The major occupation of the people of Taraba State is agriculture. Cash crops, such as coffee, tea, groundnuts and cotton are produced in commercial quantities. In addition, cattle, sheep and goats are reared in large numbers, especially on the Mambilla Plateau and along the Benue and Taraba valleys. Taraba

the forms they applied with and were interviewed with. He told my wife not to bother as all the salaries of the names approved will be for her. She had to rebuke him and reported the issue to me.

Thereafter, we conducted a rigorous investigation and I discovered that banks, account officers and a whole lot of people, including retired civil servants and highly placed individuals, were involved in the ghost workers’ scheme and this led to me firing successively three consultants I hired to make payments of local council staff.

“These canker worms that I’m telling you about included both religious leaders and traditional rulers. It was so bad. A particular case in time was of a certain old man living in Ardo-Kola local government area who sent his son every month to 10 different banks to make salary withdrawals. So, one day, the young man returned to the father and told him that he was only able to withdraw from one bank. The old man’s remark was that this government is not cooperating but my reply to him was that there is a different government in place. We made arrests and prosecutions. So many were charged” Despite all these challenges the Darius the Governor has been able to tackle many socioeconomic maladies bedeviling the resourced-endowed state. From here on, we will look at how DDI is trying to change the story of Taraba. For the sake of brevity, we will be contentwith just two areas exemplified by the revolutionary ways he is addressing water shortages with a tinge of technological innovation and the skills first approach to taking the youths out of the streets.

@Businessdayng

longer have to go to the stream to fetch water and sell to people, but instead go to any of the water kiosks dotted all over the capital, using their water debit cardsto fill their jerry cans. Depending on the amount prepaid on his card, it is immediately registered in the Water Board headquarters and the bank that so-so-so amount of money has been deposited.

Many officials of the state water board were sent to Kenya under the World Bank and trained on this water sanitation and supply project. These feats earned the Governor Water man Award of the Year in 2017.

Skills First Governor Darius’ approach to youth’s empowerment is to give them skills first and encourage them to train others close to them. Beneficiaries are drawn from all the 168 electoral wards and comprise both males and females. The story of Aishatu Ali from Gashaka is very popular in the state media and it was typical of the Governor’s approach to skills acquisition programmes.

Aisha was given sewing skills.

She went back to her community and started applying her skills with the empowerment she received and soon trained her daughter and a widow relative.

Today they are all doing well offering tailoring services to their communities. Through this approach the state government has taken many youth off the streets, which has helped in addressing the issue of youth restiveness.

The humility of Darius manifests itself when he was asked about the kind of person he wants to succeed him and he has this to say: “I will rather pray for God to bring somebody after his own heart, someone who thinks about people first to take over from me.

That is the time that one needs to pray even more that God should give him somebody with equal or better vision, somebody with a heart for the people; somebody who thinks about the people first before himself. All these are attributes that are accumulated. Above all, you need somebody who is humble and willing to learn.”

I would say it takes a humble person to recognize humility as imperative character of a leader.

For Darius’ pragmatism we need to only look at his performance in the 2019 elections. For someone who had to go into a re-run election in his first tenure, only to win landslide in the second, must have been a pragmatic politician.

No doubt Darius’ humility and pragmatism gave him the second mandate in a conclusive manner for that matter!

In all these lies great lessons for our aspiring politicians.

•Hassan is a writer on Business, Economy and Politics

38

Wednesday 04 December 2019

BUSINESS DAY

news Fraudsters recruiting unbanked Nigerians to...

Continued from page 1

or reduce unclaimed dividends. The initiative allows investors’ accounts to be credited immediately they are mandated with the registrars and the relevant banks.

As part of the KnowYour-Customer (KYC) requirements, investors are requested to make available their BVN, a biometric identification system implemented by the Central Bank of Nigeria (CBN), which gives each bank customer a unique identity across the Nigerian banking industry.

A market source close t o t h i s d e ve l o p m e nt, however, told BusinessDay that while BVN has helped a lot in solving the conundrum about unclaimed dividends, “it is not foolproof and has not delivered 100 percent”.

Our source further said that some of these fraudsters go as far as the remote areas of northern and eastern parts of the country to recruit young Nigerians for their shenanigans.

The fraudsters, apparently leveraging insider information, target investments of the deceased, most of which were not known by their relatives or close family members, BusinessDay also learnt.

To claim ownership of these unclaimed dividends, the fraudsters recruit the services of unbanked individuals.

These individuals are enrolled for BVN process, take on the name of the deceased individual in the unclaimed dividend register, and then lay claim to such funds.

This is coming on the heels of several initiatives by the SEC to address the issue of unclaimed dividend in the financial ecosystem.

With this development, BVN has proven not to be foolproof for identifying rightful owners of the dividends as the perpetrators aim to deprive the rightful own-

ers of those benefits, according to our source.

BusinessDay also learnt that while some registrars have fallen victims of this trend already, others have decided to create in-house check mechanism to checkmate this ugly development.

Other targets are those investors with multiple accounts, most of them forgotten.

The SEC encourages investors to take advantage of the regulatory window to regularise their multiple accounts and claim their dividends. Already, about 2.82 million investors have enrolled in e-Dividend Mandate Management System.

The issue of multiple accounts became pronounced during the banking consolidation of 2004 and the Nigerian capital market saw a sharp increase in the number of companies being listed on the Nigerian Stock Exchange, especially financial institutions.

Investors adopted several covert means while acquiring their shares in a desperate bid to beat the standard limits that are standard during every Initial Public Offering, including limits on age and number of applications.

These investors adopted pseudo-names, among other illegal means.

SEC has on various occasions opened an ‘amnesty window’ for investors to regularise their holdings.

The value of unclaimed dividends rose from N5.1 billion to N103.1 billion between 2002 and November 2016, compared with the value of N2.09 billion in 1999. As at September 2018, it remained high at N100 billion and stood at N126.03 billion as at March 2019.

The source, however, called for an Act, if possible, that would ensure forfeiture of such unclaimed funds to the government as it is obtainable in the US and UK.

L-R: Hauwa Ojeifo, executive director, She Writes Woman (SWW); Edujie Macaulay, gas operations analyst, Seplat Petroleum; Ngozi Okonkwo, chief legal officer, Oando plc; Kemi Da-Silva Ibru, founder, Women at Risk International Foundation (WARIF), and Kiki Mordi, journalist for WFM, BBC Africa Eye, at the Women in Management, Business, Public Service (WIMBIZ) 18th Annual Conference held in Lagos.

annual imports bill, and increased non-oil exports.

“Our development finance interventions have helped to bolster agricultural production by

result in a turnaround for Africa’s most populous nation.

The eight big moves include building a more able bureaucracy, improving capital productivity drastically, developing centres of competitiveness, leapfrogging the technology ecosystem, unlocking the full potential of the oil and gas sector, accelerate agriculture transition and address current and future mobility issues.

To foster a more efficient public service, Oladiran suggested the need to digitise priority processes through Public Private Partnerships (PPP) in the short run while in the long run adopt e-government for all public services within the next five years.

On improving human capital, he said there is need for private sector-driven reskilling programmes with a focus on Science, Technology, Engineering, and Mathematics (STEM) jobs on the short run while on the long run there is need for nationwide technical and vocational education and training programmes.

“There is need to increase availability of quality and affordable power at industrial hubs on the short run and special economic zones with time-bound objectives linked to national

materials,” he said.

Lametek said the CBN’s unconventional monetary policy initiatives have been premised on ensuring credit delivery to critical sectors of the economy.

This has informed the directive to Deposit Money Banks to maintain a minimum Loan to Deposit Ra-

tio (LDR) of 65 percent by the end of December 2019.

The bank is also creating the necessary eco-system to inculcate a better credit culture among Nigerians.

“Though we adopted unconventional or heterodox monetary policies, they were, however, well thought through and have been

yielding significant gains for the Nigerian economy. Noticeably, the GDP recovery in the third quarter of 2017, which has been sustained for nine successive quarters after five consecutive quarters of negative growth,” Lametek said.

Uche Uwaleke, commissioner for finance, Imo State,

Continued from page 1

CBN’s Anchor Borrowers’ Programme...

Continued from page 2

do business in,” Oladiran said.

Finding a way to drive productivity and most especially to grow large companies may hold the key to improved economic fortunes.

According to Oladiran, large companies build ecosystem with robust value chain which will spill over to small businesses.

In Nigeria, only 42 companies measure up as large companies with a minimum of $500 million in annual revenue. That compares to 309 in South Africa.

Oladiran advised that Nigeria increase its share of large companies to boost economic growth.

Peter Tufano, dean of Saïd Business School at University of Oxford, England, said the best investment for Nigeria is to invest in human capital because in the next 30 years there would be opportunities for Africa in the global leadership space.

“Unlike some countries with an elderly working population that needs retraining, Nigeria’s young population gives it needed advantage,” said Tufano, who was the guest speaker at the CEO Forum.

From its extensive work with some of the most successful emerging markets, McKinsey recommended eight big moves that could

strategy on the long run,” Oladiran said.

To leapfrog the technology ecosystem, McKinsey & Company advised the government to scale up broadband through partnership with private sector on the short run while on the long run improve digital transformation of private companies.

In order to leverage on the power of parity, McKinsey & Company wants the government to spread the use of digital to raise financial inclusion and empower female entrepreneurs on the short run while on the long run raise women’s skill through education for the future world of work.

Regarding the full potential of the oil and gas sector, the government was advised to accelerate investments into the sector while at the same time diversifying government revenue from the sector on the short run. On the long run, the government was asked to expand infrastructure that can fast-track investment earnings from gas and petrochemicals.

McKinsey & Company also urged the government to prioritise high value crop value chains into national champion in the short run and on the long run drive full end-to-end private sectorled agricultural economy.

To address current and future mobility issues, it said the government must target investment through

McKinsey, Tufano outline reforms...

removing obstacles faced by smallholder farmers.

We have also improved access to markets for farmers by facilitating greater partnership with agroprocessors and industrial firms in the sourcing of raw www.businessday.ng

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PPP and other methods on the short run while unlocking financing and delivery models on the long run to close an annual $100 billion infrastructure financing gap.

The government’s shortand long-term approach to economic growth will be decisive, with the World Bank predicting Nigeria to be home to a quarter of the world’s poorest by 2030.

Also at the BusinessDay CEO Forum, Vice President Yemi Osinbanjo said he was optimistic on Nigerian economy as he foresees it moving in a northward direction.

Osinbajo, who was represented by Louis Odion, senior technical assistant to the president on media and publicity, office of the vice president, stated that the advent of technology holds huge opportunity for a country like Nigeria.

He assured that the current administration remains committed to working with the private sector for economic growth and development.

“Let me use this opportunity to reassure you that the Buhari-led administration is committed to working with the private sector,” Osinbajo said.

The annual event had in attendance government officials, investment bankers, policymakers, chief executive officers (CEOs), economists, researchers, analysts, academics, and private equity firms. noted that the CBN has done a lot in terms of developing the economy through its intervention funds.

He said the state has benefitted from the Anchor Borrowers’ Programme and was planning to access the Commercial Agriculture Credit Scheme (CAC).

Wednesday 04 December 2019

BUSINESS DAY

news Nigeria, Russia sign fertiliser blending deal Tony Ailemhen, Abuja

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he Federal Government Monday signed an agreement with Russia on the supply of potash, a major raw material for the production of fertiliser.

The agreement, which was signed at the Presidential Villa, Abuja, is described as a milestone in fertiliser production in Nigeria.

Managing director of the Nigeria Sovereign Investment Authority (NSIA), Uche Orji, signed on behalf of the Nigerian government while Dmitry Konyeaev signed on behalf of the Russian company that will supply the product.

Speaking at the event, Ji g a w a S t a t e g o v e r n o r, Abubakar Badaru, who is also chairman, Presidential Fertiliser Initiative, said entering the agreement with Russia was another milestone in the life of the current administration of President Muhammadu Buhari.

“It is another milestone in President Buhari’s effort to increase farm production and to support farmers. As you all recall, President Putin of Russia hosted African leaders recently at a summit and our president was there.

“During one of the side meetings, president proposed the possibility of Nigeria buying Potash form a

company in Russia and today we witnessed a culmination of that discussion, where Nigeria and Russia have signed an agreement on potash purchase by Nigeria,” he said.

He said the move, which has checked the excesses of middlemen, would further boost the supply of fertiliser at an affordable rate to Nigerian farmers.

“What we have just witnessed will help in stabilising the price of NPK brand of fertiliser that we produce locally. The beauty of this deal is that it is a direct purchase, no commission agent and also because of the involvement of the two Presidents, the price is very competitive,” the governor explained.

In his remark, Uche Orji said so far over 19 million bags of fertiliser had been blended by Nigeria in the last two years.

“Between 2017 when the Presidential Fertiliser Initiative started and today, over 19 million bags of fertiliser have been blended by this programme at a price of N5,500 and more importantly, we have revived some of the blending plants that were moribund. Today, as we approach the programme for 2020, 26 local blending plants, which include some of the old and new ones have joined the programme,” he said.

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INEC seeks legal backing for card readers, deployment of technology in elections ... engages NASS on establishment of Electoral Offences Commission, Tribunal James Kwen, Abuja

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ndependent National Electoral Commission (INEC) has pledged to ensure that the status of the Smart Card Reader (SRC) must be provided for and protected by law in ongoing efforts to amend the Electoral Act. The Commission said it would present a proposal to the National Assembly on the SRC as well as other areas in which further deployment of technology would deepen the integrity of Nigeria’s electoral process.

Mahmood Yakubu, INEC chairman, who gave this indications Tuesday at a meeting with States Residents Electoral Commissioners (RECs) in Abuja, reiterated that the SCR had

come to stay and cannot be jettisoned.

Yakubu stressed that the Commission would rather seek ways by which SCR utility in elections could be enhanced for the triple objectives of verification of the genuineness of the Permanent Voters’ Cards (PVCs), confirmation of ownership and fingerprint authentication of voters.

According to Yakubu, “accreditation data from the SCR should be used to determine over-voting and the margin of lead principle”, but “the judgement of the Supreme Court on the primacy of the voters’ register as the determinant of over-voting in law merely draws attention to the lacuna in the electoral legal frame-

work which must be addressed through immediate and appropriate amendment to the Electoral Act.” The INEC chairman disclosed that the meeting would undertake the Commission’s internal appraisal of recent elections, beginning with briefings by the RECs responsible for Bayelsa and Kogi states where elections were just held.

He said lessons learnt from these elections were important in fine-tuning INEC processes, especially in view of the impending review of the electoral legal framework for which the Commission will vigorously engage the National Assembly and stakeholders.

“It is for this reason that this meeting will discuss the Bill

recently referred to the Committee on INEC by the Senate.

Copies of the Bill have been made available to the RECs for critical evaluation and input,” he noted.

“The Commission is deeply concerned that elections in Nigeria, especially for executive positions, are increasingly characterised by brazen acts of impunity. The Commission plans for all elections to be successfully concluded and for the will of the people to prevail.

“It is inconceivable that INEC will make elaborate arrangement for the deployment of personnel and materials and then turn around to undermine ourselves in the field on election day. lmpunity has become the bane of our elections.

Court refuses IGP’s application to withdraw criminal charge against Anambra monarch, 9 others Felix Omohomhion, Abuja

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Federal High Court Abuja has refused application by the Inspector general of Police to withdraw criminal charges against Anambra monarch, Igwe Peter Anaukwu Uyanwa.

The court, instead, ordered that His Royal Highness, Igwe Peter Anaukwu Uyanwa, the Ezedike of Ukwulu kingdom, Anambra State, and nine others to be arraigned on December 6.

The nine others are Wa l t e r O k a f o r, B o n i face Kamuche, Michael Eziachalla, Christian Nwadiuto, Ichie Godwin Anigbata, Ezekiel Aniekwe, Peter Mmonife, Ichie Agu Felix Uzodigwe, and Augustine Maduka.

The defendants, who were to be arraigned last week Friday on 12-count charge in the suit marked FHC/ABJ/CR/255/2019 filed on October 16 by the Inspector General of Police for the Federal Government, evaded the arraignment.

They were alleged to have conspired to breach peace in Ukwulu community. Their offences also include perjury and fabrication of evidence.

However, a mild drama ensued when the matter was called and the defendants were not in court. The prosecutor, ACP Cosmos Anyanwu, told the court that the IGP had instructed him to withdraw the suit.

Defendants counsel, Ikenna Egbuna, told the court that he was not opposed to the withdrawal, but explained that the defendants were absent in court because the prosecutor had informed him that he was asked to withdraw the matter.

The nominal complainant, who was in court, Chinedu Tagbo, objected to the move. During proceedings, he signified by raising his hands in the open court.

Justice Okon Abang gave him the opportunity to ventilate his grievances.

Tagbo told the court that he had already petitioned the Inspector General of Police to change ACP Anyanwu from the case for corruption and extortion. He handed the judge the documents to buttress his complain.

He further told the court that after the prosecutor filed the charge, he demanded for N5m for legal fees without which the suit will be withdrawn. He said as a victim of the crime he seeks refuge under the protection of the court.

Tagbo chronicled how the prosecutor ACP Anyanwu had tried to frustrate the service on the defendants by withholding till date the processes he collected N100,000 for preparation and filing. He said the court bailiff later effected the service by serving copies of the Certified True Copy of the charge on the defendants.

L-R: Femi Gbajabiamila, speaker, House of Representatives; Ibijoke Sanwo-Olu, first lady of Lagos State, and Governor Babajide Sanwo-Olu, during a day of tribute for late Brigadier General Mobolaji Johnson, first governor of Lagos State, organised by the State Government, at Onikan Stadium renamed after him by Governor Sanwo-Olu.

Sanwo-Olu immortalises Mobolaji Johnson JOSHUA BASSEY

...Tinubu, Kanu, other pay tributes

agos State governor, Babajide Sanwo-Olu on Tuesday immortalised first military governor of the state, Mobolaji Johnson, with the renaming of the newly reconstructed Onikan Stadium on Lagos Island, after him. The stadium is now known as Mobolaji Olufunso Johnson Arena.

Sanwo-Olu made the declaration at ‘Day of Honour’ event organised by the state to celebrate Johnson, who passed on

October 30, 2019, at the age of 83 years. Johnson served as military administrator of the Federal Territory of Lagos from January 1966 to May 1967 during the brief military regime of AguyiIronsi and as military governor of Lagos State at its creation in May, 1967 till July, 1975 during the military regime headed by Yakubu Gowon.

His regime was said to have witnessed an increase in Lagos State’srevenuefromN36.7million

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CORRECTION OF NAME This is to notify the general public that my name was written as Ozigbo Ikponmwosa Esere instead of my correct name Ozigbo-Esere Ikponmwosa. All former documents remain valid.

General public should take note.

CHANGE OF NAME

I, formerly known and addressed as Miss Oluwafunmilola Adebola Adeyemi now wish to be known and addressed as Mrs Oluwafunmilola Adebola Ede. All former documents remain valid.

General Public please take note.

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CHANGE OF NAME

I, formerly known and addressed as Charity Omachona Uyo now wish to be known and addressed as Charity Akoji Uyo. All former documents remain valid. General Public please take note.

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toN99.7million.Theincreasewas largely attributed to the revenue allocation formula that had just been introduced and increased revenue from crude oil, which was partly shared out to the state governments by the federal military government at the time, under Gowon.

Paying tributes to the late military governor, Sanwo-Olu, who led members of his cabinet to the former Onikan Stadium, where the event held, described

CHANGE OF NAME

I, formerly known and addressed as Miss. Oguayo Elizabeth Chinyere now wish to be known and addressed as Mrs. Iwuji Elizabeth Chinyere. All former documents remain valid. General Public please take note.

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I, formerly known and addressed as Olatunji Janet Temitope, Awonusi Janet Temitope now wish to be known and addressed as Olorunnusi Janet Temitope.

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Johnson as a man who saw the future and worked to achieve the Lagos of our dreams.

Sanwo-Olu said Johnson’s selflessness in service and excellent achievements had been a source of inspiration to successive administrations in Lagos.

Describing the former administrator as quintessential manager of resources and people, SanwoOlu said the late Johnson’s personality symbolised integrity, humility, fairness and justice.

CHANGE OF NAME

I, formerly known and addressed as Miss. Oladeji Racheal Adetola now wish to be known and addressed as Mrs. Adjahoueze Racheal Adetola. All former documents remain valid. General Public please take note.

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I, formerly known and addressed as Miss Oladuro Yetunde Evelyn now wish to be known and addressed as Mrs Olasanoye Yetunde Evelyn. All former documents remain valid.

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Wednesday 03 December 2019

BUSINESS DAY

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Wednesday 04 December 2019

BUSINESS DAY

news

NEITI: FAAC Q3 2019 disbursement stands at N273trn HARRISON EDEH, Abuja

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ederation Account Allocation Committee (FAAC) disbursed N2.273 trillion to the three tiers of government and other statutory recipients between July and September this year, information obtained from the Nigeria Extractive Industries Transparency Initiative (NEITI) reveals.

According to the report, the total revenues from Value Added Tax (VAT) dropped by N36.8 billion to N275.12 billion in the third quarter of the year compared with N311.94 billion in the preceding quarter, according to the National Bureau of Statistics (NBS).

NEITI in a statement issued by its director of communications, Orji Ogbonnaya Orji, explained that the disbursement was 18.79 percent higher than the N1.913 trillion shared in the second quarter of 2019.

The figure was also 17.81 percent higher than the N1.929 trillion disbursed in the first quarter of the year. It was, however, lower than the N2.28 trillion recorded in the third quarter of 2018.

NEITI, in the latest edition of its Quarterly Review, said it extracted the data from FAAC and NBS, noting that for the first time since the fourth quarter of 2018, total FAAC allocations exceeded N2 trillion in a quarter.

In addition with the disbursements in previous quarters, it said it showed that FAAC

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disbursements exceeded N2 trillion in four of the last six quarters.

“The last time this happened was in the third quarter of 2014. This is a big improvement compared to N886.48 billion recorded in 2016-Q2.

However, it is still lower than N2.607 trillion of 2013-Q1,” the report noted.

It added that a breakdown of the N2.273 trillion disbursed in the last quarter of 2019 showed that the Federal Government received N920.2 billion, while the states and local government received N724.16 billion and N44.19 billion, respectively.

It said the amount received by the Federal Government in the third quarter of 2019 was 15.6 percent higher than the N795.84 billion it received in the second quarter. Besides, it was also 14.6 percent higher than the N803.13 billion it received in the first quarter of the same year.

For states, it explained that the amount received during the third quarter of 2019 was 9.6 per cent higher than the N660.2 billion they received in the second quarter and also 7.3 percent higher than the N675.2 billion they got in the first quarter of the same year.

The amount received by the local governments for the same period, it added, was 12.02 percent higher than the N393.95 billion received in the second quarter and 10.73 percent higher than the N398.44 billion received in the first quarter.

Minister of petroleum to implement new PSC law to the letter Olusola Bello

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inister of State for Petroleum Resources, Timipre Silva, has pledged to implement the letters of the Deepwater Offshore Production Sharing Contract Act recently signed into law by President Muhammadu Buhari.

He said implementing the content of the bill was one of his major priorities and that he would not hesitate to do anything in the oil and gas industry that would benefit Nigerians.

Other priority areas include increasing the country’s refining capacity and ending the smuggling of Petroleum products out of the country, the minister said.

According to Silva, by the time all of these are fully implemented there would be increase in job availability for Nigerian youths.

He said the high cost of crude oil production affects the country’s net revenue, and therefore asked industry operators to ad-

… IOCs not against Nigeria’s deepwater offshore PSC Act dress this issue.

The minister, who disclosed this at the ongoing Practical Nigerian Content in Yenagoa, Bayelsa State, also said he would endure that the petroleum industry Bill was signed into law and also implement the Gas commercialisation programme of the Federal Government.

Meanwhile, international oil companies operating in Nigeria say they are not against the government’s decision to review the Deepwater Offshore Production Sharing Contract Act recently signed into law

by President Muhammadu Buhari, but that they want a win-win situation where all stakeholders are happy. They spoke Tuesday at the ongoing Practical Nigerian Content Conference in Yenagoa.

The IOCs say such an approach will enable the industry grow its reserves from the current 38 billion barrels to a higher

volume, and even promote local content in the industry better.

The oil companies, represented by their managing directors, said Nigeria was blessed with skilled personnel and resources required for the industry to be great, but declared that the government should provide the needed enabling the environment.

Osagie Okunbor, managing director of Shell Petroleum Development Company, said the problem of the country was not reserve increase, not skills needed for growing the industry, as Nigeria was second to none in term of technical capacity.

Nigeria can run the oil and gas industry successfully, but needs an enabling environment to thrive, Okunbor said.

According to Okunbor, the government should make sure it creates a stable and enabling environment to move the industry forward.

He said embracing local content was the way to go, as it had a commercial advantage because it would ensure skills are grown.

“It is something everybody must strike to grow,” he said.

Speaking in the same vein, the managing director of Chevron, Jeff Ewing, said the challenge was that there was a need to generate more work in the industry by creating an enabling environment. “The big projects must have the right fiscal regimes to fly,” he said.

The managing director of ExxonMobil, Paul McGrath summed up his opinion by saying that the industry has a bit of support in terms of fiscal regimes.

He, however, stated that he was happy that the minister of State for Petroleum said he would make the passage of the Petroleum Industry Bill a priority project in the first quarter of the year 2020.

UNIBEN new VC promises infrastructure development through PPP, BoT initiatives IDRIS UMAR MOMOH & CHURCHILL OKORO, Benin

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illian Salami, on Monday assumed office as the 10th substantive Vice Chancellor of the University of Benin (UNIBEN) with a promise to pay attention to physical structural development using public private partnership (PPP) and build on transfer (BoT) platforms.

Salami, a professor of Home Economics and Nutritional Education, is the second female to be appointed Vice Chancellor of the University several years after Grace Alele-Williams.

The new Vice Chancellor, who made the promised shortly after taking over as the 10th Vice Chancellor of the institution from Faraday Orunmwense, the immediate past Vice Chancellor, however, solicited the support and cooperation of staff.

She also solicited the support and cooperation of students with a view to make the institution compete with other institutions globally.

According to Salami, “We must harness our strength through cooperation so that we can take the university to the next level and continue to maintain its pride among the best universities.

“My administration will invest in innovation curriculum and teaching to deliver better ways of teaching, and provide practical experience to our students. This will ensure that our student are marketable globally

and relevant to present and future demand.”

She further promised to build on the internally generated revenues of the institution by initiating relevant and innovative education programmes to attract both youths and adults.

She disclosed that her administration would put a mechanism in place to ensure that assessment and promotion matters were announced on time while staff received their entitlements as at when due.

“There is no doubt we have challenges but those challenges are surmountable and I am here to do justice to those challenges.

The reasons why we are here is primarily for the students. We would look into the accommodation, structure as well as staff welfare.

“This will ensure that students are marketable globally and relevant to present and future demands. A quality assurance unit will be created in addition to SERVICOM to monitor teaching and learning processes,” she said.

She however promised to build on his predecessor’s achievement to advance the institution to an era of modern and world-class high institution of learning.

Earlier, the immediate past Vice Chancellor, Faraday Olunmwense, described the new Vice Chancellor as a very proactive and progressive minded person who would take the university to greater heights. www.businessday.ng

L-R: Aigboje Aig-Imoukhuede, founder and chairman, Africa Initiative for Governance; Aliko Dangote, president/CE, Dangote Industries Limited, and Peter Tufano, dean, Said Business School, University of Oxford, during a courtesy visit by the Dean to the Dangote head office in Lagos, yesterday.

Nigeria needs N1trn venture capital fund - Moghalu SEYI JOHN SALAU

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ormer deputy governor of the Central Bank of Nigeria (CBN), Kingsley Moghalu, says Nigeria urgently needs to create a N1 trillion venture capital fund, as the current government initiative at tackling unemployment and poverty through TraderMoni and others are not sustainable, hence the need to create wealth for the citizenry through equity investment.

Moghalu stated this at the recent ‘kickstart’ awards ceremony organised by International Breweries Foundation.

According to Moghalu, Nigeria must prioritise innovation by focusing heavily on innovation to create skills among its young population by promoting educational reforms.

Speaking further on initiative to drive entrepreneurship, Moghalu said as a society we must ensure nobody go through the tertiary education system without understanding how to set up and man-

age a business. Hence, there is a need to critically review Nigeria’s population trends and its importance to youth employability.

On the current political atmosphere in the country, he said Nigerian youth must be directly involved in active politics. This, he said, calls for an urgent fundamental electoral reform.

Vice President Yemi Osinbajo commended International Breweries Foundation on the kickstart initiative in supporting entrepreneurs, saying kickstart had empowered 100s of budding entrepreneurs.

“We must all ask ourselves to do more; I believe both the private and public sector of our emerging economy must find means and ways to do more with less, and create that value that makes citizens more productive and the nation much more prosperous. I am sure it is every entrepreneurs dream to be an Aliko Dangote, and rightly so,” Osinbajo said, represented by Festus Keyamo, the minister of state for labour.

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N2.9bn alleged budget: Foreign Affairs Ministry debunks ICPC’s claims Innocent Odoh, Abuja

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inistry of Foreign Affairs has denied the report by the Independent Corrupt Practices and Other Related Offenses Commission (ICPC) that the sum of N2.9 billion had been earmarked for zonal intervention/ constituency projects in the Ministry’s 2019 budget.

The Ministry in a statement issued by its spokesman, Ferdinand Nwonye, on Monday said no such amount was earmarked in the Ministry’s 2019 budget, adding that the said amount was not reflected in the 2019 Appropriation of the Ministry of Foreign Affairs and never came to the attention of the Ministry.

“The attention of the Ministry of Foreign Affairs has been drawn to media reports credited to the chairman of the ICPC stating that the sum of 2.9 @Businessdayng

billion has been earmarked for Zonal Intervention/ Constituency Projects in the Ministry’s 2019 Budget.

“The Ministry wishes to inform the public that no such amount was earmarked in the Ministry’s 2019 Budget. However, an investigation conducted as a consequence of the media report revealed that unknown to the Ministry, Zonal Intervention Projects allocated to Members of the National Assembly (NASS) as Constituency Projects to the tune of N2.9 billion was earmarked by NASS for execution by the Institute of Peace and Conflict Resolution (ICPR), which happens to be an Agency of the Ministry of Foreign Affairs.

“It is important to note that this amount is not reflected in the 2019 Appropriation of the Ministry of Foreign Affairs and never came to the attention of the Ministry,” the statement said.

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BUSINESS DAY

Wednesday 04 December 2019

Wednesday 04 December 2019

BUSINESS DAY

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10th Anniversary Edition of BusinessDay CEO Forum Nigeria, in Lagos

Peter Tufano, dean, Said Business School, keynote speaker.

L-R: Okechukwu Enelamah, former minister, industry, trade, and investment; Aigboje AigImoukhuede, chairman, Wapic Insurance; Peter Tufano, dean and professor of finance, Said Business School, and Peter Obi, former governor, Anambra State.

L-R: Baker Magunda, MD, Guinness Nigeria; Orji, MD/CEO, NSIA; Enase Okonedo, dean, Lagos Business School (LBS); Effiong Okon, executive director, Seplat, and Uyi Akpata, country senior partner, PwC Nigeria.

L-R: Chika Ekeji, associate principal, McKinsey and Company; Adebayo Sanni, managing director, Oracle Nigeria; Lynda Saint-Nwafor, chief enterprise business officer, MTN; Juliet Ehimuan, country manager, Google, and Bola Asiru, principal, business development, advisors, Mastercard Middle East and Africa

L-R: Peter Obi, former governor, Anambra State; Peter Tufano, dean and professor of finance, Said Business School; Mohammed Hayatudeen; Ladi Balogun, CEO, FCMB Group, and Okechukwu Enelamah, former minister, industry, trade, and investment

L-R: Fidelis Anosike; Louis Odion, senior technical assistant to the president on media, office of the vice president; Frank Aigbogun, publisher/CEO, BusinessDay Media Limited, Emeka Ihedioha, governor, Imo State

L-R: Tammy Brophy, Africa Initiative manager. Chair Oxford Africa Business Alliance; Tunde Coker, MD/CEO, Rack Centre, and Mazen Mroue, chief operating officer, MTN

L-R: Folakemi Fatogbe, director, risk management, Central Bank of Nigeria (CBN); Wole Oshin, group managing director, Custodian Investment Group, and Aniekan Ukpanah, partner, Udo Udoma and Belo-Osagie

L-R: Fiyinfolu Oludiran, partner, McKinsey & Company; Okechukwu Enelamah, former minister, industry, trade, and investment, and Chika Ekeji, associate principal, McKinsey and Company.

L-R: Yomi Badejo-Okusanya, group managing director, CMC Connect; Foluso Philips, chairman, Philips Consulting, and Enobong Hanson, director, account management, Mastercard

Bola Ajomale (r), MD/CEO, NASD Plc, with Collins Onuegbu, executive vice chairman, Signal Alliance.

Enase Okonedo (r), dean, Lagos Business School (LBS), with Oluwatoyin Sanni, group CEO, Emerging Africa Capital Group.

Stefan Traumann (l), consul general, consulate general of the federal republic of Gernay, Lagos, with Tobias Meletschus, director, corporate development, Julius Berger.

L-R: Tolu Osinibi of FCMB; Franklin Ngwu of LBS, and Ralph Ozoude of UPS

L-R: Tokunbo Adesanya (r), founding partner, RockVille and Co., with Bola Asiru, principal, business development, advisors, Mastercard Middle East and Africa

L-R: Ladipo Nylander, general manager, enterprise business, MTN; Olu Akanmu, executive director, retail banking, FCMB, and Matthew Azoji, MD/CEO, Nimeth

L-R: Obafemi Charles, business head marine, CFAO-YAMAHA Motor; Boye Ajayi, MD, CFAO-YAMAHA Motors, and Lanre Adisa, MD/CCO, Noah’s Ark Communications Limited

L-R: Tajudeen Ahmed, group head, business development, BUA Group; Rob Taiwo, MD, Phillips Consultant; Francis Buamah, senior partner, Phillips Consultant, and Paul Ayim, senior partner, Phillips Consultant

L-R: Oluseyi Olanrewaju, finance director, Vodacom; Zakari Usman, director, business development, Vodacom, and Solomon Ogufere, commercial director, Vodacom Business Nigeria

L-R: Abisola Jinadu-Anjorin, commercial lead, LADOL; Amina Oyagbola, managing consultant, AKMS Consulting; Niyo Yusuf, managing partner, Verraki Partners, and Eyitope Kola-Oyeneyin, partner, McKinsey and Company.

Pictures by Pius Okeosisi, Olawale Amoo, and David Apara

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Wednesday 04 December 2019

BUSINESS DAY

10th Anniversary Edition of BusinessDay CEO Forum Nigeria, in Lagos

L-R: Oshiokamele Aruna, MD, TetraPak West Africa, and Damilola Runsewe, SM, SME segment management, MTN

L-R: Sanjay Jain, MD, SSNL; Matthew Azoji, MD/CEO, Neimeth International Pharmaceutical Plc, and Agboola Belgore, GM, policy and strategy, Amobyng Nigeria Limited

L-R: Tobias Meletschus, director, corporate development, Julius Berger; Tolu Osinibi, capital markets, FCMB, Ayo Stuffman of VAS2Nets Technologies Limited

L-R: Aniekan Ukpanah, managing partner, Udo Udoma and Belo-Osagie, and Olu Akanmu, executive director, retail banking, FCMB

L-R: Ralph Ozoude Jr, director, UPS, and Franklin Ngwu, senior lecturer, strategy, corporate governance and risk management, Lagos Business School (LBS)

L-R: Olumide Bolumole, divisional head, listing business, Nigerian Stock Exchange (NSE); Otome Okolo, partner, Streamsowers and John, and Maria Glover, project lead, Impact Investor Foundation (IIF)

L-R: Ekpen Omonbude, CEO, Eraskorp Nigeria Limited; Monjola Adeboye, communications officer, Emerging Africa Capital Group, and Niyi Oladejo, operating partner, Sahel Capital

L-R: Tunde Kehinde, chairman, Skylink Consulting Limited, and Demola Adedeji, lead partner, Rightsource Professional Services

L-R: Naeto Chikwe, special assistant to Imo State governor (Lagos Liason Office); Tony Abili, SSA to Imo State governor/Liason officer, Imo State Liason Office Lagos; Chima Uwanna, deputy chief of staff to Imo State governor, and Adaora Onyechere, SSA to Imo State governor on information and advocacy

L-R: Funmi Ekundayo, MD/CEO, STL Trustees Limited; Tolu Aderemi, partner, Perchstone & Grays LP, and Olumide Obayomi, director, BDML

Wednesday 04 December 2019

BUSINESS DAY

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10th Anniversary Edition of BusinessDay CEO Forum Nigeria, in Lagos

Onyinye Ikenna-Emeka, GM, enterprise marketing MTN; Lynda Saint-Nwafor, chief enterprise business officer, MTN, and Ugonwa Nwoye, chief customer services officer, MTN.

L-R: Uzoma Dozie, CEO, Sparkle, and Faruk Saleh, group CEO, Metro Capital Advisory Group

L-R: Olu Akanmu, ED, retail, FCMB; Wole Oshin MD/CEO, Custodian and Investment Group, and Bisi Lamikanra, partner-head of advisory, KPMG.

L-R: Wole Abu, CEO, Pan African Towers Limited; Onome Okwah, manager, public relations and protocol, MTN, and Erhumu Bayagbon, head, public relations Airtel Nigeria.

L-R: Idris Jimoh, Maria Glover, project lead, Impact Investment, and Samjay Jain, MD/CEO, SSNL

L-R: Rob Taiwo, MD; Francis Buamah, senior partner; Paul Ayim, senior partner, and Folayin Akinjayeju, associate partner, all of Phillips Consulting.

L-R: Bassey Umoh, MD, Universal Energy Resources Limited, and Kieran Godden, COO, Total Health Trust.

L-R: Nnamdi Agbim of Interkel Group and Stefan Traumann, German consul general

L-R: Alexandra Ibehre, senior manager, sales enablement, MTN; Chika Ekeji, associate partner, McKinsey, and Fiyinfolu Oladiran, partner, McKinsey

L-R: Frank Aigbogun, publisher/CEO, BusinessDay Media; Emeka Ihedioha, governor, Imo State, and Asu Ighodalo, founding partner, Banwo Ighodalo.

Pictures by Pius Okeosisi, Olawale Amoo, and David Apara

46

Wednesday 04 December 2019

BUSINESS DAY

news

NMRC, ITF partnership narrows skills gap in building industry CHUKA UROKO

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igeria Mortgage Refinance Company (NMRC), working in collaboration with the Industrial Training Fund (ITF), has helped to narrow the wide skills gap in Nigeria by empowering 40 unemployed and vulnerable youths with training in technical skills in housing construction and entrepreneurship.

The skills gap in Nigeria, often cited as one of the key constraints to the growth of the country’s housing market, is such that builders resort to importing artisans who are proficient in plumbing, carpentry, tiling, bricklaying, etc., from neighbouring West African countries notably Togo, Ghnana, Benin Republic.

The training, which is part of the company’s 2019 corporate social responsibility programme, involved 15 female victims of various forms of human trafficking and domestic abuse under the care of the National Agency for the Prohibition of Trafficking in Persons (NAPTIP).

The trainees underwent a two-month intensive training programme in electrical installation, plumbing, screeding/painting and in-

terior decoration.

“The training programme was part of NMRC’s ongoing strategic community outreach programme,” explained Kehinde Ogundimu, NMRC’s managing director/ chief executive, who spoke at the graduation of the trainees.

NMRC’s goal, he said, was to impact lives, empower unemployed and vulnerable persons as well as to contribute to on-going efforts to redress the skills gap in the building industry in Nigeria, leading to the slow growth of a robust housing market in the country.

Ogundimu commended ITF for their continued par tnership and timely completion of the training programme. He also commended NAPTIP for their collaboration and encouraged the beneficiaries to make judicious use of the skills they have acquired to take their lives to the next phase.

Joseph Ari, DG /CEO, Industrial Training Fund, represented by Danladi Wase, area manager, ITF, Abuja, commended NMRC for sustaining the yearly empowerment programme, noting that the training has given the beneficiaries the chance to take charge of their lives.

Chris Oshiafi, chief executive officer, PanAfrican Capital Holdings, speaking as a panellist on “Is Africa Too Far From Asia? at the Asia-Commonwealth Business Summit in Singapore.

Ogun retains 60% CAPEX benchmark as Abiodun presents N449.9bn 2020 fiscal estimates RAZAQ AYINLA, Abeokuta

‘Transportation bears 46% of manufacturers’ production cost’ … as UN scores Nigeria low for poor connectivity AMAKA ANAGOR-EWUZIE in Abuja

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anufacturers are presently bearing the brunt of poor transport infrastructure across the nation’s supply chain, as about 46 percent of their production cost now goes to the transportation component of the manufacturing business.

As a result, Nigerian manufacturers cannot compete with their counterparts in China and even in Benin Republic due to lack of effective and modern transport system.

This was the key takeaway from the opening of a ongoing three-day National Summit organised by the Chartered Institute of Transport Administration Nigeria (CIoTA), with the theme, “Unlocking the Potential of Transportation for Sustainable Development.”

Speaking in Abuja on Tuesday at the event, Hassan Bello, keynote speaker, said the United Nations Conference on Trade and Development (UNCTAD) had scored Nigerian very low due to lack of connectivity.

According to Bello, good transport infrastructure brings down cost of doing business, and that if Nigeria has good roads, railway, and power sector, the manufacturers will have competitive advantage over other countries.

Bello, who doubles as the executive secretary of the Nigerian Shippers’ Council (NSC), said

it cost hundreds of thousands to hire a truck from Lagos to Kaduna to move one 20-foot container, but cost less to move same by rail.

“There is massive distortion in the transport system, which is eating up the economy, and for a country that wants to diversify its economy, it cannot work. Our problem is using one mode of transportation all the time without alternative,” Bello said.

He further pointed out that there must be a policy that certain percentage of goods must be carried by inland waterways, road, pipeline and a majority by rail.

“If we have the pipeline, tankers would not be going to Apapa because pipelines are means of transport. The connectivity of pipeline, inland waterways, railway and air transportation are critical. The port in Baro must be able to speak to the Inland Dry Port in Kaduna,” he said.

Citing example, he stated that a train from Kaduna to Abuja along narrow gauge was about 40km per hour, which is tedious and not efficient, and by the time the rail was rehabilitated, it could do 75 to 100km/hour.

In his presentation, Fidet Okhiria, managing director, Nigerian Railway Corporation, who collaborated this, said the cost of moving goods from the point of production to another place, where it is needed, was quite higher than the cost of raw materials used in producing the goods. www.businessday.ng

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overnor Dapo Abiodun of Ogun State, like the immediate past governor, on Tuesday retained a 60 percent capital expenditure benchmark when he presented N449.974 billion state fiscal estimates for 2020 before the Ogun State House of Assembly.

G overnor pres ented N449.974 billion as budget proposal for the year 2020, which “Budget to Build Our Future Together,” focusing on capital projects and reinventing the National Social Investment Programmes in the state with the largest budgetary vote of N128.067

billion, representing 28% of the budget size.

Ogun fiscal estimates proposed for 2020 fiscal year by Governor Abiodun has a total of N269.132 billion as capital expenditure, representing 60.31%, which is a retention of 60% benchmark for the CAPEX initiated by the All Progressives Congress (APC) in the state, while N269.132 billion, representing 39.69% was budgeted for recurrent expenditure.

A close look of the 2020 Appropriation Bill shows that the fiscal estimates are based on five strategic pillars ISEYA - Infrastructure - N107.964 billion = 24%; Social Wellbeing and Wel-

Second year running, UBA Group emerges African Bank of the Year

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anker Magazine has selectedUnited Bank for Africa (UBA) plc as the “African Bank of the Year 2019.”

This is the second time UBA has clinched the prestigious award, having been named Best African Bank of 2017 by The Banker magazine.

This year, UBA also won best bank category in 6 of its subsidiaries: UBA Benin, UBA Tchad, UBA Gabon, UBA Congo, UBA Cote D’Ivoire and UBA Sierra Leone.

The unprecedented win marks the first time ever in the history of the banker awards, that any one bank will be given as many as six wins including the grand regional award.

The awards ceremony took place at the Sheraton Grand, Park Lane in London at the weekend where UBA was represented by its CEO, UBA Africa, Victor Osadolor, who received all seven awards on behalf of the bank.

John Everington, Middle East and Africa Editor for The Banker, said the aim of the award “is to highlight industry

wide excellence within the global banking community.

The winner is selected from participating banks in each of the countries from which entries are received for the competition.”

The UBA’s group CEO, Kennedy Uzoka, who expressed delight over the recognition from The Banker, stated, “The recognitions come as a reassurance that we are on track in consolidating our leadership position in Africa, as we continue to create superior value for all our stakeholders.

“UBA must be doing something right, and for us, these awards mark another milestone for the Group. It is a testament of the diligent execution of the bank’s strategic initiatives geared towards customer service. Being recognised as Africa’s best bank complements positive feedback from customers and is recognition of our improving efficiencies, service quality and innovation.

I therefore dedicate it to our growing loyal corporate and retail customers, who are our essence.”

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fare - N128.067 billion = 28%; Education - N91.804 billion = 20%; Youth Empowerment - N7.896 billion = 2%; Agriculture - N21.634 billion and other expenses - N92.804 billion = 21%.

The proposed fiscal bill shows budget finance sources which include internally generated revenue (IGR) that stands at N255.946 billion, representing 57%; statutory allocation is N43.431 billion, representing 10%; expected revenue form VAT stands at N22.031 billion which represents 5%, while capital and other receipts are N129.566 billion which represents 28%.

The budget, which was presented before the

Olakunle Oluomo-led State House of Assembly, devised a Medium-Term Expenditure Framework (MTEF) with a three fiscal-year financial plan which projects 2.4% gross domestic growth of N2.99 trillion for 2020; N3.06 trillion for 2021 and N3.14 trillion for 2022, respectively.

The fiscal estimates project inflation rate at 10.2% in 2020; 8.49% for 2021 and 6.59% for 2022, respectively, as the capital expenditure is retained at 60% benchmark, starting from 60% capital expenditure ratio for 2020 as well as 65% and 70% ratio for 2021 and 2022 fiscal years, respectively.

FG undertakes 524 highways, bridges’ projects across country - Fashola HARRISON EDEH, Abuja

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inister of Works and Housing, Babatunde Fashola, on Tuesday updated the Federal Executive Council (FEC) on the ongoing road and bridge construction and rehabilitation projects nationwide, stating that a total of 524 roads and bridges’ projects are currently ongoing across the country.

Fashola, who gave the updates in a presentation he made before the Council, highlighting 80 of them as priority projects scheduled for completion in the 2020-2021 fiscal year, noted that every state in the Federation including the FCT had at least three such ongoing projects.

He listed those on priority list to include 27 financed with Sovereign SUKUK Fund, 47 scheduled for substantial completion in 2020/2021 and other priority projects, two roads leading to the ports and four major bridges.

Giving reasons for the prioritization of the 80 projects, the Minister who explained that it would improve the ease @Businessdayng

of doing business in the country, declared, “The projects on completion will bring about reduced travel time, lower vehicle operating costs and improve the comfort of road users as well as improve the ease of doing business in the country and ultimately boost the Nigerian Economy.”

He noted that Federal roads and bridges (categorized from A1 to A9) are major arterial routes that connect all states in Nigeria including the Federal Capital Territory, adding that the routes and bridges linked cities with high economic activities and carried majority of Heavy Goods Vehicles which gradually dispersed through the link routes to different parts of the country.

The Minister listed the roads to include Lagos-Ibadan-Ilorin-Jebba-Kotangora-JegaSokoto-Niger Border as A1; Warri-Benin-Lokoja-AbujaKaduna-Kano-Daura-Niger Border as A2; Port HarcourtAba-Umuahia-Okigwe-Oturkpo-Makurdi-Akwanga-JosBauchi-Maiduguri-Gamboru as A3 and Calabar-Ikom-OgojaKatsina Ala-Jalingo-Yola-BamaMaiduguri as A4.

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Wednesday 04 December 2019

BUSINESS DAY

FT

FINANCIAL TIMES

World Business Newspaper

VICTOR MALLET, JAMES POLITI AND JIM BRUNSDEN

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onald Trump declared on Tuesday he was prepared to wait until after the US election next year to reach a trade deal with China, fuelling global economic tensions a day after stepping up a dispute with EU allies.

The US president said there was no deadline for the US-China talks, raising doubts about the prospects for a resolution to the dispute with Beijing.

“In some ways I like the idea of waiting until after the election,” the US president told reporters on a visit to London for a summit of the Nato alliance. “The China trade deal is dependent on one thing: Do I want to make it? . . . We’re doing very well with China right now and we can do even better.”

Markets were shaken by the comments. The S&P was down more than 1 per cent in morning trading in New York, following a decline in the European Stoxx 600 index of 0.4 per cent and a drop of 1.6 per cent for the FTSE 100.

Mr Trump has previously said that he was willing to wait until after the 2020 election to ink a deal with China, most recently in September in a press conference with Scott Morrison, the Australian prime minister.

“I don’t think I need it before the election. I think people know that we’re doing a great job,” he said at the time. Mr Trump has also said at other times that China was urgently looking for a deal and willing to wait for the chance that a Democratic candidate wins the 2020 presidential race and replac-

Trump says he is prepared to wait to strike US-China trade deal Stock markets sell off as president warns that agreement could come after US election

Donald Trump arriving in the UK on Monday night © Bloomberg

es Mr Trump in the White House.

Mr Trump’s latest comments came after Washington on Monday threatened to impose 100 per cent tariffs on up to $2.4bn of French goods, including champagne and luxury items. The decision followed a conclusion by the US trade representative’s office that a French digital services tax unfairly discriminated against American technology companies.

Washington also said on Monday it might broaden its punitive

Japanese giant GPIF halts stock lending from its equity portfolio

Wall Street stocks sink more than 1% after US president’s comments

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arkets were jolted after Donald Trump suggested a trade deal with China could be delayed until after the US presidential election in November next year.

Speaking in London during a press conference with Nato secretary-general Jens Stoltenberg, Mr Trump said he had “no deadline” for getting a deal done, adding: “In some ways I think it’s better to wait until after the election.”

China’s currency slipped directly following the comments, as did government bond yields and equity markets on both sides of the Atlantic.

The S&P 500 was down 1.3 per cent shortly after opening bell on Tuesday, again putting the index on course for its biggest one-day drop in about two months, and having fallen 0.9 per cent on Monday. The Nasdaq Composite sank 1.3 per cent and the Dow Jones Industrial Average fell 1.2 per cent.

Declines in Europe picked up steam. The broad Stoxx 600 was

down 1.1 per cent, France’s Cac 40 sank 1.3 per cent and London’s FTSE 100 tumbled 1.9 per cent. Germany’s Dax clung to a 0.1 per cent decline.

“As we get closer to the December 15 deadline for new tariffs being imposed on China, risk markets will likely become increasingly nervous as each day passes if we get no news confirming either a date to sign a phase one deal or a delay in these tariffs being imposed,” Mohammed Kazmi, portfolio Manager at UBP, said.

The offshore renminbi, the version of the Chinese currency which international investors can access outside of China, weakened 0.4 per cent to 7.0682 to the dollar.

In fixed income, the yield on US 10-year Treasuries gave up ground to trade down 7.4 basis points at 1.7603 per cent on the day as investors retreated into the debt. Gold, seen as a haven asset sought out by investors in times of market turbulence, traded 1 per cent higher.

“The China trade deal is dependent on one thing: Do I want to make it?” said Mr Trump. “ . . . we’re doing very well with China right now and we can do even better.” www.businessday.ng

the EU was ready to retaliate with “a strong riposte”.

Bruno Le Maire called the tariff plans “unacceptable” and not worthy of an ally. “It’s in no one’s interest, it’s not in the interest of growth, or of political stability,” he said in a radio interview on Tuesday.

The planned tariffs on French goods follow months of complaints in Washington about the digital services tax, introduced by the government of President Emmanuel

World’s biggest pension fund strikes blow against short-sellers

Markets jolted by rising concerns over global trade PETER WELLS, MYLES MCCORMICK AND ALICE WOODHOUSE

tariffs on other EU products — including from the UK, France, Spain and Germany — because of subsidies to European aircraft maker Airbus that have been deemed illegal by the WTO. In addition, the US said on Monday it would restore tariffs on metals from Argentina and Brazil to punish them for their currency policies.

Paris hit back at the Trump administration’s tariff threat, with France’s finance minister vowing

Macron, which targets companies such as Google, Apple, Amazon and Facebook.

France insists that the tax, designed to ensure that tech companies pay a reasonable level of tax in the countries where they do business rather than shifting the profits to tax havens, is aimed at companies from all countries, including China. It was pitched as a stop-gap measure until new rules could be approved on a multilateral basis through the OECD. Mr Le Maire asked whether the US was still committed to reaching an agreement at the OECD for a global minimum tax.

The OECD negotiations are under way and due to be concluded next year. Mr Le Maire had announced at the G7 summit in Biarritz in August that the US and France had reached a compromise on how to treat France’s national turnover tax on big tech groups.

According to Mr Le Maire, he and US Treasury secretary Steven Mnuchin agreed that the French tax would stay in place for two years but companies would receive tax credits for those years if the international tax rate agreed at the OECD resulted in a lower level of taxation.

A g n è s Pa n n i e r- R u n a c h e r, French junior finance minister, said France would not back down on its digital tax and needed to be “pugnacious” in defending it.

LEO LEWIS AND BILLY NAUMAN

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apan’s public pension fund has struck a blow against shortsellers, declaring that it will no longer allow overseas shares to be lent out from its ¥80tn ($733bn) global equity portfolio.

The move by the Government Pension Investment Fund, the world’s largest, will affect shares in its $370bn overseas equity portfolio and could prove hugely disruptive to equity markets if others follow its lead. The decision is part of GPIF’s efforts to establish itself as an environmental, social and governance-focused investor.

The announcement drew a swift response from Elon Musk, the Tesla founder who has clashed with short-sellers over the performance of his electric car group’s shares. “Bravo, right thing to do!

Short selling should be illegal,” he tweeted on Tuesday morning.

People close to the GPIF said the initiative, which was led by Hiro Mizuno, the fund’s chief investment officer, encountered a range of internal objections and remains divisive.

The GPIF said it was concerned that lending stocks out stopped it exercising proper stewardship over the underlying investments. This

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included a lack of transparency over the final borrower and how it was using GPIF shares. Should these concerns be addressed, said the fund, it will consider lending stocks again.

GPIF will continue to lend securities from its bond portfolio. Traders wishing to short- sell shares, betting on a fall in the price, must first borrow them from their owner.

The decision will incur a direct financial cost to the Japanese fund.

According to the GPIF’s most recent annual report, it declared a net $300m in fees from lending shares that sit in the foreign segment of its portfolio over last three years to 2018.

After a series of readjustments in recent years, the proportion of Japanese and overseas shares have been raised to a combined 50 per cent of the GPIF’s $1.6tn asset portfolio.

Under Japanese rules that prevent the GPIF holding or voting on individual stocks, the administration of the fund’s equity holdings is entrusted to a broad range of outside asset managers. Several of them have said they have come under intensified pressure from Mr Mizuno to push companies harder, particularly on governance issues.

Traders in Tokyo said the immediate risk the GPIF’s decision posed to markets is that other asset managers may feel obliged to @Businessdayng

follow its lead in effectively branding the practice of short selling as “non-ESG”.

However, others argue that despite the huge symbolism of the GPIF’s move, it is unlikely to have an immediate impact on market fundamentals.

There are numerous aspects of securities lending that can present issues for ESG-minded investors.

For example, if a stock is out on loan, the voting rights go with it, which means the asset owner cannot engage with its portfolio companies.

Asset owners also typically have little say over what happens with their securities once they are lent out. Many investors are concerned their securities will be used for tax evasion purposes.

However, there are steps investors can take to avoid both of these scenarios that still allow them to participate in securities lending, said Andrew Dyson, chief executive of the International Securities Lending Association, a Londonbased trade group. Many asset owners have provisions in their lending policies that require their securities to be returned for voting purposes. To sidestep tax-evasion problems, asset owners can choose to not lend out any securities close to their dividend date, he said.

Wednesday 04 December 2019

BUSINESS DAY

48

NATIONAL NEWS

FT

UniCredit plans 8,000 job cuts and first share buyback in a decade Move by Italy’s biggest bank will result in closure of 500 branches in effort to save €1bn STEPHEN MORRIS AND ALICE WOODHOUSE

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niCredit, Italy’s largest lender, said it plans to cut 8,000 jobs and seek regulatory approval for a share buyback that will be seen as a litmus test for the wider European banking sector.

The moves were part of a fouryear strategic plan unveiled by chief executive Jean Pierre Mustier on Tuesday, which will also lead to the closure of 500 branches in an effort to save €1bn of costs in Western Europe.

Mr Mustier declined to give details of where the job cuts will fall, but said they would be done in a “socially responsible way.”

Over the past 18 months, UniCredit has explored mergers with other challenged European banks such as Germany’s Commerzbank and France’s Société Générale, the Financial Times has reported.

However, Mr Mustier poured cold water on the speculation, saying the priorities were capital returns and organic growth.

“No M&A, how can I be more precise . . . We prefer share buybacks to M&A,” Mr Mustier said in London after being pressed on the issue.

“We might look at small bolt-on acquisitions, most likely in central and eastern Europe where we have a growth plan, but most likely nothing in western Europe.”

Winning approval for a €2bn share buyback would be a coup for

Mr Mustier, who will have to convince the European Central Bank that UniCredit’s balance sheet is now robust enough for excess capital to be returned to shareholders.

Magdalena Stoklosa, head of European bank research at Morgan Stanley, said that if UniCredit is successful it could prove a turning point for the troubled European banking sector and pave the way for peers to follow suit.

“The real significance of a large, liquid eurozone bank being able to buy back shares is the final approval on the regulatory side that signals the end of the balance sheet cleanup and rehabilitation period,” she told the FT recently.

The planned share repurchase means the bank will raise its capital distribution for this year to 40 per cent of underlying net profit from 20 per cent. A combination of dividends and buybacks would push that to 50 per cent in 2023. Overall, the bank said €8bn will be returned to investors by 2023 when €6bn of dividends are included.

In a wide-ranging plan, UniCredit also announced a quicker timetable to reduce its bad debts, pledging to cut non-performing loans to less than €9bn by the end of the year and below €5bn by the end of 2020.

Revenues should be “resilient,” the bank added, despite headwinds such as negative interest rates in Europe. It reiterated its guidance for €4.7bn in underlying net income this year and €5bn in 2023.

Trump criticises Macron ahead of Nato gathering Turkish president Erdogan meanwhile vows to block Nato defence plans for Baltic nations MICHAEL PEEL AND LAURA PITEL

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S president Donald Trump branded his French counterpart Emmanuel Macron “disrespectful” while Turkey’s president Recep Tayyip Erdogan vowed to block a Nato plan for the defence of Baltic nations against Russia hours before the 70th birthday summit of the military alliance near London.

The barbs will stoke nerves that a carefully managed meeting intended to underscore Nato’s continued relevance and resolve will instead highlight growing faultlines over funding, co-ordination and military priorities.

Mr Trump launched a presummit broadside against Mr Macron, branding “nasty” and “very insulting” the French leader’s comments last month that Nato was suffering “brain death”. Mr Macron risked further splits in Nato last week when he said its main adversary was terrorism, rather than Russia or China.

Mr Trump — who has in the past flayed European allies for failing to spend more on their militaries and who, on the presidential campaign trail, once branded Nato “obsolete” — said the alliance served “a great purpose”.

He said he saw potential for France “breaking off” from Nato, although Mr Macron has made no such suggestion.

“I’m looking at him [Mr Macron] and I’m saying that he

needs protection more than anybody and I see him breaking off,” Mr Trump said, speaking to reporters alongside Jens Stoltenberg, Nato secretary-general. “So I’m a little surprised at that.”

Meanwhile, Mr Erdogan said he demanded that the 29-member group agree to recognise the Syrian Kurdish YPG militia, which has helped the US-led coalition fight Isis, as a terrorist group. “If our friends will not recognise those who we see as terrorists as a terrorist group, we will be against every [other] kind of step,” said Mr Erdogan before flying to the UK for the summit. “We want support for our country in the fight against terrorism without ‘ifs and buts’.”

Chart showing estimated defence expenditure in 2019 as a % of GDP. Spending falls short of Nato guidelines of 2% for most members Mr Erdogan said on Tuesday that he had spoken by phone to Andrzej Duda, the Polish president, the previous day and agreed to meet him and other Baltic leaders in London. But, with Washington making clear that it would not cede to Turkey’s demands, it remained unclear how member states would break the impasse.

Mark Esper, US defence secretary, said Washington would not give in to Turkey’s demands to apply a terrorist label to the YPG militia, which was trained and equipped by the Pentagon in order to spearhead the fight against Isis jihadis in Syria. www.businessday.ng

Concerns about rising levels of government debt have sapped business confidence in South Africa © Bloomberg

South Africa’s economy contracts in third quarter Disappointing figures weigh on rand and add to Cyril Ramaphosa’s woes JOSEPH COTTERILL

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outh Africa’s economy contracted in the third quarter, compounding the problems facing President Cyril Ramaphosa in Africa’s most industrialised nation.

Gross domestic product in the continent’s second-biggest economy fell at an annualised rate of 0.6 per cent in the three months to the end of September, South Africa’s official statistics authority said on Tuesday.

Economists had forecast a rise of 0.1 per cent. The disappointing data weighed on the rand, which fell nearly 1 per cent against the US dollar.

Under Mr Ramaphosa, South Africa has battled to exit a long period of sluggish growth that set in under Jacob Zuma, his predecessor.

Delays in reforms to near-bankrupt state companies, infighting in the ruling African National Congress and worries about rising levels of government debt have sapped business confidence.

In the second quarter the economy had rebounded at a rate of more than 3 per cent, after contracting in

the first three months of the year when rolling blackouts at the troubled electricity monopoly, Eskom, hobbled industry.

But in the third quarter key economic sectors including mining, farming and manufacturing all recorded sharp declines. Mining activity dropped more than 6 per cent.

“The strong growth in Q2 was a brief rebound rather than evidence of real growth momentum,” said John Ashbourne, senior emerging markets economist at Capital Economics.

“While economic activity in South Africa is increasingly volatile, the trend of progressively weaker growth is clear.”

The return to contraction means the economy is likely to grow at a rate of 1 per cent or less this year, below the level of population growth.

The South African Reserve Bank, which kept rates at 6.5 per cent last month, has forecast growth of 0.5 per cent this year.

That would mean the sixth consecutive year of declining GDP per capita in South Africa, according to the IMF. “With low growth and low job creation, the increasing labour force is projected to exacerbate unemployment pressures, poverty, and

inequality,” it said last week.

Low growth is a problem for South Africa’s ballooning government debts, which are on the verge of losing their last investment-grade credit rating from Moody’s, the only rating agency yet to downgrade the country’s debt to junk status.

According to the finance minister Tito Mboweni, current government debt levels of 3tn rand ($205bn), approximately 60 per cent of GDP, are set to rise to 80 per cent of GDP by the middle of the 2020s.

Costly bailouts for Eskom, which can no longer keep up payments on its own $30bn debts and is struggling to keep the lights on, have left Mr Mboweni, in office since October 2018, with little fiscal room for manoeuvre.

Last month Moody’s cut its outlook for South Africa from stable to negative and slashed its own forecasts for medium-term growth to between 1 per cent and 1.5 per cent.

The economy was growing at about 4 per cent a year until the 2008 financial crisis. Since then, growth in productivity has collapsed, adding to deep structural problems from the days of apartheid — like a dysfunctional education system — that impede progress.

Companies vow to improve climate disclosure after TCI warning Moody’s and Airbus among those targeted by hedge fund over emissions LESLIE HOOK

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ompanies including Charter Communications and Moody’s have vowed to improve their environmental disclosures after receiving warning letters from activist hedge fund TCI, which has said it will vote against directors at groups that do not publish their carbon dioxide emissions.

TCI, a long-only fund with $28bn under management, has launched a campaign to force companies in its portfolio to disclose their emissions and publish plans to reduce them. Founder Christopher Hohn has been outspoken advocate for greater disclosure on carbon dioxide emissions, arguing that investors must step in as governments have not yet made climate-related disclo-

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sures mandatory.

Ten companies — including Airbus, Moody’s, Safran and Charter Communications — have received letters from TCI reprimanding them over their climate records.

Moody’s pledged to improve after it was criticised for receiving a “D grade” in its emissions rating from CDP, a non-profit climate assessment group.

“Moody’s takes shareholder input on ESG [environmental, social, governance] issues seriously,” a spokesman said, pointing to the group’s recent acquisition of several sustainability related businesses.

Although Moody’s is increasingly focused on environmental risks in its ratings business, the group received the low grade from CDP because it has not set @Businessdayng

any emissions targets for its own business.

Column chart of Number of companies disclosing environmental data to the CDP showing Climate concerns “It is untenable for Moody’s to achieve such a low score when seeking to demonstrate environmental leadership,” TCI warned in its letter. “It may also leave Moody’s at a competitive disadvantage relative to peers.”

TCI, which holds a 3 per cent stake in Moody’s, also asked the agency to lobby for better disclosure from banks about the exposure of their loan books to climate risk.

“Moody’s must advocate for banks to disclose climate change risks associated with their loan books,” the activist hedge fund wrote.

BUSINESS DAY

Wednesday 04 December 2019

49

FINANCIAL TIMES

COMPANIES & MARKETS

@ FINANCIAL TIMES LIMITED

Fidelity’s head of $2.8tn asset management arm to retire Steve Neff to be replaced by head of global asset management Bart Grenier ROBIN WIGGLESWORTH

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he head of Fidelity’s $2.8tn asset management division is retiring from the Boston investment group after just a year in the job, to be replaced by a senior executive from its international arm.

Steve Neff was previously chief technology officer at Fidelity, and his appointment last year as head of its sprawling asset management arm was widely-seen as an indicator of how the investing industry is changing.

However, in a memo sent to Fidelity employees on Tuesday, the company’s chief executive Abigail Johnson said Mr Neff was planning to retire at the end of March. In the memo Ms Johnson said he “will be remembered as a skilled steward for Fidelity’s mutual fund shareholders and institutional clients, as well as an innovative leader of technology development”.

Mr Neff, an avid cyclist and 23-year veteran of the Boston money management giant, will be replaced by Bart Grenier, who is currently global head of asset management at Fidelity International, the company’s global affiliate.

Andrew McCaffery has been appointed global chief investment officer of Fidelity International, re-

placing Mr Grenier. He joined the company in July as Mr Grenier’s deputy.

“Bart is the ideal candidate to succeed Steve,” Ms Johnson said in the memo. “The breadth of his experience across investment strategies and asset classes, as well as his strategic insights and spirit of innovation, makes him well suited to lead asset management.”

Asset management profits have been buoyed by the post-crisis market rally, but executives are girding themselves for a leaner environment. Morgan Stanley estimates the global fee pool for active managers will shrink by a third — or about $40bn — over the next five years, and the listed industry’s shares have lagged behind the stock market rally lately.

Over $300bn has seeped out active equity funds this year, extending investors withdrawals over the past five years to north of $2tn, according to EPFR. Many investment groups, including Fidelity, hope that harnessing modern technology such as machine learning and data science will both be able to contain costs and improve performance.

“The investments we are making in technology are centred on two major goals: generating alpha and scale and efficiency,” Mr Neff said in a recent interview with the Financial Times.

Markets jolted by rising concerns over global trade Wall Street stocks sink more than 1% after US president’s comments PETER WELLS, MYLES MCCORMICK AND ALICE WOODHOUSE

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arkets were jolted after Donald Trump suggested a trade deal with China could be delayed until after the US presidential election in November next year.

Speaking in London during a press conference with Nato secretary-general Jens Stoltenberg, Mr Trump said he had “no deadline” for getting a deal done, adding: “In some ways I think it’s better to wait until after the election.”

China’s currency slipped directly following the comments, as did government bond yields and equity markets on both sides of the Atlantic.

The S&P 500 was down 1.3 per cent shortly after opening bell on Tuesday, again putting the index on course for its biggest one-day drop in about two months, and having fallen 0.9 per cent on Monday. The Nasdaq Composite sank 1.3 per cent and the Dow Jones Industrial Average fell 1.2 per cent.

Declines in Europe picked up steam. The broad Stoxx 600 was down 1.1 per cent, France’s Cac 40 sank 1.3 per cent and London’s FTSE 100 tumbled 1.9 per cent.

Germany’s Dax clung to a 0.1 per cent decline.

“As we get closer to the De-

cember 15 deadline for new tariffs being imposed on China, risk markets will likely become increasingly nervous as each day passes if we get no news confirming either a date to sign a phase one deal or a delay in these tariffs being imposed,” Mohammed Kazmi, portfolio Manager at UBP, said.

The offshore renminbi, the version of the Chinese currency which international investors can access outside of China, weakened 0.4 per cent to 7.0682 to the dollar.

In fixed income, the yield on US 10-year Treasuries gave up ground to trade down 7.4 basis points at 1.7603 per cent on the day as investors retreated into the debt. Gold, seen as a haven asset sought out by investors in times of market turbulence, traded 1 per cent higher.

“The China trade deal is dependent on one thing: Do I want to make it?” said Mr Trump. “ . . . we’re doing very well with China right now and we can do even better.”

The comments come as Mr Trump reignites global trade tensions more broadly, reimposing tariffs on some metal imports from Brazil and Argentina and threatening to impose duties on French products. www.businessday.ng

Grounded Boeing 737 Max jets. Hundreds of the aircraft are in storage waiting for Federal Aviation Authority clearance to fly © Getty

Boeing will pay for its previously cosy relations with regulators Streamlined testing smoothed the 737 Max’s path to market but softer oversight generally portends scandal BROOKE MASTERS

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oeing had very little to be thankful for last week. The aerospace group is struggling to get back on track after two crashes involving its 737 Max jets killed nearly 350 people.

But the US Federal Aviation Administration said that it plans to inspect and sign off on every single 737 Max before delivery, once the watchdog agrees to let the grounded model back into the air. This effectively revokes the company’s longstanding ability to perform routine safety checks on its own.

Then the European Aviation Safety Agency weighed in, saying that it would independently assess the safety of Boeing’s next new model, the 777X, rather than relying on the FAA to lead the process.

This is likely to slow the task of getting new planes into service, which will annoy customers and hit the company’s profits. Boeing already has hundreds of 737 Max jets in storage waiting for FAA clearance, and the 777X, an update of its popular 777 model to add

bigger engines and wings, will be a year behind schedule.

The new regulatory scepticism of Boeing’s commitment to safety is not surprising. The US, and most developed countries, spent more than a century cycling through tighter and looser regulation. Scandals and crisis — Upton Sinclair’s 1906 meatpacking exposé, the 1929 crash — beget tougher rules. Then as memories fade, closer relationships develop between companies and their watchdogs. Some of this is good: rules work better when watchdogs know the industries they oversee.

But too often co-operation turns into capture. Five years after the 1887 creation of the first US regulatory agency, a corporate attorney boasted that the Interstate Commerce Commission had been co-opted to provide “supervision [that] is almost entirely nominal”.

Ever since, companies have been tempted to use political contributions and strategic hiring of regulatory personnel to do exactly the same thing.

In Boeing’s case, the FAA delegated most regulatory testing of new models to the manufac-

turer. The streamlined process smoothed the 737 Max’s path to market, allowing Boeing to meet production and cost targets. But then new MCAS anti-stall software was partly blamed for two crashes in five months. The jets were grounded, amid claims of inadequate testing and pilot training.

Recent corporate history is replete with companies that initially profited from cosy relationships with their regulators, only to be hit by failures that undermined public trust and led to new regulatory systems that are not just tougher but also far more complex.

For decades, the US Food and Drug Administration served as the gold standard of pharmaceutical regulation — other countries often accepted medicines it had approved. But in the 1990s, it sped up its approval process, partly by relying more on the manufacturers, and loosened the rules around sales and promotion. Blockbuster drugs poured on to the market.

But then a series of product and marketing scandals hit, including deaths from the painkiller Vioxx, forcing a public rethink.

Tech tax v lux levy: le tit-for-tat Dispute between France and the US is serious but could still be resolved

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rance gave the US the Statue of Liberty. But those historic bonds are starting to fray.

France has angered the US by taxing its digital giants. In response, the US has proposed tariffs on $2.4bn of French luxury goods such as champagne, cheese and handbags.

The stock market reaction was one of sniffy hauteur. On Tuesday shares in the targets, large French companies such as LVMH, Kering and Hermès, barely dipped. Kering produces the vast majority of its goods in Italy, not France. Hermès garners only about 12 per cent of its revenues from the US. LVMH receives double that proportion.

But half the goods it sells in the US are manufactured there.

In general, luxury’s pricing power allows levies to be passed on to the consumers. French cheesemakers may find it harder.

Americans might not feel they

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have to eat Roquefort. An Oregon blue cheese won top prize at the recent World Cheese Awards.

But the tax dispute is serious.

It could spread and escalate. The politics are not conducive to a climbdown. France says its 3 per cent levy on revenue from digital services is a matter of fiscal fairness. Under current rules, tech groups often pay very low tax bills outside the US. Take Alphabet, for example. Its foreign tax rate in 2018 was just 6.5 per cent. After many years of debate, France reckoned it was time to take action.

That is understandable, but rash. There is a discriminatory tinge to the digital tax, though France denies it. Critics say the clue about the “GAFA tax” — as French politicians call it — is in the name. Tactlessly, the logos of Google, Apple, Facebook and Amazon were shown on the government website that announced it. @Businessdayng

The stand-off could still be resolved. The Paris-based OECD has hammered out a proposal to allow national governments to tax a slice of multinationals’ profits on the basis of sales in their countries. That would change the basis of taxation of not just digital companies but others too. France, for example, would get some more tax from US digital companies, but would also lose some of the tax spoils from its own giants such as LVMH. France is not alone in introducing digital taxes. All governments should tread carefully to maximise the chance of international agreement. That would have wide benefits, including for Silicon Valley companies. The dangers of unilateral solutions are not limited to stoking trade tensions.

They could leave a big part of the world’s economy bogged down in a Balkanised tax regime.

50

Wednesday 04 December 2019

BUSINESS DAY

FT

ANALYSIS

Moral Money special edition: Ford Foundation’s Darren Walker on reforming philanthropy, capitalism and technology ‘Privileged people don’t like to be made uncomfortable’ ANDREW EDGECLIFFE-JOHNSON AND GILLIAN TETT

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ndrew Carnegie published the first Gospel of Wealth in 1889 and 130 years later the great library builder is still cited as a model for modern philanthropists. Today’s wealthy donors might not care to recall that just three years after his book appeared, Carnegie also violently suppressed a strike at the Homestead steel mill outside Pittsburgh.

“Mr Andrew Carnegie preaches a gospel of wealth worthy of the apostolic age, but at Pittsburgh he believes in blood and iron,” the Financial Times of 1892 observed. Charges of hypocrisy about how those who give away fortunes make them in the first place live on in the philanthrosceptics of today, such as Anand Ghiridaradas and Rutger Bregman.

Even then, though, Moral Money’s FT predecessors took the view that this “trustee of incalculable wealth . . . owes to himself and to his adopted country a solemn responsibility for its administration”.

In our own gilded age, one of the most influential of those trustees is Darren Walker, president of the $13bn Ford Foundation. Last month he published

disrupting, just as the current form of capitalism needs disrupting because, at their roots, they can do more to make the world a fair and just place.

But, unfortunately, we have a distorted form of capitalism and a distorted form or philanthropy that is contributing to more inequality and we need to think about how we use our economic system and our system of giving in a way that actually builds bridges and reduces the divide between those who are privileged and those who are disadvantaged by it.

MM: Abigail Disney recently told an FT conference that philanthropy doesn’t challenge privilege. Do you agree with that?

DW: I agree that philanthropists are generally privileged people and privileged people don’t like to be made uncomfortable . . . Andrew Carnegie’s view was the fact that . . . people are losing limbs making iron ore in these Pittsburgh factories, that’s just the cost of business and the question is not “What harm are we doing?” but it’s “Are we generous in giving back?”.This is the conundrum for the philanthropist . . . How comfortable are we with that trade-off?

MM: We’re becoming more used to companies being on the

Ford Foundation president Darren Walker: ‘Partnership with the private sector is essential to solve the problems our planet faces’ © Getty

what he calls “a new gospel of wealth”: a book called From Generosity to Justice.

It is a challenge to philanthropists to listen to those outside their privileged bubble and direct their work to addressing the root causes — rather than just the consequences — of injustice. And it is an argument about how companies and their investors can create a more inclusive model of capitalism.

Ahead of Giving Tuesday, Moral Money’s Andrew Edgecliffe-Johnson and Gillian Tett sat down with Mr Walker in an office filled with books and Dogon masks to discuss the former investment banker’s prescription for reforming philanthropy, capitalism and technology.

What follows are highlights of that conversation, edited for length and clarity.

Moral Money: What are you trying to achieve with this book?

Darren Walker: What I hope to achieve is to make a modest contribution to the thinking of American philanthropists, how they approach their giving, what they prioritise in their giving, how they connect it to their work as capitalists and . . . that they think . . . about how they can use philanthropy to advance justice in the world.

MM: Do you start from a view that the current model of philanthropy has actively run against this pursuit of justice that you’re arguing for?

DW: I don’t think that the current form of philanthropy has affirmatively not sought justice. I think that the current form of philanthropy needs

same side as foundations in a lot of these battles, such as carmakers supporting tighter emissions standards in California.

DW: This is one of the things I’m proud of in philanthropy and, here, at Ford. Ideas that were marginal at one time like seat belts, which were contested and resisted by industry but with support from philanthropy, advocacy, policy and research [became] mainstream thinking.

MM: Are you finding more allies in the corporate world than when you started at the foundation?

DW: I think that there absolutely are more allies in corporations for social change and it is, in part, self-interest and ultimately it has to be good for business.

[But] a foundation and a business are different enterprises and we shouldn’t confuse that.

MM: You were involved in the Business Roundtable’s statement [saying companies should serve other stakeholders as well as shareholders]. How substantial a change do you think it heralds?

DW: The Business Roundtable doesn’t have the authority to mandate a specific set of interventions by its members but what it can do is encourage its members to develop very specific responses to this aspiration and I think that is what needs to come next. I think in order not to play into the hand of the cynics, the signatories need to develop concrete plans that reflect their aspirations in this space. www.businessday.ng

Brazil reforms: has Jair Bolsonaro missed his moment?

The government’s plans to kick-start the economy risk being overshadowed by riots in Chile and political turmoil at

MICHAEL STOTT, ANDRES SCHIPANI AND BRYAN HARRIS

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hen Brazil’s congress finally approved a landmark pensions reform in late October after more than two decades of prevarication, business groups cheered and investors started to wonder whether President Jair Bolsonaro’s far-right government might finally deliver on an ambitious agenda to revive Latin America’s largest economy.

“Everything is falling into place,” crowed Brazil’s US-educated finance minister Paulo Guedes in an interview days later. “There is a new politics in Brazil.”

But as the controversial pension reform passed into law, demonstrators 3,000km away across the Andes in Chile were rioting against the very system he had hailed as an example. Days later, Brazil’s leftwing opposition was galvanised by the release from jail of charismatic former president Luiz Inácio Lula da Silva pending an appeal against his corruption conviction.

Now, as the window for passing major legislation ahead of 2020 municipal elections starts to close, Brazil-watchers are asking whether the Bolsonaro government can deliver on the rest of its reform programme or whether the country will again succumb to its perpetual habit of disappointing investors.

“They have talked a very good game on reform,” says William Jackson, chief emerging market economist at Capital Economics.

“But it does seem that since the pension reform passed, some of the headwinds have grown . . . It is not clear there is the same appetite for overhauling the public administration and the environment has shifted.”

For many people around the world, Brazil’s “new politics” is associated with Mr Bolsonaro’s outspoken attacks on Amazon conservation and gay rights, or his advocacy of God and guns as solutions to Brazil’s chronic social problems since taking office this year.

Yet, many in the Brazilian business community have been more focused on the nascent economic reforms his government has proposed. On São Paulo’s Avenida Faria Lima, known as Brazil’s Wall Street for its concentration of investment banks, the optimism in some quarters is palpable — even if economic growth remains weak. The Bovespa share index

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hit a record high on November 7, up 20 per cent on the year; initial public offering issuance in 2019 was the highest for a decade at $22bn; and low interest rates have driven Brazilians to abandon the safety of bank deposits and risk their money on stocks for the first time in years.

“A new Brazil is being born,” says Paulo Skaf, head of the powerful São Paulo industry group FIESP. “We are seeing organic growth without the government injecting money. For the first time in 70 years, we’re growing on our own.”

A former day trader and entrepreneur who learnt economics from Milton Friedman at the University of Chicago, Mr Guedes remains determined to push his “More Brazil Plan”. Nothing will stop him from cutting the state, “privatising everything” and deregulating, he says, namechecking Margaret Thatcher, Ronald Reagan and the “wonderful transformation” which Friedman’s “Chicago boys” carried out in Chile during the dictatorship of Augusto Pinochet in the 1970s and 1980s.

Chart showing that Brazil’s economy has been stagnant for most of the decade. Cumulative growth in GDP (rebased) But following weeks of riots in Chile, where masked protesters burnt Santiago’s metro stations, looted supermarkets, ransacked churches and pelted police with projectiles as they vented their anger over years of inadequate public services and low wages, Mr Bolsonaro appears to be having second thoughts over how hard to push potentially unpopular reforms.

With an eye on forthcoming municipal elections and his own flagging electoral support, the president has postponed until next year one of Mr Guedes’ key reforms, an overhaul of the terms and conditions of Brazil’s pampered federal employees, who enjoy guaranteed jobs for life and automatic promotions for seniority regardless of performance.

When the so-called “administrative reform” bill was reintroduced, it would be “as soft as possible”, said Mr Bolsonaro, who recently left the political party that backed him in last year’s election, the Social Liberal party, after a messy falling-out.

Government officials deny that the Chilean riots or October’s heavy election defeat in Argentina of a Bolsonaro ally, President Mau@Businessdayng

ricio Macri, have influenced their considerations and Mr Guedes remains as determined as ever to enact his sweeping changes.

But, as Gabriella Dorlhiac, executive director of the International Chamber of Commerce in Brazil, puts it: “Chile and Argentina are a very clear signal that if reforms are to succeed, people need food on the table.”

With administrative reform on the back burner, attention is now focused on the remaining legislation. This includes a sweeping simplification of the country’s Byzantine tax system, long a key demand of business. The legislation is mired in Brazil’s 25-party congress with competing proposals jostling for attention and powerful lobbies mobilising to defend special interests.

Congress has taken centre stage because Mr Bolsonaro’s controversial government lacks a majority and the pension reform only passed because a cross-party coalition of legislators, led by the influential lower house speaker Rodrigo Maia, decided to back it. As the chairman of one bank in São Paulo put it: “Congress is governing despite Bolsonaro.”

Joice Hasselmann, a lawmaker from the Social Liberal party, says the pillars of the reforms were the pensions, taxation and administrative bills.

“If the tax and administrative [laws] are not approved, the government’s plans for a reform agenda are compromised. However, a considerable number of the parliamentarians in Congress have caught the mood of the reform agenda and so it could be that even against the headwinds, we are able to make this fly in Congress.”

A second senior pro-reform legislator says it is too early to say whether further reforms are dead.

“The postponement of the administrative reform showed political caution from the [presidency] in not wanting to present so many polemical reforms at the same time,” he says.

Opposition legislators have been emboldened by the protests against pro-business governments in Chile, Argentina, Colombia and Ecuador. Scenting political blood, they have attacked the tax proposals for focusing on simplification, saying the emphasis should instead be on addressing the unfairness in the system, which contributes to one of the globe’s highest levels of inequality.

Wednesday 03 December 2019

BUSINESS DAY

51

Live @ The STOCK Exchanges Prices for Securities Traded as of Tuesday 03 December 2019 Company

Market cap(nm)

Price (N)

Change

Trades

Volume

Company

Market cap(nm)

Price (N)

Change

Trades

Volume

PRICES FOR MAIN BOARD SECURITIES (Equities) BANKING ACCESS BANK PLC. 330,570.60 9.30 1.09 356 35,406,553 UNITED BANK FOR AFRICA PLC 241,105.92 7.05 0.71 171 15,909,974 ZENITH BANK PLC 590,254.08 18.80 1.08 393 18,366,551 920 69,683,078 OTHER FINANCIAL INSTITUTIONS FBN HOLDINGS PLC 240,498.46 6.70 -1.49 189 4,691,329 189 4,691,329 1,109 74,374,407 TELECOMMUNICATIONS SERVICES MTN NIGERIA COMMUNICATIONS PLC 2,422,187.05 119.00 -0.83 45 569,682 45 569,682 45 569,682 BUILDING MATERIALS DANGOTE CEMENT PLC 2,436,792.56 143.00 - 75 1,465,230 LAFARGE AFRICA PLC. 223,092.97 13.85 -1.07 78 2,197,125 153 3,662,355 153 3,662,355 EXPLORATION AND PRODUCTION SEPLAT PETROLEUM DEVELOPMENT COMPANY PLC 323,467.98 549.70 - 9 4,611 9 4,611 9 4,611 1,316 78,611,055 REAL ESTATE INVESTMENT TRUSTS (REITS) SKYE SHELTER FUND PLC 1,710.00 85.50 - 0 0 UNION HOMES REAL ESTATE INVESTMENT TRUST (REIT) 10,175.81 40.70 - 0 0 UPDC REAL ESTATE INVESTMENT TRUST 11,873.80 4.45 - 4 8,850 4 8,850 4 8,850 OTHER FINANCIAL INSTITUTIONS NIGERIA ENERYGY SECTOR FUND 411.91 552.20 - 0 0 VALUEALLIANCE VALUE FUND 3,312.39 103.20 - 0 0 0 0 0 0 4 8,850 CROP PRODUCTION FTN COCOA PROCESSORS PLC 440.00 0.20 - 0 0 OKOMU OIL PALM PLC. 52,035.79 54.55 9.87 24 249,013 PRESCO PLC 37,850.00 37.85 - 5 11,025 29 260,038 FISHING/HUNTING/TRAPPING ELLAH LAKES PLC. 8,520.00 4.26 - 0 0 0 0 LIVESTOCK/ANIMAL SPECIALTIES LIVESTOCK FEEDS PLC. 1,500.00 0.50 -1.96 17 1,727,709 17 1,727,709 46 1,987,747 DIVERSIFIED INDUSTRIES A.G. LEVENTIS NIGERIA PLC. 953.02 0.36 - 2 4,148 JOHN HOLT PLC. 217.92 0.56 - 1 1,296 S C O A NIG. PLC. 1,903.99 2.93 - 0 0 TRANSNATIONAL CORPORATION OF NIGERIA PLC 40,647.99 1.00 2.00 61 6,775,534 U A C N PLC. 21,609.72 7.50 2.74 99 3,106,465 163 9,887,443 163 9,887,443 BUILDING CONSTRUCTION ARBICO PLC. 711.32 4.79 - 1 2 1 2 INFRASTRUCTURE/HEAVY CONSTRUCTION JULIUS BERGER NIG. PLC. 25,080.00 19.00 - 16 15,045 ROADS NIG PLC. 165.00 6.60 - 0 0 16 15,045 REAL ESTATE DEVELOPMENT UACN PROPERTY DEVELOPMENT COMPANY PLC 2,598.40 1.00 - 15 412,577 15 412,577 32 427,624 AUTOMOBILES/AUTO PARTS DN TYRE & RUBBER PLC 954.53 0.20 - 0 0 0 0 BEVERAGES--BREWERS/DISTILLERS CHAMPION BREW. PLC. 7,281.43 0.93 -8.82 7 278,200 GOLDEN GUINEA BREW. PLC. 242.22 0.89 - 0 0 GUINNESS NIG PLC 63,521.10 29.00 -6.45 35 677,002 INTERNATIONAL BREWERIES PLC. 85,958.62 10.00 - 21 123,240 NIGERIAN BREW. PLC. 408,241.85 51.05 - 59 5,225,127 122 6,303,569 FOOD PRODUCTS DANGOTE SUGAR REFINERY PLC 164,400.00 13.70 -0.72 98 2,855,639 FLOUR MILLS NIG. PLC. 77,907.21 19.00 4.11 66 608,819 HONEYWELL FLOUR MILL PLC 8,723.22 1.10 - 27 1,638,106 MULTI-TREX INTEGRATED FOODS PLC 1,340.10 0.36 - 0 0 N NIG. FLOUR MILLS PLC. 766.26 4.30 - 0 0 NASCON ALLIED INDUSTRIES PLC 37,092.14 14.00 - 13 14,074 UNION DICON SALT PLC. 3,321.07 12.15 - 0 0 204 5,116,638 FOOD PRODUCTS--DIVERSIFIED CADBURY NIGERIA PLC. 18,594.20 9.90 - 16 82,538 NESTLE NIGERIA PLC. 1,070,085.94 1,350.00 - 55 47,215 71 129,753 HOUSEHOLD DURABLES NIGERIAN ENAMELWARE PLC. 1,680.31 22.10 - 0 0 VITAFOAM NIG PLC. 4,878.29 3.90 - 10 119,244 10 119,244 PERSONAL/HOUSEHOLD PRODUCTS P Z CUSSONS NIGERIA PLC. 20,845.00 5.25 - 30 174,152 UNILEVER NIGERIA PLC. 105,995.35 18.45 4.24 61 2,273,595 91 2,447,747 498 14,116,951 BANKING ECOBANK TRANSNATIONAL INCORPORATED 128,446.86 7.00 - 25 58,270 FIDELITY BANK PLC 58,239.34 2.01 -3.83 81 7,804,804 GUARANTY TRUST BANK PLC. 891,764.73 30.30 -0.66 270 34,611,435 JAIZ BANK PLC 20,330.33 0.69 4.55 18 894,854 STERLING BANK PLC. 59,020.36 2.05 - 16 283,235 UNION BANK NIG.PLC. 203,845.27 7.00 - 33 775,675 UNITY BANK PLC 7,598.07 0.65 - 2 8,810 WEMA BANK PLC. 27,773.62 0.72 -1.37 33 1,839,679 478 46,276,762 INSURANCE CARRIERS, BROKERS AND SERVICES AFRICAN ALLIANCE INSURANCE PLC 4,117.00 0.20 - 0 0 AIICO INSURANCE PLC. 4,989.75 0.72 2.86 16 1,307,634 AXAMANSARD INSURANCE PLC 18,900.00 1.80 - 24 5,680,972 CONSOLIDATED HALLMARK INSURANCE PLC 3,170.70 0.39 - 0 0 CONTINENTAL REINSURANCE PLC 22,820.04 2.20 - 0 0 CORNERSTONE INSURANCE PLC 10,310.66 0.70 -4.11 9 2,002,834 GOLDLINK INSURANCE PLC 909.99 0.20 - 0 0 GUINEA INSURANCE PLC. 1,228.00 0.20 - 1 1,200 INTERNATIONAL ENERGY INSURANCE PLC 487.95 0.38 - 0 0 LASACO ASSURANCE PLC. 1,830.86 0.25 -3.85 17 2,187,708 LAW UNION AND ROCK INS. PLC. 2,792.61 0.65 -8.45 7 212,057 LINKAGE ASSURANCE PLC 4,080.00 0.51 - 1 5,000 MUTUAL BENEFITS ASSURANCE PLC. 2,234.55 0.20 - 1 1,000 NEM INSURANCE PLC 10,032.96 1.90 -5.00 14 380,799 NIGER INSURANCE PLC 1,547.90 0.20 - 2 155,000 PRESTIGE ASSURANCE PLC 2,745.10 0.51 - 0 0 REGENCY ASSURANCE PLC 1,333.75 0.20 - 1 100,000 SOVEREIGN TRUST INSURANCE PLC 1,668.16 0.20 - 2 2,130 STACO INSURANCE PLC 4,483.72 0.48 - 0 0 STANDARD ALLIANCE INSURANCE PLC. 2,582.21 0.20 - 0 0 SUNU ASSURANCES NIGERIA PLC. 2,800.00 0.20 - 0 0 UNIC DIVERSIFIED HOLDINGS PLC. 516.46 0.20 - 0 0 UNIVERSAL INSURANCE PLC 3,200.00 0.20 - 0 0 VERITAS KAPITAL ASSURANCE PLC 2,773.33 0.20 - 3 25,100 WAPIC INSURANCE PLC 5,219.27 0.39 8.33 33 1,273,297 131 13,334,731 MICRO-FINANCE BANKS NPF MICROFINANCE BANK PLC 2,538.17 1.11 - 2 7,100 2 7,100

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MORTGAGE CARRIERS, BROKERS AND SERVICES ABBEY MORTGAGE BANK PLC 4,200.00 1.00 - 0 0 ASO SAVINGS AND LOANS PLC 7,370.87 0.50 - 0 0 INFINITY TRUST MORTGAGE BANK PLC 5,796.93 1.39 - 0 0 RESORT SAVINGS & LOANS PLC 2,265.95 0.20 - 0 0 UNION HOMES SAVINGS AND LOANS PLC. 2,949.22 3.02 - 0 0 0 0 OTHER FINANCIAL INSTITUTIONS AFRICA PRUDENTIAL PLC 8,160.00 4.08 -2.86 26 508,611 CUSTODIAN INVESTMENT PLC 35,291.19 6.00 - 3 1,400 DEAP CAPITAL MANAGEMENT & TRUST PLC 660.00 0.44 - 0 0 FCMB GROUP PLC. 36,833.04 1.86 -2.11 93 3,655,209 ROYAL EXCHANGE PLC. 1,337.80 0.26 8.33 4 149,730 STANBIC IBTC HOLDINGS PLC 385,423.03 36.80 -3.54 10 2,504,381 UNITED CAPITAL PLC 13,800.00 2.30 -0.87 52 1,977,433 188 8,796,764 799 68,415,357 HEALTHCARE PROVIDERS EKOCORP PLC. 1,994.40 4.00 - 1 1 UNION DIAGNOSTIC & CLINICAL SERVICES PLC 852.75 0.24 - 0 0 1 1 MEDICAL SUPPLIES MORISON INDUSTRIES PLC. 494.58 0.50 - 0 0 0 0 PHARMACEUTICALS EVANS MEDICAL PLC. 366.17 0.50 - 0 0 FIDSON HEALTHCARE PLC 7,823.85 3.75 - 5 116,673 GLAXO SMITHKLINE CONSUMER NIG. PLC. 7,175.26 6.00 - 15 41,359 MAY & BAKER NIGERIA PLC. 3,364.21 1.95 -4.88 14 284,665 NEIMETH INTERNATIONAL PHARMACEUTICALS PLC 1,386.38 0.73 - 0 0 NIGERIA-GERMAN CHEMICALS PLC. 556.71 3.62 - 0 0 PHARMA-DEKO PLC. 325.23 1.50 - 0 0 34 442,697 35 442,698 COMPUTER BASED SYSTEMS COURTEVILLE BUSINESS SOLUTIONS PLC 923.52 0.26 -7.69 15 4,403,168 15 4,403,168 COMPUTERS AND PERIPHERALS OMATEK VENTURES PLC 1,470.89 0.50 - 0 0 0 0 IT SERVICES CWG PLC 6,413.06 2.54 - 0 0 486.00 4.50 - 2 1,200 NCR (NIGERIA) PLC. TRIPPLE GEE AND COMPANY PLC. 316.77 0.64 - 0 0 2 1,200 PROCESSING SYSTEMS CHAMS PLC 1,643.62 0.35 -7.89 32 3,105,094 10,962.00 2.61 9.66 3 275,635 E-TRANZACT INTERNATIONAL PLC 35 3,380,729 TELECOMMUNICATIONS SERVICES AIRTEL AFRICA PLC 1,123,311.48 298.90 - 3 15,540 3 15,540 55 7,800,637 BUILDING MATERIALS BERGER PAINTS PLC 2,173.68 7.50 - 7 1,223 CAP PLC 16,800.00 24.00 -1.23 19 610,376 CEMENT CO. OF NORTH.NIG. PLC 249,726.52 19.00 -3.95 92 2,194,820 313.43 0.59 - 0 0 MEYER PLC. PORTLAND PAINTS & PRODUCTS NIGERIA PLC 1,769.32 2.23 - 0 0 PREMIER PAINTS PLC. 1,156.20 9.40 - 0 0 118 2,806,419 ELECTRONIC AND ELECTRICAL PRODUCTS AUSTIN LAZ & COMPANY PLC 2,256.91 2.09 - 0 0 CUTIX PLC. 2,518.69 1.43 - 13 188,626 13 188,626 PACKAGING/CONTAINERS BETA GLASS PLC. 26,898.49 53.80 - 0 0 GREIF NIGERIA PLC 388.02 9.10 - 0 0 0 0 AGRO-ALLIED & CHEMICALS NOTORE CHEMICAL IND PLC 100,754.14 62.50 - 0 0 0 0 131 2,995,045 CHEMICALS B.O.C. GASES PLC. 2,547.42 6.12 - 3 2,157 3 2,157 METALS ALUMINIUM EXTRUSION IND. PLC. 1,781.64 8.10 - 1 100 1 100 MINING SERVICES MULTIVERSE MINING AND EXPLORATION PLC 852.39 0.20 - 0 0 0 0 PAPER/FOREST PRODUCTS THOMAS WYATT NIG. PLC. 83.60 0.38 - 0 0 0 0 4 2,257 ENERGY EQUIPMENT AND SERVICES JAPAUL OIL & MARITIME SERVICES PLC 1,252.54 0.20 - 11 477,567 11 477,567 INTEGRATED OIL AND GAS SERVICES OANDO PLC 45,996.23 3.70 - 54 1,270,771 54 1,270,771 PETROLEUM AND PETROLEUM PRODUCTS DISTRIBUTORS 11 PLC 53,332.04 147.90 - 7 4,225 CONOIL PLC 12,838.11 18.50 - 23 95,055 ETERNA PLC. 3,651.61 2.80 - 17 155,620 FORTE OIL PLC. 23,574.91 18.10 - 34 79,828 MRS OIL NIGERIA PLC. 4,663.23 15.30 - 4 2,820 37,652.97 110.90 - 13 9,713 TOTAL NIGERIA PLC. 98 347,261 163 2,095,599 ADVERTISING AFROMEDIA PLC 1,509.28 0.34 - 1 500 1 500 AIRLINES MEDVIEW AIRLINE PLC 17,551.17 1.80 - 0 0 0 0 AUTOMOBILE/AUTO PART RETAILERS R T BRISCOE PLC. 270.56 0.23 - 0 0 0 0 COURIER/FREIGHT/DELIVERY RED STAR EXPRESS PLC 2,623.26 4.45 - 2 6,572 TRANS-NATIONWIDE EXPRESS PLC. 431.34 0.92 2.22 3 600,795 5 607,367 HOSPITALITY TANTALIZERS PLC 642.33 0.20 - 1 2,000 1 2,000 HOTELS/LODGING CAPITAL HOTEL PLC 4,259.15 2.75 - 0 0 IKEJA HOTEL PLC 2,120.37 1.02 -9.73 5 104,500 TOURIST COMPANY OF NIGERIA PLC. 7,862.53 3.50 - 0 0 TRANSCORP HOTELS PLC 41,042.18 5.40 - 0 0 5 104,500 MEDIA/ENTERTAINMENT DAAR COMMUNICATIONS PLC 4,800.00 0.40 - 0 0 0 0 PRINTING/PUBLISHING ACADEMY PRESS PLC. 223.78 0.37 - 1 4,960 LEARN AFRICA PLC 964.31 1.25 - 3 7,500 STUDIO PRESS (NIG) PLC. 1,183.82 1.99 - 2 780 UNIVERSITY PRESS PLC. 629.86 1.46 - 11 355,000 17 368,240 ROAD TRANSPORTATION ASSOCIATED BUS COMPANY PLC 679.66 0.41 - 1 8 1 8 SPECIALTY INTERLINKED TECHNOLOGIES PLC 757.44 3.20 - 0 0 SECURE ELECTRONIC TECHNOLOGY PLC 1,126.31 0.20 - 0 0

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@Businessdayng

Wednesday 04 December 2019

BUSINESS DAY

53

POLITICS & POLICY Olafeso seeks unity among PDP members for electoral success in Lagos, Southwest

…As Doherty assumes office Iniobong Iwok

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ddy Olafeso, national vice-chairman (Southwest) of the main opposition, People’s Democratic Party (PDP), has called for unity among party members in Lagos State and the Southwest, saying that peace was crucial to the electoral success of the party in the state and across the region.

Some states chapters of the party in the Southwest, especially Lagos State have been engulfed in leadership crisis since after the conclusion of the 2019 general election; In Lagos State, the crisis led to the defection of some chieftains of the party to the ruling All Progressives Congress (APC).

In resolving the crisis, the national leadership of the party had some months back, set up a peace committee headed by Ben Obi, which culminated in the recent election of a new state chairman for the state chapter.

But speaking during the inauguration of the new executive committee of the party in Lagos State, Tuesday, Olafeso said the South West was at its

lowest ebb, noting that unity was crucial for the party’s success so it can rescue the country.

“The South West is at crossroads, but this is a time for a new beginning indeed and with peace in Lagos State, is the beginning of a new thing in the South West. The challenges in the country today are enormous; there is need

for all of us to be united, and I appeal for that unity,” Olafeso said.

In his inaugural speech, the newly elected Lagos State chairman of the party, Adedeji Doherty, said that the party was set to wrest power from the APC in the state in 2023, saying that the state presently needs the PDP to experience development.

L-R: Femi Gbajabiamila, speaker, House of Representatives; Babajide Sanwo-Olu, Lagos State Governor, and Bola Tinubu, APC National Leader, during a ‘Day of Tribute’ for the late Brigadier General Mobolaji Johnson, first governor of Lagos State, organised by the state government, at Onikan Stadium renamed after him by Governor Sanwo-Olu on Tuesday.

Group flays Oyo APC, ALGON over attacks on Makinde REMI FEYISIPO, Ibadan

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yo State chapter of the All Progress i v e s C o n g re s s (APC) and some purported members of the Association of Local Governments of Nigeria (ALGON) in the state have been advised to stop their alleged “relentless and meaningless attacks” on Governor Seyi Makinde.

Oyo Kajola Group (OKG), an Oyo State-based Sociopolitical Organisation that gave the advice, said that recent outbursts by the APC and ALGON on the management of local government matters by Governor Makinde can only be termed as the compulsive attitude of bad losers whose negative tendencies are completely unproductive.

OKG, in a statement by its Media Coordinator, Adebayo Ayandele, which was made public in Ibadan on Tuesday, said the “criticisms against Makinde by the APC and ALGON are not only baseless but a clear demonstration of undemocratic tendencies by political actors who have unfortunately benefitted from the nation’s

Doherty explained that the new leadership of the party would usher in a new lease of life for the party and Lagos in particular.

He, however, showered encomium on the national leadership of the party for the role it played in uniting the party.

“Our democratic journey in Lagos over the past 20 years

democracy.”

“We can only urge them to stop being bad losers and stop the incessant display of undemocratic conducts, including their call for unconstitutional intervention in Oyo State,” the OKG said.

The group stated that APC’s statement calling on President Muhammadu Buhari and the National Assembly to adopt undemocratic measures by illegally intervening in the issue of local government in Oyo State was not only a shameful faux pas, but a portrayal of the members of the APC and ALGON in Oyo State as nambypamby democrats.

The group further described Oyo APC’s call to President Buhari and the leadership of the National Assembly to prevail on Makinde on local government administration in Oyo State as a disgrace, noting that APC members in the state would have to avail themselves the opportunity of the free education policy of the Makinde administration and free distribution of textbooks to return to secondary school classrooms to learn Government and Civics Education, especially topics www.businessday.ng

on federalism, democracy and government system.

According to the group, the claim made by the APC that Makinde’s plans to appoint caretaker committees was an affront on the judiciary and a decision to position his lackeys in office was not only strange but totally baseless, especially coming from a party that administered local governments in Oyo State with caretaker committees for seven of its eight years in office.

The group added that the claim that Makinde tried to ‘bribe’ known APC members appointed into the Oyo State Independent Electoral Commission (OYSIEC) by the immediate past government was a “wicked lie” from the rotten pit, noting that Makinde’s offer to pay the OYSIEC members off the appointment was lawful and well-intended.

The Group advised Governor Makinde to go ahead if he so wishes to appoint caretaker chairmen for the local councils, as according to it, the move will enable the grassroots in Oyo State to feel the impact of government more than before.

has been a tedious one which has been marred with one problem or the other which has led us to failures at every council, gubernatorial and presidential election in the past,” Doherty said.

While narrating how he emerged, Doherty explained that the failure of the party to win Lagos since 1999 created a serious concern for the National Chairman of the party, Uche Secondus, who in his own wisdom decided to create a fact-finding committee headed by Senator Ben Obi to look for a long lasting solution to the division and crises in the party.

He explained that the PDP transformation train has taken off, asking members of the party who had left to come back without meeting any condition.

He outlined the 7-point agenda through which his leadership would rebuild the party in the state, urging aggrieved members who are with various cases in court to give peace a chance.

“It was this bold step taken by the Prince Uche Secondusled NWC that has finally given birth to the new dawn in our party today. Having said this, I would like to thank the major actors in this process that

ensured that this decision by the NWC became a reality.

“The 65percent, 35percent sharing formula used in the past hereby comes to an end; PDP Lagos State will start afresh; we are one family and the party remains supreme,” He added.

Commenting on the state of the nation and Lagos, the Lagos PDP Chairman stated that the country’s democracy was at a critical situation, stating further that public primary and tertiary institutions in Lagos are dilapidating due to poor funding and bad management.

According to him, “Our roads are death traps due to lack of funds and mismanagement of resources. Our financial situation is in critical stage where Lagos State is in a phenomenal debt situation of over N2trillion and still rising.

“Our general hospitals and primary health care units are under-staffed, underequipped and not affordable to the common man. Our transportation system over the years has been way behind in functionality due to bad management, low funding; in fact, it is becoming an eye sore and this is due to misplaced priorities,” he further said.

We’ll use technology to fight crime – Sanwo-Olu

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agos State Governor, Babajide Sanwo-Olu, on Tuesday restated his administration’s commitment to adopt technology in the fight against crime in the state, saying there was need for a complete overhaul of the state’s security architecture.

The governor said this at the 13th Annual Town Hall Meeting on security, which was organised by the Lagos State Security Trust Fund, themed: ‘Transformational Security’.

The town hall event is organised as a feedback mechanism where residents and other stakeholders in the security framework converge to get a first-hand report on the state of security as well as a forum for fundraising towards improving the security situation in Lagos State.

At the event, which was held at the Civic Centre on Victoria Island, Sanwo-Olu said the overhaul was necessary to develop new capability in security operations, which, he said, would be driven by technology. The overall goal, he stressed, is to

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enable the State Government secure residents’ lives and their property in line with modern policing technique.

The governor said the Smart City project of the state required deployment of modern technology to combat crimes, pointing out that the current architecture could not be sustained in the face sophisticated method used by criminals.

He said: “Security in modern times has come to a level where technology needs to play an important role. There is need to boost intelligence through modern techniques to prevent crimes before they occur.

“The Government, through LSSTF, is going to redesign the security operations in line with our Smart City project, which will launch our capability to the next level. We will be using technology as a strong enabler to ensure that Lagos remain safe, responsive in securing lives and businesses.

“We are rejigging and retooling our Command Control Centre. We will be building new Data Room and installing thousands of @Businessdayng

interconnected cameras. All of these will be used by the police and other enforcement agents to analyse crimes and security incidents.”

The governor said the state cabinet had already deliberated on the new policing model, declaring that procurement would be made in the New Year to start the implementation.

Sanwo-Olu noted that government’s primary responsibility is to provide security to all citizens, but he added that Lagos Government’s partnership with private and corporate citizens through LSSTF was to leverage collaboration in achieving improved security.

Describing policing profession as “a difficult job”, the governor said the public must always support law enforcement agents who, he said, endangered their lives to secure the society.

Sanwo-Olu announced that 1,000 policemen would be deployed to work in complementary role with men of Lagos State Traffic Management Authority (LASTMA) to ensure hitch-free Yuletide.

Thebigread

BUSINESS DAY Wednesday 04 December 2019 www.businessday.ng

Finance Bill: Implications of new tax regime on different sectors of Nigeria’s economy ...reduces compliance cost for insurance companies, MSMEs exempted from CIT, VAT OLUWASEGUN OLAKOYENIKAN & OLUFIKAYO OWOEYE

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ith just a step for Nigeria’s amended tax laws to become an Act, Nigerians need to keep tabs on the implications of the Finance Bill on the different sectors they play.

Signing the bill into law would mean Nigeria’s plan to consolidate on its slowly growing but stable economy, and reduce its budget deficits is in the offing. Amongst the ways to achieve these but with general implications is the amendment of the excess dividend tax rules to get rid of double taxation and help corporates retain profits, a move that could bolster investor confidence and deliver increased foreign direct investment for the country.

“This particularly affects holding companies on dividends received from their subsidiaries thereby making Nigeria unattractive as a headquarters or group holding company location,” Lagos-based advisory firm PwC said in a recent note. “The Finance Bill proposes changes to limit the application of the tax only to untaxed profits that are not exempt from tax.”

Also, the loopholes that currently exist under the commencement and cessation period – the beginning and the end of the reporting period - in the Companies Income Tax Act (CITA) were also addressed.

The amended Act deletes the old basis for computing basis periods for new businesses and ceasing periods. It further introduces a simplified “actual year basis” for computing basis period during commencement and cessation periods.

According to the Act, where a company permanently ceases to carry on a trade or business in an accounting period, its assessable profit shall be the amount of the profits from the beginning of the accounting period to the date of cessation and the tax shall be payable within six months from the date of cessation.

On the other hand, the tax reliefs of N2,500 per child and N2,000 for each dependent adult would cease to exist. Tax Identification Number will become a requirement to operate new and existing bank accounts, while the penalty for failure to register for value added tax (VAT) was reviewed upwards to N50,000 for the first month of default N25,000 for each subsequent month of default.

Besides these general implications, the bill also proposes changes that affect some particular sectors of the economy such as the banking industry and capital markets, insurance, energy and utilities, consumer and indus-

President Muhammadu Buhari at the National Assembly

trial products, micro, small and medium-sized enterprises, real estate investment companies, and the digital economy.

The banking industry and capital markets The new Finance Bill introduces ‘thin capitalisation’ benchmark of 30 percent of earnings before interest, taxes, depreciation and amortization (EBITDA) as the limit for interest deduction on loans by a foreign ‘connected person’.

While the bill exempts Nigerian subsidiaries of foreign companies engaged in banking and insurance from this rule, it provides that any excess interest expense can only be carried forward for five subsequent years.

Also, the government introduced an electronic payment option for stamp duty and also increased the stamp duty threshold to N10,000. This implies a one-off levy of N50 will apply to bank transfers on an amount from N10,000 and above.

Furthermore, some Nigerians currently feeling the pains of CBN’s recent directive of N50 on Point of Sale (POS) transactions of N1,000 and above, can now heave a sigh of relief when President Buhari finally assents to the bill.

Insurance companies In a bid to ensure that insurance companies are taxed in a fair and equitable manner relative to other companies operating in other sectors of the economy, Section 16 of the CIT removed double tax provision and recognises regulatory cost that will be incurred by such companies in compliance with the conditions imposed by the insurance regulator this includes among others provision for outstanding claims.

For example, Section 16(9)(c) suggests that after all deductions have been granted to life insur-

ance companies, the company must have 20percent of its gross income available as taxable profit.

Also, for general insurance, tax deductions for other reserves, claims, and outgoings are capped at 25 percent of total premium.

Restricting the tax deduction for claims is a significant disruption to insurance business as payment of claims drives customer confidence.

In a bid to ensure that tax deduction obtained is in line with the requirements of section 20(1) (a) of the National Insurance Act, the Finance Bill proposes that the claim for reserve for unexpired risks in a financial year, should be calculated on a time apportionment basis of the risks accepted during the financial year.

The Finance Bill eliminates the restriction of tax deduction for claims and outgoings to a cap of 25percent of total premium. The Finance Bill also introduces an additional allowance of 10percent of estimated outstanding claims for claims incurred but not reported at year-end. This is positive for the industry as valid business expenses of insurance companies would no longer be disallowed from a tax perspective.

Energy & Utility Firms The Companies Income Tax Act provides that companies engaged in gas utilisation(downstream operation) are granted a series of incentives for utilisation of gas.

These incentives include a taxfree period for up to five years, Accelerated capital allowance after the tax-free period, Tax-free dividends during the tax-free period, Tax deductibility of interest payable on loans obtained with the prior approval of the Minister for a gas project Until now, withholding tax was not charged on dividends from

upstream operations, the new Finance Bill seeks to repeal Section 60 of the Petroleum Profit Tax Act (PPTA) and Section 43 of CITA. This means that dividends from upstream companies will henceforth be subject to withholding tax.

The current rate is 10percent (or 7.5percent if payable to recipients of a treaty country).

The Bill creates a proxy for technical, professional and consultancy services performed outside Nigeria by oil and gas companies.

According to the bill, if there is a significant economic presence for the services provider in Nigeria.

The Nigerian recipient of such services will now be required to deduct WHT from the applicable fees which will be regarded as the final tax in the hands of the recipients.

This could increase the costs of such services to Nigerian companies where the service providers pass on the withholding tax costs through “net of tax” clauses especially if there is no tax relief available to the foreign company in its home country.

Consumer & Industrial products players The Bill includes a definition of “basic food items” for the purpose of VAT exemption. This is defined as “agro and aqua based staple food” and include items such as bread, cereal (raw or semiprocessed), cooking oil, culinary herbs (if raw and unprocessed), fish (other than ornamental), flour and starch (refined or unrefined), fruits (including dried), milk (including powdered), nuts and pulses (including roasted, fried, boiled, salted), roots (also in the form of flakes), salt (excluding industrial), vegetables (dried or ground), and water (excluding sparkling or flavoured). The Bill also includes sanitary items in the

exemption list.

Section 41 of the Companies Income Tax Act (CITA) grants a 15 percent tax credit to a company that incurs capital expenditure to replace “obsolete” plant and machinery. This is in addition to the capital and investment allowances ordinarily available on such capital expenditure. The Bill has deleted this provision in order to rationalise incentives and due to the ambiguity on what constitutes an “obsolete” plant or machinery, making the incentive redundant in practice.

The Bill seeks to increase the VAT rate from 5 percent to 7.5 percent to help reduce budget deficits, fund the new minimum wage and provide social services.

The implication is that the VAT rate increase will result in highercost production and investment, which will be passed on to the consumers.

Only a business that has an annual turnover of NGN 25 million and above, will be required to register for VAT, charge and collect VAT on its sales. This enhances the competitiveness of small businesses and avoids the burden of administering VAT on such small businesses by the Micro, small and mediumsized enterprises The micro, small and mediumsized enterprises are one of the biggest beneficiaries of the new finance bill.

One of such privileges is that, while CITA imposes 30 percent corporate income tax on the profits of a company, the bill exempts small businesses with turnover less than N25 million from the tax, and a lower corporate income tax rate of 20 percent will apply to medium-sized companies with turnover between N25 million and N100 million.

Companies that make CIT payment on or before 90 days from the due date for filing will be entitled to a bonus of 2 percent and 1 percent bonus for a medium-sized and a large firm, respectively.

Also, the bill introduces VAT registration threshold of N25 million turnover, implying that SMEs that do not meet the threshold would not need to register for VAT and as a result would not be able to recover input VAT on their purchases.

Real estate investment companies The bill proposes to exempt dividend and rental income received by real estate investment companies on behalf of their unitholders from corporate income tax.

However, this is based on the provision that a minimum of 75 percent of the dividend or rent earned is distributed within 12 months of the end of the financial year in which the income was earned.

•Continues online at www.businessday.ng

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